Publication

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, 2019 and all information contained in these financial statements rests with the management of the Canadian Intergovernmental Conference Secretariat (CICS). 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 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 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 Financial Management.

A Core Control Audit was performed in 2011-12 by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan are posted on the departmental web site here.

The financial statements of the CICS have not been audited.


André M. McArdle,
Secretary
Ottawa, Canada
August 28, 2019


Brian J. Berry FCPA, FCMA,
Assistant Secretary and Chief Financial Officer
Ottawa, Canada
August 28, 2019

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

  2019 2018
Liabilities
Accounts payable and accrued liabilities (note 4) $ 632,507 $ 666,494
Vacation pay and compensatory leave 89,991 91,861
Employee future benefits (note 5) 88,118 87,991
Total liabilities 810,616 846,346
Financial assets
Due from Consolidated Revenue Fund 537,296 558,496
Accounts receivable and advances (note 6) 157,479 212,541
Total financial assets 694,775 771,037
Departmental net debt 115,841 75,309
Non-financial assets
Prepaid expenses 15,271
Tangible capital assets (note 7) 184,353 227,538
Total non-financial assets 199,624 227,538
Departmental net financial position $ 83,783 $ 152,229

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


André M. McArdle,
Secretary
Ottawa, Canada
August 28, 2019


Brian J. Berry FCPA, FCMA,
Assistant Secretary and Chief Financial Officer
Ottawa, Canada
August 28, 2019

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

  Planned results
2019
2019 2018
Expenses
Intergovernmental Conference Services $ 4,593,998 $ 4,375,638 $ 4,263,855
Internal Services 1,685,891 1,401,645 1,390,396
Total expenses 6,279,889 5,777,283 5,654,251
Revenues
Shared cost agreement– Transfers received from the provincial governments 1,100,000 1,024,400 965,800
Revenues earned on behalf of Government (1,100,000) (1,024,400) (965,800)
Total revenues
Net cost of operations before government funding and transfers $ 6,279,889 5,777,283 5,654,251
Government funding and transfers
Net cash provided by Government of Canada   5,194,441 5,247,924
Change in due from Consolidated Revenue Fund   (21,200) 160,073
Services provided without charge by other government departments (note 9)   535,596 479,565
Net cost (revenue) of operations after government funding and transfers   68,446 (233,311)
Departmental net financial position – Beginning of year   152,229 (81,082)
Departmental net financial position – End of year   $ 83,783 $ 152,229

Segmented information (note 10)

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)

  2019 2018
Net cost (revenue) of operations after government funding and transfers $ 68,446 $ (233,311)
Change due to tangible capital assets
Acquisition of tangible capital assets 135,018
Amortization of tangible capital assets (43,185) (18,416)
Loss on disposal of tangible capital assets (7,357)
Total change due to tangible capital assets (43,185) 109,245
Change due to prepaid expenses 15,271
Net increase (decrease) in net debt 40,532 (124,066)
Departmental net debt – Beginning of the year 75,309 199,375
Departmental net debt – End of year $ 115,841 $ 75,309

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)

  2019 2018
Operating activities
Net cost of operations before government funding and transfers $ 5,777,283 $ 5,654,251
Non-cash items:
Amortization of tangible capital assets (43,185) (18,416)
Services provided without charge by other government departments (535,596) (479,565)
Loss on disposal of tangible capital assets (7,357)
Variations in Statement of Financial Position:
(Decrease) increase in accounts receivable and advances (55,062) 27,346
(Decrease) Increase in prepaid expenses 15,271
Decrease (increase) in accounts payable and accrued liabilities 33,987 (116,164)
Decrease (increase) in vacation pay and compensatory leave 1,870 (802)
Decrease (increase) in employee future benefits (127) 53,613
Cash used in operating activities 5,194,441 5,112,906
Capital investing activities
Acquisition of tangible capital assets 135,018
Cash used in capital activities 135,018
Net cash provided by Government of Canada $ 5,194,441 $ 5,247,924

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.

Intergovernmental Conference Services:

Provides continuity of planning and archival services and impartial administrative support for federal-provincial-territorial and provincial- territorial conferences of First Ministers, Ministers and Deputy Ministers, throughout Canada.

Internal Services:

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories 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 are prepared using the CICS’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 2018-19 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 2018-19 Departmental Plan.
  2. Net Cash Provided by Government of Canada – 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 of Canada.
  3. Amounts due from the CRF – 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
    1. Other revenues are recognized in the period the event giving rise to the revenue occurs.
    2. 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
    1. Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
    2. 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. The CICS’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The CICS’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: 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. Accounts receivable –Accounts receivable are initially recorded at cost. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.
  8. Tangible capital 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 7. All tangible capital assets and leasehold improvements having an initial cost of $10,000 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.

    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. 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.
  10. 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 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 CICS 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 CICS 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

  2.   2019 2018
      (in dollars)
    Net cost of operations before government funding and transfers $ 5,777,283 $ 5,654,251
    Adjustments for items affecting net cost of operations but not affecting authorities:
    Services provided without charge by other government departments (535,596) (479,565)
    Amortization of tangible capital assets (43,185) (18,416)
    Loss on disposal of tangible capital assets (7,357)
    Decrease (increase) in vacation pay and compensatory leave 1,870 (802)
    Decrease (increase) in employee future benefits (127) 53,613
    Refund of prior years’ expenditures 19,012 1,882
    Refund of program expenditures (3,543) 559
    Adjustments to prior year’s accounts payable and accounts receivable 29,716 19,304
      (531,853) (430,782)
    Adjustments for items not affecting net cost of operations but affecting authorities:
    Acquisition of tangible capital assets 135,018
    Increase in prepaid expenses 15,271
    Increase in employee advances and overpayments 9,873 15,240
      25,144 150,258
    Current year authorities used $ 5,270,574 $ 5,373,727
  3. Authorities provided and used

