Archived – Financial statements, March 31, 2014

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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, 2014, and all information contained in these statements, rests with the management of Statistics Canada (the Agency). 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 Agency's financial transactions. Financial information, submitted in the preparation of the Public Accounts of Canada and included in the Agency'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; organizational arrangements that provide appropriate divisions of responsibility; communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Agency; and 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 ongoing process to identify key risks, assess effectiveness of associated key controls, and make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2014 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex to the Statement of Management Responsibility including Internal Control over Financial Reporting, which can be found at the end of the notes to these financial statements (Note 16).

The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal finance staff, who conduct periodic assessments of different areas of the Agency's operations, and by the Departmental Audit Committee (DAC), which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting. The DAC provides the Chief Statistician with objective advice and recommendations regarding the sufficiency, quality, and results of assurance on the adequacy and functioning of Statistics Canada's risk management, control and governance processes (including accountability and auditing systems). It does this by using a risk-based approach, reviewing all core areas of the Agency's management, control, and accountability processes, including reporting.

The financial statements of Statistics Canada have not been audited.

The original version was signed by
Wayne R. Smith, Chief Statistician
Stéphane Dufour, Chief Financial Officer
Date signed August 14, 2014

Statement of Financial Position (Unaudited)
As at March 31

(in thousands of dollars)
  2014 2013
Liabilities    
Accounts payable and accrued liabilities (Note 4) 36,273 39,331
Vacation pay and compensatory leave 20,779 20,869
Deferred revenue (Note 5) 1,167 914
Lease obligation for tangible capital assets (Note 6) 484 161
Employee future benefits (Note 7b) 24,292 46,158
Total net liabilities 82,995 107,433
Financial assets    
Due from Consolidated Revenue Fund 34,457 31,660
Accounts receivable and advances (Note 8) 5,085 8,433
Total net financial assets 39,542 40,093
Departmental net debt 43,453 67,340
Non-financial assets    
Prepaid expenses 8,241 6,416
Consumable supplies 1,556 483
Tangible capital assets (Note 9) 126,862 119,813
Total non-financial assets 136,659 126,712
Departmental net financial position 93,206 59,372
Contractual obligations (Note 10)
Contingent liabilities (Note 11)

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

The original version was signed by
Wayne R. Smith, Chief Statistician
Stéphane Dufour, Chief Financial Officer
Date signed August 14, 2014

Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31

(in thousands of dollars)
  Planned results
2014
2014 2013
Expenses      
Economic and environmental statistics 135,737 143,004 147,992
Socio-economic statistics 107,062 107,732 122,341
Censuses 21,202 61,781 52,235
Statistical infrastructure 168,444 151,453 149,776
Cost-recovered statistical services 92,211 79,980 90,547
Internal services 57,322 56,737 67,870
Total expenses 581,978 600,687 630,761
Revenues      
Special statistical services 92,211 90,909 94,003
Publications  -  - 81
Other 128 93 105
Revenues earned on behalf of Government of Canada (128) (93) (2,364)
Total revenues 92,211 90,909 91,825
Net cost from continuing operations 489,767 509,778 538,936
Transferred operations (Note 13)      
Expenses  -  - 377
Net cost of transferred operations  -  - 377
Net cost of operations before government funding and transfers 489,767 509,778 539,313
Government funding and transfers      
Net cash provided by Government of Canada 433,884 466,884 524,357
Change in due from Consolidated Revenue Fund 4,330 2,797 (1,610)
Services provided without charge by other federal government departments (Note 12a) 65,336 74,395 81,431
Transfer of capital assets to other government department  -  - (189)
Transfer of assets to other government department (Note 13)  - (464)  -
Net cost of operations after government funding and transfers (13,783) (33,834) (64,676)
Departmental net financial position—beginning of year 62,649 59,372 (5,304)
Departmental net financial position—end of year 76,432 93,206 59,372
Segmented information (Note 14)

The accompanying notes form an integral part of these financial statements.
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31

