Financial Statements for the year ended March 31, 2023 (Unaudited)

Statement of management responsibility including internal control over financial reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2023, and all information contained in these financial statements rests with the management of the Privy Council Office. These financial statements have been prepared by management using the Government of Canada's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Privy Council Office's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Privy Council Office’s Departmental Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Privy Council Office and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2023 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The Privy Council Office’s system of internal control is reviewed by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Clerk of the Privy Council.

The financial statements of the Privy Council Office have not been audited.
 

John Hannaford
Clerk of the Privy Council and Secretary to the Cabinet

Matthew Shea
Chief Financial Officer

Ottawa, Canada
September 14, 2023

Statement of financial position (Unaudited)

As at March 31

(in thousands of dollars)
  2023 2022
Liabilities
Accounts payable and accrued liabilities (note 4)
27,121 24,257
Vacation pay and compensatory leave
14,785 14,322
Employee future benefits (note 5b)
3,559 3,930
Total liabilities 45,465 42,509
Assets
Financial assets
Due from Consolidated Revenue Fund
22,758 17,181
Accounts receivable and advances (note 6)
7,471 9,568
Total net financial assets 30,229 26,749
Departmental net debt 15,236 15,760
Non-financial assets
Prepaid expenses
994 1,134
Inventory (note 8)
278 279
Tangible capital assets (note 9)
31,044 33,736
Total non-financial assets 32,316 35,149
Departmental net financial position 17,080 19,389
Contractual obligations (note 10)

The accompanying notes form an integral part of these financial statements.

John Hannaford
Clerk of the Privy Council and Secretary to the Cabinet

Matthew Shea
Chief Financial Officer

Ottawa, Canada
September 14, 2023

Statement of operations and departmental net financial position (Unaudited)

For the year ended March 31

(in thousands of dollars)
  2023
Planned
Results
2023
Actual
2022
Actual
Expenses
Serve the Prime Minister and Cabinet
106,654 132,543 103,746
Internal Services
110,008 152,184 128,622
Total expenses
216,662 284,727 232,368
Revenues
Miscellaneous revenues
25 797 759
Internal services support
5,444 6,588 6,217
Revenues earned on behalf of Government
(25) (18) (21)
Total revenues
5,444 7,367 6,955
Net cost from continuing operations 211,218 277,360 225,413
Net cost of operations before government funding and transfers 211,218 277,360 225,413
Government funding and transfers
Net cash provided by Government of Canada
  237,502 210,137
Change in due from Consolidated Revenue Fund
  5,577 (8,852)
Services provided without charge by other government departments (note 11a)
  32,075 29,411
Transfer of overpayments
  (103) (118)
Net cost of operations after government funding and transfers   2,309 (5,165)
Departmental net financial position - Beginning of year   19,389 14,224
Departmental net financial position - End of year   17,080 19,389
Segmented information (note 12)

The accompanying notes form an integral part of these financial statements.

Statement of change in departmental net debt (Unaudited)

For the year ended March 31

(in thousands of dollars)
  2023
Actual
2022
Actual
Net cost of operations after government funding and transfers 2,309 (5,165)
Change due to tangible capital assets
Acquisition of tangible capital assets
2,550 9,466
Amortization of tangible capital assets
(5,218) (3,753)
Proceeds from disposal of tangible capital assets
(10) (3)
Net (loss) or gain on disposal of tangible capital assets including adjustments
9 10
Transfer to other government departments
(23) -
Total change due to tangible capital assets (2,692) 5,720
Change due to inventory (1) (149)
Change due to prepaid expenses (140) (558)
Increase (decrease) in departmental net debt (524) (152)
Departmental net debt - Beginning of year 15,760 15,912
Departmental net debt - End of year 15,236 15,760
The accompanying notes form an integral part of these financial statements.

