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DPR Financial Statement 2010-2011


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Courts Administration Service

Financial Statements(Unaudited)
For the year ended March 31, 2011

Statement of Management Responsibility

Statement of Financial Position

Statement of Operations

Statement of Equity of Canada

Statement of Cash Flows

Notes to the Financial Statements

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011 and all information contained in this report rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector.

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 department's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the department's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting 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 department.

The financial statements of the Courts Administration Service have not been audited.

____________________                        ________________________
Daniel Gosselin, FCA                                Francine Côté, CA, CISA
Chief Administrator                              Chief Financial Officer

(Ottawa, Canada)
(August 18, 2011)

 


Courts Administration Service
Statement of Financial Position

At March 31 (Unaudited)

(in thousands of dollars)

  2011 Restated
(Note 11)
2010
ASSETS    
Financial assets    
Due from the Consolidated Revenue Fund 7,640 10,503
Accounts receivable and employee advances (Note 4) 1,590 1,750
Total financial assets 9,230 12,253
Non-financial assets    
Prepaid expenses 4 -
Tangible capital assets (Note 5) 4,519 4,619
Total non-financial assets 4,523 4,619
TOTAL ASSETS 13,753 16,872
     
LIABILITIES    
Accounts payable and accrued liabilities (Note 6) 3,247 4,841
Vacation pay and compensatory leave 1,820 1,883
Deposit accounts (Note 7) 5,949 7,383
Employee future benefits (Note 8) 8,681 7,825
TOTAL LIABILITIES 19,697 21,932
     
EQUITY OF CANADA (5,944) (5,060)
     
TOTAL LIABILITIES AND EQUITY OF CANADA 13,753 16,872

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

 


Courts Administration Service
Statement of Operations

For the Year Ended March 31 (Unaudited)
(in thousands of dollars)

  2011 2010
EXPENSES    
Judicial Services 40,104 40,072
Registry Services 32,744 32,447
Internal Services 20,079 19,204
TOTAL EXPENSES 92,927 91,723
REVENUES    
Judicial Services 518 629
Registry Services 7,071 12,579
Internal Services 388 545
TOTAL REVENUES 7,977 13,753
NET COST OF OPERATIONS 84,950 77,970

Segmented information (Note 10)

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

 


Courts Administration Service
Statement of Equity of Canada

At March 31 (Unaudited)

(in thousands of dollars)

  2011 Restated
(Note 11)
2010
Equity of Canada, beginning of year (5,060) (7,455)
Net cost of operations (84,950) (77,970)
Net cash provided by Government 58,379 52,709
Change in due from the Consolidated Revenue Fund (2,863) (647)
Services provided without charge by other government departments (Note 9) 28,550 28,303
Equity of Canada, end of year (5,944) (5,060)

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

 


Courts Administration Service
Statement of Cash Flow

For the Year Ended March 31 (Unaudited)

(in thousands of dollars)

  2011 2010
OPERATING ACTIVITIES    
Net cost of operations 84,950 77,970
Non-cash items    
Amortization of tangible capital assets (Note 5) (670) (505)
Services provided without charge by other government departments (Note 9) (28,550) (28,303)
Loss on disposal and write-down of tangible capital assets (71) (23)
Variations in Statement of Financial Position    
Increase (decrease) in accounts receivable and employee advances (160) (1,208)
Increase (decrease) in prepaid expenses 4 (22)
(Increase) decrease in accounts payable and accrued liabilities 1,594 2,704
(Increase) decrease in vacation pay and compensatory leave 63 (101)
(Increase) decrease in deposit accounts 1,434 (920)
(Increase) decrease in employee future benefits (856) (28)
Cash used in operating activities 57,738 49,564
     
CAPITAL INVESTING ACTIVITIES    
Acquisitions of tangible capital assets (Note 5) 643 3,150
Proceeds from disposal of tangible capital assets (2) (5)
Cash used in capital investing activities 641 3,145
     
Net cash provided by Government of Canada 58,379 52,709

 


Notes to the Financial Statements (Unaudited)

For the year ended March 31

1. Authority and objectives

The Courts Administration Service (CAS), which was established on July 2, 2003 by the Courts Administration Service Act, S.C. 2002, c.8, is responsible for providing administrative services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court of Canada and the Tax Court of Canada (here after referred to as the "the Courts"). 

