Departmental Financial Reporting Requirements for Fiscal Year Ended March 31, 2013

Date sent:

To: Deputy Chief Financial Officers

Message from Sylvain Michaud, Executive Director, Government Accounting Policy and Reporting, Office of the Comptroller General

The purpose of this communication is to advise you of reporting requirements related to the year-end. This letter contains information on departmental financial reporting requirements related to:

  • Reporting of unrecorded departmental financial transactions;
  • Liabilities related to contaminated sites;
  • Requests for publication exemption for certain payments of claims against the Crown, ex gratia payments and court awards; and
  • Work force adjustment costs.

A separate call letter will follow to provide instructions for the 2012-2013 departmental and agency financial statements.

Reporting Unrecorded Departmental Financial Transactions

The Treasury Board Policy on Allowances for Valuations of Assets and Liabilities requires departments and agencies to (1) perform an annual assessment of the collectability of financial claims and (2) supply the Treasury Board Secretariat with details related to any liabilities of a material amount that are not or cannot be recorded in departmental accounts.

Financial transactions of departments and agencies should be accurately recorded in the Accounts of Canada. For the most part, this occurs through departmental entry of financial transactions into their departmental financial management system from which the trial balance is submitted to the Central Financial Management Reporting System (CFMRS). However, there may be situations where material amounts affecting departmental accounts will not have been recorded as of the close of accounting period 12 extended 2 (P12-2) on . These include:

  1. Transactions resulting from events that occur between the close of the CFMRS and the date of completion of the Government's financial statements in late August which provide evidence of conditions that existed at year-end (e.g. the bankruptcy of a recipient of a significant unconditionally repayable contribution or loan guarantee, the unexpected loss of a claim against the department, etc.). Particular attention should be given to any changes related to the economic environment that could have a significant effect on the estimates and the assumptions used for the valuation of assets and liabilities;
  2. The correction of a significant error discovered either by the department or the agency or their auditor following the close of CFMRS. Hard errors found as a result of the Public Accounts audit should be corrected, if feasible. Errors not corrected will be included in the Office of the Auditor General's Summary of Unadjusted Differences. They should be documented and discussed directly with the Office of the Comptroller General. As part of the preparation of the Public Accounts, the Comptroller General reserves the right to require a post-closing entry for these latter items; and
  3. Allowances for likely contingent liabilities that have not been recorded by the department or the agency because of one of the exceptions listed in Treasury Board Accounting Standard (TBAS) 3.6 – Contingencies.

In the situations described above, departments and agencies should notify the Receiver General of the possible requirement for a post-closing entry by providing the amount and details of the nature of the transaction as soon as the information is available. Please refer to the Receiver General Manual Chapter 14 – Appendix 15 for more information on Central Financial Management Reporting System Post Closing Entries.

It should be noted, other than the exceptions mentioned under point 3 above, that if a post-closing entry is recorded, the department's or the agency's financial statements will need to reflect the transaction as if it had been recorded in the department's or the agency's trial balance.

In the situations described in point 3 above, departments and agencies should notify the Treasury Board Secretariat, by , of the amount of the allowance, the details of the nature of the allowance and the reasons why the department or the agency has not recorded the allowance. For any developments after , departments and agencies are to provide the information to the Treasury Board Secretariat as soon as it is available.

In all situations, information should be treated as confidential and forwarded to:

Sylvain Michaud
Executive Director
Government Accounting Policy and Reporting
Financial Management Sector
Office of the Comptroller General
Treasury Board Secretariat
300 Laurier Avenue West, 8th floor
Ottawa, Ontario, K1A 0R5
Tel: 613-952-0886
Email: Sylvain.Michaud@tbs-sct.gc.ca

Liabilities Related to Contaminated Sites

Departments and agencies must provide summary financial information on environmental liabilities to the Receiver General on Form TA5a as per the Public Accounts Instructions Section 15.3.8 Environmental Liabilities - Remediation found at: Chapter 15 - Public Accounts Instructions 2012-2013 - RG - PWGSC.

The deadline for submitting this Form is , the same date that plates and forms for Volumes I are submitted to the Receiver General.

Additionally, departments and agencies must update the Federal Contaminated Sites Inventory (FCSI) by . The amounts reported in FCSI should be used to prepare Form TA5a and should therefore reconcile.

If there are any questions on the financial reporting requirements for environmental liabilities for contaminated sites, please contact Cindy Laprade by e-mail or by phone at 613-952-0909 or Michel Vaillant by e-mail or by phone at 613-952-5380. If there are any questions on FCSI related technical issues, please contact Nicole Casault by e-mail or by phone at 613-946-4796.

Requests for Publication Exemptions for Payments of Claims against the Crown, Ex gratia Payments and Court Awards

As provided in Chapter 15 of the Receiver General's Manual of the Public Accounts Instructions, in rare instances where a department or an agency considers that the names of PAYEe(s) associated with the payment should not be disclosed, a written request from the Chief Financial Officer with a justification for the non-disclosure must be submitted by to:

Sylvain Michaud
Executive Director
Government Accounting Policy and Reporting
Financial Management Sector
Office of the Comptroller General
Treasury Board Secretariat
300 Laurier Avenue West, 8th floor
Ottawa, Ontario, K1A 0R5
Tel: 613-952-0886
Email: Sylvain.Michaud@tbs-sct.gc.ca

Treasury Board Secretariat will coordinate all departmental requests but the department and agency should be prepared to provide further details to the Standing Committee on Public Accounts on an as required basis. If there are any questions on exemption requests, please contact Sylvianne Côté by e-mail or by phone at 613-952-8024. More information can be found in the Receiver General Manual Chapter 15 – Sections 15.5.10 to 15.5.12.

Workforce Adjustment Costs

The liability for work force adjustment costs that were part of the cost saving measures included in Budget 2012 has been recorded centrally as an obligation for termination benefits for the fiscal year 2011-2012 and will continue to be recorded centrally for the fiscal year 2012-2013. Therefore, departments should not record any accrual transactions related to the work force adjustment cost included in Budget 2012 in their departmental trial balance. Only the payables at year end (PAYE) associated with the work force adjustment costs should be recorded by departments which require a charge to an appropriation. Therefore, similar to the prior year, departments should continue to present their obligation for termination benefits for presentation purposes in their departmental financial statements. Additional information on how to present this information in departmental financial statements will be provided in the reporting requirements for departmental and agency financial statements call letter which will be issued shortly.

With regards to the timing of potential charges to the appropriation for WFA costs, each entitlement needs to be assessed separately. As examples, two options available under the Work Force Adjustment Directive are discussed below.

Transitional Support Measure (TSM)
The trigger to charge the appropriation for the TSM lump-sum payment is the payment due date as per the agreement with the employee. If no payment date is specified, then the trigger is the struck off strength date (termination of employment); for example, if the employee is struck off strength as of but the payment is not to be made until June, then the appropriation cannot be charged as of since the amount is not due or owing to the employee as of . If the employee is struck off strength as of and no payment date is specified, or if the payment date is on or before March 31st and is still outstanding, then the appropriation can be charged as of .
Education Allowance
The trigger to charge the appropriation for the education allowance is the date the claim is submitted by the employee. If the eligible costs have been incurred by the employee and the claim was submitted on or before , the appropriation can be charged as of .

If you have any other questions with regards to when to charge the appropriation for WFA costs, please do not hesitate to contact April Felhaber by e-mail or by phone at 613-954-0117.

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