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Appendix B

Financial Statements of the
Office of the Secretary to the Governor General


For the Year Ended March 31, 2004

Office of the Secretary to the Governor General
Management’s Responsibility for the Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2004 and all information contained in this report rests with the Office of the Secretary to the Governor General’s management.

These statements, which include amounts based on management’s best estimates as determined through experience and judgement, have been prepared in accordance with Treasury Board Accounting Standards based upon Canadian generally accepted accounting principles. Readers of these statements are cautioned that the financial statements are not necessarily complete; certain liabilities and expenses are only recorded at a government wide level at this time. These statements should be read within the context of the significant accounting policies set out in the Notes.

Management has developed and maintains books, records, internal controls and management practices, designed to provide reasonable assurance that the Government’s assets are safeguarded and controlled, resources are managed economically and efficiently in the attainment of corporate objectives, and that transactions are in accordance with the Financial Administration Act and regulations as well as the Office of the Secretary to the Governor General’s policies and statutory requirements.

_____________________________
Barbara Uteck
Secretary to the Governor General
and Herald Chancellor

_____________________________
JoAnn MacKenzie
Director General, Corporate Services



Statement of Financial Position (unaudited)

As at March 31
(dollars)

2004 2003
ASSETS    
Financial assets:    
          Cash 22,273 3,203
          Accounts receivable (note 3) 11,333 27,669
          Gift shop inventory 71,805 84,873
  105,411 115,745
Non-financial assets:    
          Medals and official gifts 632,411 580,381
          Capital assets (note 4) 451,131 416,831
  1,083,542 997,212
TOTAL ASSETS 1,188,953 1,112,957
LIABILITIES
   
          Accounts payable and accrued
          liabilities (note 3)
279,005 920,736
          Accrued salaries and benefits 1,096,952 1,043,905
          Deferred revenue (note 5) 18,530 4,550
TOTAL LIABILITIES 1,394,487 1,969,191
NET LIABILITIES 205,534 856,234
TOTAL 1,188,953 1,112,957

Commitments (note 7)
Contingencies (note 8)

The accompanying notes are an integral part of these financial statements


Statement of Operations and Net Liabilities (unaudited)

For the year ended March 31
(dollars)

  2004 2003
  Revenues
Note 6
Expenses
Note 6
Net
Cost
Revenues
Note 6
Expenses
Note 6
Net
Cost
Business Line            
Governor General 132,878 15,083,315 14,950,437 107,223 15,926,341 15,819,118
Honours 15,896 3,489,805 3,473,909 62,278 3,410,485 3,348,207
Former Governors General   773,225 773,225   863,832 863,832
Total 148,774 19,346,345 19,197,571 169,501 20,200,658 20,031,157
Net liabilities, April 1           1,403,613
Net cash provided by Government           20,578,536
Net liabilities, March 31     205,534     856,234


Statement of Cash Flows (unaudited)

(dollars)
For the year ended March 31

  2004 2003
Operating transactions
         Net cost of operations 19,197,571 20,031,157

Adjustments for items notaffecting cash

           Statement of Operations
   
              Amortization of capital assets (113,648) (46,818)
              Gain on disposal of capital assets - 6,000
           Statement of Financial Position    
              Decrease (increase) in liabilities 574,704 77,115
              Increase (decrease) in assets other
              than capital assets
41,696 107,117
Cash applied to operating transactions 19,700,323 20,174,571
     
Capital transactions    
           Acquisitions of capital assets 147,948 409,965
           Sale of capital assets - (6,000)
Cash applied to capital transactions 147,948 403,965
Net Cash Provided by Government 19,848,271 20,578,536


The accompanying notes form an integral part of these Statements.


Notes to the Financial Statements (unaudited)

For the year ended March 31, 2004

1. Authority and Objectives

The Office of the Secretary to the Governor General (the OSGG) was constituted through Letters Patent on October 1, 1947. The OSGG is defined as an agency by virtue of it being listed in Schedule 1.1 of the Financial Administration Act.

The primary objectives of the OSGG are to enable the Governor General to perform his/her constitutional and traditional roles and to provide the administration of Honours. The Office also provides for expenditures in respect of pensions and activities performed by former Governors General. To reflect these objectives, the operations of the OSGG is divided into three business lines:

(a) Governor General – provides for the Governor General’s salary, for the costs of the Governor General’s annual program including visits in Canada and abroad, for the citizen access and visitor services program at Rideau Hall and the operation of the office and residences;

(b) Honours – provides for the administration of programs in the National Honours system, including the Order of Canada, the Order of Military Merit, the Canadian Bravery Decorations, the Meritorious Service Decorations, Exemplary Service Medals, Special Service Medals, Commemorative and other medals; provides for the administration of the Governor General’s Academic Medals and the Governor General’s Caring Canadian Award; and, provides for the administration of the Canadian Heraldic Authority; and,

(c) Former Governors General – provides for the activities performed by former Governors General, which devolve upon them as a result of their having occupied that office and the pensions of former Governors General or their spouses.

