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Cliquez ici pour soumettre

Formulaire de rponsePour tre pris en considration,

les commentaires devront tre reus

le 20 avril 2012 au plus tard.

Utilisation des crdits budgtairesnonc de principes

Le CCSP invite les intresss formuler des commentaires sur tous les aspects des principes proposs dans l'nonc deprincipes.

Ce formulaire ne vise pas restreindre votre rponse. Chaque bote de texte acceptera lintgralit

de vos commentaires.

Vous pouvez sauvegarder le formulaire et lenvoyer, pour examen, dautres personnes de votreorganisation avant de le soumettre.

Nom : Charles REESINK

Organisation : quick french

Courriel : quick2french"yahoo.ca

Commentaires gnraux :

Ce aui se concoit bien s enonce clairementEt les mots pour le dire arrivent aisementUne relecture rendant ces testes plus lisibles, moins lourds est indispensable.

1. tes-vous d'accord sur la ncessit d'laborer une norme distincte sur la comptabilisation de l'utilisation des crdits?

Absolument.

Si vous avez rpondu oui la question 1, veuillez rpondre aux questions suivantes.

2. tes-vous d'accord pour que la norme propose ne s'applique qu'aux entits qui ont directement accs desressources conomiques par le Trsor ou l'quivalent?

Oui - pour autant qu'il n'existe pas de truchements camouflages.

3. tes-vous d'accord pour que la norme propose ne s'applique qu'aux entits qui ont directement accs desressources conomiques par le Trsor ou l'quivalent?

Pas d'accord: s'il n'y a pas entite juridique distincte, comment effectuer une information financiere.

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4. tes-vous d'accord pour que le financement auquel l'entit a accs en vertu des crdits soit comptabilis dans lestats financiers?

Certainement

5. Si vous avez rpondu oui la question 4, tes-vous d'accord pour que l'utilisation des crdits soit comptabilise

dans l'tat des rsultats?

Certainement

6. tes-vous d'accord avec les critres de comptabilisation proposs?

Passablement

7. tes-vous d'accord pour que les crdits soient prsents sparment?

Absolument

8. tes-vous d'accord avec les obligations d'information proposes?

Oui, a condition que la lisibilite en soit accrue.

Cliquez ici pour soumettre

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Click here to submit

Response Questionnaire

To be considered, comments must be received by

April 20, 2012

Use of Appropriations

Statement of Principles

PSAB welcomes comments on all aspects of the Statement of Principles.

This form is not intended to constrain your response. Each text box will accommodate your full comments.

You are able to save and forward this form to others in your organization for review prior to submission.

Name: Greg MacBeth

Organization: Office of the Auditor General - Manitoba

E-mail: [email protected]

General comments:

I am replying on behalf of the Office of the Auditor General - Manitoba. My comments are from the perspective of the

public sector within our jurisdiction.

1. Do you support the need for a separate standard on accounting for the use of appropriations?

Yes

If you answered yes to Question 1, please answer the following questions.

2. Do you agree that the proposed standard would only apply to those entities that directly access the economic

resources through the consolidated revenue fund or equivalent?

Yes

3. Do you agree that an economic entity for financial reporting purposes is not limited to separate legal entities?

Yes

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4. Do you agree that the funding accessed directly under the authority of an appropriation would be recognized in

financial statements?

Yes

5. If you answered yes to Question 4, do you agree that the use of appropriations would be recognized in thestatement of operations?

Yes

6. Do you agree with the proposed recognition criteria?

No. The recognition criteria is based on expenditures. We believe it should be based on expenses incurred during the

period by the entity (expenses) as opposed to cost of services acquired (expenditure). Under expenditure recognition

basis, if good/services have been consumed by the entity but an expenditure has not been made, the entity would not be

allowed to set up a receivable from the government for this expenses (paragraph .105). We believe a receivable should beset up by the entity.