These services permit individuals, companies, organizations and the Government of Canada to submit disputes and other matters to the Courts, and enable the Courts to hear and resolve the cases before them fairly, without delay and as efficiently as possible.

The Courts Administration Service has three program activities: to provide Registry Services, to provide Judicial Services and to provide Internal Services.  

Registry Services processes legal documents and applications for judicial review under the jurisdiction of the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court of Canada and the Tax Court of Canada. It also ensures the proper court records management and adequate operation of the litigation and court access process.

Judicial Services provides direct support to all the Justices through the efforts of judicial assistants, law clerks, jurilinguists, chauffeurs, court attendants, and library personnel. The services provided include research, documentation, revision, editing, and linguistic and terminological advice, the object of which is to assist the judges in preparing their judgments and reasons for judgment.

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. These groups 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; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

 


2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary authorities

The Courts Administration Service is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Courts Administration Service 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 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.

(b) Net cash provided by Government

The Courts Administration Service operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Courts Administration Service is deposited to the CRF and all cash disbursements made by the Courts Administration Service 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.

(c) 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 Courts Administration Service is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

  • Revenues consist primarily of filing fees, fines and sales of copies of filed documentation, including copies of judgments and orders. All such revenue is non-respendable, meaning it cannot be spent by the Courts Administration Service and is deposited to the CRF.
  • All revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  • Employment Insurance (EI) Operating Account: At the end of each fiscal year, the Courts Administration Service determines the cost associated with the administration of Employment Insurance cases. The total cost allocated by the Courts Administration Service for handling EI cases are expended against Human Resources and Skills Development Canada (HRSDC), the department responsible for the EI Operating account. As such, HRSDC would show an expense and the Courts Administration Service would show an equivalent, non respendable revenue item. The purpose of this accounting exercise is to more accurately reflect the total cost of running the federal government's EI program and it is strictly internal to the government.

(e) 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, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage are recorded as operating expenses at their estimated cost.

(f)  Employee future benefits

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Courts Administration Service's contributions to the Plan are charged to expenses in the year incurred and represents the total obligation to the Plan. Current legislation does not require the Courts Administration Service to make contributions for any actuarial deficiencies of the Plan.
  • Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.

(g) Accounts receivables

Accounts receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated using exchange rates in effect at year-end. Gains and losses resulting from foreign currency transactions are included in Registry Services and Internal Services expenses and Registry Services revenues on the statement of operations with the exception of the foreign exchange gain or loss relating to a long-term foreign currency denominated monetary item which is recognized in the financial statements, deferred and amortized to revenue / expense over the remaining life of the monetary item.

(i) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the assets as follows:

Asset Class

Amortization period

Machinery & Equipment

10 years

Computer hardware

3 years

Computer software

4 years

Furniture & fixtures

10 years

Motor vehicles

10 years

Leasehold improvements

Over term of lease

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.

(j) 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 severance benefits, the allowance for doubtful accounts 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 Courts Administration Service receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of operations 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:

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

(in thousands of dollars)

  2011 2010
Net cost of operations 84,950 77,970
Adjustments for items affecting net cost of operations but not affecting authorities:    
Add (Less):    
Services provided without charge by other government departments (28,550) (28,303)
Amortization of tangible capital assets (670) (505)
Decrease (increase) in vacation pay and compensatory leave 63 (101)
Increase in employee future benefits (856) (28)
Loss on disposal and write-down of tangible capital assets (71) (24)
Revenue not available for spending 7,977 13,753
Refund of previous year expenditures 41 24
Adjustments of previous year's payables at year-end (PAYE) 114 263
Other (3) -
  (21,955) (14,921)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Add (Less):    
Acquisition of tangible capital assets 643 3,150
Variation in advances 2 -
Variation in prepaid expenses 4 (22)
  649 3,128
Current year authorities used 63,644 66,177