Statement of cash flow (Unaudited)

For the year ended March 31

(in thousands of dollars)
  2023 2022
Operating activities
Net cost of operations before government funding and transfers 277,360 225,413
Non-cash items:
Amortization of tangible capital assets
(5,218) (3,753)
Gain (Loss) on disposal of tangible capital assets
9 10
Services provided without charge by other government departments (note 11a)
(32,075) (29,411)
Transfer of overpayments
103 118
Transfer to other government departments
(23) -
Variations in Statement of Financial Position:
Increase / (decrease) in accounts receivable and advances
(2,097) 4,741
Increase / (decrease) in prepaid expenses
(140) (558)
Increase / (decrease) in inventory
(1) (149)
Decrease / (increase) in accounts payable and accrued liabilities
(2,864) 3,759
Decrease / (increase) in vacation pay and compensatory leave
(463) 70
Decrease / (increase) in future employee benefits
371 434
Cash used in operating activities 234,962 200,674
Capital investing activities
Acquisitions of tangible capital assets (note 9)
2,550 9,466
Proceeds from disposal of tangible capital assets
(10) (3)
Cash used in capital investing activities 2,540 9,463
Net cash provided by the Government of Canada 237,502 210,137
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)

For the year ended March 31

1. Authority and objectives

Privy Council Office (PCO) is a division of the federal public administration as set out in column 1 of Schedule I.1 of the Financial Administration Act and reports to Parliament through the Prime Minister.

PCO reports directly to the Prime Minister and is headed by the Clerk of the Privy Council and Secretary to the Cabinet. The Clerk is also the Head of the Public Service. The mandate of PCO is to serve Canada and Canadians by providing professional, non-partisan advice and support to the Prime Minister, the Deputy Prime Minister and Minister of Finance, portfolio ministers, Cabinet, and Cabinet committees by ensuring that the Cabinet decision-making runs smoothly to help implement the Government's agenda and by fostering and effective, inclusive and innovative Public Service.

Commissions of inquiry established under the Inquiries Act are designated as departments under the Financial Administration Act and the Prime Minister is designated as the “appropriate Minister” under that same Act. PCO provides administrative and financial management support to commissions of inquiry. There are two active commissions in 2022-23: Joint Public Inquiry into the Nova Scotia April 2020 Tragedy and the Public Inquiry into the 2022 Public Order Emergency.

To achieve its strategic outcome and deliver results for Canadians, PCO articulates its plans and priorities based on the core programs included below.

Serve the Prime Minister and Cabinet

To deliver analysis, advice and support to the Prime Minister, the Deputy Prime Minister and Ministers of the Portfolio including non-partisan advice and information from across the Public Service resulting from consultations and collaboration with international and domestic sources inside and outside government. To act as secretariat to the Cabinet and its committees including managing the Cabinet's decision-making system; coordinate departmental policy proposals to Cabinet; schedule and provide support services for meetings of Cabinet and Cabinet committees; advance the Government's agenda across federal departments and agencies; and provide administrative services to the Prime Minister's Office, the Deputy Prime Minister's Office, Portfolio Ministers, and Commissions of Inquiry. To lead and renew the Public Service in order to advise the Government in implement its agenda, foster healthy workplaces that promote diversity and inclusion, and deliver services and results to Canadians.

Internal Services

Internal Services are the services that are provided within a department so that it can meet its corporate obligations and deliver its programs. There are 10 categories of internal services:

2. Summary of significant accounting policies

These financial statements are prepared using the department’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

  1. (a) Parliamentary authorities
    :
    The Privy Council Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Privy Council Office do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amount in the "Expenses" and "Revenues" sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2022-2023 Departmental Plan. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2022-2023 Departmental Plan.
  2. (b) Net cash provided by Government
    :
    The Privy Council Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Privy Council Office is deposited to the CRF, and all cash disbursements made by the Privy Council Office are paid from the CRF. The net cash provided by the Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
  3. (c) Amounts due from or to the CRF
    :
    Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Privy Council Office is entitled to draw from the CRF without further authorities to discharge its liabilities.
  4. (d) Revenues
    :
    Revenues from regulatory fees are recognized based on the services provided in the year. Revenues that are non-respendable are not available to discharge the Department’s liabilities. While the Clerk of the Privy Council Office and Secretary to the Cabinet is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the entity’s gross revenues.
  5. (e) Expenses
    :
    Transfer payments are recorded as an expense in the year the transfer is authorized, and all eligibility criteria have been met by the recipient. Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment. Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their carrying value.
  6. (f) Employee future benefits
    :
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Privy Council Office’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Privy Council Office's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
    • Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. (g) Financial instruments
    :
    A contract establishing a financial instrument creates, at its inception, rights, and obligations to receive or deliver economic benefits. The financial assets and financial liabilities portray these rights and obligations in the financial statements. The Privy Council Office recognizes a financial instrument when it becomes a party to a financial instrument contract.
     