(in thousands of dollars)
  Planned results
2014
2014 2013
Net cost of operations after government funding and transfers (13,783) (33,834) (64,676)
Change due to tangible capital assets      
Acquisition of tangible capital assets (Note 9) 28,527 33,247 24,960
Amortization of tangible capital assets (Note 9) (35,278) (25,130) (34,383)
Net loss on disposal of tangible capital assets  - (1,068) (5,117)
Adjustment to tangible capital assets  -  - 246
Capital assets transfer to other government department  -  - (189)
Total change due to tangible capital assets (6,751) 7,049 (14,483)
Change due to consumable supplies 8 1,073 (3,032)
Change due to prepaid expenses  - 1,825 2,761
Decrease in departmental net debt (20,526) (23,887) (79,430)
Departmental net debt—beginning of year 65,332 67,340 146,770
Departmental net debt—end of year 44,806 43,453 67,340
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)
  2014 2013
Operating activities    
Net cost of operations before government funding and transfers 509,778 539,313
Non-cash items:    
Amortization of tangible capital assets (Note 9) (25,130) (34,383)
Loss on disposal of tangible capital assets (1,068) (5,117)
Services provided without charge by other federal government departments (Note 12a) (74,395) (81,431)
Adjustment to tangible capital assets  - 246
Variations in Statement of Financial Position:    
Decrease in accounts payable and accrued liabilities 3,058 39,445
Decrease in vacation pay and compensatory leave 90 2,493
(Increase) decrease in deferred revenue (253) 2,286
Decrease in employee future benefits 21,866 36,777
Decrease in accounts receivable and advances (3,348) (99)
Increase in prepaid expenses 1,825 2,761
Increase (decrease) in consumable supplies 1,073 (3,032)
Transfer of assets to other government departments (Note 13) 464  -
Cash used in operating activities 433,960 499,259
Capital investing activities    
Acquisitions of tangible capital assets, excluding capital leases (Note 9) 32,776 24,960
Cash used in capital investing activities 32,776 24,960
Financing activities    
Payments of lease obligation for tangible capital assets 148 138
Cash used in financing activities 148 138
Net cash provided by Government of Canada 466,884 524,357
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)
For the year ended March 31

1. Authority and objectives

Statistics Canada was established in 1918, pursuant to the Statistics Act. The Agency received full departmental status by order-in-council in 1965.

The Agency is a division of the public service named in Schedule I.1 of the Financial Administration Act.The minister responsible for Statistics Canada is the Minister of Industry, who represents the Agency in Parliament and in Cabinet.

The Agency's mandate derives primarily from the Statistics Act. The act requires the Agency to—under the direction of the minister—collect, compile, analyze, and publish statistical information on the economic, social, and general conditions of the country and its citizens. Statistics Canada has a  mandate to  coordinate and manage the country's statistical system.

The Agency's mandate has two primary objectives:

  • provide statistical information and analysis of the economic and social structure and functioning of Canadian society as a basis for the development, operation and evaluation of public policies and programs. This information is used for public and private decision-making, and for the general benefit of all Canadians
  • promote the quality, coherence, and international comparability of Canada's statistics through collaboration with other federal departments and agencies, with the provinces and territories, and in accordance with sound scientific standards and practices.

Effective April 1, 2013, the Agency adopted a new Program Alignment Architecture, which was approved through a Treasury Board submission. The Agency previously reported on four programs: Economic Statistics; Social Statistics; Census, Demography and Aboriginal Statistics; and Internal Services. The agency now reports on the six programs described below.

Economic and Environmental Statistics — The program's purpose is to create a trusted, relevant and comprehensive source of information on the entire spectrum of Canada's economy. The program informs public debate on economic issues, guides business decision making, and supports economic policy development, implementation and evaluation.

Socio-economic Statistics —The program's purpose is to provide integrated information and relevant analysis on the social and socio-economic characteristics of individuals, families, and households and on the major factors that affect their well being.

Censuses — The program's purpose is to provide statistical information, analyses and services that measure changes in the Canadian population, the demographic characteristics, and the agricultural sector.

Statistical Infrastructure — The program's purpose is to provide activities and services to support a strong statistical system.

Cost-Recovered Statistical Services — The program's purpose is to produce high-quality, cost-recovered statistical services that meet the needs of specific federal and provincial institutions, as well as other clients.

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.

Comparative figures have been reclassified to reflect the new Program Alignment Architecture that was adopted April 1, 2013.

