Publication

For the Year Ended March 31, 2016

Canadian Intergovernmental Conference Secretariat
Statement of Management Responsibility Including Internal Control over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2016, and all information contained in these statements rests with the management of the Canadian Intergovernmental conference Secretariat (CICS) These financial statements have been prepared by management using the Government’s accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the CICS’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the CICS’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the CICS’s and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The CICSis subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

The financial statements of the CICS have not been audited.


André M. McArdle, Secretary
Ottawa, Canada
September 23rd, 2016


Brian J. Berry FCPA, FCMA,
Assistant Secretary and Chief Financial Officer
Ottawa, Canada
September 23rd, 2016

Canadian Intergovernmental Conference Secretariat
Statement of Financial Position (Unaudited)
As at March 31
(in dollars)

2016 2015
Liabilities
Accounts payable and accrued liabilities (note 4) $ 658,405 $ 507,459
Vacation pay and compensatory leave 103,027 94,261
Employee future benefits (note 5) 141,604 139,127
Total liabilities 903,036 740,847
Financial assets
Due from Consolidated Revenue Fund 517,753 392,307
Accounts receivable and advances (note 6) 383,654 178,224
Total gross financial assets 901,407 570,532
Financial assets held on behalf of Government
Accounts receivable and advances (note 6) (242,500) (53,300)
Total financial assets held on behalf of Government (242,500) (53,300)
Total net financial assets 658,907 517,232
Departmental net debt 244,129 223,616
Non-financial assets
Tangible capital assets (note 7) 116,723 142,644
Total non-financial assets 116,723 142,644
Departmental net financial position $ (127,406) $ (80,971)

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

Canadian Intergovernmental Conference Secretariat
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in dollars)

2016
Planned results
2016 2015
Expenses
Conference Services $ 4,322,419 $ 3,708,288 $ 3,650,977
Internal Services 2,363,278 2,137,619 2,209,240
Total expenses 6,685,697 5,845,908 5,860,217
Revenues
Shared cost agreement– Transfers received from the provincial governments 1,100,000 992,500 1,012,600
Revenues earned on behalf of Government (1,100,000) (992,500) (1,012,600)
Total revenues
Net cost of operations before government funding and transfers 6,685,697 5,845,908 5,860,217
Government funding and transfers
Net cash provided by Government 5,118,247 5,261,690
Change in due from Consolidated Revenue Fund (125,445) (189,104)
Transfer of Accounts receivable to Public Works and Government Services (note 10) (63,438)
Services provided without charge by other government departments (note 8) 555,782 620,305
Net cost of operations after government funding and transfers 46,434 230,765
Departmental net financial position – Beginning of year (80,971) 149,793
Departmental net financial position – End of year $ (127,406) $ (80,972)

Segmented information (note 9)

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

Canadian Intergovernmental Conference Secretariat
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31
(in dollars)

2016 2015
Net cost of operations after government funding and transfers $ 46,434 $ 230,765
Change due to tangible capital assets
Acquisition of tangible capital assets 42,493 21,310
Amortization of tangible capital assets (68,414) (126,150)
Total change due to tangible capital assets (25,920) (104,840)
Net increase (decrease) in departmental net debt 20,514 125,925
Departmental net debt – Beginning of the year 223,616 97,691
Departmental net debt – End of year $ 244,130 $ 223,616

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

Canadian Intergovernmental Conference Secretariat
Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in dollars)

2016 2015
Operating activities
Net cost of operations before government funding and transfers $ 5,845,908 $ 5,860,217
Non-cash items:
Amortization of tangible capital assets (68,414) (126,150)
Services provided without charge by other government departments (Note 8) (555,782) (620,305)
Transition payments for implementing salary payments in arrears (note 10) 63,438
Variations in Statement of Financial Position:
Increase (decrease) in netted Financial assets 16,230 (135,165)
Decrease (increase) in accounts payable and accrued liabilities (150,946) 252,484
(Increase) decrease in vacation pay and compensatory leave (8,766) (10,274)
(Increase) decrease in future employee benefits (2,477) (43,865)
Cash used in operating activities 5,075,754 5,240,380
Capital investing activities
Acquisition of tangible capital assets 42,493 21,310
Cash used in capital investing activities 42,493 21,310
Net cash provided by Government of Canada $ 5,118,247 $ 5,261,690

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

Canadian Intergovernmental Conference Secretariat
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and objectives

The Canadian Intergovernmental Conference Secretariat (the CICS) was designated a department within the Government of Canada in November 1973, by an Order-in-Council. The CICS is an agency of the Federal and Provincial governments. The CICS is named in Section II of the Financial Administration Act and reports to Parliament through the President of the Queen’s Privy Council for Canada.

