ARCHIVED - Military Police Complaints Commission of Canada

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Section III – Supplementary Information

Departmental Links to Government of Canada Outcomes

Strategic Outcome: A military police organization that performs its policing duties in a highly professional manner, free from interference and with the confidence and support of those it serves.
Program Activity	Actual Spending 2007 – 08 ($000)			Alignment to Government of Canada Outcome Area
	Budgetary	Non-budgetary	Total
Complaints Resolution	2,909		2,909	maintaining safe and secure communities in Canada and abroad

Table 1: Comparison of Planned to Actual Spending (including FTEs)

(in thousands)	2005-06 Actual	2006-07 Actual	2007-2008
			Main Estimates	Planned Spending	Total Authorities	Actual
Complaints Resolution	2,703	2,837	3,434	3,434	3,489	2,909
Total	2,703	2,837	3,416	3,434	3,489	2,909
Less: Non-Respendable revenue
Plus: Cost of services received without charge *	154	127		111		111
Net cost of Department	2,857	2,964		3,545	3,489	3,020
Full Time Equivalents	15	16		18		16

*Employer's share of Public Service Insurance Plan; the Commission pays its accommodation costs, included in Complaints Resolution, ($225 thousand) directly to Public Works and Government Services Canada.

Table 2: Resources by Program Activity

2007-2008
Budgetary ($000)
Program Activity	Operating	Total: Net Budgetary Expenditures	Total
Complaints Resolution
Main Estimates	3,434	3,434	3,434
Planned Spending	3,434	3,434	3,434
Total Authorities	3,489	3,489	3,489
Actual Spending	2,909	2,909	2,909

Table 3: Voted and Statutory Items

Vote or Statutory Item	Truncated Vote or Statutory Wording	2007-2008 (in thousands)
		Main Estimates	Planned Spending	Total Authorities	Actual
20	Program Expenditures	3,139	3,139	3,306	2,726
(S)	Contributions to employee benefit plans	295	295	183	183
	Total	3,434	3,434	3,489	2,909

Table 4: Services Received Without Charge

(in thousands)	2007-2008
Contributions covering employers' share of employees' insurance premiums and 111 expenditures paid by TBS (excluding revolving funds)	111
Total 2007 – 2008 services received without charge	111

Table 5: Financial Statements

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements of the Military Police Complaints Commission (Complaints Commission) for the year ended March 31, 2008 and all information contained in these statements rests with the Complaints Commission's management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with 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 managements' 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 Complaints Commission's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Complaints Commission'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 Complaints Commission.

The financial statements of the Complaints Commission have not been audited.

Ottawa, Canada
Date: August 15, 2008

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

	2008		2007
Operating Expenses
Complaints Resolution
Salaries and employee benefits	1,416,881		1,475,597
Professional and special services	1,126,436		997,668
Accommodation	225,207		148,813
Amortization of tangible capital assets	97,844		41,173
Transportation and telecommunications	97,545		94,734
Utilities, materials and supplies	66,918		66,035
Information	22,058		32,929
Rentals	8,602		10,086
Other	2,385		6,212
Net Cost of Operations	3,063,876		2,873,247

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

Statement of Financial Position (Unaudited)
At March 31
(in dollars)

	2008		2007
Assets
Financial assets
Accounts receivable and advances (note 4)	123,393		107,154
Non-financial assets
Tangible capital assets (note 5)	136,502		162,770
Total	259,895		269,924
Liabilities
Accounts payable and accrued liabilities	328,119		205,520
Vacation pay and compensatory leave	55,499		78,107
Employee severance benefits (Note 6)	254,706		214,637
Total liabilities	638,324		498,264
Equity of Canada	(378,429)		(228,340)
Total	259,895		269,924

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

Statement of Equity of Canada (Unaudited)
At March 31
(in dollars)

	2008		2007
Equity of Canada, beginning of year	(228,340)		(454,503)
Net cost of operations	(3,063,876)		(2,873,247)
Current year appropriations used (note 3)	2,908,777		2,836,971
Change in net position in the Consolidated Revenue Fund (note 3)	(106,360)		134,999
Services provided without charge by other government departments (note 7)	111,370		127,440
Equity of Canada, end of year	(378,429)		(228,340)

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

Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in dollars)

	2008		2007
Operating Activities
Net cost of operations	3,063,876		2,873,247
Non-cash items:
Amortization of tangible capital assets	(97,844)		(41,173)
Services provided without charge (note 7)	(111,370)		(127,440)
Variations in Statement of Financial Position:
Increase (decrease) in receivables and advances and prepaids	16,239		(65,140)
Decrease (increase) in liabilities	(140,060)		243,670
Cash used by operating activities	2,730,841		2,883,164
Capital investment activities
Acquisitions of tangible capital assets	71,576		88,807
Cash used by capital investment activities	71,756		88,807
Financing Activities
Net cash provided by Government of Canada	(2,802,417)		(2,971,971)

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

Notes to the Financial Statements (Unaudited)

1. Authority and Objectives

The Military Police Complaints Commission (Complaints Commission) is a quasi-judicial agency, which reports to Parliament through the Minister of National Defence. It is a civilian body, external and independent of the Department of National Defence (DND) and the Canadian Forces (CF). The Commission was established in the fall of 1999 under Part IV of the National Defence Act (Sections 250.1 to 250.53). Its mandate is to monitor and review complaints about the conduct of the military police in performance of their policing duties or functions and to deal with complaints of interference in military police investigations.

