Appendix B - Financial Statements of the Office of the Secretary to the Governor General
Financial Statements of the
As at March 31
|Accounts receivable (note 3)||163,830||11,333|
|Gift shop inventory||66,780||71,805|
|Medals and official gifts||569,749||632,411|
|Capital assets (note 4)||457,594||451,131|
| Accounts payable and accrued
liabilities (note 3)
|Accrued salaries and benefits||1,597,189||1,096,952|
|Deferred revenue (note 5)||4,450||18,530|
Contingencies (note 7)
The accompanying notes are an integral part of these financial statements
For the year ended March 31
|Former Governors General||568,954||568,954||773,225||773,225|
|Net liabilities, April 1||205,534||856,234|
|Net cash provided by Government||17,513,032||19,848,271|
|Net liabilities, March 31||902,558||205,534|
The accompanying notes are an integral part of these financial statements.
For the year ended March 31
|Net cost of operations||18,210,056||19,197,571|
Adjustments for items not affecting cash
Statement of Operations
|Amortization of capital assets||(162,310)||(113,648)|
|Gain on disposal of capital assets||-||6,000|
|Statement of Financial Position|
|Decrease (increase) in liabilities||(775,536)||574,704|
| Increase (decrease) in assets other
than capital assets
|Cash applied to operating transactions||17,344,259||19,700,323|
|Acquisitions of capital assets||168,773||147,948|
|Sale of capital assets||-||-|
|Cash applied to capital transactions||168,773||147,948|
|Net Cash Provided by Government||17,513,032||19,848,271|
For the year ended March 31, 2004
The Office of the Secretary to the Governor General (OSGG) was constituted through letters patent on October 1, 1947. The OSGG is defined as an agency by virtue of 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 or 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 are divided into three business lines:
(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 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, and services provided without charge 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 Notes that follow 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.
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.
The OSGG records expenses when the underlying transaction or event giving rise to the expense occurred, subject to the following:
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. Only informatics software costs incurred since April 2001 are recorded as capital assets.
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:
The OSGG does not carry insurance since it is the policy of the Government of Canada to self-insure.
(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 2004-05 fiscal year, such payments amounted to $288,350.
(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.
The accounts receivable and accounts payable with other government departments and unrelated external parties are as follows:
|Other Government Departments||153,330||833|
|Accounts Payable and Accrued Liabilities:|
|Other Government Departments||137,942||46,376|
|Informatics Software||Informatics Hardware||Vehicles||Total|
|Opening April 1, 2004|
|Net Carrying Cost||116,379||233,003||101,749||451,131|
|Closing March 31, 2005
| Accumulated Amortization
|Net Carrying Cost||125,703||250,605||81,286||457,594|
This account has been established to record gifts, donations or bequests to Rideau Hall from private organizations and individuals to fund specific initiatives.
A summary of revenues and expenses for the year ended March 31 is as follows:
|Salaries and employee benefits||13,140,657||12,746,650|
|Materials and supplies||1,495,100||1,999,720|
|Other Business Services||643,647||1,112,958|
|Postage, Freight and Cartage||162,310||117,824|
|Amortization of capital assets||78,198||113,648|
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 that it fails 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.
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.
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 net results of operations for the year on a government-funding basis that differ from generally accepted accounting principles in Canada. These differences are reconciled below.
(a) Reconciliation to net cost of operations
|Net cost of operations||18,210,056||19,197,571|
|Items affecting Net Results but not affecting Appropriations|
|Less:Expenses not affecting appropriations|
|Medals and official gifts issued||282,858||272,445|
|Employee leave benefits earned||63,885||172,805|
|Department of Justice legal fees||855||810|
|Add: Revenue not affecting appropriations||195,170||148,774|
|Items not affecting Net Results but affecting Appropriations|
|Add: Purchase of medals and official gifts||190,292||307,424|
|Payments of employee leave benefits||115,634||104,447|
|Purchase of gift shop inventory||72,788||60,844|
|Total Parliamentary appropriations used||18,358,394||19,332,059|
(b) Parliamentary appropriations provided and used
|Appropriations Provided||Appropriations Used|