7. Do you agree that appropriations would be separately reported?

Yes

8. Do you agree with the proposed disclosures?

Yes


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April 20, 2012






Name: Ron Williams, CA (Comptroller General of Finance)

Organization: Government of Newfoundland and Labrador


General comments:


No, the Province does not support the need for a separate standard on the accounting for the use of appropriations. The

Government of Newfoundland and Labrador does not prepare general purpose financial statements on a departmental

basis or support a position that financial statements should be accounting for appropriations. In fact, it is our view that

appropriations are only a budgetary authority or limit to spend and as such are not in themselves economic events that

should be recognized in financial reporting. From our perspective, there are controls over the incurrence of actual costs

within budget limits in our daily accounting via encumbrance accounting controls. Accountability of the spending

authority under appropriations is reported in our Report on the Program Expenditures and Revenues of the Consolidated

Revenue Fund. From a general purpose financial statement perspective, it has been our experience that the existing

concepts and principles within the conceptual framework and standards have allowed us to adequately report financial

transactions under the authority of appropriations as a senior government. As such, there is no justification for the Public

Sector Accounting Board (PSAB) to be contemplating a standard in this area. However, if the PSAB intends to proceed in

this area, the following comments should be taken into consideration.

While the proposals do not indicate that the Public Sector Accounting Board (PSAB) would require a government to

prepare departmental financial statements; it is to be noted that it is our position that any such requirement would be a

policy or legislative requirement of a particular government. As such, there is concern that any such requirement within

the PSA Standards that reflects the reporting of general purpose financial reporting on a departmental level will lead to the

perception and external pressure that such reporting will become a requirement.

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In direct relation, it is our position that any financial reporting on a departmental basis through general purpose financial

statements would not be appropriate. It is understood that the guidance that is included within the PSA Standards is in

reference to summary financial statements that report on the government reporting entity as per PS 1000.02. As

departmental financial statements are in essence derived from deconsolidation of the government summary financial

statements, such reporting from our perspective should not be for general purpose. While there would be challenges in

determining the appropriate reporting of components in relation to the whole of government, there is also difficulty in

seeing the value in such reporting. Assessing the financial performance and health of government as a whole is more

valuable than can be reflected in the sum of its parts.

Further, it is to be noted that per PS 1000.12 financial statements cannot be expected to fulfill all the users needs served

by a governments financial reporting system. Governments produce many kinds of reports in addition to financial

statements. For example, there are reports prepared by individual entities to comply with legislation; there are reports to

measure and report on the performance of individual funds, programs and activities; and there are special purpose reports

designed to meet particular needs of specific users.Thus, certain information is better provided, or can only be provided,

by financial reports other than financial statements. As such, from our perspective any reporting that is prepared on a

departmental basis would be special purpose financial reporting rather than general purpose financial reporting. It is also

to be noted that the proposals would not achieve common practice across jurisdictions given that reporting from a

departmental perspective may be in the form of general purpose financial statements or the preparation of special purpose

financial reports that would not be subject to this proposed standard.

In direct relation, due process and a decision is also required in determining the appropriate definitions to adequately

identify particular government organizations from senior governments, where applicable. As the due process regardingthe appropriate terminology has not been finalized, there appears to be conflicting interpretations between auditors and

senior governments in certain cases of existing standards and in relation to application of this proposal as to the meaning

of government organizations. Specifically, this proposal is noted as applying to government organizations and in actual

interpretation of the proposals, the details indicate that the Section applies more to government departments. It is to be

reiterated that it is our position that a government organization should not be used in reference to a government

department or any implication to a grouping of departments within a senior government. There needs to be terminology

that makes a clear distinction and interpretation between a senior government and a government organization that is only

brought into the government reporting entity upon consolidation.




As we do not agree with a proposed standard, this is not an aspect that requires consideration.


As we do not agree with a proposed standard, this is not seen as a necessary consideration to address.



No, funding directly accessed under the authority of an appropriation would not be recognized in the financial statements;

only actual financial transactions or events that result under the limits or budgetary authority of the appropriations should

be recorded in the financial statements.

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5. If you answered yes to Question 4, do you agree that the use of appropriations would be recognized in the

statement of operations?


As we do not agree with a proposed standard; it is our position that an financial transaction that results from funding under

an appropriation that is to be recorded can be assessed based on the existing recognition criteria that exists within the PSA

Standards.


