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2013–14 Future-oriented financial statements

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Statement of management responsibility

Management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at and reflect the plans described in the Report on Plans and Priorities.


Karen E. Shepherd
Commissioner of Lobbying

Johanne Blais
Chief Financial Officer

Ottawa, Canada

Future-oriented Statement of Financial Position
As at March 31
(in dollars)
  Estimated Results
2013
Planned Results
2014
Liabilities    
Accounts payable and accrued liabilities (note 6) 266,839 244,881
Vacation pay and compensatory leave 132,022 136,115
Employee future benefits (note 7) 375,882 326,963
Total Liabilities 774,743 707,959
Financial assets    
Due from the Consolidated Revenue Fund 266,839 244,881
Accounts receivable and advances (note 8) 1,543 200
Total financial assets 268,382 245,081
     
Net debt 506,361 462,878
Non-financial assets    
Prepaid expenses - -
Tangible capital assets (note 9) 1,426,948 1,003,122
Total non-financial assets 1,426,948 1,003,122
     
Net financial position 920,587 540,244

Contingent liabilities (note 10)

Information for the year ended includes actual amounts from to .

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

Future-oriented Statement of Operations and Net Financial Position
For the year ending March 31
(in dollars)
  Estimated Results
2013
Planned Results
2014
Expenses    
Registration of Lobbyists 1,297,211 1,330,651
Education and Research 969,594 931,378
Reviews and Investigations under the Lobbying Act and the Lobbyists' Code of Conduct 1,179,576 1,240,059
Internal Services 1,913,891 1,867,133
Net cost of operations before government funding 5,360,272 5,369,221
Government funding    
Net cash provided by Government 4,846,804 4,538,391
Change in due from the Consolidated Revenue Fund 27,149 (21,958)
Services provided without charge by other government departments (note 10) 466,059 472,445
Net cost of operations after government funding 20,260 380,343
Net financial position — Beginning of year 940,847 920,587
Net financial position — End of year 920,587 540,244

Segmented information (note 12)

Information for the year ended includes actual amounts from to .

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

Future-oriented Statement of Change in Net Debt
For the year ending March 31
(in dollars)
  Estimated Results
2013
Planned Results
2014
Net cost of operations after government funding 20,260 380,343
Change due to tangible capital assets    
Acquisition of tangible capital assets 315,000 -
Amortization of tangible capital assets (369,858) (423,826)
Total change due to tangible capital assets (54,858) (423,826)
Change due to prepaid expenses (10,686) -
Net decrease in net debt (45,284) (43,483)
Net debt — Beginning of year 551,645 506,361
Net debt — End of year 506,361 462,878

Information for the year ended includes actual amounts from to .

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

Future-oriented Statement of Cash Flows
For the year ending March 31
(in dollars)
  Estimated Results
2013
Planned Results
2014
Operating activities    
Net cost of operations before government funding 5,360,272 5,369,221
Non-cash items:    
Amortization of tangible capital assets (note 9) (369,858) (423,826)
Services provided without charge by other government departments (note 10) (466,059) (472,445)
Variations in Future-oriented Statement of Financial Position:    
Decrease in accounts receivable and advances (54,588) (1,343)
Decrease in prepaid expenses (10,686) -
Decrease in accounts payable and accrued liabilities 28,782 21,958
Increase in vacation pay and compensatory leave (6,643) (4,093)
Decrease in employee future benefits 50,584 48,919
Cash used in operating activities 4,531,804 4,538,391
Capital investing activities    
Acquisitions of tangible capital assets (note 9) 315,000 -
Cash used in capital investing activities 315,000 -
     
Net cash provided by Government of Canada 4,846,804 4,538,391

Information for the year ended includes actual amounts from to .

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

Notes to the future-oriented financial statements

1. Authority and objectives

The Office of the Commissioner of Lobbying (OCL) supports the Commissioner of Lobbying, the Agent of Parliament responsible for the administration of the Lobbying Act (the Act). The legislation seeks to improve transparency and accountability regarding communications between lobbyists and federal public office holders and increase the confidence of Canadians in the integrity of government decision-making. To that end, the mandate of the OCL is to establish and maintain the Registry of Lobbyists, develop and implement educational programs to foster awareness about the Act; and, ensure compliance with the Act and the Lobbyists' Code of Conduct.