2. Summary of Significant Accounting Policies

(a) Basis of Preparation

These financial statements have been prepared on an accrual basis of accounting in accordance with Treasury Board Accounting Standards. These Standards are based on generally accepted accounting principles in Canada. The primary source of the accounting principles is from the recommendations of the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants supplemented by the recommendations of the Accounting Standards Board of the Canadian Institute of Chartered Accountants for situations not covered by the Public Sector Accounting Board. Readers of these statements are cautioned that the introduction of accrual accounting at the departmental level is evolutionary. Not all assets, liabilities and expenses applicable to the OSGG are recorded at the departmental level at this time. Items such as a portion of the Consolidated Revenue Fund; pension fund liabilities; severance pay liabilities; severance pay expenses except for cash payments; services provided without charge, etc are not recorded. As such, the financial statements are not necessarily complete. However, all such assets, liabilities and expenses are recorded in the financial statements of the Government of Canada. The following notes provide additional detail and should be read with care.

(b) Consolidated Revenue Fund

All departments and agencies, including the OSGG, operate within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash receipts and all cash disbursements made by the OSGG flow through the CRF.

(c) Net Cash Provided by Government

This is the difference between all cash receipts and all cash disbursements including transactions with other departments made by the OSGG during the year.

(d) Revenue

These are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues. Revenues received but not earned are recorded as deferred revenue and are primarily related to Governor General events. They are recorded as revenue when the event is held and related expenditures are incurred.

(e) Expenses

The OSGG records expenses when the underlying transaction or event giving rise to the expense occurred, subject to the following:

  • Employee severance benefits are expensed as paid; no estimated accruals are recorded; accruals of these benefits is recognized in the consolidated financial statements of the Government of Canada;
  • Vacation pay and overtime are expensed in the year the entitlement occurs;
  • Contributions to superannuation plans are recognized in the period that the contributions are made; actuarial surpluses or deficiencies are not recorded in the OSGG’s books but are recognized in the consolidated financial statements of the Government of Canada. The OSGG’s contribution to the Public Service Superannuation Plan in the year was $1,337,492;
  • A certain number of federal departments and agencies support the activities of the Governor General and the Office as part of their mandate. The level of support and services provided to the Office of the Governor General is determined by each of the contributors and funded out of the budgets of those organizations. The various contributing departments and agencies are responsible for allocating and managing the funds they provide to support the activities of the Governor General and the Office and are subject to Treasury Board guidelines. The amounts spent by the departments and agencies in question do not appear in the accounts of the Office of the Governor General. The major departments and agencies providing support include: the Solicitor General of Canada (RCMP) for protective/security services; the Department of National Defence for transportation services, ceremonial support, logistical support and photographic services; the Department of Foreign Affairs and International Trade for foreign policy advice and foreign/state visit support; the Department of Canadian Heritage for planning and conduct of state and ceremonial occasions including royal visits and state funerals; Public Works and Government Services Canada for management of La Citadelle, the Governor General's official residence in Quebec City and for office accommodation for the Chancellery; and the National Capital Commission for property management services. Support provided by these government departments and agencies are not recorded as operating expenses by the OSGG at the present time. The information is not currently available to the OSGG and any estimation could not be substantiated with any degree of precision. Contributions covering employer's share of employee's insurance premiums and costs paid by the Treasury Board Secretariat are also not recorded.

(f) Receivables

Receivables are stated at amounts that are expected to be ultimately realized.

(g) Gift Shop Inventory

Gift shop inventory is valued at the lower of cost and net realizable value.

(h) Medals and Official Gifts

Medals for the Order of Canada insignia and other honours, held for distribution in the future, are recorded at original cost.

(i) Capital Assets

All assets treated as capital assets under Public Sector Accounting Board Recommendations plus leasehold improvements, having an initial cost of $5,000 or more, are recorded at their acquisition cost. Capital assets do not include intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

The OSGG capitalizes capital assets on a straight-line basis over the estimated useful life of the capital asset as follows:

Asset Class

Amortization Period

Informatics hardware

3 years

Motor vehicles

5 years

Informatics software

7 years

(j) Insurance

The OSGG does not carry insurance since it is the policy of the Government of Canada to selfinsure.

(k) Annuity Payments to Former Governors General

Pursuant to provisions contained within the Governor General’s Act and the Supplementary Retirement Benefits Act, taxable annuities are paid to: (i) former Governors General; and (ii) surviving spouses of former Governors General. These annuities are indexed annually to the Consumer Price Index and are recognized in the period in which payment is due. In the 2003-04 fiscal year, such payments amounted to $280,259.

