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PPSC Financial Statements 2008-2009
Office of the Director of Public Prosecutions
Financial Statements
- Management Responsibility for Financial Statements
- Statement of Financial Position (unaudited)
- Statement of Operations (unaudited)
- Statement of Equity of Canada (unaudited)
- Statement of Cash Flow (unaudited)
- Notes to the Financial Statements (unaudited)
Management Responsibility for Financial Statements
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009 and all information contained in these statements rests with management of the Office of the Director of Public Prosecutions. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with 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 Office’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Office’s Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within parliamentary authorities, and are properly recorded to maintain accountability of government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Office of the Director of Public Prosecutions.
The financial statements of the Office have not been audited.
__________________________
Brian Saunders
Director of Public Prosecutions
__________________________
Lucie Bourcier
Chief Financial Officer
Ottawa, Canada
__________________________
Date
Statement of Financial Position (unaudited)
As at March 31
In thousands of dollars
| 2009 | 2008 | |
|---|---|---|
| Assets | ||
| Financial assets | ||
| Receivables (Note 6) | 5,526 | 5,528 |
| Advances (Note 7) | 4 | 5 |
| Total financial assets | 5,530 | 5,533 |
| Non-financial assets | ||
| Tangible capital assets (Note 8) | 5,890 | 4,375 |
| Total non-financial assets | 5,890 | 4,375 |
| Total | 11,420 | 9,908 |
| Liabilities and Equity of Canada | ||
| Liabilities | ||
| Accounts payable and accrued liabilities (Note 9) | 21,592 | 14,326 |
| Vacation pay and compensatory leave | 3,094 | 2,548 |
| Employee severance benefits (Note 10) | 13,866 | 12,553 |
| Total liabilities | 38,552 | 29,427 |
| Equity of Canada | (27,132) | 19,519) |
| Total | 11,420 | 9,908 |
The accompanying notes form an integral part of these financial statements.
Statement of Operations (unaudited)
For the year ended March 31
In thousands of dollars
| 2009 | 2008 | |
|---|---|---|
| Expenses (Note 4) | ||
| Prosecution of drug, organized crime and Criminal Code offences | 126,377 | 101,981 |
| Prosecution of federal offences to protect the environment, natural resources, economic and social health | 22,649 | 22,227 |
| Addressing criminal issues, in the context of prosecutions, to contribute to a safer world for Canada | 5,686 | 5,230 |
| Promoting a fair and effective justice system that reflects Canadian values within a prosecutorial context | 1,059 | 1,307 |
| Total expenses | 155,771 | 130,745 |
| Revenues (Note 5) | ||
| Prosecution of drug, organized crime and Criminal Code offences | 2,699 | 3,041 |
| Prosecution of federal offences to protect the environment, natural resources, economic and social health | 9,829 | 8,969 |
| Total revenues | 12,529 | 12,010 |
| Net cost of operations | 143,242 | 118,735 |
The accompanying notes form an integral part of these financial statements.
Statement of Equity of Canada (unaudited)
For the year ended March 31
In thousands of dollars
| 2009 | 2008 | |
|---|---|---|
| Equity of Canada, beginning of year | (19,519) | 0 |
| Net cost of operations | (143,242) | (118,735) |
| Current year appropriations used (Note 3) | 132,191 | 109,939 |
| Revenue not available for spending | (1,038) | (1,230) |
| Change in net position in the Consolidated Revenue Fund (Note 3) | (8,523) | (1,855) |
| Net liability transfer from the Department of Justice Canada (Note 13) | 0 | (19,250) |
| Services provided without charge by other government departments (Note 12) | 13,000 | 11,612 |
| Equity of Canada, end of year | (27,132) | (19,519) |
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flow (unaudited)
For the year ended March 31
In thousands of dollars
| 2009 | 2008 | |
|---|---|---|
| Operating activities | ||
| Net cost of operations | 143,242 | 118,735 |
| Non-cash items | ||
| Amortization of tangible capital assets (Note 8) | (1,594) | (1,451) |
| Services provided without charge by other government departments (Note 12) | (13,000) | (11,612) |
| Variations in Statement of Financial Position | ||
| Increase in accounts receivable and advances | (3) | 5,533 |
| Increase in liabilities | (9,125) | (29,427) |
| Cash used by operating activities | 119,520 | 81,778 |
| Capital investment activities | ||
| Acquisitions of tangible capital assets (Note 8) | 3,110 | 851 |
| Transfer of tangible capital assets from the Department of Justice Canada (Note 8) | 0 | 4,975 |
| Cash used by capital investment activities | 3,110 | 5,826 |
| Financing activities | ||
| Net cash provided by Government of Canada | (122,629) | (106,854) |
| Net liability transfer from the Department of Justice Canada (Note 13) | 0 | 19,250 |
| Cash used by financing activities | (122,629) | (87,604) |
The accompanying notes form an integral part of these financial statements.
