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Statement of Management Responsibility Including Internal Control Over Financial Reporting

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2022 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 at https://scics.ca/en/publication/core-control-audit-of-the-canadian-intergovernmental-conference-secretariat/.

The financial statements of the CICS have not been audited.

André M. McArdle

Carole Bourget

Secretary

Assistant Secretary and Chief Financial Officer

Ottawa, Canada

Ottawa, Canada

September 7, 2022

September 7, 2022

Statement of Financial Position (Unaudited)

As at March 31, 2022

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2022

2021

Liabilities

Accounts payable and accrued liabilities (note 4)

277,432

395,330

Vacation pay and compensatory leave

273,443

213,236

Employee future benefits (note 5)

80,981

77,761

Total liabilities

631,856

686,327

Financial assets

Due from the Consolidated Revenue Fund

196,214

348,722

Accounts receivable and advances (note 6)

187,804

79,285

Total financial assets

384,018

428,007

Departmental net debt

247,838

258,320

Non-financial assets

Prepaid expenses
Tangible capital assets (note 7)

4,470

7,341

Total non-financial assets

4,470

7,341

Departmental net financial position

(243,368)

(250,979)

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

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the year ended March 31, 2022

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

Planned Results 2022

2022

2021

Expenses

Intergovernmental Conference Services

Internal Services

4,445,360

1,442,566

3,715,351

1,803,020

3,900,203

1,459,853

Total expenses

5,887,926

5,518,371

5,360,056

Revenues

Shared cost agreement Transfers received from the provincial governments

965,000

953,800

968,800

Revenues earned on behalf of Government

(965,000)

(953,800)

(968,800)

Total revenues

Net cost of operations before government funding and transfers

5,887,926

5,518,371

5,360,056

Government funding and transfers

Net cash provided by Government of Canada

5,087,878

4,055,220

Change in due from Consolidated Revenue Fund

(152,508)

80,961

Services provided without charge by other government departments (note 9)

590,611

560,446

Net cost (revenue) of operations after government funding and transfers

(7,610)

663,429

Departmental net financial position – Beginning of year

(250,979)

412,450

Departmental net financial position – End of year

(243,369)

(250,979)

Segmented information (note 10)

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, 2022

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2022

2021

Net cost (revenue) of operations after government funding and transfers

(7,610)

663,429

Change due to tangible capital assets

Acquisition of tangible capital assets

Amortization of tangible capital assets

(45,001)

Total change due to tangible capital assets

(45,001)

Change due to prepaid expenses

(2,871)

1,676

Net (decrease) increase in net debt

(10,481)

620,104

Departmental net debt Beginning of year

258,320

(361,784)

Departmental net debt End of year

247,839

258,320

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

Statement of Cash Flow (Unaudited)

For the year ended March 31, 2022

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2022

2021

Operating activities

Net cost of operations before government funding and transfers

5,518,371

5,360,056

Non-cash items:

Amortization of tangible capital assets

(45,001)

Services provided without charge by other government departments

(590,611)

(560,446)

Variations in Statement of Financial Position:

Increase (decrease) in accounts receivable and advances

108,519

(616,621)

Decrease (increase) in prepaid expenses

(2,871)

1,676

Decrease in accounts payable and accrued liabilities

117,898

7,175

Increase in vacation pay and compensatory leave

(60,207)

(98,917)

(Increase) decrease in employee future benefits

(3,220)

7,298

Cash used in operating activities

5,087,879

4,055,220

Capital investing activities

Acquisition of tangible capital assets

Cash used in capital activities

Net cash provided by Government of Canada

5,087,879

4,055,220

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

For the year ended March 31, 2022

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

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 Deputy Prime Minister of Infrastructure and Communities.

Intergovernmental Conference Services

Provides expert planning, 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, the 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:

a) 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 2021-22 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 2021-22 Departmental Plan.

b) 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.

c) Amount 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.

d) Revenues

Other revenues are recognized in the period the event giving rise to the revenue occurs.

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

e) Expenses

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.

f) Employee future benefits

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.