2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2013–14 fiscal year. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary authorities — The Agency is financed by the Government of Canada, through Parliamentary authorities. In addition to its yearly Parliamentary appropriations, the Agency has the authority to expend revenue received during the fiscal year. Financial reporting of authorities provided to the Agency 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 bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-14 Report on Plans and Priorities.
  2. Net cash provided by Government of Canada — The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the CRF, and all cash disbursements made by the Agency are paid from the CRF. The net cash provided by the Government of Canada is the difference between all cash receipts and all cash disbursements, including transactions between federal government departments.
  3. Amounts due from or to the CRF are the result 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 the Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.
  4. Revenues
    • Revenues received for special statistical services are recorded as deferred revenue upon receipt. These amounts are recognized as revenue in the period in which the services are rendered and related expenses are incurred.
    • Publication and other 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 Agency's liabilities. While the Deputy Head 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 entity's gross revenues.
  5. Expenses — Expenses are recorded on an 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 federal government departments for accommodation (office space), employer contributions to the health and dental insurance plans, legal services, and workers' compensation 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, a multi-employer pension plan administered by the Government of Canada. The Agency's contributions to the plan are charged to expenses in the year incurred, and represent the total departmental obligation to the plan. The Agency'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 benefits: Employees entitled to severance 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 severance benefits for the Government of Canada as a whole.
  7. Accounts receivable — Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.
  8. Contingent liabilities — Contingent liabilities are potential liabilities that 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.
  9. Consumable supplies — Consumable supplies include items held for future program delivery and not that are intended for resale. These supplies are recorded at the acquisition cost. If there is no longer a service potential, the supplies are valued at the lower of cost or net realizable value.
  10. Foreign currency transactions — Transactions involving foreign currencies are translated into Canadian-dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect on March 31, 2014. Gains and losses resulting from foreign currency transactions are included in the Statement of Operations and Departmental Net Financial Position.
  11. 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.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
    Amortization of tangible capital assets
    Asset class Amortization period
    Computer hardware 5 years
    Computer software 5 years
    Other equipment 5 years
    Motor vehicles 7 years
    Leasehold improvements 25 years
    Software under development Once in service
    Leased tangible capital assets Term of lease
    Software assets under development are recorded in the applicable capital asset class in the year that they become available for use. They are not amortized until that time.
  12. 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 contingent liabilities, 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 Agency 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 Agency 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
(in thousands of dollars)
  2014 2013
Net cost of operations before government funding and transfers 509,778 539,313
Adjustments for items affecting net cost of operations but not affecting authorities    
Add (Less):    
Amortization of tangible capital assets (Note 9) (25,130) (34,383)
Loss on disposal of tangible capital assets (1,068) (5,117)
Services provided without charge by other federal government departments (Note 12a) (74,395) (81,431)
Adjustments to accrued liabilities not charged to authorities 988 (946)
Decrease in vacation pay and compensatory leave 90 2,493
Decrease in employee future benefits 21,866 36,777
Adjustments to capital assets  - 246
Refunds of previous years' expenditures 240 636
Increase in respendable accounts receivable  - 645
Consumption of prepaid expenses (8,529) (7,366)
Loss on write-down of inventory  - (130)
Bad debt expense  - (13)
Inventory usage  - (2,902)
Total items affecting net cost of operations but not affecting authorities (85,938) (91,491)
Adjustments for items not affecting net cost of operations but affecting authorities    
Accrued liabilities charged to authorities 4,227 36,844
Payment of lease obligations for tangible capital assets 148 138
Decrease in respendable accounts receivable (1,370)  -
Acquisitions of prepaid expenses 10,818 10,127
Acquisition of consumable supplies 1,073  -
Acquisitions of tangible capital assets, excluding capital leases 32,776 24,960
Total items not affecting net cost of operations but affecting authorities 47,672 72,069
Current year authorities used 471,512 519,891
(b) Authorities provided and used
(in thousands of dollars)
  2014 2013
Authorities provided:    
Vote 105 - Operating expenditures 429,490 472,275
Statutory amounts 67,809 79,837
Total authorities provided 497,299 552,112
Less:    
Lapsed: Operating (25,787) (32,221)
Current year authorities used 471,512 519,891

4. Accounts payable and accrued liabilities

The following table presents details of the Agency's accounts payable and accrued liabilities:

Accounts payables and accrued liabilities (in thousands of dollars)
  2014 2013
Accounts payable - external parties 17,050 12,906
Accounts payable - other federal government departments and agencies 6,950 11,857
Accrued salaries and wages 11,961 9,041
Accrued liabilities 312 5,527
Total accounts payable and accrued liabilities 36,273 39,331

In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years, starting in 2012–13. As a result, the Department has recorded at March 31, 2014, an obligation for termination benefits for an amount of $0.3 million ($5.5 million in 2012–13).