  4.   2019 2018
      (in dollars)
    Authorities provided:
    Vote 1 – Operating expenditures $ 5,888,971 $ 5,885,063
    Statutory amounts 294,915 289,642
    Less:
    Lapsed: Operating (913,312) (800,978)
    Current year authorities used $ 5,270,574 $ 5,373,727

4. Accounts payable and accrued liabilities

The following table presents details of the CICS’s accounts payable and accrued liabilities :

  2019 2018
  (in dollars)
Accounts payable – Other government departments and agencies $ 66,262 $ 120,239
Accounts payable – External parties 260,089 150,530
Total accounts payable 326,351 270,769
Accrued liabilities 9,366 28,704
Accrued salaries 296,790 367,021
Total accounts payable and accrued liabilities $ 632,507 $ 666,494

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 CICS 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 2018-19 expense amounts to $205,673 ($197,247 in 2017-18). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2017-18) the employee contributions and, for Group 2 members, approximately 1 time (1 time in 2017-18) the employee contributions.

    The CICS’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.

  2. Severance benefits

    Severance benefits provided to the CICS’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, 2019, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. 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:

  3.   2019 2018
      (in dollars)
    Accrued benefit obligation, beginning of year $ 87,991 $ 141,604
    Expense for the year 127 (29,732)
    Benefits paid during the year (23,881)
    Accrued benefit obligation, end of year $ 88,118 $ 87,991

6. Accounts receivable and advances

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

  2019 2018
  (in dollars)
Accounts receivable – Other government departments and agencies $ 137,306 $ 139,333
Accounts receivable – External parties 19,573 72,608
Employee advances – Petty cash 600 600
Net accounts receivable $ 157,479 $ 212,541

7. Tangible capital assets

Cost (in dollars)
Asset class Opening Balance Acquisitions Disposals
and Write-Offs
Closing Balance
Informatics hardware $ 815,321 $ 815,321
Informatics software 20,000 20,000
  $ 835,321 $ 835,321

 

Accumulated Amortization (in dollars)
Asset class Opening Balance Amortization Disposals
and Write-Offs
Closing Balance
Informatics hardware $ 601,116 $ 36,519 $ 637,635
Informatics software 6,667 6,666 13,333
  $ 607,783 $ 43,185 $ 650,968

 

Net book value (in dollars)
Asset class 2019 2018
Informatics hardware $ 177,686 $ 214,205
Informatics software 6,667 13,333
  $ 184,353 $ 227,538

8. Contractual obligations

The nature of CICS’s activities can result in some large multi-year contracts and obligations whereby the CICS will be obligated to make future payments when the goods or services are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Related Parties Acquisitions of
goods and services
Operating
leases
Total
  (in dollars)
2020 159,295 36,530 195,825
2021 4,986 4,986
2022 4,986 4,986
2023 4,986 4,986
2024 and thereafter

9. Related party transactions

The CICS 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 CICS has defined its key management personnel as the Secretary and Assistant Secretary.

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

  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:

      2019 2018
      (in dollars)
    Accommodation $ 343,222 $ 272,207
    Employer’s contribution to the health and dental insurance plans 192,374 207,358
    $ 535,596 $ 479,565

    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 other government departments and agencies

    The CICS incurred expenses of $1,322,667 in 2018-19 ($1,455,978 in 2017-18) from transactions in the normal course of business with other Government departments, agencies and Crown Corporations. In addition, the CICS has shared service agreements with other government departments related to the provision of Finance, Human Resources, Administration and Information Management and Technology services. The expenses are $256,588 in 2018-19 ($242,220 in 2017-18) and are included in the total amount of transactions with related parties.

      2019 2018
      (in dollars)
    Expenses – Other government departments and agencies 1,322,667 1,455,978
  3. Expenses disclosed in b) exclude common services provided without charge, which are already disclosed in a).

10. Segmented information

Presentation by segment is based on the CICS’s core responsibilities. 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:

Intergovernmental
Conference Services
Internal
services
2019 2018
  (in dollars)
Operating expenses
Salaries and employee benefits $ 2,061,741 $ 687,775 $ 2,749,516 $ 2,975,754
Professional and special services 771,538 328,797 1,100,335 878,905
Transportation and Communication 615,772 99,166 714,938 751,736
Rentals 509,876 87,064 596,940 611,856
Accommodation 267,713 75,509 343,222 272,207
Equipment expenses 71,327 66,829 138,156 59,978
Amortization of tangible capital assets 32,053 11,132 43,185 18,416
Utilities, materials and supplies 12,353 27,089 39,442 58,483
Information services 14,619 14,721 29,340 6,502
Repair and maintenance 18,646 3,563 22,209 13,057
Loss on disposal of tangible capital assets 7,357
Total operating expenses 4,375,638 1,401,645 5,777,283 5,654,251
Revenues
Shared cost agreement – Transfers received from the provincial governments 1,024,400 1,024,400 965,800
Revenues earned on behalf of Government (1,024,400) (1,024,400) (965,800)
Total revenues
Net cost of operations before government funding $ 4,375,638 $ 1,401,645 $ 5,777,283 $ 5,654,251

11. Subsequent event

On 12 June 2019, an agreement between the Government of Canada and 15 public service unions was signed to compensate current and former government employees for damages associated with the Phoenix payroll system. The provisions of this agreement will also be extended to excluded employees from the 15 public service unions, as well as unrepresented government employees and executives. Compensation for fiscal years 2016-17 to 2018-19 includes up to 4 days of leave credits. Those credits are expected to be added to employees’ leave banks in 2019-20. The CICS estimates these additional leave credits at approximately $20,785.

12. Comparative information

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