Registration of lobbyists

Lobbying the federal government is a legitimate activity but it must be done transparently. The Lobbying Act requires that individuals who are paid to lobby public office holders must disclose certain details of their lobbying activities. OCL approves lobbyists' registrations and makes them available for searching in an electronic registry that is accessible on the Internet.

Education and research

OCL develops and implements educational and research programs to foster awareness of the requirements of the Lobbying Act and the Lobbyists' Code of Conduct. The primary audiences for programs are lobbyists, their clients and public office holders.

Reviews and Investigations under the Lobbying Act and the Lobbyists' Code of Conduct

OCL validates information provided by registered lobbyists to ensure accuracy. Allegations of non-registration or misconduct by lobbyists are reviewed and formal investigations are carried out when required.

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 to those provided specifically to a program.

2. Methodology and significant assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the organization as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2012–13 is based on actual results as at December 31, 2012 and forecasts for the remainder of the fiscal year. Estimated year end information for 2012–13 is used as the opening position for the 2013–14 planned results, and forecasts have been made for the planned results for the 2013–14 fiscal year.

  • The main assumptions underlying the forecasts are as follows:
    • OCL's activities will remain substantially the same as for the previous year.
    • Expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  • These assumptions are adopted as at January 31, 2013.

3. Variations and changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2012–13 and for 2013–14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements, OCL has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

  • Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:
    • The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
    • Implementation of new collective agreements.
    • Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, OCL will not be updating the forecasts for any changes to authorities or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of significant accounting policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board Accounting Standards in effect on . These accounting policies stated below, 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
      OCL is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to OCL 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 Future-oriented Statement of Operations and Net Financial Position and in the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.
    2. Net cash provided by government
      OCL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCL is deposited to the CRF, and all cash disbursements made by OCL 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 Government.
    3. Due from or to the CRF
      Amounts due from or to 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 OCL is entitled to draw from the CRF without further authorities to discharge its liabilities.
    4. Expenses
      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 contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
    5. Employee future benefits
      1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government. OCL's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. OCL'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.
    6. Accounts receivable
      Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
    7. Contingent liabilities
      Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the future-oriented financial statements.
    8. Tangible capital assets
      All tangible capital assets having an initial cost of $5,000 or more and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost.

      Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

      Tangible Capital Assets with Amortization period
      Asset Class Amortization Period
      Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.
      Machinery and equipment 5 years
      Furniture and fixtures 5 years
      Informatics software 5 years
      Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement

5. Parliamentary authorities

OCL receives its funding through annual parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Net Financial Position and the Future-oriented Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, OCL 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) Authorities requested
(in dollars)
  Estimated Results
2013
Planned Results
2014
Authorities requested    
Vote 45 — Program expenditures 4,486,116 4,082,992
Statutory amounts — Contributions to employee benefit plans 435,266 434,784
Forecast authorities available 4,921,382 4,517,776

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

(b) Reconciliation of net cost of operations to requested authorities
(in dollars)
  Estimated Results
2013
Planned Results
2014
Net cost of operations before government funding 5,360,272 5,369,221
Adjustments for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (note 9) (369,858) (423,826)
Decrease in employee future benefits 50,584 48,919
Increase in vacation pay and compensatory leave (6,644) (4,093)
Services provided without charge by other government departments (note 10) (466,059) (472,445)
Total items affecting net cost of operations but not affecting authorities (791,977) (851,445)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisitions of tangible capital assets (note 9) 315,000 -
Decrease in prepaid expenses (10,686) -
Total items not affecting net cost of operations but affecting authorities 304,314 -
Net cost of operations total 4,872,609 4,517,776
Forecast current year lapse 48,773 -
Forecast authorities available 4,921,382 4,517,776

6. Accounts payable and accrued liabilities

The following table presents details of OCL's forecasted accounts payable and accrued liabilities:

OCL's forecasted accounts payable and accrued liabilities
(in dollars)
  Estimated Results
2013
Planned Results
2014
Accounts payable to other government departments and agencies 58,514 48,209
Accounts payable to external parties 133,614 110,082
Total accounts payable 192,128 158,291
Accrued liabilities 74,711 86,590
Total accounts payable and accrued liabilities 266,839 244,881

7. Employee future benefits

(a) Pension benefits

OCL's employees participate in the Public Service Pension 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 OCL contribute to the cost of the Plan. The forecasted expenses are $310,780 in 2012–13 and $310,434 in 2013–14.

OCL'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.

(b) Severance benefits

OCL provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2011–12. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation. Information about the severance benefits, estimated as at the date of these statements, is as follows:

Severance Benefits
(in dollars)
  Estimated Results
2013
Planned Results
2014
Accrued benefit obligation — Beginning of year 426,466 375,882
Expense for the year 13,361 -
Expected benefits payments during the year (63,945) (48,919)
Accrued benefit obligation — End of year 375,882 326,963

8. Accounts receivable and advances

The following table presents details of OCL's forecasted accounts receivable and advances balances:

Accounts receivable and advances
(in dollars)
  Estimated Results
2013
Planned Results
2014
Accounts receivable 1,343 -
Employee advances 200 200
Accounts receivable and advances 1,543 200

9. Tangible capital assets

Tangible capital assets
(in dollars)
  Estimated Results
2013
Planned Results
2014
Opening balance 1,481,806 1,426,948
Acquisition of tangible capital assets 315,000 -
Less: Current year amortization (369,858) (423,826)
Net Book Value 1,426,948 1,003,122

10. Contingent liabilities

In the normal course of its operations, OCL may face legal challenges with regard to a decision made by the Commissioner or for any other reasons. Some of these legal actions may result in actual liabilities when one or more future events occur. To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, a liability is accrued and an expense recorded in the financial statements. No contingent liabilities are recognized in OCL's future-oriented financial statements.

11. Related party transactions

OCL is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. OCL 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, OCL receives 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 OCL's Future-oriented Statement of Operations and Net Financial Position as follows:

Accommodation and employer's contribution to the health and dental insurance plans
(in dollars)
  Estimated Results
2013
Planned Results
2014
Accommodation 260,051 260,051
Employer's contributions to the health and dental insurance plans 206,008 212,394
Total 466,059 472,445

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 Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in OCL's Future-oriented Statement of Operations and Net Financial Position.

(b) Other transactions with related parties

OCL receives services provided with charge from other government departments through Memoranda of Understanding (MOUs.) The forecasted amount for transactions with related parties is $1.1 M for 2012–13 and $0.8 M for 2013–14.

12. Segmented information

Presentation by segment is based on OCL'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 4. The following table presents the forecasted expenses incurred for the programs, by major object of expenses. The segment results for the period are as follows:

Forcasted expenses incurred for the programs, by major object of expenses
(in dollars)
  2013 2014
  Total Registration of Lobbyists Education and Research Reviews
and
Investigations
Internal Services Total
Operating Expenses            
Salaries and employee benefits 3,171,163 758,207 665,377 1,074,544 651,900 3,150,028
Professional and special services 1,374,328 80,100 151,788 76,600 1,034,928 1,343,416
Amortization of tangible capital assets 369,858 408,231 - - 15,595 423,826
Accommodation 260,051 65,013 65,013 75,415 54,610 260,051
Telecommunication services 40,912 17,600 2,600 1,500 18,800 40,500
Utilities, materials and supplies 22,237 1,000 1,000 1,000 37,000 40,000
Rental 60,561 - - - 40,000 40,000
Information services 26,067 - 30,600 - 1,800 32,400
Travel 31,848 500 15,000 11,000 4,000 30,500
Furniture and equipment 3,247 - - - 5,000 5,000
Repair and maintenance - - - - 3,500 3,500
Net Cost of Operations 5,360,272 1,330,651 931,378 1,240,059 1,867,133 5,369,221
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