5. Deferred revenue

The Agency has the authority to expend revenue received during the fiscal year. Deferred revenue represents the balance at year-end of unearned revenue stemming from amounts received from external parties, which are restricted for specific statistical services. Revenue is recognized in the period in which these expenditures are incurred or in which the service is rendered. Details of the transactions related to this account are as follows:

Deferred revenue (in thousands of dollars)
  2014 2013
Opening balance 914 3,200
Amount received 91,162 91,179
Revenues recognized (90,909) (93,465)
Net closing balance 1,167 914

6. Lease obligation for tangible capital assets

The Agency has entered into agreements to lease all photocopiers under capital lease with a cost of $754 and accumulated amortization of $275 as at March 31, 2014 ($507 and $350, respectively, as at March 31, 2013). Obligations for the coming years include the following:

Lease obligation for tangible capital assets (in thousands of dollars)
  2014 2013
2014  - 90
2015 180 52
2016 142 22
2017 118 2
2018 59  -
Total future minimum lease payments 499 166
Less: imputed interest (1.15% to 3.16%) (15) (5)
Balance of obligations under leased tangible capital assets 484 161

7. Employee future benefits

(a) Pension benefits

The Agency'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 are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to EAP 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 2013-2014 expense amounts to $48 million ($57 million in 2012-2013).  For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-2013) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-2013) the employee contributions.

The Agency'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 Agency 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, 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.

Severance benefits (in thousands of dollars)
  2014 2013
Accrued benefit obligation - beginning of year 46,158 82,935
Expense or adjustment for the year 9,435 4,731
Benefits paid during the year (31,301) (41,508)
Accrued benefit obligation - end of year 24,292 46,158

8. Accounts receivable and advances

The following table presents details of the Agency's accounts receivable and advances balances:

Accounts receivable and advances (in thousands of dollars)
  2014 2013
Receivables - other federal government departments and agencies 1,458 2,017
Receivables - external parties 3,569 6,304
Employee advances 73 127
Subtotal 5,100 8,448
Allowance for doubtful accounts on receivables from external parties (15) (15)
Net accounts receivable and advances 5,085 8,433

9. Tangible capital assets

Tangible capital assets (in thousands of dollars)
  Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Disposals and write-offs Adjustments (1) Closing balance Opening balance Amortization Disposals and write-offs Adjustments (1) Closing balance 2014 2013
Computer hardware 7,375  - 287 (739) 6,349 6,843 315 287 (739) 6,132 217 532
Computer software 200,421 839 8,635 19,682 212,307 126,919 23,745 7,578  - 143,086 69,221 73,502
Other equipment 3,378 959 104  - 4,233 2,798 170 104  - 2,864 1,369 580
Motor vehicles 1,832 897 77  - 2,652 880 88 66  - 902 1,750 952
Leasehold improvements 16,587 1,415  -  - 18,002 3,771 663  -  - 4,434 13,568 12,816
Software under development 31,274 28,666  - (19,682) 40,258  -  -  -  -  - 40,258 31,274
Leased tangible capital assets 508 471 225  - 754 351 149 225  - 275 479 157
Total 261,375 33,247 9,328 (739) 284,555 141,562 25,130 8,260 (739) 157,693 126,862 119,813
(1) Adjustments of $19.7 million include software assets under development, that were transferred to computer software upon completion of the assets.

In 2013-14, the Agency transferred computer hardware and other equipment with a cost of $0.7 million (net book value of $0) to Shared Services Canada.

10. Contractual obligations

The nature of the Agency's activities can result in some large multi-year contracts and obligations whereby the Agency will be obligated to make future payments when the services or goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual obligations (in thousands of dollars)
  2015 2016 2017 2018 Total
Licence, maintenance and/or support - software 2,190 180 360  - 2,730
Total 2,190 180 360  - 2,730

11. Contingent liabilities

Claims and litigation

Claims have been made against the Agency in the normal course of operations. These claims include items with pleading amounts, and others for which no amount is specified. The total amount claimed in these actions is significant, and their outcomes are not determinable.

12. Related party transactions

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

(a) Common services provided without charge by other federal government departments

During the year, the Agency received services without charge from certain common service organizations related to accommodation (office space), the employer's contribution to the health and dental insurance plans, workers' compensation coverage, and legal services. These services provided without charge have been recorded in the Agency's Statement of Operations and Departmental Net Financial Position as follows.

Common services provided without charge by other government departments (in thousands of dollars)
  2014 2013
Accommodation (office space) 38,899 38,874
Employer's contribution to the health and dental insurance plans 35,364 42,407
Worker's compensation 130 147
Legal services 2 3
Total 74,395 81,431

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes, and economical 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 Agency's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

Other transactions with related parties (in thousands of dollars)
  2014 2013
Accounts payable - other federal government departments and agencies 6,950 11,857
Accounts receivable - other federal government departments and agencies 1,458 2,017
Expenses - other federal government departments and agencies 10,508 8,427
Revenues - other federal government departments and agencies 74,698 76,644

Expenses and revenues disclosed in (b) exclude common services provided without charge, which is disclosed in (a).