Notes to the Financial Statements (unaudited)
1. Authority and objectives
On December 12, 2006, the Office of the Director of Public Prosecution (ODPP) also, known as the Public Prosecution Service of Canada, was created by the Director of Public Prosecutions Act which is Part 3 of the Federal Accountability Act. This Office took over the duties of the former Federal Prosecution Service within the Department of Justice.
The Office has four (4) program activities:
- Prosecution of drug, organized crime and Criminal Code offences
Under this program activity, the ODPP provides prosecution-related advice and litigation support during the police investigation, and prosecutes all drug charges under the Controlled Drugs and Substances Act, regardless of whether a federal, provincial or municipal police agency lays the charges, except in the case of Quebec and New Brunswick, where the ODPP prosecutes drug charges laid by the RCMP. The ODPP also under this program activity prosecutes organized crime cases, and, pursuant to agreements with the provinces, Criminal Code offences where they are related to drug charges and the drug aspect forms the major part of the case. In the three territories, the ODPP prosecutes all Criminal Code offences. It should be noted that the operational priority for prosecution-related advice during the investigative stage is primarily on cases of high complexity and that must be a high level of risk.
- Prosecution of federal offences to protect the environment, natural resources, economic and social health
Under this program activity, the ODPP provides prosecution-related advice and litigation support to federal investigative agencies, and prosecutes offences under 50 federal statutes. Examples of these types of offences include: environmental offences under the Canadian Environmental Protection Act, revenue offences under Income Tax Act, and offences under the Fisheries Act. As well, the ODPP provides advice on capital market fraud cases and may prosecute such cases.
- Adressing criminal issues, in the context of prosecutions, to contribute to a safer world for Canada
Under this program activity, the ODPP prosecutes offences under such federal statutes as the Proceeds of Crime (Money Laundering) Terrorist Financing Act, Customs Act, Excise Act, and the Excise Tax Act to combat trans-national crime and terrorism. As well, the ODPP may provide counsel to assist in the execution of extradition and mutual legal assistance requests before Canadian courts under the Extradition Act, and the Mutual Legal Asistance in Criminal Matters Act.
- Promoting a fair and effective justice system that reflects Canadian values within a prosecutorial context
Under this program activity, the ODPP contributes to the government priority of strenghtening the criminal justice system across Canada and improving its efficiency by providing legal training to police, and by promoting federal/provincial/territorial cooperation within the prosecution community on shared issues.
2. Summary of significant accounting policies
The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
The significant accounting policies are as follows:
(a) Parliamentary appropriations
The Office is financed by the Government of Canada mostly through parliamentary appropriations. Appropriations provided to the Office do not parallel financial reporting according to generally accepted accounting principles since appropriations 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 appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.
(b) Net cash provided by Government
The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received is deposited to the CRF and all cash disbursements 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.
(c) Change in net position in the Consolidated Revenue Fund
The change in net position in the Consolidated Revenue Fund (CRF) is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
(d) Revenues
- Revenues derived from the provision of legal services are recognized in the year the services are rendered.
- Fines, forfeitures and court costs are recognized upon receipt of payment by the Office.
(e) Expenses
- Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
- Expenses related to the provision of advisory and prosecution functions are limited to those costs borne and settled directly by the Office. These costs may or may not be recovered as revenue from government departments and agencies. The costs of the provision of advisory and prosecution services paid directly by government departments and agencies to outside suppliers, such as legal agents, are not included in the expenses of the Office.