    Financial instruments consist of accounts receivable, and accounts payable and accrued liabilities.
     
    All financial assets and liabilities are recorded at cost or amortized cost. Any associated transaction costs are added to the carrying value upon initial recognition.
     
    Accounts receivable are initially recorded at cost and, where necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.
  8. (h) Non-financial assets
    :
    The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 9. All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable, and intangible assets.
     
    Inventories are valued at cost and are comprised of spare parts and supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.
  9. (i) Measurement uncertainty
    :
    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets.
     
    Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
  10. (j) Related party transactions
    :
    Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.
     
    Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:
    1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
    2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

The Privy Council Office receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Privy Council Office has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables.

(a) Reconciliation of net cost of operations to current year authorities used

(in thousands of dollars)
  2023 2022
Net cost of operations before government funding and transfers 277,360 225,413
Adjustments for items affecting net cost of operations but not affecting
authorities:
Amortization of tangible capital assets
(5,218) (3,753)
Gain (loss) on disposal of tangible capital assets
9 10
Services provided without charge by other government departments
(32,075) (29,411)
Decrease / (increase) in vacation pay and compensatory leave
(463) 70
Decrease / (increase) in employee future benefits
371 434
Bad debt expense
- (25)
Refund of prior years’ expenditures
366 1,832
Other
- (15)
Total items affecting net cost of operations but not affecting authorities
(37,010) (30,858)
Adjustments for items not affecting net cost of operations but affecting
authorities:
Acquisition of tangible capital assets
2,550 9,466
Proceeds from disposal of tangible capital assets
(10) -
(Gain) loss on foreign exchange
(4) (3)
Increase / (decrease) in inventory
(1) (149)
Increase / (decrease) in prepaid expenses
(140) (558)
Accounts receivable and advances
192 304
Total items not affecting net cost of operations but affecting authorities
2,587 9,060
Current year authorities used 242,937 203,615

(b) Authorities provided and used

(in thousands of dollars)
  2023 2022
Authorities provided
Vote 1 - Operating expenditures
227,866 197,492
Statutory amounts
21,720 19,566
Less:
Authorities available for future years
(14) -
Lapsed: Operating
(6,635) (13,443)
Current year authorities used 242,937 203,615

4. Accounts payable and accrued liabilities

The following table presents details of PCO's accounts payable and accrued liabilities:

(in thousands of dollars)
  2023 2022
Accounts payable - Other government departments and agencies 3,176 3,228
Accounts payable - External parties 23,228 19,848
Total accounts payable 26,404 23,076
Acrrued liabilities 717 1,181
Total accounts payable and accrued liabilities 27,121 24,257

5. Employee future benefits

(a) Pension benefits

The Privy Council Office's employees participate in the Public Service Pension Plan (the "Plan"), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and employer contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups - Group 1 related to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2022-23 expense amounts to $19,336,810 ($17,387,706 in 2021-22). For Group 1 members, the expense represents approximately 1.02 times (1.01 times in 2021-22) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2021-22) the employee contributions.

The Privy Council Office's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

Severance benefits provided to PCO’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2023, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

(in thousands of dollars)
  2023 2022
Accrued benefit obligation - Beginning of year 3,930 4,364
Expense for the year 1,606 1,475
Benefits paid during the year (1,977) (1,909)
Accrued benefit obligation - End of year 3,559 3,930

6. Accounts receivable and advances

The following table presents details of PCO's accounts receivable and advances balances:

(in thousands of dollars)
  2023 2022
Receivables - Other government departments and agencies 3,385 2,499
Receivables - External parties 3,903 6,901
Employee advances 232 217
Subtotal 7,520 9,617
Allowance for doubtful accounts on receivables from external parties (49) (49)
Net accounts receivable 7,471 9,568

The following table provides an aging analysis of accounts receivable from external parties and the associated valuation allowances used to reflect their net recoverable value.

