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Section IV: Supplementary Information

This section depicts how the Department’s Program Activities align with Government of Canada outcome areas, reports on progress against specific government initiatives and policies (as required by Treasury Board Canada) and includes additional information on the Department’s structure and performance in 2007-08.

The figures in the following set of tables have been rounded to the nearest thousand. Due to rounding, figures may not add to the totals shown. The Corporate Services Program Activity is not reported separately; it has been pro-rated across the other Program Activities.

Main Estimates figures are as reported in the 2007-08 Main Estimates.

Planned Spending figures are as reported in the 2007-08 Report on Plans and Priorities (RPP). Resources that are earmarked in the fiscal framework and are anticipated to be incorporated into the Department’s reference levels through 2008-09 Supplementary Estimates are included.

Total Authorities represent 2007-08 Main Estimates plus Supplementary Estimates and Allotment transfers received during the 2007-08 fiscal year, as well as adjustments to statutory amounts, internal adjustments and transfers (combined total of $16,116.8K), as reported in the 2007-08 Public Accounts.

Actual figures represent the actual expenditures incurred during the 2007-08 fiscal year, as reported in the 2007-08 Public Accounts.

Departmental Links to the Government of Canada Outcomes

The Department’s Strategic Outcome of enhancing the safety, security and emergency preparedness of Canadians in an open society contributes to the achievement of the following Government of Canada Outcomes:

• Safe and secure communities;
• A safe and secure world through international cooperation; and
• A strong and mutually beneficial North American partnership.

Program Activity	Actual Budgetary Spending 2007-08 (thousands of dollars)
	Operating	Grants	Contributions	Total
Emergency Management and National Security	67,530	154	86,103	153,788
Policing and Law Enforcement	46,610	0	2,482	49,092
Community Safety and Partnerships	48,432	4,996	83,598	137,026
Total	162,573	5,150	172,183	339,906

Table 1: Comparison of Planned to Actual Spending

(thousands of dollars)			2007-08
Program Activity	2005-06 Actual	2006-07 Actual	Main Estimates	Planned Spending	Total Authorities	Total Actual
Emergency Management and National Security	184,872	108,918	206,736	232,183	230,473	153,788
Policing and Law Enforcement	44,601	33,615	32,195	36,946	55,118	49,092
Community Safety and Partnerships	140,249	157,920	189,119	189,146	158,575	137,026
Total	369,723	300,453	428,050	458,275	444,166	339,906
Less: Non-Respendable Revenue [1]	(8,190)	(11,480)	N/A	N/A	N/A	(5,013)
Plus: Cost of services received without charge [2]	12,900	13,514	N/A	13,800	N/A	13,422
Total Departmental Spending	374,434	302,487	428,050	472,075	444,166	348,315
Full-time Equivalents	810	825	N/A	995	N/A	827

^[1] Non-Respendable Revenue includes proceeds from court awards, gain on exchange, access to information requests, parking fee reimbursement and other miscellaneous revenues.

^[2] Cost of services received without charge includes accommodation provided by Public Works and Government Services Canada (PWGSC), the employer’s share of employees’ insurance premiums and expenditures paid by TBS, Workers’ Compensation coverage provided by Human Resources and Social Development Canada, and services provided by the Department of Justice.

* The variance between the Main Estimates ($428M) and the Planned Spending ($458M) is mainly due to the funds earmarked in the fiscal framework for the departmental Core Emergency Management Capacity ($23M) and for the National Integrated Interagency Information System ($4M). Furthermore, the $14M decrease between Planned Spending and the Authorities is mainly due to $6M of the earmarked items in the fiscal framework that was not accessed, Supplementary Estimates (A), resulting in the reduction in authorities of $26.5M and a net increase in funding of $12M from Supplementary Estimates (B) as well as $6.6M from TBS central votes.

** Actual spending ($340M) is lower than the authorities by $104M due to less spending than anticipated on the Disaster Financial Assistance Arrangements (DFAA) program ($64M), the grants and contributions of the National Crime Prevention Centre due to the refocusing of the strategy ($20M), the inability of the Communities At-Risk program to spend due to the short time-frame to implement the program ($2M), and a lapse in the Department's Operating Budget ($16M).

