Departmental Financial Reporting Requirements for Fiscal Year Ending March 31, 2014

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To: Deputy Chief Financial Officers

Message from Michel Vaillant, A/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 departmental financial transactions;
  • Liabilities related to contaminated sites; and
  • Requests for publication exemption for certain payments of claims against the Crown, ex gratia payments and court awards.

A separate call letter will follow to provide instructions for the 2013-2014 departmental and agency financial statements.

Reporting Departmental Financial Transactions

Financial transactions of departments and agencies should be accurately recorded in the Accounts of Canada. For the most part, this occurs through the entry by departments 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 Audit Misstatements. 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:

Michel Vaillant
A/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
E-mail: Michel.Vaillant@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 2013-2014 - 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 Federal Contaminated Sites Inventory should be used to prepare Form TA5a and should therefore reconcile.

This year departments and agencies must also provide the information requested below related to disclosures of contingent liabilities and measurement uncertainty for contaminated sites.

Sites with Contingent Liability Disclosure
Federal Site Identifier # (per FCSI) Site Name Amount Disclosed ($000) Reason for not recognizing a liability
Identifier # Insert Site Name $000 Insert reason here
Total Contingent Liability Disclosure $000 N/A

Note that the only reason to disclose a contingent liability is due to uncertainty related to responsibility that is currently undeterminable. Uncertainty related to the estimate should be disclosed as measurement uncertainty in accordance with PS 2130 “Measurement uncertainty”.

Sites with Measurement Uncertainty Disclosure
Federal Site Identifier # (per FCSI) Site Name Amount Recognized as a Liability($000) Lowest Estimate($000) Highest Estimate($000) Reason for Measurement Uncertainty Is the amount expected to change within the year?(Yes/No) Is the amount considered material?
Identifier # Site Name $000 $000 $000 Insert reason here Yes or No Yes or No
Totals $000 $000 $000 N/A

Please ensure that all measurement uncertainty disclosed meets the criteria in PS 2130. “The nature of measurement uncertainty that is material should be disclosed” and “The extent of measurement uncertainty that is material should be disclosed when it is reasonably possible that the amount could change by a material amount in the near term”, i.e. one year.

The information requested in the above two tables should be copied onto separate worksheets and forwarded to Cindy Laprade by e-mail by .

In order to ensure that this information is disclosed properly the related notes to the financial statements may require some changes. Please refer to the call letter for Reporting Requirements for Departmental and Agency Financial Statements for Fiscal Year Ending , which will be communicated shortly, when preparing the notes in your financial statements related to environmental liabilities and associated contingencies.

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. For any questions on FCSI related technical issues, please contact Nicole Casault at 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 May 29, 2014 to:

Michel Vaillant
A/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: Michel.Vaillant@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.

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