As we do not agree with a proposed standard; it is our position that that there is no apparent reason that appropriations

should be reported or disclosed in general purpose financial statements.


As we do not agree with a proposed standard; it is our position that the proposed disclosure requirements are not required

for general purpose financial statements.


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April 20, 2012

Tim Beauchamp, DirectorPublic Sector Accounting

The Canadian Institute of Chartered Accountants277 Wellington Street West

Toronto, Ontario M5V 3H2

Dear Mr. Beauchamp:

RE: Use of Appropriations Statement of Principles

Thank you for the opportunity to provide comments on the Use of Appropriations Statement ofPrinciples.

1. Do you support the need for a separate standard on accounting for the use of appropriations?Yes. Many jurisdictions have issued legislation which requires certain core government departmentsand / or ministries to issue financial statements prepared in accordance with Generally Accepted

Accounting Principles (GAAP). These jurisdictions (and only these jurisdictions) need guidance onhow to consistently account for the funding that is accessed under the authority of an appropriation.

However, any guidance issued on this topic should not be presumed to apply to jurisdictions thathave no legislated need for departmental financial statements. Any final standard must clearlyindicate that it is not intended to prescribe accounting policies for departments, etc., that have nolegislated requirement for GAAP compliant financial statements.

Various parties have argued that departments are cost centres, not reporting entities, and the primaryobjective of issuing separate financial statements is reporting on actual expenditures / expensesagainst legislated authorities. In effect, these parties are asserting that, with respect to departmental

reporting, special purpose financial statements are more appropriate for user needs. While we agreewith this position, the reality is that legislators have dictated the need for GAAP based financialstatements.

Since generally accepted principles are typically intended to provide general purpose frameworks,the statements prepared under existing GAAP must be general purpose, rather than special purpose

PO Box 1871723 Hollis StreetHalifax, NS B3J 2N3(902) [email protected]

Department of FinanceGovernment Accounting

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reports. In the face of this reality, guidance on how to account for appropriations in accordance withGAAP is needed.

2. Do you agree that the proposed standard would only apply to those entities that directly accessthe economic resources through the consolidated revenue fund or equivalent?

Yes.

3. Do you agree that an economic entity for financial reporting purposes is not limited to separatelegal entities?

Yes, we agree that an economic entity for financial reporting purposes is not limited to a separate

legal entity. However, an economic entity should comprise its own set of assets, liabilities, revenuesand expenses and these should be clearly distinguished from the rest of the entity. The definition ofan economic entity in paragraph .027 of the SOP notes that the assets and liabilities of an economic

entity would not be intermixed with those of other entities. We agree but feel that a final standard

should elaborate on the concept of intermixed. Specifically, it should explain that the mere abilityto allocate assets and liabilities would not override the fact that they are intermixed. The decisiontree in the Appendix should contain the same clarification. The final standard should include thedefinition and the decision tree and should make it clear that entities not meeting the definition

should prepare special purpose, rather than general purpose, financial statements.

4. Do you agree that the funding accessed directly under the authority of an appropriation wouldbe recognized in financial statements?

Yes, funding accessed under the authority of an appropriation would be recognized in the financial

statements because it meets the general recognition criteria outlined in PS1000.55:

a) the item has an appropriate basis of measurement, and a reasonable estimate can be made of

the amount involved; and

(b) for an item that involves obtaining or giving up future economic benefits, it is expected that

such benefits will be obtained or given up.

Criterion a) is met once the expenditure is incurred because, at this point, an estimate of theappropriation to be received is available. Criterion b) is also met when the expenditure is incurred

because it is at this time that the entity becomes eligible to receive the fully funded goods andservices provided through the appropriation. The fully funded goods and services represent an

economic benefit to the entity that is secured when the expenditure is made.

The standard should address cases in which the authority to spend is not in place at year end but is

fully expected to be granted in the near future. In such situations, funding is accessed prior toauthorization of the appropriation. In these circumstances, the standard should allow appropriationsrevenue to be recognized provided there is a demonstrated historical practice of issuing the authoritysubsequent to year end.