*** The increase in the actual spending ($39M between 2006-07 and 2007-08) is mainly due to increased claims under the Disaster Financial Assistance Arrangements contribution program offset by a decrease in operating expenditures.

Table 2: Voted and Statutory Items

2007-08 Voted and Statutory Items (thousands of dollars)
Vote or Statutory Item		Main Estimates	Planned Spending	Total Authorities	Total Actual
1	Operating expenditures	115,432	145,657	166,857	150,977
5	Grants and contributions	301,315	301,315	265,715	177,333
S	Minister of Public Safety Canada—Salary and motor car allowance	75	75	74	74
S	Contributions to employee benefit plans	11,228	11,228	11,521	11,521
	Total	428,050	458,275	444,166	339,906

Vote 1 – Operating expenditures
The $30M increase between the Vote 1 - Planned Spending and the Main Estimates is mainly due to the funds earmarked in the fiscal framework for the departmental Core Emergency Management Capacity ($23M) and for the National Integrated Interagency Information System ($4M). The $16M variance between the total authorities and total actual represents the lapse in the Operating Budget which exceeds the Department's maximum eligible Carry-Forward of $6.1M.

Vote 5 – Grants and Contributions
The variance ($88M) between the authorities and actual spending is mainly due to the estimated provincial claims under the Disaster Financial Assistance Arrangements (DFAA) not being realized ($63.6M) and the lapse in grants and contributions of the National Crime Prevention Centre (NCPC) due to the refocusing of the strategy ($20M).

Table 3: Non-Respendable Revenue

(thousands of dollars)	Actual 2005-06	Actual 2006-07	2007-08
			Main Estimates	Planned Revenue	Total Authorities	Actual
Emergency Management and National Security
Refund of previous years’ expenditures	765	443	N/A	0	N/A	68
Adjustments to prior year’s payables	1,962	2,480	N/A	0	N/A	2,006
Miscellaneous revenues	2	11	N/A	0	N/A	32
Policing and Law Enforcement
Refund of previous years’ expenditures	765	122	N/A	0	N/A	49
Adjustments to prior year’s payables	1,962	4,960	N/A	0	N/A	218
Miscellaneous revenues	3	11	N/A	0	N/A	11
Community Safety and Partnerships
Refund of previous years’ expenditures	765	1,313	N/A	0	N/A	341
Adjustments to prior year’s payables	1,962	2,126	N/A	0	N/A	2,255
Miscellaneous revenues	3	12	N/A	0	N/A	33
Total
Total refund of previous years’ expenditures	2,295	1,878	N/A	0	N/A	458
Total adjustment to prior year’s payables	5,886	9,566	N/A	0	N/A	4,479
Total miscellaneous revenues	8	35	N/A	0	N/A	76
Total Non-Respendable Revenues	8,190	11,480	N/A	0	N/A	5,013

Miscellaneous revenues include such items as fees collected for access to information requests, parking fee reimbursements, gain on currency rate exchange. Miscellaneous revenues are higher this year mainly due to gain on currency rate exchange.

Table 4: Sustainable Development Strategy

During fiscal year 2007-08, Public Safety Canada (PS) developed and tabled in Parliament its Sustainable Development Strategy (SDS) for 2007 09. Building on previous strategies, the SDS is fully aligned with the federal government's approach by focusing on the three mandatory federal priorities: building energy; vehicle emissions; and green procurement. In addition, PS has broadened its Strategy with a fourth priority: that of contributing to the sustainability of Canadian communities.

The SDS groups the Department's four priorities under two broad headings: greening operations - representing the sustainable direction for PS office management; and the role of Public Safety Canada in sustainable communities, increasing the sustainability of Canadian communities through the work of individual programs that support public safety and emergency management.

The Department is making steady progress in implementing the changes in culture and practices that reflect a fully integrated approach between sustainable development and departmental programs.