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.

Significant accounting policies are as follows:

(a) Parliamentary appropriations

The Complaints Commission is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Complaints Commission do not parallel financial reporting according to Canadian 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 Complaints Commission operates within the Consolidated Revenue Fund (CRF) which is administered by the Receiver General for Canada. All cash received by the Complaints Commission is deposited to the CRF and all cash disbursements made by the Complaints Commission 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 is the difference between the net cash provided by Government and appropriations used in a year. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Expenses

Expenses are recorded on the accrual basis:

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

(e) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Complaints Commission's contributions to the Plan are charged to expenses in the year incurred and represent the total Complaints Commission obligation to the Plan. Current legislation does not require the Complaints Commission to make contributions for any actuarial deficiencies of the Plan.
   
2. 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.

(f) Accounts receivable and advances

Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(g) Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $3,000 or more are recorded at their acquisition cost. The Complaints Commission does not capitalize intangibles, works of art 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:

(h) Measurement uncertainty

The 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 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 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 Complaints Commission receives 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 Complaints Commission 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:

	2008		2007
	(in dollars)
Net cost of operations	3,063,876		2,873,247
Adjustments for items affecting net cost of operations but not affecting appropriations
Add (Less):
Services provided without charge by other government departments	(111,370)		(127,440)
Amortization of tangible capital assets	(97,844)		(41,173)
Other			(2,504)
Decrease (Increase) in employee severance benefits liability	(40,069)		58,190
Decrease (Increase) in vacation pay and compensatory leave liability	22,608		(12,156)
	2,837,201		2,748,164
Adjustments for items not affecting net cost but affecting appropriations
Add: Tangible capital assets acquisition	71,576		88,807
Current year appropriations used	2,908,777		2,836,971

(b) Appropriations provided and used

	Appropriations Provided
	2008		2007
	(in dollars)
Vote 20 - Operating expenditures	3,306,150		3,331,000
Statutory amounts	183,327		208,043
Less:
Lapsed appropriations: Operating	(580,700)		( 702,072)
Current year appropriations used	2,908,777		2,836,971

(c) Reconciliation of net cash provided by Government to current year appropriations used

	2008		2007
	(in dollars)
Net cash provided by Government	2,802,417		2,971,970
Change in net position in the Consolidated Revenue Fund
Decrease (Increase) in accounts receivable and advances	(16,239)		62,251
(Decrease) Increase in accounts payable and accrued liabilities	122,599		(197,636)
Other adjustments	-		386
	106,360		(134,999)
Current year appropriations used	2,908,777		2,836,971

4. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances

	2008		2007
	(in dollars)
Receivables from other Federal Government departments and agencies	122,893		106,654
Employee advances	500		500
Total	123,393		107,154

5. Tangible Capital Assets
(in dollars)

	Cost
Capital asset class	Opening balance	Acquisi- tions and transfers	Disposals transfers and write-offs	Closing Balance
Informatics hardware	248,594	29,708	-	278,302
Software	-	11,387	-	11,387
Equipment	165,824	14,215	-	180,039
Leasehold improvements	63,511	16,266	-	79,777
Total	477,929	71,576	-	549,505
	Accumulated amortization
Capital asset class	Opening balance	Amorti- zation and transfers	Disposals transfers and write-offs	Closing Balance
Informatics hardware	148,276	88,484	-	236,760
Software	-	-	-	-
Equipment	165,824	785	-	166,609
Leasehold improvements	1,059	8,575	-	9,634
Total	315,159	97,844	-	413,003
			2008	2007
Capital asset class			Net book Value	Net book Value
Informatics hardware			41,542	100,318
Software			11,387	-
Equipment			13,430	-
Leasehold improvements			70,143	62,542
Total			136,502	162,770

Amortization expense for the year ended March 31, 2008 is $97,844 (2007 was $41,173).

6. Employee benefits

a) Pension benefits

The Complaints Commission'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 Complaints Commission contribute to the cost of the Plan. The 2007-08 expense amounts to $133,465 ($153,325 in 2006-07) which represents approximately 2.1 times (2.2 in 2006-07) the contributions by employees.

The Complaints Commission'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 Complaints Commission 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:

	2008		2007
	(in dollars)
Accrued benefit obligation, beginning of the year	214,637		272,827
Expense for the year	40,069		(58,190)
Accrued benefit obligation, end of the year	254,706		214,637

7. Related party transactions

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

a) Services provided without charge:

During the year, the Complaints Commission received without charge from another department the employer's contribution to the health and dental insurance plans. This service without charge has been recognized in the Complaint Commission's Statement of Operations as follows:

	2008		2007
	(in dollars)
Employer's contribution to the health and dental insurance plans	111,370		127,440

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 Complaints Commission's Statement of Operations.

b) Payables outstanding at year-end with related parties:

	2008		2007
	(in dollars)
Accounts payable to other government departments and agencies	39,303		43,141

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