Conference Services:

Our mandate is to provide administrative support and planning services for intergovernmental conferences of first ministers, ministers and deputy ministers, throughout Canada.

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. These groups are:

  • Management and Oversight Services;
  • Communications Services;
  • Human Resources Management Services;
  • Financial Management Services;
  • Information Management Services;
  • Information Technology 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 those provided specifically to a program.

In order to effectively pursue its mandate, CICS aims to achieve its strategic outcome. It is that multilateral meetings of First Ministers, Ministers and Deputy Ministers are planned and conducted flawlessly.

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the Government’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

  1. Parliamentary authorities ―The CICS is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the CICS do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the basis of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts  reported in the Future-oriented Statement of Operations included in the 2015-16 Report on Plans and Priorities. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2015-16 Report on Plans and Priorities.

  2. Net cash provided by Government― The CICS operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by CICS is deposited to the CRF and all cash disbursements made by the CICS are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

  3. Amounts due from or to the CRF are the results 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 CICS’s entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

    Revenues that are non-respendable are not available to discharge the CICS’s liabilities. While the Secretary is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the CICS’s gross revenues.

  5. 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 the employer’s contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

  6. Employee future benefits
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan Superannuation Pension Plan, a multi-employer pension plan administered by the Government. The Department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Department’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. Future benefits: Employees entitled to future 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 future benefits for the Government as a whole.

  7. Tangible capital assets ― All tangible capital assets having an initial cost of $2,000 or more are recorded at their acquisition cost. The CICS does not capitalize intangibles, works of arts and historical treasures that have cultural, aesthetic or historical value.

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

    Asset Class Amortization Period
    Furniture, furnishings and office equipment 5 years
    Computer software 3 years
    Computer hardware 3 years
  8. 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 future 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 Authorities

The Department receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the 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

2016 2015
(in dollars)
Net cost of operations before government funding and transfers $ 5,845,908 $ 5,860,217
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (68,414) (126,150)
Services provided without charge by other government departments (555,782) (620,305)
Decrease (increase) in vacation pay and compensatory leave (8,766) (10,274)
Decrease (increase) in employee future benefits (2,477) (43,865)
Refund of prior years’ expenditures 17,588 25,115
Total items affecting net cost of operations but not affecting authorities (617,850) (775,479)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 42,493 21,310
Transistion payments for implementing salary payments in arrears 63,438
Total items not affecting net cost of operations but affecting authorities 42,493 84,748
Current year authorities used $ 5,270,551 $ 5,169,487

b. Authorities provided and used

2016 2015
(in dollars)
Authorities provided:
Vote 05 – Program expenditures $ 5,827,101 $ 5,842,294
Vote (S) – Contributions to employee benefit plans 314,567 318,016
Lapsed: Program Expenditures (871,117) (990,823)
Current year authorities used $ 5,270,551 $ 5,169,487

4. Accounts payable and accrued liabilities

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

2016 2015
(in dollars)
Accounts payable to external parties $ 325,624 $ 187,841
Accounts payable to other government departments and agencies 53,846 74,964
Salaries and wages 239,975 99,944
Total accounts payable 619,446 362,749
Accrued liabilities 38,960 144,711
Total accounts payable and accrued liabilities $ 658,405 $ 507,460

5. Employee future benefits

  1. Pension benefitsThe Department’s employees participate in the public service pension plan (the “Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

    Both the employees and the Department contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

    The 2015-16 expense amounts to $216,831 ($217,396 in 2014-15). For Group 1 members, the expense represents approximately 1.25 times (1.41 times in 2014-15) the employee contributions and, for Group 2 members, approximately 1.24 times (1.39 times in 2014-15) the employee contributions.