Briefly, in the first year of the Strategy, the Department has:

• Developed (with the assistance of PWGSC Government Consulting Services) and launched an implementation action plan;
• Established a SDS program by assigning dedicated staff to manage the SDS program and support the Leads responsible for the implementation of specific targets in the strategy, as well as provide the necessary liaison with Environment Canada and other federal SDS officials;
• Established a formal governance framework to oversee SDS activities, and monitor progress;
• Initiated the development of an evergreen communications action plan to support employee awareness and engagement in SDS activities, and launched a departmental Green Corner on Info-Central – the Department’s electronic reference centre for news and information.

The SDS 2007-09 and performance information for the entire reporting period may be viewed at http://www.publicsafety.gc.ca/abt/dpr/sds-eng.aspx#annexa.

1. SDS Departmental goals : PS will reduce the environmental impacts of its operations while supporting the safety and well being of Canadian communities. This will consist of: Reduced energy consumption and GHG emissions Reduced departmental vehicle usage and GHG emissions Most products and services procured are « green » Maximizing departmental contribution to sustainable communities
2. Federal SD Goal (s): Mandated Priorities Building Energy Green Procurement Vehicle Emissions
Proposed Federal SDS Goals
Clean Air Clean Water Climate change		Environmental Quality
Sustainable Communities Sustainable Use of Natural Resources Governance for Sustainable Development		Sustainable Development Management
3. Department's Expected Results for 2007-08	4. Supporting Performance Measure(s)	5. Achieved SDS Departmental Results for 2007-08
Establish baseline data - number of printers and personal printers in use at PSC NHQ that are set to a default duplex setting. Develop employee communications.	Reduction in use of paper for printing/copying. Reduction of office electricity use.	24 Duplex printers have been installed to replace single side printers, including personal printers. Energy meters have been installed at PS’s NHQ offices and are now able to provide monthly electricity use data to establish a measurement baseline.
Establish baseline data—number of personal lights in use at PSC NHQ, and whether they use compact fluorescent bulbs or LEDs. Work with GWL Realty Advisors to determine energy use on PS floors. Develop employee communications on energy reduction.	Reduction of office electricity use.	Baseline data and performance data will be established via the new energy meters installed at PS’s NHQ offices and through an audit of personal lights and office equipment in use in the NCR to be conducted in 2008-09. The Department’s Info Central Green Corner provides information regarding alternative lighting options.
Develop a GHG reduction strategy. Develop employee communications on energy reduction.	Completion of energy audits for PS offices located in the National Capital Region by 2007-08. Completion of GHG emissions reduction strategy for PS offices located in the National Capital Region by 2007-08.	The GHG reduction strategy for the PS offices in NCR is still under development.
Identify the number and type of office equipment in use at PS NHQ. Determine proportional energy use. Develop employee communications on reduction of energy use.	Reduction of office electricity use.	The majority of the Department’s office equipment has been set to default to sleep mode.
Establish data collection mechanism to determine number of “green” car rentals. Provide periodic reporting on “green” car rentals. Develop employee communications to encourage “green” rental practices where possible.	Increase in number of green or fuel-efficient vehicles leased or rented by PS staff.	An employee survey regarding green rental availability and rental practices has been developed to initiate data collection and determine where “green” rental vehicles are feasible in departmental business activities. Research has also been carried out to determine budget impacts of green rentals.
Establish data collection mechanism to determine number of Ecopass users Develop employee communications to promote ECOPASS program use.	Increase in number of new users of public transit services.	Baseline data collection initiated and data collected since September 2007 suggests an increase in the number of users of public transit services.
Establish baseline data regarding the number of employees who are in carpooling arrangements. Develop employee communications to encourage use of Carpooling as a transportation option.	Increase in number of new users of carpooling.	An employee survey has been developed to collect voluntary data on the number of employees who are in carpooling arrangements. The survey will be conducted in 2008-09.
Identify departmental staff to receive Eco-driving training on a priority basis. Develop mechanism for identifying fuel consumption data and monitoring impact of Eco-driving training. Develop employee communications to promote employee training in Eco-driving.	Reduction of fuel purchased on PS business, per kilometre driven.	The Department has developed its own Eco-Driving training program and is proceeding to provide training on-line. The training is mandatory for departmental drivers/chauffeurs and those who drive on departmental business and voluntary for other employees.
