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Future-Oriented Financial Statements 2011–2012

For the years ending March 31, 2011 and March 31, 2012

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for years ending March 31, 2011 and 2012 rests with departmental management. The future-oriented financial information has been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of Estimates (Report on Plans and Priorities), and will be used in the department's Departmental Performance Report to compare with actual results.

Management is responsible for the integrity and objectivity of the information contained in future-oriented financial information and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of the future-oriented statement of operations, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The actual results achieved for the fiscal years covered in the accompanying future-oriented financial information will vary from the information presented and the variations may be material.

The purpose of the Canada School's Departmental Audit Committee is to ensure the Deputy Minister (DM) has independent, objective advice, guidance, and assurance on the adequacy of the Canada School's control and accountability processes. In providing this support to the DM, the Departmental Audit Committee exercises active oversight of core areas of control and accountability in an integrated and systematic way. The presence of Board members on the Committee enhances the effectiveness of the oversight roles, as key issues considered by the Audit Committee are also reported to the Board. The integrated support and advice provided by these oversight bodies strengthens the Canada School's approach to achieving excellence in financial management.


Original signed by:

Guy Mc Kenzie
Deputy Minister/President
Canada School of Public Service



Original signed by:

Chantale Cousineau-Mahoney
Vice-President and Chief Financial Officer
Corporate Management and Registration Services Branch


Ottawa, Ontario
February 10, 2011


Future-Oriented Statement of Operations (Unaudited)
For the years ending March 31 (in thousands of dollars)

Future-Oriented Statement of Operations (Unaudited) for the years ending March 31 (in thousands of dollars). Expenses and revenues are listed in the first column. Read down the first column and then to the right for the estimated results for 2011 and the forecast for 2012.
Estimated Results
2011*
Forecast 2012
Expenses
Foundational Learning 91,222 76,298
Organizational Leadership Development 23,504 12,846
Public Sector Management Innovation 12,929 12,995
Internal Services 23,344 19,152
Total Expenses 150,999 121,291
Revenues
Foundational Learning 54,413 38,502
Organizational Leadership Development 9,629 7,456
Public Sector Management Innovation 3,466 4,042
Internal Services 274 -
Total Revenues 67,782 50,000
Net Cost of Operations 83,217 171,291

The accompanying notes form an integral part of the future-oriented financial statement of operations.

* The estimated results for the fiscal year 2010-11 include actual amounts from April 1, 2010 to November 30, 2010.

The revenue forecast for 2010-2011 is greater than the amount presented in the Annual Reference Level Update with a corresponding requirement to incur additional expenditures in the program area.

Segmented information (Note 8)

1. Authority and Objectives

On April 1, 2004, amendments to the Canadian Centre for Management Development Act were proclaimed and the organization was renamed the Canada School of Public Service (the School). The amended legislation, now entitled the Canada School of Public Service Act, continues and expands the mandate of the former organization as a departmental corporation. The School reports to the President of the Treasury Board, through a Board of Governors made up of representatives of the private and public sectors.

The School is the common learning service provider for the Public Service of Canada. It brings a unified approach to serving the common learning and development needs of public servants and helps ensure that all public service employees across Canada have the knowledge and skills they need to meet the employer's knowledge standard and deliver results for Canadians.

Through its programming, the School delivers on its legislative mandate to encourage pride and excellence in public service and to foster a common sense of purpose, values and traditions. It helps to ensure that public servants have the knowledge, competencies and skills they need to serve Canada and Canadians and supports the growth and development of public servants committed to the service of Canada. The School assists deputy heads in meeting their organization's learning needs and pursues excellence in public sector management and public administration.

