Future-Oriented Financial Statements 2012–2013

For the years ending March 31, 2012 and March 31, 2013

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for years ending March 31, 2012 and 2013 rests with departmental management. The future-oriented financial information has been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of Estimates (Report on Plans and Priorities), and will be used in the department's Departmental Performance Report to compare with actual results.

Management is responsible for the information contained in future-oriented financial statements and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of the future-oriented financial statements, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The actual results achieved for the fiscal years covered in the accompanying future-oriented financial information will vary from the information presented and the variations may be material.

Ottawa, Ontario
May 2012

Future-Oriented Statement of Financial Position
As at March 31

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.

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

Future-Oriented Statement of Operations
For the year ending March 31

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.

Segmented information is contained in note 12.

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

Future-Oriented Statement of Equity of Canada
For the year ending March 31

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.

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

Future-Oriented Statement of Cash Flow
For the year ending March 31

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.

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

Notes to the Future-Oriented Financial Statements

1. Authority and Objectives

On April 1, 2004, amendments to the Canadian Centre for Management Development Act were proclaimed and the organization was renamed the Canada School of Public Service (the School). The amended legislation, now entitled the Canada School of Public Service Act, continues and expands the mandate of the former organization as a departmental corporation.

The School is the common learning service provider for the Public Service of Canada. It brings a unified approach to serving the common learning and development needs of public servants and helps ensure that all public service employees across Canada have the knowledge and skills they need to meet the employer's knowledge standard and deliver results for Canadians.

Through its programming, the School delivers on its legislative mandate to encourage pride and excellence in public service and to foster a common sense of purpose, values and traditions. It helps to ensure that public servants have the knowledge, competencies and skills they need to serve Canada and Canadians and supports the growth and development of public servants committed to the service of Canada. The School assists deputy heads in meeting their organization's learning needs and pursues excellence in public sector management and public administration.

2. Underlying Assumptions

The Future-Oriented Financial Statements has been prepared:

• On the basis of government policies, government priorities, and external environment at the time the future-oriented financial information was finalized;
• On the basis of the departmental plans as described in the Report on Plans and Priorities;
• On the basis of the forecast as at November 30, 2011 for estimated results of 2011‑12;
• On the basis of the revenue forecast of $50 million in 2012-13, as disclosed in the Annual Reference Level Update and Report on Plans and Priorities;
• According to the requirements of Treasury Board accounting policies which are based on Canadian generally accepted accounting principles for the public sector;
• On the basis that estimated year end information for 2011-12 is used as the opening position for the 2012-13 planned results;
• In consideration of historical costs and trend analysis.

3. Variations and Changes to the Forecast Financial Information

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

Factors that could lead to material differences between the Future-Oriented Financial Statements and the historical financial statements include:

• The impact of economic conditions on the amount of revenue earned in 2011-12;
• Revenue to be earned in 2012-13 may be greater than the forecast amount of $50 million;
• Reductions in expenditures due to increased operational efficiencies and further government-wide reduction initiatives.

Once the Report on Plans and Priorities is presented, the Canada School of Public Service will not be updating the forecasts for any changes to appropriations.

4. Summary of Significant Accounting Policies

The future-oriented financial information has 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:

1. Parliamentary Authorities

   The School is partially financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The Future-Oriented Financial Statements are based on accrual accounting. Consequently, items presented in the Future-Oriented Statement of Operations are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a reconciliation between the two reporting methodologies.

2. Net Cash Provided by Government of Canada

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

3. Due from the Consolidated Revenue Fund (CRF)

   Amounts due from 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 School is entitled to draw from the CRF without further appropriations to discharge its previous year's liabilities.

4. Forecasted Revenues
   
   
   • Revenues are recognized based on the services anticipated to be provided for the year;
   • Revenues are accounted for in the period in which the underlying transaction or event occurs that gives rise to the revenues.
     
     
5. Forecasted Expenses

   Expenses to be recorded when the underlying transaction or expense occurred, subject to the following:

   • Vacation pay and compensatory leave to be expensed as the benefits accrue to employees under their respective terms of employment;
   • Services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans to be recorded as operating expenses, at their estimated cost;

   • Contributions to be recognized in the year in which the recipient has met the eligibility criteria or fulfils the terms of a contractual transfer agreement.