Identify number and type of office equipment in use at PS NHQ. Determine energy usage. Develop employee communications.	Reduced energy use in offices.	97 % of office equipment currently in use at PS is Energy Star rated.
Determine designated staff to receive green procurement training. Develop employee communications to raise awareness on green procurement and inform employees of the new green procurement training requirements.	Increase in percentage of "green products" procured.	Staff to be trained were identified and notified by email of expectations and requirement to have completed on-line training. Training is ongoing.
Identify volume of toner cartridges that are sent to recycling. Develop employee communications to inform employees of available programs and encourage recycling.	All toner cartridges used are remanufactured or recycled. Reduction in the number of toner cartridges sent to landfill (waste).	95 % of toner cartridges procured are recycled product. Used toner cartridges are also diverted to recycling.
Identify volume/destination of electronic office equipment being disposed of from PS NHQ to determine volume that could be further diverted for recycling.	Increase in volume of computer and office equipment diverted to E-waste depots or returned to manufacturers.	Used computers (95%) and printers (60%) are re-used in schools through Computers for Schools programs. The remainder are returned to crown assets.
Identify potential to expand types of materials to be recycled. Determine, in consultation with PWGSC, mechanism for collection of performance data. Develop employee communications to raise awareness and engagement regarding new recycling options.	Increase in volume of recycled materials diverted to recycling programs.	The Department is in the process of negotiating arrangements for the collection and recycling of batteries. A waste audit conducted in 2007 for 269 Laurier shows that a little less than 30 % of building waste is being diverted to recycling programs. The audit results are under review by the Department’s SDS Implementation Management Group. Recommendations are expected to follow, along with enhanced employee communications. Also, the Department’s use of compact fluorescent bulbs requires that a new program be developed for appropriate disposal of the bulbs and diversion of this waste from landfills.
Legislation adopted by parliament.	Legislation in force.	Target achieved. The new Emergency Management Act came into force on August 3, 2007. With this new Act, Canada has a more comprehensive and harmonized approach to emergency management, and is in a better position to respond to emergencies, confront new threats and protect our communities.
Develop the National Strategy and Action Plan for Critical Infrastructure.	National Strategy and Action Plan for Critical Infrastructure implemented.	The development of the National Strategy and Action plan for Critical Infrastructure is underway.
Provide assistance in gathering data on the level of youth engaged. Undertake staff communications to reduce youth gang criminal activity.	Number of youth engaged in gang prevention activities.	6 projects have been launched which have contributed to the engagement of 424 youths in gang prevention activities.
Provide assistance in gathering data on the level of programs aimed at reducing substance-related crime Support the program activities with communications activities.	Number of projects aimed at reducing substance -related crime.	6 projects aimed at reducing substance-related crime were identified for funding.
Provide assistance in gathering data on the level of programs for at risk families/children. Support the program activities with communications activities.	Number of projects funded to lower risk factors for at-risk families and children.	19 projects aimed at reducing risk factors for at-risk families and children have been funded. Performance is being monitored.
Develop and implement a communications plan for employee awareness and engagement in support of the SDS.	Employee awareness and engagement in achieving SDS targets.	A comprehensive communications plan is still under development which will be in place in 2008-09. Ad hoc communications activities include the launch of a Green Corner on the Department’s Info Central electronic information site. The Green Corner allows departmental employees to access the Department’s SDS and pull information that constitutes environment-friendly tips. Also, a coffee mug program was launched, providing each employee with a travel beverage mug bearing the Department’s name and encouraging employees to avoid unnecessary waste caused by disposable coffee cups.

Additional Tables Available Electronically

2007-08 Financial Statements

Statement of Management Responsibility (unaudited)

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended
March 31, 2008 and all information contained in these statements rests with Public Safety and Emergency Preparedness Canada's management (PSEPC). 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 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 to the Public Accounts of Canada and included in PSEPC's Departmental Performance Report is consistent with these financial statements.