2. Underlying Assumptions

The Future-Oriented Statement of Operations has been prepared:

  • On the basis of the forecast as at November 30, 2010;
  • On the basis of the revenue forecast of $50 million in 2011-12, as disclosed in the ARLU and RPP.
  • On the basis of government policies, government priorities, and external environment at the time the future-oriented financial information was finalized;
  • According to the requirements of Treasury Board Accounting Policies which are based on Canadian generally accepted accounting principles for the public sector;
  • On the basis that the resources provided will enable the Canada School of Public Service to deliver the expected results specified in the Report on Plans and Priorities;
  • On the basis of historical costs and trend analysis;
  • Material asset acquisitions are not planned in the foreseeable future; therefore the note on Capital Assets has been excluded from these Financial Statements.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results from 2010-11 to 2011-12, actual results achieved are likely to vary from the forecast information presented.

Factors that could lead to material differences between the Future-Oriented Financial Statements and the historical financial statements include:

  1. Economic conditions may affect the amount of revenue earned in 2010-11;
  2. In 2011-12, revenue earned may be greater than the forecast amount of $50 million based on trend analysis;
  3. Streamlining and efficiencies related to operating expenditures.

Once the Report on Plans and Priorities is presented, the Canada School of Public Service will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates.

4. Summary of Significant Accounting Policies

The future-oriented financial information has been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. Significant accounting policies are as follows:

  1. Parliamentary Appropriations: The School is partly financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The Future-Oriented Financial Statements are based on accrual accounting. Consequently, items presented in the Future-Oriented Statement of Operations are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a reconciliation between the bases of reporting.
  2. Net Cash Provided by Government: The School operates within the Consolidated Revenue Fund (CRF) which is administered by the Receiver General for Canada. All cash received by the School is deposited to the CRF and all cash disbursements made by the School are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
  3. Forecasted Revenues:
    • Revenues from course fees are recognized in the accounts based on the services provided in the year;
    • Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  4. Forecasted Expenses:
    Expenses are recorded when the underlying transaction or expense occurred subject to the following:
    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment;
    • Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost;
    • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfiled the terms of a contractual transfer agreement.
  5. Employee Future Benefits:
    • Pension benefits
      Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The School's contributions to the Plan are charged to expenses in the year incurred and represent the total School's obligation to the Plan. Current legislation does not require the School 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 related 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. Tangible Capital Assets:
    All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. Work in progress is only amortized when the related projects are completed and their amortization is based on the estimated useful life of the asset.

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

    Amortized of Tangible Capital Assets

    Asset classes are listed in the first column. Read down the first column and then to the right for the assets useful life.
    Asset class Useful life
    Machinery and equipment 5-10 years
    Other equipment (including furniture) 5-12 years
    Informatics hardware 3-5 years
    Software (including developed software) 3-5 years
    Motor vehicle 4 years
    Leasehold improvements 2-10 years
  7. Measurement Uncertainty: The preparation of the future-oriented financial information requires management to make estimates and assumptions that affect the reported amounts of all the revenues and expenses reported in the Future-Oriented Financial Statements. Assumptions are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. At the time of preparation of this statement of operations, management believes the estimates and assumptions to be reasonable. Nonetheless, as with all such estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

5. Parliamentary Appropriations

The School receives part of its funding through Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the School 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:

Parliamentary Appropriations Authorities requested in thousands of dollars. Vote 35 and Statutory amounts are listed in the first column. Read down and then to the right for the estimated results for 2011 and the forecast for 2012.
(in thousands of dollars) Estimated Results
2011*
Forecast
2012
Vote 35 59,900 48,2108
Statutory amounts (Revenue and EBP) 74,152 56,739
 
Forecast authorities available 134,052 104,949

Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-12 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-11 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

b) Reconciliation of net cost of operations to requested authorities:

Parliamentary Appropriations Reconciliation of net cost of operations to requested authorities in thousands of dollars. Net cost of operations and adjustments are listed in the first column. Read down and then to the right for the estimated result and forecast for 2012.
(in thousands of dollars) Estimated Results 2011* Forecast 2012
Net cost of operations 83,217 71,291
Adjustments for items affecting net cost of operations but not affecting appropriations
Add (Less):
Revenues 67,782 50,000
Services provided without charge (15,811) (15,772)
Employee severance benefits (1,135) (570)
Amortization of tangible capital assets (1,116) (582)
Vacation leave (185) (118)
Other 560 -
  50,095 32,958
Adjustments for items not affecting net cost of operations but affecting appropriations
Add (Less):
Acquisition of tangible capital assets 40 -
Prepaid expenses 700 700
  740 700
Appropriations available for use (forecast) 134,052 104,949

6. Employee Future Benefits

  1. Pension benefits
    The School and all eligible employees contribute to 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 the department contribute to the cost of the Canada School Pension Plan. The 2011-12 forecasted expense amounts will be $2,318,400 (estimated amount in 2010-11 is $2,318,400).

    The School'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. Employee severance benefits
    The School 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 appropriations. Information about the severance benefits, measured as at March 31 is as follows:

    Information about the severance benefits, measured as at March 31

    Employee severance benefits in thousands of dollars. Read down the first column and then to the right for figures for 2011 and 2012.
    (in thousands of dollars) 2011 2012
    Accrued benefit obligation, beginning of year 14,824 15,959
    Expense for the year 3 326 2 994
    Benefits paid during the year (2,191) (2,424)
    Accrued benefit obligation, end of year 15,959 16,529

7. Related Party Transactions

The School is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The School enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the School will have received services which were obtained without charge from other Government departments and agencies as presented below.

Services provided without charge: During the year, the School is forecasted to receive without charge from other government departments, accommodation, legal fees, the employer's contribution to the health and dental insurance plans and worker's compensation coverage. These services without charge have been recognized in the School's Statement of Operations as follows:

Services provided without charge

Related party transactions in thousands of dollars. Read down the first column and then to the right for figures for 2011 and 2012.
(in thousands of dollars) 2011 2012
Accommodation received from Public Works and Government Services Canada (PWGSC) 10,000 10,000
Contributions covering employer's share of employees' insurance premiums and expenditures paid by Treasury Board Secretariat (TBS) 5 811 5 772
Legal Services (Justice Canada) - -
Total 15,811 15,772

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The cost of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada are not included as an expense in the School's Statement of Operations.

8. Segmented Information

Information by sector in thousands of dollars. Estimated results for 2011 and the 2012 forecast for foundational learning, organizational leadership development, public sector management innovation and internal services are listed in the top row. Transfer payments and operating expenses are listed in the first column along with total operating expenses, total expenses, revenues and net cost of operations.
(in thousands of dollars)  Estimated Results
2011*
2012 Forecast
Foundational Learning Organizational Leadership Development Public Sector Management Innovation Internal Services Total
Transfer payments 275     275   275
Operating Expenses
Salaries and employee benefits 89,079 55,840 9,401 9,215 14,017 88,473
Professional and special services 36,368 12,069 2,032 2,068 3,029 19,198
Rental of accommodation and equipment 12,781 4,241 714 727 1,065 6,747
Transportation and telecommunications 5,153 1,710 288 293 429 2,720
Utilities, materials and supplies 1,829 607 102 104 153 966
Small equipment and parts 2,362 784 132 134 197 1,247
Printing and publishing 1,299 431 73 74 108 686
Amortization of tangible capital assets 1,116 371 62 63 93 589
Repair and maintenance 639 212 36 36 53 337
Other operating expenses 98 33 6 6 8 53
Total operating expenses 150,724 76,298 12,846 12,720 19,152 121,016
Total Expenses 150,999 76,298 12,846 12,995 19,152 121,291
Revenues
Regulatory 67,741 38,471 7,456 4,042 - 49,969
Miscellaneous 41 31 - - - 31
Total Revenues 67,782 38,502 7,456 4,042 - 50,000
Net Cost of Operations 83,217 37,796 5,390 8, 953 19,152 171,291

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