(l) 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.

(m) Measurement Uncertainty

The preparation of 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 item where estimates are used is amortization of capital assets.

3. Accounts Receivable and Payables

The accounts receivable and accounts payable with other Government departments and unrelated external parties are as follows:

  2004 2003
  (dollars)  
Accounts Receivable:    
External Parties 10,500 11,500
Other Government Departments 833 16,169
Total 11,333 27,669
 
Accounts Payable and Accrued Liabilities:    
Other Government Departments 46,376 288,770
External Parties 232,629 631,966
Total 279,005 920,736

4. Capital Assets

  Informatics Software Informatics Hardware Vehicles Total
 
(dollars)
Opening April 1, 2003  
     Cost 135,776 329,764 214,860 680,400
     Accumulated Amortization - 167,923 95,646 263,569
     Net Carrying Cost 135,776 161,841 119,214 416,831
2003-04 transactions        
     Additions - 147,948 - 147,948
     Net Disposals - - - -
     Net write-downs - - - -
     Amortization
19,397 76,786 17,465 113,648
Closing March 31, 2004
       
     Cost
135,776 477,712 214,860 828,348
     Accumulated Amortization
19,397 244,709 113,111 377,217
     Net Carrying Cost 116,379 233,003 101,749 451,131
 

5. Deferred Revenue

This account has been established to record gifts, donations or bequests to Rideau Hall from private organizations and individuals to fund specific initiatives.

  2004   2003
  (dollars)
Opening Balance 4,550   -
Add: Deposits 13,980   4,550
Less: Payments -   -
Closing Balance 18,530   4,550

6. Summary of Revenues and Expenses by Major Classification

A summary of revenues and expenses for the year ended March 31 is as follows:

  2004   2003
Revenues (dollars)
Gift Shop 103,902   101,223
Other 44,872   68,278
Total Expenses 148,774   169,501
     
Salaries and employee benefits 12,746,650   12,238,388
Materials and supplies 1,999,720   2,209,761
Other Business Services 1,112,958   1,055,779
Travel 1,000,978   1,417,683
Professional services 955,113   1,572,791
Information services 628,629   845,640
Telecommunications 373,779   280,172
Rentals 227,547   283,623
Postage, Freight and Cartage 117,824   150,940
Amortization of capital assets 113,648   46,818
Miscellaneous 69,499   99,063
Total 19,346,345   20,200,658

7. Commitments

The OSGG does not have any material commitments to report.

8. Contingencies

In the normal course of its operations, the OSGG may become involved in various legal actions. Some of these potential liabilities 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 on the government’s consolidated financial statements. These estimated liabilities are not recognized on the OSGG’s financial statement as a liability until the amount of the liability is firmly established.

9. Related Party Transactions

The OSGG is related in terms of common ownership to all Government of Canada departments and agencies, and Crown Corporations. The OSGG enters into transactions with these entities in the normal course of business and on normal trade terms except for those services provided without charge as previously identified.

10. Parliamentary Appropriations

The OSGG receives its funding through Parliamentary appropriations, which is based primarily on cash flow requirements. Items recognized on the Statement of Operations in one year may be funded through Parliamentary appropriations in prior and future years. Accordingly, the OSGG has different net results of operations for the year on a government-funding basis than on Canadian generally accepted accounting principles. These differences are reconciled below.

(a) Reconciliation to net cost of operations

  2004   2003
    (dollars)  
Net cost of operations 19,197,571   20,031,157
Adjustments:      
Items affecting Net Results but not affecting Appropriations      
Less:Expenses not affecting appropriations      
Medals and official gifts issued 272,445   261,090
Employee leave benefits earned 172,805   256,493
Amortization 113,648   46,818
Inventory used 74,241   60,143
Department of Justice legal fees 810   -
  633,949   624,544
       
Add: Revenue not affecting appropriations 148,774   169,501
  18,712,396   19,576,114
       
Items not affecting Net Results but affecting Appropriations      
Add: Purchase of medals and official gifts 307,424   289,479
Capital acquisitions 147,948   409,966
Payments of employee leave benefits 104,447   204,486
Purchase of gift shop inventory 60,844   95,655
Employee advances (1,000)   -
  619,663   999,586
       
Total Parliamentary appropriations used 19,332,059   20,575,700
 

(b) Parliamentary appropriations provided and used

  Appropriations Provided Appropriations Used
  2004 2003 2004 2003
  (dollars)
Program expenditures 17,151,001 18,645,250 17,062,782 18,265,356
Statutory amounts 2,269,586 2,310,653 2,269,277 2,310,344
         
Total 19,420,587 20,955,903 19,332,059 20,575,700
Updated: 2018-03-26
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