PSEPC 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 department.

The financial statements of PSEPC have not been audited.

Deputy Minister	Elisabeth Nadeau
Suzanne Hurtubise	Assistant Deputy Minister,
Ottawa, Canada	Corporate Management Branch
	Senior Financial Officer

Statement of Financial Position (unaudited)

As at March 31 (in dollars)	2008	2007
Assets
Financial assets
Accounts receivable and advances  (Note 5)	1,445,382	3,302,783
Non-financial assets
Tangible capital assets  (Note 6)	15,396,818	15,443,604
Total Assets	16,842,200	18,746,387
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities	93,972,985	77,247,783
Joint research and development project	1,370,099	2,048,335
Vacation pay and compensatory leave	4,210,964	4,195,718
Employee severance benefits  (Note 7)	12,174,990	11,445,931
Disaster financial assistance arrangements program (Note 9)	510,512,677	575,525,839
Total Liabilities	622,241,715	670,463,606
Equity of Canada	(605,399,515)	(651,717,219)
Total Liabilities and Equity	16,842,200	18,746,387
There are no contingent liabilities or contractual obligations
The accompanying notes form an integral part of these financial statements

Statement of Equity (Unaudited)

For the Year ended March 31 (in dollars)	2008	2007
Equity of Canada, beginning of year	(651,717,219)	(637,372,208)
Net cost of operations	(284,984,166)	(306,874,502)
Current year appropriations used  (Note 3)	339,905,885	300,452,729
Revenue not available for spending (Note 3)	(76,170)	(35,332)
Refunds of prior year expenditures (Note 3)	(458,158)	(1,873,096)
Change in net position in the Consolidated Revenue Fund  (Note 3)	(22,286,274)	(19,527,834)
Services received without charge from other government departments  (Note 8)	14,216,587	13,513,023
Equity of Canada, end of year	(605,399,515)	(651,717,219)
The accompanying notes form an integral part of these financial statements

Statement of Operations (unaudited)

For the Year ended March 31 (in dollars)	2008				2007
	Community Safety and Partnerships	Emergency Management and National Security	Policing and Law Enforcement	Total
					Total
Expenses
Transfer payments  (Note 4)	86,271,339	20,331,970	2,365,981	108,969,290	143,244,475
Operating expenses
Salaries and employee benefits	31,409,256	39,940,650	14,878,897	86,228,803	77,988,635
Professional and special services	8,190,917	14,454,289	19,607,146	42,252,352	41,236,519
Accommodation	5,608,703	5,503,999	1,951,343	12,064,045	10,225,561
Equipment rentals	705,167	871,584	9,076,389	10,653,140	11,388,175
Travel and relocation	1,896,859	3,442,304	757,044	6,096,207	5,565,122
Equipment	1,967,716	2,725,932	701,434	5,395,082	5,375,042
Information	2,302,927	2,101,924	845,256	5,250,107	4,779,120
Communication	1,142,791	1,586,247	384,928	3,112,966	3,224,814
Utilities, material and supplies	490,810	878,172	160,653	1,529,635	1,546,532
Amortization	379,239	938,886	125,180	1,453,305	771,535
Repairs	328,123	568,561	140,772	1,037,466	1,564,294
Bad debt expense	16,938	-	-	16,938	-
Total Operating expenses	54,439,456	73,012,548	48,639,042	176,091,046	163,665,359
Total Expenses	140,710,795	93,344,518	51,005,023	285,060,336	306,909,834
Revenues
Revenues	32,753	31,992	11,425	76,170	35,332
Net Cost of Operations
Net Cost of Operations	140,678,042	93,312,526	50,993,598	284,984,166	306,874,502
The accompanying notes form an intergral 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	284,984,166			306,874,502
Non-cash items:
Amortization of tangible capital assets (Note 6)	(1,453,305)			(771,535)
Services received without charge from other government departments (Note 8)	(14,216,587)			(13,513,023)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	(1,857,401)			(438,719)
Decrease (increase) in liabilities	48,221,891			(27,673,086)
Cash used by operating activities	315,678,764			264,478,139
Capital investment activities
Acquisitions of tangible capital assets  (Note 6)	1,406,519			14,538,328
Cash used by capital investment activities	1,406,519			14,538,328
Financing activities
Net cash provided by Government of Canada	(317,085,283)			(279,016,467)
The accompanying notes form an integral part of these financial statements