(in thousands of dollars)
Accounts receivable from external parties 2023 2022
Not past due 1,916 6,815
Number of days past due
1 to 30
1,585 32
31 to 60
77 1
61 to 90
3 -
91 to 365
258 1
over 365
64 52
Subtotal 3,903 6,901
Less: Valuation allowance (49) (49)
Total 3,854 6,852

7. Risk management

The Privy Council Office has exposure to the following risks from its use of financial instruments: credit risk, market risk and liquidity risk.

a. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss.

PCO’s maximum exposure to credit risk at March 31, 2022 and March 31, 2023 is the carrying amount of its financial assets.

PCO has determined that there is no significant concentration of credit risk related to accounts receivable from external parties. An analysis of the age of these financial assets and the associated valuation allowances used to reflect these accounts at their net recoverable value is disclosed in Note 6.

b. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk if comprised of currency risk. Interest rate risk and other price risk.

i. Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the foreign exchange rates.

PCO has determined that there is no significant concentration of currency risk related to foreign denominated financial instruments.

c. Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting its obligations associated with financial liabilities.

As the funding for PCO’s financial liabilities is drawn from the Consolidated Revenue Fund, its exposure to liquidity risk is fully mitigated.

8. Inventory

The following table presents details of PCO's inventory, measured at cost using the specific identification method:

(in thousands of dollars)
  2023 2022
Office equipment and furniture 278 279
Total inventory 278 279

9. Tangible capital assets

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset class Amortization Period
Machinery and equipment 3 to 30 years
Informatics hardware 3 to 10 years
Informatics software 2 to 10 years
Other equipment 3 to 30 years
Motor vehicles 2 to 35 years
Leasehold improvements Over the useful life of the improvement or the lease term, whichever is shorter
Assets under construction Once in service, in accordance with asset class

Assets under construction are recorded in the applicable asset class in the year they are put into service and are not amortized until they are put into service.

(in thousands of dollars)

Cost

Accumulated Amortization
Net Book Value
Capital Asset Class Opening Balance Acquisitions Adjustments (1) Disposal
and
Write-Offs
Closing
Balance
Opening Balance Amortization Adjustments (1) Disposal
and
Write-Offs
Closing
Balance
2023 2022
Machinery and equipment 60 - - - 60 60 - - - 60 - -
Informatics hardware 6,242 916 (103) 72 6,983 5,210 427 (80) 72 5,485 1,498 1,032
Informatics software 16,546 - - - 16,546 12,899 1,036 - - 13,935 2,611 3,647
Other equipment 20,836 1,265 - 24 22,077 10,138 2,728 - 23 12,843 9,234 10,698
Motor vehicles 642 94 26 31 731 390 118 26 31 503 228 252
Leasehold improvements 16,991 - - - 16,991 1,571 909 - - 2,480 14,511 15,420
Assets under construction - software 2,646 160 - - 2,806 - - - - - 2,806 2,646
Assets under construction - other 41 115 - - 156 - - - - - 156 41
Total 64,004 2,550 (77) 127 66,350 30,268 5,218 (54) 126 35,306 31,044 33,736
(1) Adjustments include assets under construction that were transferred to the other categories upon completion of the assets.

10. Contractual obligations

The nature of the Privy Council Office’s activities may result in some large multi-year contracts and obligations whereby the Privy Council Office will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)
  Transfer payments Operating leases Other obligations with related parties Total
2024 - 18,981 29,127 48,108
2025 - 2,319 3,598 5,917
2026 - 1,042 1,326 2,368
2027 - 450 692 1,142
2028 - 227 - 227
2029 and subsequent - - - -
Total - 23,019 34,743 57,762

11. Related party transactions

The Privy Council Office is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

The Privy Council Office enters into transactions with these entities in the normal course of business and on normal trade terms.

During the year, the Privy Council Office has an agreement with the National Security and Intelligence Review Agency, the National Security and Intelligence Committee of Parliamentarians and with the Leaders' Debate Commission for the provision of finance and administration services which is included in the revenues of section b) of this note. During the year, PCO received common services which were obtained without charge from other government departments as disclosed below.

a) Common services provided without charge by other government departments

During the year, PCO received services without charge from certain common service organizations, related to accommodations, legal services, the employer's contribution to the health and dental insurance plans and workers’ compensation coverage. These services provided without charge have been recorded at the carrying value in PCO's Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)
  2023 2022
Accommodation 18,001 16,227
Employer’s contribution to the health and dental insurance plans 13,058 12,309
Legal services 1,015 874
Worker’s compensation 1 1
Total 32,075 29,411