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5. If you answered yes to Question 4, do you agree that the use of appropriations would berecognized in the statement of operations?

Yes the use of appropriations should be recognized in the statement of operations because

appropriations meet the definition of revenue:

According to PS1000.46, revenues, including gains, are increases in economic resources, either by

way of increases of assets or decreases of liabilities, resulting from the operations, transactions and

events of the accounting period.

Appropriations are the primary means through which entities who are not self-sustaining obtain

funding. For example, when a department acquires goods or services, funds are paid out of theconsolidated revenue fund (or equivalent), on its behalf. In effect, the liability is incurred by thedepartment but settled by the consolidated revenue fund. Therefore, the ability to use an

appropriation does create an increase in economic resources because, from the entitys perspective, it

results in derecognition of the liability.

Put another way, the appropriation gives the entity the right to transfer the obligation to anotherparty. As such, the appropriation is an increase in economic resources, by way of a decrease inliabilities, which results from the transactions and events of the accounting period. Since there is no

intention for the department to repay the consolidated revenue fund at a future date, these amountsshould be recognized as revenue rather than a liability.

6. Do you agree with the proposed recognition criteria?Yes, except for those related to capital appropriations. A liability exists beyond the acquisition of the

capital item because the government expects the entity to use the acquired asset over its useful life toprovide goods and services.

Paragraph .104 of the SOP suggests that there are no circumstances under which a liability wouldresult once the eligible capital expenditure has been made. We disagree with this statement. Per PS

3200.05, liabilities have three essential characteristics:

(a) they embody a duty or responsibility to others, leaving a government little or no discretion to

avoid settlement of the obligation;

(b) the duty or responsibility to others entails settlement by future transfer or use of assets,

provision of goods or services, or other form of economic settlement at a specified or determinable

date, on occurrence of a specified event, or on demand; and

(c) the transactions or events obligating the government have already occurred.

We believe a capital appropriation represents the governments intent to fund services over future

periods. The capital appropriation has been legislatively approved only so that the recipient entitycan meet the governments future service delivery plans and promises. In the absence of the future

need for service delivery, the appropriation would not have been granted. As such, the entity has aduty to the legislature and the public and has little choice but to use the asset in that service capacity

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for as long as is rationally possible. This duty entails settlement by future use of the asset and itarises due to a past event, that is, as a result of making use of the appropriation.

In addition to the above, the proposed treatment would be inconsistent with the nature and financialreality of a department or ministry. Departments and ministries are expected to operate within the

budget constraints imposed upon them and, as such, are permitted only to break even. Any operatingsurplus is returned to the consolidated revenue fund (or equivalent) and any operating deficit is

covered by the consolidated revenue fund. Clearly, these entities are not profit centers. However, ifcapital appropriations were treated as revenue when received, this would create the illusion that thedepartment made a profit in the year the capital appropriation was received. It will also lead to

illusory deficits (by way of amortization expense) in the years following the appropriation. Webelieve this presents a misleading picture to financial statement users. Users of entity level financialstatements want to see whether the entity is operating within the fiscal constraints imposed upon it.

The proposed accounting treatment for capital appropriations, as outlined in the SOP, would notprovide this information.

We believe revenue for capital appropriations should be recognized in a pattern that reflects therelated assets amortization expense because this method provides users with more relevant

information regarding the use of appropriations within pre-established limits. Further, it is throughuse of the asset that the obligation to the consolidated revenue fund is fulfilled. Until the asset isused, there is no decrease in the entitys liabilities, so revenue recognition at an earlier point is not

appropriate.

The standard should also address how a department or ministry would account for capital

contributions from outside the consolidated revenue fund. We assume this 3rd party funding wouldbe treated in accordance with PS 3410, even if this would result in a treatment that is different thancapital funding received from the consolidated revenue fund, but this should be clarified.

7. Do you agree that appropriations would be separately reported?Yes. Appropriations should be a separate line item in the statement of operations. The amountshould be reported below a subtotal of the entitys own source revenues less expenses. An example

of this presentation format is provided in Appendix I.