Notes to the Financial Statements (unaudited)

1. Authority and objectives

The Department of Public Safety and Emergency Preparedness Canada (PSEPC) was created in 2003 to ensure coordination across all federal departments and agencies responsible for national security and the safety of Canadians. The department operates under the Department of Public Safety and Emergency Preparedness Act (2005, c.10) that received Royal assent on March 23, 2005.

PSEPC contributes to the public safety of Canadians through the promotion and maintenance of a just, peaceful and safe society; it has three main core activities:

• Community Safety and Partnerships: providing national public safety leadership, protecting the security of Canadians, enhancing the role of Canadians in community safety and security;
• Emergency Management and National Security: delivering a broad range of national emergency preparedness, and critical infrastructure protection; and
• Policing and Law Enforcement: providing leadership and strategic policy advice with respect to policing policy and public safety interoperability.

2. 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
PSEPC is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department 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
PSEPC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the department 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 is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues
Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues. Revenues include access to information program (ATIP) fees, employees' parking fees etc.

(e) Expenses
Expenses are recorded on the accrual basis:

• Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements;
• Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement;
• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment; and
• 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.

(f) Employee future benefits
Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The department'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 the department 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) Receivables
Accounts receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $10,000 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 asset as follows:

Asset Class	Amortization Period
Informatics hardware	4 years
Informatics software	3-5 years
Motor Vehicles	3 years
Leasehold improvements	remaining term of the lease or useful life of the improvement

(i) 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, 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 and Disaster Financial Assistance Arrangements program 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

PSEPC 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, PSEPC 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 dollars)	2008	2007
Net cost of operations	284,984,166	306,874,502
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Employee severance benefits (Note 7)	(729,059)	(1,115,942)
Services received without charge from other government departments (Note 8)	(14,216,587)	(13,513,023)
Accruals for disaster financial assistance (Note 9)	65,013,162	(16,135,805)
Refund of prior year expenditures	458,158	1,873,096
Adjustments to previous years' payables at year-end	4,478,751	9,560,422
Vacation pay and compensatory leave	(15,246)	(308,580)
Reduction for amounts paid to Justice Canada not affecting appropriation	-	(565,045)
Amortization of tangible capital assets	(1,453,305)	(771,535)
Bad debt expenses	(16,938)	-
Revenue not available for spending	76,170	35,332
Adjustments to previous years' receivables at year-end	(79,906)	-
	53,515,200	(20,941,080)
Adjustments for items not affecting net cost of operations but affecting appropriation:
Add (Less):
Acquisitions of tangible capital assets	1,406,519	14,519,307
	1,406,519	14,519,307
Current year appropriations used	339,905,855	300,452,729

(b) Appropriations provided and used:

(in dollars)	2008	2007
Operating expenditures - Vote 1	166,856,501	165,546,330
Grants & Contributions - Vote 5	265,714,745	291,680,000
	432,571,246	457,226,330
Less:
Lapsed appropriations	(104,260,548)	(167,077,826)
	328,310,698	290,148,504
Minister's salary and motor car allowance	74,322	75,709
Contributions to employee benefits plan	11,520,865	10,228,516
Current year appropriations used	339,905,885	300,452,729

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

(in dollars)	2008	2007
Net cash provided by Government	317,085,283	279,016,467
Revenue not available for spending	76,170	35,332
Refunds of prior year expenditures	458,158	1,873,096
	317,619,611	280,924,895
Change in net position in the Consolidated Revenue Fund
Adjustments to previous years' payables at year-end	4,478,751	9,560,422
Bad debt expense	(16,938)	-
Increase (decrease) in joint research and development project	(678,236)	(1,194,596)
Reduction for amounts paid to Justice Canada not affecting appropriation	-	(565,045)
(Increase) decrease in accounts receivable	1,857,401	438,719
Increase (decrease) in accounts payable	16,725,202	11,307,355
Adjustments to previous years' receivables at year-end	(79,906)	-
Motor vehicle transferred from Industry Canada without charge	-	(19,021)
	22,286,274	19,527,834
Current year appropriations used	339,905,885	300,452,729