13. Transfers to other government departments

Effective April 1, 2013, the Agency transferred responsibility for workplace technology devices (WTD) (formerly known as end user devices) to Shared Services Canada, in accordance with Order-in-Council P.C. 2013-0366 and 2013-0368. Accordingly, the Agency transferred the following assets, related to WTD, to Shared Services Canada on April 1, 2013:

Transfers to other government departments (in thousands of dollars)
Assets 2013
Prepaid expenses 464
Total assets transferred 464
Adjustment to the departmental net financial position 464

In addition, the 2013 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the expenses of the transferred operations.

During the transition period, the Agency, on behalf of Shared Services Canada, continued to administer the transferred activities. The administered expenses amounted to $0.9 million for the year, which includes $0.5 million in transferred prepaid expenses. These expenses are not recorded in these financial statements.

14. Segmented information

Presentation by segment is based on the Agency'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 the revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Segmented information (in thousands of dollars)
  Economic and Environmental Statistics Socio-economic Statistics Censuses Statistical Infrastructure Cost-recovered Statistical Services Internal Services 2014 Total 2013
Operating expenses                
Salaries and employee benefits 121,294 87,701 48,768 109,386 63,493 46,772 477,414 498,344
Accommodation (office space) 9,883 7,146 3,974 8,912 5,173 3,811 38,899 38,874
Professional services 2,293 3,064 2,466 9,178 5,562 1,833 24,396 18,748
Transportation and postage 1,576 5,434 432 1,413 3,492 380 12,727 13,183
Amortization 6,664 2,590 2,946 12,210  - 720 25,130 34,383
Repairs and maintenance 8 98 17 288 259 7 677 1,047
Materials and supplies 659 628 789 4,527 639 802 8,044 9,589
Rentals 527 613 2,281 5,097 1,060 1,991 11,569 10,722
Communication and printing 91 232 60 198 79 56 716 541
Loss on write-down of inventory  -  -  -  -  -  -  - 130
Loss on disposal of tangible capital assets 6 218 44 229 214 357 1,068 5,117
Interest component on leased tangible capital assets  - 1  - 2 1 3 7 6
Bad debts  -  -  -  -  -  -  - 13
Other 3 7 4 13 8 5 40 64
Total operating expenses 143,004 107,732 61,781 151,453 79,980 56,737 600,687 630,761
Revenues                
Special statistical services  -  - 12,000  - 78,909  - 90,909 94,003
Publications  -  -  -  -  -  -  - 81
Other  -  -  -  - 93  - 93 105
Revenues earned on behalf of Government  -  -  -  - (93)  - (93) (2,364)
Total Revenues  -  - 12,000  - 78,909  - 90,909 91,825
Net cost from continuing operations 143,004 107,732 49,781 151,453 1,071 56,737 509,778 538,936

15. Comparative information

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

16. Summary of the assessment of effectiveness of the system of internal control over financial reporting and Statistics Canada's action plan for fiscal year 2013-14

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting

1. Introduction

This document provides summary information on the measures taken by Statistics Canada to maintain an effective system of internal control over financial reporting (ICFR), including information on internal control management, assessment results and related action plans.

Detailed information on Statistics Canada's authority, mandate and program activities can be found in its Departmental Performance Report and Report on Plans and Priorities.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

Statistics Canada has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. A departmental internal control management framework, approved by the Deputy Head and reviewed by the Departmental Audit Committee (DAC), is in place and includes:

  • organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
  • values and ethics considerations;
  • ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
  • updates at least twice a year on ICFR, as well as the provisions of related assessment results and action plans to the Deputy Head and departmental senior management and the DAC.

The DAC provides advice to the Deputy Head on the adequacy and effectiveness of the Agency's risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The Agency relies on other organizations for the processing of certain transactions that are recorded in its financial statements, as follows:

Common arrangements

  • For processing of all external financial transactions, Statistics Canada uses the Common Departmental Financial System (CDFS). This system, shared across various departments, is hosted by Public Works and Government Services Canada (PWGSC).
  • PWGSC centrally administers payment of salaries, oversees and delegate procurement of goods and services, in accordance with the Agency's Delegation of Authority, and provides accommodation services.
  • The Treasury Board of Canada Secretariat provides the Agency with information that is used to calculate various accruals and allowances, such as the accrued severance liability.
  • The Department of Justice Canada provides legal services to Statistics Canada.
  • Shared Services Canada provides information technology (IT) infrastructure services to the Agency in the areas of data centre and network services. The scope and responsibilities will be addressed in a framework that is being developed by SSC, and will be shared with partner organizations.