 

(b) Authorities provided and used

(in thousands of dollars)

  2011 2010
Authorities provided:    
Vote 30 – Program expenditures 58,034 60,222
Statutory authorities 6,869 6,951
Less:    
Lapsed authorities (1,255) (991)
Authorities available for future years (4) (5)
Current year Authorities used 63,644 66,177

 


4. Accounts receivable and employee advances

The following table presents details of accounts receivable and employee advances:

(in thousands of dollars)

  2011 2010
Receivables from other government departments and agencies 1,531 1,696
Receivables from external parties 49 46
Employees advances 11 9
1,591 1,751
Allowance for doubtful accounts on receivables from external parties (1) (1)
Total 1,590 1,750

 


5. Tangible capital assets

Cost

(in thousands of dollars)

  Opening
Balance
Acquisitions Transfers,
Ajustments,
Disposals
and
Write-Offs
Closing
Balance
Machinery and equipment 674 - - 674
Computer hardware 2,653 12 - 2,665
Computer software 1,071 47 - 1,118
Furniture and fixtures 776 - - 776
Motor vehicles 412 56 (67) 401
Assets under construction - Computer software 347 - - 347
Assets under construction - Leasehold improvements 2,147 145 (2,292) -
Leasehold improvements 18 383 2,292 2,693
Total 8,098 643 (67) 8,674

Accumulated amortization

(in thousands of dollars)

  Opening
Balance
Acquisitions Transfers,
Ajustments,
Disposals
and
Write-Offs
Closing
Balance
Machinery and equipment 575 25 - 600 
Computer hardware 1,943 387 - 2,330
Computer software 82 112 - 194
Furniture and fixtures 650 51 - 701
Motor vehicles 226 35 (60) 201
Leasehold improvements 3 60 66 129
Total 3,479 670 6 4,155

Net book value

(in thousands of dollars)

  Opening
Balance
Acquisitions Transfers,
Ajustments,
Disposals
and
Write-Offs
Closing
Balance
Machinery and equipment 99 74
Computer hardware 710 335
Computer software 989 924
Furniture and fixtures 126 75
Motor vehicles 186 200
Assets under construction - Computer software 347 347
Assets under construction - Leasehold improvements 2,147 -
Leasehold improvements 15 2,564
Total 4,619 4,519

Disposals of assets under construction represent assets that were put into use in the year and have been transferred to the other capital asset classes as applicable.

Amortization expense for the year ended March 31, 2011 is $669,502 (2009-10 was $505,054).

 


6. Accounts payable and accrued liabilities

The following table presents details of accounts payable and accrued liabilities:

(in thousands of dollars)

  2011 2010
Accounts payable to other government departments and agencies 1,089 2,592
Accounts payable to external parties 1,567 1,878
  2,656 4,470
Accrued liabilities 591 371
  3,247 4,841

 


7. Deposit accounts

The Courts Administration Service maintains two deposit accounts on behalf of litigants before the Courts. Pursuant to an order of the Court, the deposit accounts will record funds paid into the Federal Court of Appeal, Federal Court and Tax Court of Canada. These amounts are held as payments and eventually released, pending judgment of the Courts. The underlying differences of these two accounts are the calculation of interest as described below. 

Calculation of Interest:
Deposit Account for the Federal Court of Appeal & Federal Court:  Pursuant to the Order in Council P.C. 1970 4/2, the account earns interest semi annually at a rate that is equal to nine tenths of the monthly average of tender rates for three month Treasury bills and is calculated on the minimum monthly balance. 