4. Transfer payments

The following table presents details of transfer payments:

(in dollars)	2008	2007
Grants
Community Safety and Partnership	4,996,376	5,988,450
Emergency Management and National Security	154,000	590,466
Contributions
Community Safety and Partnership	81,274,963	79,123,667
Emergency Management and National Security	20,177,970	55,707,056
Policing and Law Enforcement	2,365,981	1,834,836
Total	108,969,290	143,244,475

5. Accounts receivable and advances

The following table presents details of accounts receivable and advances:

(in dollars)	2008	2007
Receivables from other federal government departments and agencies	1,425,813	3,278,031
Employee advances	19,569	24,752
Total	1,445,382	3,302,783

6. Tangible capital assets

(in dollars) Cost	Opening balance	Acquisitions	Disposals and write-offs			Closing balance
Informatics hardware	3,406,602	367,483	-			3,774,085
Informatics software	147,970	-	-			147,970
Motor vehicles	121,948	30,722	-			152,670
Leasehold improvements	15,560,196	1,008,314	-			16,568,510
Total cost	19,236,716	1,406,519	-			20,643,235
Accumulated amortization	Opening balance	Amortization	Disposals and write-offs	Closing balance	2008 Net book Value	2007 Net book Value
Informatics hardware	2,013,012	391,154	-	2,404,166	1,369,919	1,393,590
Informatics software	111,835	15,433	-	127,268	20,702	36,135
Motor vehicles	95,975	14,548	-	110,523	42,147	25,973
Leasehold improvements	1,572,290	1,032,170	-	2,604,460	13,964,050	13,987,906
Total accumulated amortization	3,793,112	1,453,305	-	5,246,417	15,396,818	15,443,604

Amortization expense for the year ended March 31, 2008 is $1,453,305 (2007 - $771,535)

7. Employee benefits

PSEPC'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/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The 2007-08 expense amounts to $8,667,248 ($7,538,416 in 2006-07), which represents approximately 2.1 times the contributions by employees.

The departmental 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
PSEPC 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 dollars)	2008	2007
Accrued benefit obligation, beginning of year	11,445,931	10,329,989
Expense for the year	1,628,387	1,943,591
Benefits paid during the year	(899,328)	(827,649)
Accrued benefit obligation, end of year	12,174,990	11,445,931

8. Related party transactions

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

(a) Services received without charge from other government departments
During the year the department received services without charge from other departments. These services have been recognized in the department's Statement of Operations as follows:

(in dollars)	2008	2007
Accommodation	8,376,971	7,680,133
Employer's contribution to the health and dental insurance plans	4,892,434	4,907,479
Legal services provided by Justice Canada without charges	939,338	917,861
Worker's compensation coverage	7,844	7,550
	14,216,587	13,513,023

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 costs 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.

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

(in dollars)	2008	2007
Accounts payable to other government departments and agencies	11,117,617	11,223,722

9. Disaster financial assistance arrangements program (DFAA)

In the event of a natural disaster in Canada, the federal government provides financial assistance to provincial and territorial governments through the Disaster Financial Assistance Arrangements Program to help meet the basic costs of response and recovery when such expenditures exceed what an individual province or territory could reasonably be expected to bear on its own. The current outstanding liabilities of $510,512,677 is the estimated cost to PSEPC of 41 natural disaster events for which the Federal Government has agreed to share the costs and final payments have not yet been made.

(in dollars)	2008	2007
Opening balance	575,525,839	559,390,034
Disbursements	(76,385,468)	(31,679,253)
Accrued expenses for the year	11,372,306	47,815,058
Closing balance	510,512,677	575,525,839

10. Comparative information

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

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