8. Do you agree with the proposed disclosures?Yes. The disclosures provide useful information to departmental financial statement users.

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This concludes our thoughts on the Use of Appropriations Statement of Principles. We would bepleased to discuss any questions or comments you may have with respect to this letter. To do so,

please contact Jill Devanney ([email protected]), Rob Bourgeois ([email protected]), or theundersigned.

Regards,

Suzanne Wile, CAExecutive Director, Government AccountingNova Scotia Department of Finance
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

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APPENDIX I

Government Department AStatement of Operations

For the Year Ended March 31, 2012

Budget2012

Actual2012

Actual2011

RevenuesService Fees $ xxx $ xxx $ xxx

Recoveries xxx xxx xxxExpenses

Salaries and employee benefits x,xxx x,xxx x,xxx

Operating goods and services x,xxx x,xxx x,xxx

Travel xxx xxx xxx

Amortization xxx xxx xxx

Other xx xx xx

Surplus (deficit) beforegovernment contributions

x,xxx x,xxx x,xxx

Government contributions x,xxx x,xxx x,xxx

Surplus (deficit) $ nil $ nil $ nil

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April 20, 2012






Name: Doug Carr

Organization: Office of the Comptroller, Province of Prince Edward Island


General comments:

Although we do not support a separate standard for appropriations, and as such are not asked to respond to the remaining

questions we feel that it is important to give our feedback on these matters and have included responses to questions 2-8.

It is important that feedback is not limited to only those who are in support of an appropriations standard, in case the

standard is implemented it is important to have feedback from everyone not just a select group.


We do not support the need for a standard on accounting for the use of appropriations. Currently the Province of PEI does

not prepare department level general purpose financial statements, and we do not expect to do so in the future. We are

concerned that this standard is being added to the PSA Handbook for the few jurisdictions whom are producing these

types of statements.

We believe that department level general purpose financial statements should be considered supplementary reports. As,

PSAB currently uses SORPs in the PSA handbook to address the supplementary reporting needs of jurisdictions, and since

department or ministry general purpose financial statements would be supplementary information to the summary

financial statements of the government reporting entity any guidance from PSAB should be include in the PSA Handbook

as a SORP rather than a standard.

Another major concern that we have with this standard is that as proposed, it breaks away from PSABs established

standard format of mandatory compliance (although there may be optional reporting methods). It would be the first PSA

Handbook standard where compliance is entirely optional. Currently, all other PSAB guidance on matters that are

considered optional are not included in the PSA Handbook as a standard but are classified as SORPs. Not only are we

concerned about the possible precedent that would be set by including an optional standard in the PSA handbook, but we

are concerned with how the audit community will treat the optional nature of the standard. It has been our experience,

that the audit community often treats everything included in the Handbook as an absolute requirement for all jurisdictions

and therefore we are concerned that our Auditor General, will force department level general purpose financial statements

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on us. The precedent has been set in the past where auditors are requiring jurisdictions to comply with SORPs, which are

suppose to be guidelines for jurisdictions who are looking to present certain types of information.




Currently, P.005 states the proposals in this Statement of Principles would apply to those entities that directly access

funding under the authority of appropriations and do not receive the funds or other transfer as defined in GOVERNMENT

TRANSFERS, Section PS 3410. While we agree that should this standard be implemented that it should only apply to

entities that directly access funding under the authority of appropriations through consolidated revenue fund, we have a

few concerns regarding the clarity of this statement, as it is currently written.

We would like to see this statement be narrowed down and limited to only the circumstances when a jurisdiction chooses

to produce department/ministry level general purpose financial statements so it cannot be misinterpreted that all entities

that receive appropriations need to produce general purpose financial statements.

Also, it is important that there be a strong clarification between an appropriation and a transfer, this is especially important

in cases where ministries may include agencies. In P.035 PSAB supports the position that reporting entities may be basedon defined activities or separate legal entities. This statement of defined activities is vague in if it means the activities of

a ministry or department. Considering this issue in conjunction with this question if general purpose financial statement

are required at the ministry level and a ministry includes an agency that receives a transfer having a clear distinction

between an appropriation and a transfer becomes more important.