3. Departmental assessment results during fiscal year 2013–14

The key findings from the current year's assessment activities, as well as the significant adjustments are summarized below.

New or significantly amended key controls-In the current year, there were no significantly amended key controls in existing processes that required a reassessment. During the year, the time-entry systems were integrated, and the material management modules in our departmental financial management system were activated.  Subsequent conversion testing was performed, and no significant deficiencies were found in the conversion plan.

Ongoing monitoring program – As part of its ongoing monitoring plan, the Agency completed its reassessment of direct and precise monitoring, financial close and reporting, payroll and benefits, interviewers' pay, capital assets, revenue, and high- and low-risk areas of IT general controls. For the most part, the key controls tested performed as intended, with some remediation suggested to strengthen the control environment, as follows:

  • Additional reconciliation procedures
  • Enhanced evidence of review and approvals
  • Increased documentation and standardization of control procedures
  • Additional approvals over master data

In addition, the following weaknesses from prior years have not yet been completely addressed:

  • Lack of periodic review of user access to financial systems and folders
  • Additional valuation procedures over capital assets.

However, a remediation plan is in place for both items of recommendation, and will be implemented in the coming year.

Finally, the findings from the 2011 Census cycle are being factored into the 2016 Census controls.

4. Statistics Canada's action plan

4.1 Progress during fiscal year 2013-14

The Agency continued its ongoing monitoring according to the previous fiscal year's plan, as shown in the following table. Remediation actions have been assigned and are in progress.

Progress during fiscal year 2013-14
Previous year's ongoing monitoring plan Status
Direct and precise monitoring (entity-level controls) Completed
Payroll and benefits Completed
Interviewers' pay Completed
Capital assets Completed
Revenue Completed
IT General controls (high- and low-risk areas) Completed

In 2013-14, the Agency also performed the following work:

Work the Agency performed in 2013-2014
Additional work Status
Testing of data migration for the integrated time entry system Completed
Testing of data migration for the new material management modules Completed
Operating effectiveness testing: financial close and reporting process Completed

Follow-ups were done on the previous years' testing recommendations and the proposed remediation plans. The Agency has updated its Internal Control over Financial Reporting Risk-based Testing Strategy, including the risk assessments and testing schedule.

In 2013-14, Statistics Canada's Internal Audit Division performed a follow-up of the Audit of Key Financial Controls to ensure that the remediation from the previous audit's recommendation was implemented. The audit concluded that the Agency has successfully implemented the recommendations of their previous audit.

In addition to the ongoing monitoring work described above, Statistics Canada has a rigorous pre- and post-payment verification process and governance in place. The Agency tests transactions, selected by random sample, for compliance with the Financial Administration Act and specific spending requirements.

4.2 Action plan for the next fiscal year and subsequent years

The Agency's ongoing monitoring plan over the next three years, based on an annual validation of the high-risk processes and controls and related adjustments, is shown in the following table:

Ongoing Monitoring Plan
Key control areas Operating effectiveness testing rotation
Fiscal year
2014-15
Fiscal year
2015-16
Fiscal year
2016-17
Financial closing and reporting Yes Yes Yes
Budgeting and forecasting Yes Yes Yes
Payroll and benefits   Yes  
Interviewers' pay   Yes  
Capital assets   Yes  
Operating expenditures Yes   Yes
Revenue   Yes  
Census   Yes  
Direct and precise monitoring Yes Yes Yes
IT general controls Yes Yes Yes

Ongoing follow-ups will be performed on the previous years' testing recommendations and proposed remediation plans. In addition, the business process narratives will be updated, and design and implementation testing will be performed as required.

The Agency is currently reviewing its administrative processes. This task should be completed in fiscal year 2014-15. The review will result in the streamlining and modification of several business processes that have an impact on financial reporting results. The new processes will be aligned with common business processes that are used across the federal government. Existing documentation will be updated, and the risks reassessed. Furthermore, design and implementation testing will be conducted on the new business processes.

The services of an external accounting firm have been retained to help complete the action plan and to provide independent, objective advice.

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