    The Department’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 benefitsThe CICS 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. Information about the severance benefits, measured as at March 31, is as follows:

    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 2012. 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.

2016 2015
(in dollars)
Accrued benefit obligation – Beginning of year $ 139,127 $ 95,262
Expense (adjustment) for the year 2,477 43,865
Accrued benefit obligation – End of year $ 141,604 $ 139,127

6. Accounts receivable and advances

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

2016 2015
(in dollars)
Receivables – External parties $ 243,001 $ 56,464
Receivables – Other government departments and agencies 140,053 114,565
Overpayments – to be recovered from external parties 6,595
Employee advances 600 600
Subtotal 383,654 178,224
Accounts receivable held on behalf of Government (242,500) (53,300)
Net accounts receivable $141,154 $124,924

7. Tangible capital assets

(in dollars)

Cost
Capital asset class Opening balance Acquisition Closing balance
Furniture, furnishings and office equipment $ 180,124 $ 180,124
Computer software 5,164 7,500 12,664
Computer hardware 628,174 34,993 663,167
Total $ 813,462 $ 42,493 $ 855,955
Accumulated Amortization
Capital asset class Opening balance Amortization Closing balance
Furniture, furnishings and office equipment $ 158,196 $ 12,924 $ 171,120
Computer software 3,730 1,578 5,307
Computer hardware 508,892 53,912 562,804
Total $ 670,817 $ 68,414 $739,231
Net book value
Capital asset class 2016 2015
Furniture, furnishings and office equipment $ 9,004 $ 21,928
Computer software 7,357 1,434
Computer hardware 100,363 119,282
Total $ 116,723 $ 142,644

8. Related Party Transactions

The CICS is related as a result of common ownership to all government departments, agencies, and Crown corporations. The CICS enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the CICS received common services which were obtained without charge from other government departments as disclosed below.

a. Common services provided without charge by other government departments

During the year, the CICS received 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 the CICS Statement of Operations and Departmental Net Financial Position as follows:

2016 2015
(in dollars)
Accommodation $ 347,146 $ 428,274
Employer’s contribution to the health and dental insurance plans 208,635 192,031
Total $ 555,782 $ 620,305

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 in the CICS Statement of Operations and Departmental Net Financial Position.

b. Other transactions with related parties

2016 2015
(in dollars)
Expenses – Other Government departments and agencies $ 1,274,423 $ 1,054,594

Expenses disclosed in (b) exclude common services provided without charges, which are already disclosed in (a).

9. Segmented information

Presentation by segment is based on the Department’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 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

Conference Services Internal Services Total
2016 2015
(in dollars)
Operating expenses
Salaries and employee benefits $ 1,911,739 $ 1,014,193 $ 2,925,932 $ 2,862,268
Professional and special services 764,047 432,749 1,196,795 1,309,006
Transportation and Communication 573,556 91,052 664,607 701,337
Rentals 342,238 65,968 408,206 363,909
Accommodation 429,254 429,254 428,274
Utilities, materials and supplies 54,095 33,242 87,338 42,691
Amortization of tangible capital assets 12,478 55,936 68,414 126,150
Information 41,207 2,120 43,327 18,726
Repairs and upkeep 8,929 13,105 22,033 7,856
Total operating expenses 3,708,288 2,137,619 5,845,908 5,860,217
Revenues
Shared cost agreement – Transfers received from the provincial governments 992,500 992,500 1,012,600
Revenues earned on behalf of Government (992,500) (992,500) (1,012,600)
Total revenues
Net cost of operations $ 3,708,288 $ 2,137,619 $ 5,845,908 $ 5,860,217

10. Restated information

Numbers from the previous fiscal years have been modified to correct an error. The impact of this error is limited to the note 5-a. It has no impact on CICS statements

2015 before
adjustment
Effect of
change
2015 Restated
(in dollars)
Pension benefits: Cost $ 287,847 $ (70,451) $ 217,396