Although we understand the point PSAB is trying to make regarding the fact that a legal entity and an economic entity are

not necessarily the same thing (P032 - P033), it appears that they are failing to give due consideration to the some of the

concerns raised in their argument. Several of these arguments remain valid concerns regardless of the legal status of the

entity. The difficulty in separating a departments assets, liabilities, revenues and expenses from the overall entity is anissue, even if the legal entity component is taken out of the argument. For instance, what if the maintenance of a building is

the responsibility of one department but it is being used by others. Under PSABs proposed method of reporting would

cost allocations be required? If so, this could lead to major inconsistencies between fiscal years given the frequent nature of

re-organizations within government or even the frequencies which departments physical locations can be moved to suit

their changing needs.

Overall, it appears that PSAB is going out of their way to create a new definition of an entity so they can get the detail for

the high-level consolidated statements. However, the current conceptual framework is not set up to support this level of

detail and having pockets of exceptions within the overall handbook can lead to confusion from the users of the financial

statements.

P035 states, PSAB is of the view that for the purpose of applying the standard in the PSA handbook a public sector entity

can be either a separate legal entity or a defined activity. Either type of entity can issue general purpose financial

statements. However PSAB does not go into detail on what constitutes a defined activity and it is difficult to determine if

this actually translates into a department or ministry. What if a defined activity is jointly managed by multiple

departments/ministries? As written, with the lack of a clear definition this is left open to interpretation by jurisdictions,

which may result in a lack of comparability between the financial statements of the different jurisdictions, which was one of

PSABs main arguments in supporting the need for this standard. In PEIs case ministries can be made up of multiple

departments, or departments and crown corporations, and if we were to start preparing general purpose financial

statements the current lack of a definition of defined activity would not give us enough direction on if we should be

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preparing on a ministry or departmental level financial statements.



Yes

5. If you answered yes to Question 4, do you agree that the use of appropriations would be recognized in the

statement of operations?

If the use of appropriations were that be recognized, we agree that they should be recognized in the statement of

operations. P091 states, this approach is based on the fact that the use of authority under appropriations to meet

obligations results in an increase of economic resources of an entity. The increase, either as an increase in asset or decrease

in liabilities, should be reported as a credit in the statement of operations. This only indicates that appropriations should

be reported as a credit in the statement of operations, but not if the credit should be included as a revenue or as a below

the line adjustment.

P095 states, an entity that has incurred an obligation under the authority of an approved appropriation will draw upon the

consolidated revenue fund of the government to extinguish that liability. Applying the definitions in the FINANCIALSTATEMENT CONCEPTS, Sections PS 1000, extinguishing the liability should be accounted for as a credit in the statement of

operations. We are somewhat concerned with the treatment of the authorization of appropriations as a liability. If it is

considered to be a liability does that mean that a liability for authorized appropriations must be set-up? This statement also

refers to extinguishing the liability, does that mean that only the level of appropriation used (expensed) is recorded in the

statement of operations, and if so does the outstanding portion remain in the liability (if set-up), and what happens in the

case where the authority does not extend past the current fiscal year? PSAB does note in P104 that they could not come

up with an example of a situation when a parliamentary appropriation would result in a liability once an eligible

expenditure has been made; but what about when an appropriation has been authorized but no eligible expenditure has

been made, would that be a liability, and if so after the appropriation lapses how would such a liability be removed from

the books?


We agree with PSAB that appropriations should be recognized in the period that the legislation or equivalent authority for

the use of appropriation for the fiscal period has been enacted and is in effect. Our only concern with the recognition

criteria is the wording in Principle View 3b, currently it states that an eligible expenditure/expense has been incurred that

complies with the governing conditions under the legislation or equivalent authority. Does this mean that the authorized

appropriation is not recorded in full, and that the only appropriation recorded is the amount that would match the fiscal

periods expenses in order to achieve a net zero result?



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PSAB states in Principle 4 that a reconciliation of amounts recognized in the financial statements to the authorized

appropriations in the notes or supplementary schedules to the financial statements. Although PSAB is clear on the

recognition of appropriations in the notes and supplementary information, they are not clear on if the original or adjusted

appropriation is to be included in the financial statements.