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada are not included in PCO's Statement of Operations and Departmental Net Financial Position. The costs of information technology infrastructure services provided by Shared Services Canada, following the transfer of responsibilities in November 2011 are also not included in PCO's Statement of Operations and Departmental Net Financial Position.

b) Other transactions with other government departments and agencies

(in thousands of dollars)
  2023 2022
Expenses 46,588 42,287
Revenues 6,972 6,875

Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

12. Segmented information

Presentation by segment is based on the Privy Council Office's core responsibility. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in thousands of dollars)
  Serve the Prime Minister and Cabinet Internal Services 2023 2022
Expenses
Salary and employee benefits
103,732 82,662 186,394 167,698
Professional and special services
15,860 24,006 39,866 22,622
Accommodation
419 18,142 18,561 17,299
Transport and communications
1,971 3,989 5,960 4,550
Information
5,709 154 5,863 3,923
Acquisition of machinery and equipment
1,016 7,005 8,021 6,691
Repair and maintenance
275 1,318 1,593 2,418
Amortization of tangible capital assets
85 5,133 5,218 3,753
Rentals
2,736 5,099 7,835 5,548
Utilities, materials and supplies
231 503 734 520
Transfer payments
2,836 - 2,836 1,397
Other
(2,327) 4,173 1,846 (4,051)
Total Expenses 132,543 152,184 284,727 232,368
Revenues
Miscellaneous
779 18 797 759
Internal support services
- 6,588 6,588 6,217
Revenues earned on behalf of Government
- (18) (18) (21)
Total Revenues 779 6,588 7,367 6,955
Net cost from continuing operations 131,764 145,596 277,360 225,413

Annex to the Statement of management responsibility including internal control over financial reporting of the Privy Council Office for fiscal year 2022-23 (unaudited)

1. Introduction

This document provides summary information on measures taken by the Privy Council Office (PCO) to maintain an effective system of internal control over financial reporting (ICFR) as well as information on internal control management, assessment results and related action plans.

Detailed information on PCO’s authority, mandate, and programs can be found in the Departmental Plan for 2023-2024 and Departmental Results Report for 2021-22.

2. Departmental system of internal control over financial reporting

2.1 Internal Control Management

PCO has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its overall system of internal control. A departmental internal control management framework, is in place and comprises:

The Departmental Audit Committee is an independent advisory committee to the deputy head. It is responsible to provide advice to the deputy head on the adequacy and functioning of the department's risk management, control and governance frameworks and processes.

2.2 Service Arrangements relevant to financial statements

PCO relies on other departments for the processing of certain transactions that are recorded in its financial statements as follows:

3. Departmental assessment results during fiscal year 2022-23

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan.

Progress during the 2022-23 fiscal year

Previous year’s rotational on-going monitoring plan for current year Status
Payroll Completed as planned. Remediation actions started.
Financial Close and Reporting Completed as planned. Remediation actions started.
Entity Level Controls Completed as planned. Remediation actions started.

New or significantly amended key controls - In the current year, there were no significantly amended key controls in existing processes which required a reassessment.

On-going monitoring program - As part of its rotational ongoing monitoring plan, the department completed its reassessment of entity-level controls and the financial controls within the business processes of:

Based on the monitoring procedures performed, key controls were operating as intended with opportunities for improvement identified to ensure that authorized forms of signature approvals are used and accepted, that processes along with roles and responsibilities are reviewed, documented and formalized, and evidence is available to demonstrate the completion of some key control activities. Management action plans have been developed to address these findings.

4. Departmental action plan for the next fiscal year and subsequent fiscal years

PCO’s rotational ongoing monitoring plan over the next 3 fiscal years is shown in the following table. The ongoing monitoring plan is based on:

Rotational on-going monitoring plan for internal control over financial reporting
Key control areas Operating effectiveness testing rotation
Fiscal year 2023-24 Fiscal year 2024-25 Fiscal year 2025-26
Entity Level Controls     X
Information Technology General Controls1   X  
Capital Assets and Inventory X    
Payroll     X
Operating Expenses and Procurement   X  
Delegation of Authority   X  
Liabilities     X
Accounts Receivable, Revenue, Cash and Deposits X    
Financial Close and Reporting     X

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