Publication

Unaudited Financial Statements 2016-17

For the Year Ended March 31, 2017

Canadian Intergovernmental Conference Secretariat  
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, 2017 and all information contained in these statements rests with the management of the Canadian Intergovernmental Conference Secretariat (CICS). These financial statements have been prepared by management using the Government’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 CICS’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the CICS’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, directives 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 CICS 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.

The CICS is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

The financial statements of the CICS have not been audited.

Canadian Intergovernmental Conference Secretariat
Statement of Financial Position (Unaudited)
As at March 31
(in dollars)

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

Canadian Intergovernmental Conference Secretariat
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in dollars)

Segmented information (note 9)

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

Canadian Intergovernmental Conference Secretariat
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31
(in dollars)

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

Canadian Intergovernmental Conference Secretariat
Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in dollars)

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

Canadian Intergovernmental Conference Secretariat
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and objectives

The Canadian Intergovernmental Conference Secretariat (the CICS) was designated a department within the Government of Canada in November 1973, by an Order-in-Council. The CICS is an agency of the Federal, Provincial and Territorial governments. The CICS is named in Section II of the Financial Administration Act and reports to Parliament through the President of the Queen’s Privy Council for Canada.

Conference Services:

Our mandate is to provide administrative support and planning services for intergovernmental conferences of First Ministers, Ministers and Deputy Ministers, throughout Canada."

Internal Services:

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are:

• Management and Oversight Services;
• Communications Services;
• Legal Services;
• Human Resources Management Services;
• Financial Management Services;
• Information Management Services;
• Information Technology Services;
• Real Property Services;
• Materiel Services; and
• Acquisition Services.

In order to effectively pursue its mandate, CICS aims to achieve its strategic outcome that senior-level intergovernmental conference services are professionally and successfully delivered.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government’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. Parliamentary authorities – The CICS is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the CICS 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 amounts 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 2016-17 Report on Plans and Priorities. 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 2016-17 Report on Plans and Priorities.

2. Net Cash Provided by Government –The CICS operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the CICS is deposited to the CRF, and all cash disbursements made by the CICS are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Federal Government.
3. Due from the Consolidated Revenue Fund – Amounts due from 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 CICS is entitled to draw from the CRF without further authorities to discharge its liabilities.
4. Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

   Revenues that are non-respendable are not available to discharge the CICS’s liabilities. While the Secretary is expected to maintain accounting control, he 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 in reduction of the CICS’s gross revenues. 

5. Expenses are recorded on the accrual basis:

   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 and employer’s contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

6. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. The Department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Department’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.

   2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
7. Accounts receivable -are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.
8. Tangible capital assets – All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The CICS does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on First Nations reserves and museum collections.

   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
   Informatics hardware	3 years
   Informatics software	3 years
   Other equipment (including furniture)	5 years

9. Measurement uncertainty – The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are 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.

3. Parliamentary Authorities

The Department receives 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 Department 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:

1. Reconciliation of net cost of operations to current year authorities used

	2017	2016
	(in dollars)
Net cost of operations before government funding	5,735,273	5,845,908
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 9)	(526,782)	(555,782)
Amortization of tangible capital assets (note 7)	(35,896)	(68,414)
Decrease (increase) in vacation pay and compensatory leave	3,951	(8,766)
Decrease (increase) in employee future benefits	–	(2,477)
Refund of prior years’ expenditures	35	17,589
Adjustments to prior year’s accounts payable and accounts receivable	10,976	–
	(547,716)	(617,850)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (note 7)	37,466	42,493
Decrease in vacation pay and compensatory leave	8,017	–
Increase in advances	8,898	–
	54,381	42,493
Current year authorities used	5,241,938	5,270,551

2. Authorities provided and used

	2017	2016
	(in dollars)
Authorities provided:
Vote 05 – Program expenditures	5,824,616	5,827,101
Statutory amounts – Contributions to employee benefits plan	276,529	314,567
Less: Lapsed authorities	(859,207)	(871,117)
Current year authorities used	5,241,938	5,270,551

4. Accounts payable and accrued liabilities

In Canada’s Economic Action Plan 2012, the Government announced various savings measures. The CICS was not directly impacted by these measures.

5. Employee future benefits

1. Pension benefits

   The CICS’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 Plans benefits and they are indexed to inflation.

   Both the employees and the Department 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 relates 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 2016-17 expenses amounts to $192,658 ($216,831 in 2015-16). For group 1 members, the expense represents approximately 1.12 times (1.24 times in 2015-16) the employee contributions and, for Group 2 members, approximately 1.08 times (1.24 times in 2015-16) the employee contributions.

   The Department’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.

2. Severance benefits

   Severance benefits provided to the Department’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, 2017, 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:

	2017	2016
	(in dollars)
Accrued benefit obligation, beginning of year	141,604	139,127
Expense for the year	8,951	(37,077)
Benefits paid during the year	(8,951)	39,554
Accrued benefit obligation, end of year	141,604	141,604

6. Accounts receivable and advances

The following table presents details of the CICS’s accounts receivable and advances balances:

7. Tangible capital assets

8. Related Party Transactions

The CICS is related as a result of common ownership to all government departments, agencies, and Crown corporations. The CICS enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the CICS received common services which were obtained without charge from other government departments as disclosed below.

1. Common services provided without charge by other government departments

   During the year, the CICS received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded in the CICS Statement of Operations and Departmental Net Financial Position as follows:

	2017	2016
	(in dollars)
Accommodation	340,417	347,146
Employer’s contribution to the health and dental insurance plans	186,365	208,636
	526,782	555,782

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 the CICS Statement of Operations and Departmental Net Financial Position.

2. Other transactions with related parties

	2017	2016 (Revised)
	(in dollars)
Expenses – Other government departments and agencies	1,463,302	1,574,852

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

9. Segmented information

Presentation by segment is based on the Department’s program alignment architecture. 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 program activities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

10. Comparative Information

Comparative figures have been reclassified to conform to the current year’s presentation.

11. Accounting Changes

During fiscal year 2016-17, CICS changed its capitalization threshold from $2,000 to $10,000. There is no impact of this change in capitalization threshold on the financial statements in the current fiscal year.

12. Restated Information

2016 figures have been revised to include additional expenses paid to other government departments that were omitted last fiscal year. The impact of this error is limited to note 8-b. This modification has no impact on CICS statements.