As we have interpreted the disclosure requirements proposed in this statement of principles, it seems that the

reconciliation schedule will need to include:

- a reconciliation between the original amounts to the end adjusted results, ( including explanations of all the reasons for

these differences)- a reconciliation of appropriations under different accounting methods

- a reconciliation of unutilized authorized appropriations if carried forwarded to next fiscal period

We are concerned this will result in a complex reconciliation schedule that will be difficult to understand and ultimately be

of little value to the users of the general purpose financial statements.


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Finance Comptrollers Division Comptrollers Office715 401 York AvenueWinnipeg, Manitoba R3C 0P8Phone: 945-4919Fax: 948-3539


April 20th

, 2012

Mr. Tim Beauchamp, Director

Public Sector Accounting277 Wellington Street West

Toronto, Ontario

M5V 3H2

Dear Mr. Beauchamp:

Re: Statement of Principles Use of Appropriations

Thank you for the opportunity to comment on the Statement of Principles (SOP) Use of

Appropriations.

The Province of Manitoba (Province) does not support this SOP. In the Provinces view, there is no

need for a standard on the use of appropriations. The SOP states that if we do not support the need

for a standard then we need not reply to the other questions in the SOP. However, there are new

concepts introduced in this document which affect all governments and are too significant to abstainfrom commenting.

The Province views the preparation of departmental financial statements as a form of supplementaryreporting which does not require Public Sector Accounting (PSA) standards. Guidance on the use

of appropriations should be in the form of a non-authoritative Statement of Recommended Practice

(SORP). The Province views departments as cost centers which generate little to no revenue oftheir own. The Province currently produces departmental special purpose financial reports (SPFR)

which present the comparison of actual expenditures against the budgeted or appropriated amounts.

The SPFR are not presented in accordance with PSA standards and are not audited. But they domeet the needs of users who want to assess the accountability of the departments against their voted

appropriations.

Under the Highlights section, the scope of the SOP is not very clear. The section can beunderstood as requiring all departments and ministries to prepare General Purpose Financial

Statements (GPFS). However, paragraph .003 would appear to indicate that governments will

continue to retain their discretion as to whether departments should produce GPFS. Nonetheless, as

the SOP is currently worded, there is a risk that the audit community could interpret the standard asrequiring departments to produce GPFS.

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The proposed standard would introduce a new reporting entity into the PSA Handbook at a time that

the current conceptual framework is under review. A new standard would introduce the concept of

an economic entity. If PSAB wants to make such a significant change to the current definition ofthe reporting entity, then the work on the conceptual framework should first be completed.

There is no basis under the current conceptual framework to recognize appropriations as either

assets or revenue. Under PS1000.36, assets are future economic benefits under the reportingentitys control. The transaction or event giving rise to the reporting entitys control must have

already occurred. A department does not have access to the asset (i.e. the appropriation) until it hasaccrued the expenditure. With the exception of the departments own source revenues, the surplus

will always be nil. Under PS1000.46, revenues, including gains, are increases in economic

resources either by way of increases in assets or decreases in liabilities. The reporting entity has not

received an increase in assets or decrease in liabilities from its appropriations. Appropriationssimply represent the entitys authority to spend government resources.

Appropriations should also not be viewed as an adjustment to equity or as a contribution from

owners. The concepts of equity and contributions from owners are not financial statement

elements under the current conceptual framework. Further, if a department does account forappropriations as adjustment to equity, then the departments statement of operations only includes

expenses with a large deficit for the year.

Appropriations are already being recognized in the GPFS of public sector reporting entities. The

budget that is required under PSA standards includes the voted appropriations. The budget columnis where appropriations belong in the GPFS of public sector reporting entities.