Deposit Account for the Tax Court of Canada:  Pursuant to the Order in Council P.C. 1970-300,
the account earns interest semi annually at a rate that is equal to ninety percent of the average of the weekly three month Treasury bills and is calculated on a daily basis.

(in thousands of dollars)

  2011 2010
Balance, beginning of year 7,383 6,463
Receipts and other credits 1,585 2,461
Disbursements and other charges (3,019) (1,541)
Balance, end of the year 5,949 7,383

 


8. Employee future benefits

(a) Pension benefits
The Courts Administration Service's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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 Courts Administration Service contribute to the cost of the Plan. The 2010-11 expense amounts to $4,815,441 ($5,009,170 in 2009-10), which represents approximately 1.9 times (1.9 times in 2009-10) the contributions by employees.

The Courts Administration Service'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
The Courts Administration Service provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars)

  2011 2010
Accrued benefit obligation, beginning of year 7,825 7,797
Expense for the year 1,571 742
Benefits paid during the year (715) (714)
Accrued benefit obligation, end of year 8,681 7,825

 


9. Related party transactions

The Courts Administration Service is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The Courts Administration Service 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 Courts Administration Service received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the department's Statement of Operations as follows:

(in thousands of dollars)

  Judicial
Services
Registry
Services
Internal
Services
2011 2010
Accommodation (1) 19,072 4,763 1,318 25,153 24,902
Employer's contribution to the health
and dental insurance plans
1,026 1,517 803 3,346 3,272
Workers' compensation 16 23 12 51 51
Legal services - - - - 78
Total 20,114 6,303 2,133 28,550 28,303

(1) Note: Accommodation costs coded under the Judicial activities include the space of the court rooms, the Judges offices, the discovery rooms etc.

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 are not included in the Courts Administration Service's Statement of Operations.

(b) Other transactions with related parties

(in thousands of dollars)

  2011 2010
Revenues - Other government departments and agencies 1,492 1,922
Expenses - Other government departments and agencies 10,924 10,514

 


10. Segmented information

Presentation by segment is based on the Courts Administration Service's program activity architecture. The presentation by segment is based on the same accounting policies as described in Note 2. Summary of significant accounting policies. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in thousands of dollars)

  Judicial
Services
Registry
Services
Internal
Services
2011 2010
EXPENSES         (Note 12)
Salaries and employee benefits 15,598 23,616 12,544 51,758 49,755
Accommodations (Note 9) 19,072 4,763 1,318 25,153 24,902
Professional and special services 3,027 3,202 1,723 7,952 9,223
Transportation and telecommunications 433 443 1,660 2,536 2,973
Materials and supplies 1,697 190 250 2,137 2,274
Machinery and equipment 77 95 890 1,062 933
Rentals 109 183 645 937 674
Amortization of tangible capital assets 39 166 465 670 505
Repairs and maintenance 36 29 563 628 487
Information 25 63 19 107 182
Miscellaneous (9) (6) 2 (13) (185)
TOTAL EXPENSES 40,104 32,744 20,079 92,927 91,723
           
REVENUES          
Fines - 5,060 - 5,060 10,500
Employment Insurance Operating Account cost recoveries (Note 2(d)) 454 394 385 1,233 1,618
Filing fees - 1,484 - 1,484 1,417
Photocopies 64 132 - 196 215
Miscellaneous revenues - 1 3 4 3
TOTAL REVENUES 518 7,071 388 7,977 13,753
           
Net cost of operations 39,586 25,673 19,691 84,950 77,970

 


11. Adoption of new accounting policies

During the year, the Courts Administration Service adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Courts Administration Service for the 2010-11 fiscal year. The major change in the accounting policies of the Courts Administration Service required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

(in thousands of dollars)

  2010
As previously
stated
Effect
of the
adjustment
2010
Revised
amount
Statement of Financial Position      
Assets 6,369 10,503 16,872
Equity of Canada (15,563) 10,503 (5,060)

 


12. Comparative information

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