- Services provided without charge by other government departments for accommodation, 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 multi-employer plan administered by the Government of Canada. The Office’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require 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) Receivables
Receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
(h) Contingent liabilities
Contingent liabilities are potential liabilities which 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 an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
(i) Tangible capital assets
All tangible capital assets are recorded at their acquisition cost and amortized over their estimated useful life on a straight-line basis as follows:
| Asset class | Acquisition cost equal or greater than | Amortization period |
|---|---|---|
| Office and other equipment | $10,000 | 5 to 8 years |
| Telecommunications equipment | $10,000 | 4 to 5 years |
| Informatics hardware | $1,000 | 3 to 5 years |
| Informatics software | $10,000 | 3 to 5 years |
| Furniture and furnishings | $1,000 | 10 years |
| Motor vehicles | $10,000 | 5 years |
| Leasehold improvements | $10,000 | Lesser of useful life or term of the lease |
| Work in progress | In accordance with asset class | Once in service, in accordance with asset class |
(j) Measurement uncertainty
he preparation of these financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. 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 contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
3. Parliamentary appropriations
The Office receives most of its funding through annual 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 Office 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 appropriations used
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Net cost of operations | 143,242 | 118,735 |
| Adjustments for items affecting net cost of operations but not affecting appropriations | ||
| Add (Less) | ||
| Services provided without charge by other government departments (Note 12) | (13,000) | (11,612) |
| Amortization of tangible capital assets (Note 8) | (1,594) | (1,451) |
| Employee severance benefits | (1,313) | (1,164) |
| Vacation pay and compensatory leave | (547) | (120) |
| Receivables from external parties | 0 | 312 |
| Revenue not available for spending | 1,038 | 1,230 |
| Employee benefits plan (EBP)(part of employer) component of legal services revenue | 1,660 | 1,527 |
| Adjustment on contingent liabilities | (800) | 0 |
| Refunds and reversals of previous year expenses | 395 | 1,631 |
| (14,161) | (9,647) | |
| Adjustments for items not affecting net cost of operations but affecting appropriations | ||
| Add | ||
| Acquisitions of tangible capital assets (Note 8) | 3,110 | 851 |
| Current year appropriations used | 132,191 | 109,939 |
(b) Appropriations provided and used
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Vote 35 - program expenditures | 153,322 | 109,088 |
| Statutory amounts | 11,454 | 10,150 |
| 164,776 | 119,238 | |
| Less | ||
| Voted authorities lapsed | (32,585) | (9,299) |
| Current year appropriations used | 132,191 | 109,939 |
(c) Reconciliation of net cash provided by Government to current year appropriations used
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Net cash provided by Government | 122,629 | 106,854 |
| Revenue not available for spending | 1,038 | 1,230 |
| 123,668 | 108,084 | |
| Change in net position in the Consolidated Revenue Fund | ||
| Variation in accounts receivable and advances | (3) | 0 |
| Variation in accounts payable and accrued liabilities | 7,266 | 0 |
| Adjustments and refunds of previous year accounts payable | 395 | 1,630 |
| Employee benefits componant of legal services revenue | 1,660 | 1,527 |
| Other adjustments | (795) | (1,302) |
| 8,523 | 1,855 | |
| Current year appropriations used | 132,191 | 109,939 |
4. Expenses
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Operating | ||
| Salaries and employee benefits | 96,969 | 85,806 |
| Professional and special services | 37,912 | 26,702 |
| Accommodation | 9,117 | 8,084 |
| Travel and relocation | 5,359 | 4,110 |
| Amortization of tangible capital assets | 1,594 | 1,451 |
| Utilities, materials and supplies | 1,552 | 1,710 |
| Communications | 1,339 | 1,215 |
| Information | 816 | 867 |
| Repairs and maintenance | 483 | 152 |
| Rentals | 324 | 269 |
| Other | 256 | 356 |
| Claims and ex-gratia payments | 51 | 23 |
| Total operating expenses | 155,771 | 130,745 |
5. Revenues
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Services | ||
| Legal services | 11,489 | 10,809 |
| Other revenues | ||
| Fines and forfeitures | 617 | 911 |
| Rent from residential housing provided to employees | 382 | 316 |
| Other | 39 | (26) |
| 1,038 | 1,201 | |
| Total revenues | 12,527 | 12,010 |
6. Receivables
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Federal government departments and agencies | 5,238 | 5,137 |
| External parties | 165 | 391 |
| Total receivables | 5,526 | 5,528 |
7. Advances
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Standing advances held by employees for petty cash | 4 | 5 |
| Total advances | 4 | 5 |
8. Tangible capital assets
| In thousands of dollars | ||||