6. Employee Future Benefits
   
   
   • Pension Benefits:

     Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government of Canada. The School's contributions to the Plan are charged to expenses in the year incurred and represent the School's total obligation to the Plan. Current legislation does not require the School 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.

7. Accounts Receivable

   Accounts receivables and advances are stated at the lower of cost or net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

8. Tangible Capital Assets

   All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. Assets under construction are only amortized when the related projects are completed and put in service, and their amortization is based on the estimated useful life of the asset.

   Amortization of tangible capital assets is calculated on a straight-line basis over the estimated useful life of the assets as follows:

   Tangible Capital Assets. Read down the first column of asset classes, then to the right for the amortization period.

   Asset Class	Amortization Period
   Machinery and Equipment	5-10 years
   Other Equipment (including furniture)	5-12 years
   Informatics Hardware	3-5 years
   Software (including developed software)	3-5 years
   Motor Vehicles	4 years
   Leasehold Improvements	2-10 years
   Assets Under Construction	Once in service, in accordance with asset type

   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 such time.

9. Measurement Uncertainty
   

   The preparation of the Future-Oriented Financial Statements requires management to make estimates and assumptions that affect the reported amounts of all the revenues, expenses, assets and liabilities reported. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency with the departmental mandate and strategic objectives. At the time of preparation of these Future-Oriented Financial Statements, management believes the estimates and assumptions to be reasonable. Nonetheless, as with all such estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

5. Parliamentary Authorities

The School receives a portion of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the School 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) 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.

b) Reconciliation of Net Cost of Operations to Current Year Authorities Used

6. Accounts Receivable and Advances

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

7. Tangible Capital Assets

8. Accounts Payable and Accrued Liabilities

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

9. Employee Future Benefits

1. Pension Benefits

   The School and all eligible employees contribute to 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 Pension Plan.

   The School'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
   

   The School 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:

   
   
   

   Employee Future Benefits for the year ending March 31 in thousands of dollars. Read down the first column for the accrued benefits obligation (beginning of year), expenses, benefits paid and accrued benefits obligation (end of year), then to the right for the Forecast for 2013 and Estimated figures for 2012.

   (in thousands of dollars)	Forecast 2013	Estimated 2012
   Accrued benefits obligation, beginning of year	5,399	12,911
   Expense for the year	1,073	115
   Benefits paid during the year	(3,400)	(7,627)
   Accrued benefits obligation, end of year	3,072	5,399

10. Contractual Obligations

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

11. Related Party Transactions

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

1. Common Services Provided Without Charge by Other Government Departments
   

   During the year, the School receives services without charge from certain common service organizations related to accommodation and the employer's contribution to the health and dental insurance plans. The following services to be provided without charge have been recorded in the School's Statement of Operations:

   Related Party Transactions for the year ending March 31 in thousands of dollars. Read down the first column for the common services provided without charge by other government departments, then to the right for the figures for the Planned Results for 2013 and Estimated Results for 2012.

   (in thousands of dollars)	Planned Results 2013	Estimated Results 2012
   Accommodation	10,000	10,000
   Employer's contribution to the health and dental insurance plans	5,764	5,223
   Total	15,764	15,223

   The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic 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, are not included in the School's Future-Oriented Statement of Operations.

2. Other Transactions with Related Parties

   Related Party Transactions for the year ending March 31 in thousands of dollars. Read down the first column for the other transactions with related parties, then to the right for the figures for the Planned Results for 2013 and Estimated Results for 2012.

   (in thousands of dollars)	Planned Results 2013	Estimated Results 2012
   Expenses — other government departments and agencies	21,664	25,843
   Revenues — other government departments and agencies	48,657	66,061

12. Segmented Information

Presentation by segment is based on the School's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in note 4. The following table presents the expenses to be incurred and forecasted revenues for the main program activities, by major object of expenses and by major type of revenues. The segment results for the two fiscal years are as follows:

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