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.

g) 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.

h) 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

i) 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:

i.Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.

ii.Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

j) 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 as 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, vacation and compensatory leave 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 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:

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

(in dollars)

2022

2021

Net cost of operations before government funding and transfers

5,518,371

5,360,056

Adjustments for items affecting net cost of operations but not affecting authorities:

Services provided without charge by other government departments

(590,611)

(560,446)

Amortization of tangible capital assets

(45,001)

Increase in vacation pay and compensatory leave

(60,207)

(98,917)

(Increase) decrease in employee future benefits

(3,220)

7,298

Refund of prior years’ expenditures

8,957

307

Refund of program expenditures

737

Accrued liabilities not charged to authorities

5,800

(15,300)

Other

(6,111)

(5,397)

Adjustments to prior year’s accounts payable and accounts receivable

11,968

14,961

(632,687)

(702,495)

Adjustments for items not affecting net cost of operations but affecting authorities:

Increase in prepaid expenses

4,470

7,073

Increase in employee advances and overpayments

3,622

609

8,092

7,682

Current year authorities used

4,893,776

4,665,243

b) Authorities provided and used

(in dollars)

2022

2021

Authorities provided:

Vote 1 – Operating expenditures

5,903,542

5,942,134

Statutory amounts

355,275

379,679

Less:

Lapsed: Operating

(1,365,042)

(1,656,570)

Current year authorities used

4,893,775

4,665,243

4.Accounts payable and accrued liabilities

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

(in dollars)

2022

2021

Accounts payable Other government departments and agencies

32,625

157,456

Accounts payable External parties

54,458

45,402

Total accounts payable

87,083

202,858

Accrued liabilities

33,096

51,742

Accrued salaries

157,253

140,730

Total accounts payable and accrued liabilities

277,432

395,330

5.Employee future benefits

a) 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 2021-22 expense amounts to 240,024 (259,093 in 2020-21). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2020-21) the employee contributions and, for Group 2 members, approximately 1 time (1 time in 2020-21) 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.

b) 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, 2022, 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:

(in dollars)

2022

2021

Accrued benefit obligation, beginning of year

77,761

85,059

Expense for the year

3,220

14,678

Benefits paid during the year

(21,976)

Accrued benefit obligation, end of year

80,981

77,761

6.Accounts receivable and advances

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

(in dollars)

2022

2021

Accounts receivable Other government departments and agencies

95,033

60,056

Accounts receivable External parties

92,771

18,629

Employee advances Petty cash

600

Net accounts receivable

187,804

79,285

7. Tangible capital assets

Cost

Disposals

Asset class

Opening

and

Closing

(in dollars)

Balance

Acquisitions

Write-Offs

Balance

Informatics hardware

676,270

676,270

Informatics software

20,000

20,000

696,270

696,270

Accumulated amortization

Disposals

Asset class

Opening

and

Closing

(in dollars)

Balance

Amortization

Write-Offs

Balance

Informatics hardware

676,270

676,270

Informatics software

20,000

20,000

696,270

696,270

Net book value

Asset class

(in dollars)

2022

2021

Informatics hardware

Informatics software

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:

(in dollars)

Related Parties

Acquisitions of goods and services

Operating

leases

Total

2023

745,942

171,285

8,356

925,583

2024

73,876

73,876

2025

73,978

73,978

2026

74,082

74,082

2027 and thereafter

74,188

74,188

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.

a) Common services provided without charge by other government departments

During the year, the CICS received services without charge from certain common service organizations. These services provided without charge have been recorded in the CICS Statement of Operations and Departmental Net Financial Position as follows:

(in dollars)

2022

2021

Accommodation

359,759

354,247

Employer’s contribution to the health and dental insurance plans

230,852

206,199

590,611

560,446

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.

b) Other transactions with other government departments and agencies

The CICS incurred expenses of 1,556,737 in 2021-22 (1,392,921 in 2020-21) from transactions in the normal course of business with other Government departments, agencies and Crown Corporations. 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 384,771 in 2021-22 (356,352 in 2020-21) and are included in the total amount of transactions with related parties.

(in dollars)

2022

2021

Expenses Other government departments and agencies

1,556,737

1,392,921

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:

(in dollars)

Intergovernmental Conference Services

Internal Services

2022

2021

Operating expenses

Salaries and employee benefits

2,369,112

891,510

3,260,622

3,309,058

Professional and special services

791,830

549,929

1,341,759

1,015,047

Accommodation

260,826

98,934

359,760

354,247

Rentals

203,562

88,290

291,852

457,871

Transportation and Communication

50,402

115,240

165,642

94,839

Equipment expenses

16,602

40,696

57,298

39,893

Information services

6,960

14,905

21,865

35,354

Utilities, materials and supplies

16,057

3,036

19,093

7,591

Repair and maintenance

480

480

1,155

Amortization of tangible capital assets

45,001

Total operating expenses

3,715,351

1,803,020

5,518,371

5,360,056

Revenues

Shared cost agreement – Transfers received from the provincial governments

953,800

953,800

968,800

Revenues earned on behalf of Government

(953,800)

(953,800)

(953,800)

Total revenues

Net cost of operations before government funding

3,715,351

1,803,020

5,518,371

5,360,056