| Capital asset class | Opening balance | Acquisitions | Disposals and transfers | Closing balance |
|---|---|---|---|---|
| Office and other equipment | 17 | 0 | (17) | 0 |
| Telecommunications equipment | 12 | 0 | (12) | 0 |
| Informatics hardware | 1,319 | 598 | 12 | 1,929 |
| Informatics software | 222 | 115 | 337 | |
| Furniture and furnishings | 859 | 1,252 | 17 | 2,128 |
| Motor vehicles | 56 | 0 | 56 | |
| Leasehold improvements | 5,824 | 1,144 | 49 | 7,018 |
| Work in progress – leasehold improvements | 49 | 0 | (49) | 0 |
| Total tangible capital assets | 8,358 | 3,110 | 0 | 11,468 |
| In thousands of dollars | ||||
| Accumulated amortization | ||||
| Capital asset class | Opening balance | Current Year amortization | Disposals and transfers | Closing balance |
| Office and other equipment | 0 | 0 | 0 | 0 |
| Telecommunications equipment | 0 | 0 | 0 | 0 |
| Informatics hardware | 728 | 257 | 0 | 985 |
| Informatics software | 84 | 48 | 0 | 132 |
| Furniture and furnishings | 224 | 107 | 0 | 331 |
| Motor vehicles | 39 | 6 | 0 | 45 |
| Leasehold improvements | 2,910 | 1,176 | 0 | 4,086 |
| Work in progress - leasehold improvements | 0 | 0 | 0 | 0 |
| Total tangible capital assets | 3,984 | 1,594 | 0 | 5,578 |
| In thousands of dollars | ||||
| Capital asset class | 2009 Net book value | 2008 Net book value | ||
| Office and other equipment | 0 | 17 | ||
| Telecommunications equipment | 0 | 12 | ||
| Informatics hardware | 944 | 592 | ||
| Informatics software | 205 | 138 | ||
| Furniture and furnishings | 1,797 | 635 | ||
| Motor vehicles | 11 | 17 | ||
| Leasehold improvements | 2,932 | 2,915 | ||
| Work in progress - leasehold improvements | 0 | 49 | ||
| Total tangible capital assets | 5,890 | 4,375 | ||
9. Accounts payable and accrued liabilities
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Federal government departments and agencies | ||
| Accounts payable | 689 | 310 |
| External parties | ||
| Accounts payable | 17,716 | 11,916 |
| Accrued salaries | 2,187 | 1,900 |
| Other liabilities | 1,000 | 200 |
| 20,903 | 14,016 | |
| Total accounts payable and accrued liabilities | 21,592 | 14,326 |
10. Employee benefits
(a) Pension benefits
The Office’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/Quebec Pension Plans benefits and they are indexed to inflation.
Both the employees and the Office contribute to the cost of the Plan. The expense presented below represents approximately 2.0 times (2.1 in 2007-2008) the contributions by employees.
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Pension expense | 8,269 | 7,378 |
The Office’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 Office 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:
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Accrued benefit obligation, beginning of year | 12,553 | 11,389 |
| Expense for the year | 1,863 | 1,732 |
| Benefits paid during the year | (550) | (568) |
| Accrued benefit obligation, end of year | 13,866 | 12,553 |
11. Contingent liabilities
Claims and litigation
Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling approximately $10,355,000 were still pending at March 31, 2009 ($5,770,000 in 2007-2008) . Some of these potential liabilities may become actual liabilities when the event occurs or fails 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. An amount of $1,000,000 has been recorded for the fiscal year 2008-2009 ($200,000 in 2007-2008).
12. Related party transactions
The Office is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business and on normal trade terms.
Also, during the year, the Office received without charge from other government departments and agencies accommodation, the employer’s contribution to the health and dental insurance plans, and workers’ compensation coverage. These services without charge have been recognized in the Statement of Operations as follows:
| In thousands of dollars | 2009 | 2008 |
|---|---|---|
| Accommodation provided by Public Works and Government Services Canada | 7,652 | 6,915 |
| Employer’s contributions to the health and dental insurance plans paid by Treasury Board Secretariat | 5,348 | 4,697 |
| Total | 13,000 | 11,612 |
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 department’s Statement of Operations.
In addition, the Office of the Director of Public Prosecutions has provided legal services without charge to other government departments throughout the fiscal year for a total amount of $8,737,387 ($8,793,753 in 2007-2008).
13. Departmental reorganization - Net asset transfer
On December 12, 2006, the Office of the Director of Public Prosecution (ODPP) was created by the Director of Public Prosecutions Act which is Part 3 of the Federal Accountability Act. This Office took over the duties of the former Federal Prosecution Service within the Department of Justice.
The condensed assets and liabilities transferred from the Department of Justice Canada to the Office of the Director of Public Prosecutions effective April 1, 2007 where as follows:
| In thousands of dollars | 2008 |
|---|---|
| Statement of Financial Position | |
| Assets | 7,634 |
| Liabilities | (26,884) |
| Net liabilities for transfer | (19,250) |
14. Comparative information
Comparative figures have been reclassified to conform to the current year’s presentation.