Future-Oriented Financial Statements for the Years Ending March 31, 2012 and March 31, 2013

Assets

Liabilities and Equity of Canada

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

1. Authority and purpose

The Commission for Public Complaints Against the RCMP (Commission) is a federal agency reporting to Parliament that receives and reviews public complaints about the conduct of members of the RCMP in the performance of any duty or function under the Royal Canadian Mounted Police Act (RCMP Act). The Commission is entirely separate from, and independent of, the RCMP. The mandate of the Commission is set out in Part VII of the RCMP Act and can be summarized as follows:

• To receive complaints from the public about the conduct of RCMP members;
• To initiate complaints to delve into RCMP conduct when it is in the public interest to do so;
• To conduct reviews when complainants are not satisfied with the RCMP's disposition of their complaints;
• To hold hearings and conduct investigations; and
• To report findings and recommendations.

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.

2. Significant assumptions

The future-oriented statements have been prepared on the basis of the government priorities and the plans of the Commission as described in the Report on Plans and Priorities.

The main assumptions are as follows:

• (a) The Commission's activities will remain substantially the same as in the previous year.
• (b) Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
• (c) Estimated year-end information for 2011-12 is used as the opening position for the 2012-13 forecasts.

These assumptions are adopted as at March 15, 2012.

3. Variations and changes to the forecast financial information

While every attempt has been made to accurately forecast final results for the remainder of 2011–12 and for 2012–13, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements, the Commission has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include:

• (a) The timing and amounts of acquisitions and disposals of property and equipment, which may affect gains/losses and  amortization expense.
• (b) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Commission will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of significant accounting policies

The future-oriented statements have been prepared in accordance with the Treasury Board accounting policies stated below, which 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:

(a) Parliamentary appropriations

The Commission is financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The future-oriented statements are based on accrual accounting. Consequently, items presented in the future-oriented statement of operations and the future-oriented statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a reconciliation between bases of reporting.

(b) Net cash provided by government

The Commission operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF and all cash disbursements made by the 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 government.

(c) Amount due from/to the CRF

Amounts due from/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 Commission is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

Revenues from regulatory fees are recognized in the accounts based on the services provided in the year. Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred. Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

(e) 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 government departments for accommodation and the employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(f) 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 Commission's contributions to the Plan are charged to expenses in the year incurred and represent the Commission's total obligation to the Plan. Current legislation does not require the 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.

(g) 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 Commission 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 :

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

5. Parliamentary appropriations

The Commission receives most of its funding through expenditure authorities provided by Parliament. 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 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:

(b) Authorities requested

Forecast authorities requested for the year ending March 31, 2013, are the planned spending amounts presented in the 2012-13 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2012, include amounts presented in the 2011-12 Main Estimates and supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

6. Employee benefits

(a) Pension benefits

The 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 Commission contribute to the cost of the Plan. The forecast amount for both 2011-12 and 2012-13 is estimated at $450,000 each year, and represents approximately 1.9 times the contributions by employees.

The 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 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 authorities. Information about the severance benefits, estimated as at March 31, is as follows:

7. Related party transactions

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

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

During the year, the Commission is forecasted to receive services without charge from certain common service organizations related to accomodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Commission's statement of operations, as follows:

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 and audit services provided by the Office of the Auditor General, are not included in the Commission's statement of operations.

b) Other transactions with related parties

8. Segmented information

9. Tangible capital assets

Amortization expenses for the year ended March 31, 2013, are $173,077 ($68,032 for the year ended March 31, 2012).