In conclusion, the Province of Manitoba views a standard on the use of appropriations asunnecessary. The Province would prefer to see the guidance in the form of a non-authoritative

SORP. A standard on appropriations would not be in compliance with the current conceptual

framework. Appropriations do not represent an increase of assets under the direct control of the

department. Appropriations represent an authority to use government assets on the occurrence of afuture event. Viewing appropriations as equity or contributions from owners is also not in

compliance with the current conceptual framework. Finally, a standard on the use of appropriations

would introduce a new reporting entity into the PSA Handbook. PSAB should first complete its

review of the conceptual framework before it introduces new reporting entities and financialstatement elements as recommendations in the Handbook.

We appreciate the opportunity to comment on this document. If you have any questions or concernsrelated to this comments please contact the undersigned.

Yours truly,

Betty-Anne Pratt, CA

Provincial Comptroller

On Behalf of the Province of Manitoba

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DEPARTMENT PROFORMA FINANCIAL STATEMENTS

Department Proforma Financial Statements

Year Ended March 31, 2012

Note: According to section 4-54 of Manual of Financial Management, The department proformafinancial statements should form the basis for the ministry consolidated financial statements with the

other entities conforming to the framework where appropriate.

These numbers are for illustrative purposes only.

April 11, 2012

Appendix III

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2 Department Proforma Financial Statements

2011

Actual

(Restated

Budget Actual Note 3)(1)

(Schedule 4)

(in thousands)

Revenues (Schedule 1)

Internal Government Transfers 101,000$ 101,000$ 10,000$

Transfers from the Government of Canada 1,201,000 1,177,541 1,247,197

Premiums, Fees and Licences 1,800 1,838 2,259

Other Revenue(2) 18,462 19,470 20,868

1,322,262 1,299,849 1,280,324

Expenses - Directly Incurred (Note 2(b) and Schedule 9)

Program (Schedules 3(a), 5 and Note 8)Program / Output 1(3) 37,043 28,883 33,219

Program / Output 2 725,582 739,403 700,661

Program / Output 3 433,214 431,666 426,427

Program / Output 4 7,986 6,576 6,699

Program / Output 5 36,471 36,657 37,479

Program / Output 6 123,808 122,564 235,514

Program / Output 7 1,694 1,708 1,801

Program / Output 8 430,000 450,500 440,880

1,795,798 - 1,817,957 - 1,882,680

Net Operating Results (473,536)$ (518,108)$ (602,356)$

The accompanying notes and schedules are part of these financial statements.

Note: The Department Statement of Operations should be presented on the same basis as the Statement of

Operations in the 2011-12 Government Estimates. The total cost of a department's program activity

for the year, includes voted, statutory and non-cash amounts.

(1) Restatement is required by those departments impacted by the reorganization.(2)

If there are significant sources of Other Revenue (including recoveries), provide a breakdown. Gains

from Disposal of Tangible Capital Assets are included in Other Revenue.(3)

Loss on Disposal and Write-down of Tangible Capital Assets allocated are part of program expense.

DEPARTMENT OF XXXXXXXXXXX

STATEMENT OF OPERATIONS

Year ended March 31, 2012

2012

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Department Proforma Financial Statements 3

2012 2011

(Restated

Note 3)

(in thousands)

Assets

Cash and Cash Equivalents 8,521$ 9,027$

Accounts Receivable (Note 4) 327,435 309,529

Loans and Advances (Note 5) 16,150 14,403

Tangible Capital Assets (Note 7) 10,298 12,489

362,404$ 345,448$

Liabilities

Accounts Payable and Accrued Liabilities 79,915$ 37,578$

Unearned Revenue 4,356 5,432

Liabilities under Public Private Partnerships (Note 9) 2,000 3,000

86,271 46,010

Net Assets

Net Assets at Beginning of Year 299,438 21,052

Net Operating Results (518,108) (602,356)

Net Financing Provided from (for) General Revenues 494,803 880,742

Net Assets at End of Year 276,133 299,438

362,404$ 345,448$

Contractual obligations and contingent liabilities (Notes 10 and 11)



STATEMENT OF FINANCIAL POSITION

As at March 31, 2012

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STATEMENT OF CASH FLOWS


2012 2011

(Restated

Note 3)

(in thousands)

Operating Transactions

Net Operating Results (518,108)$ (602,356)$

Non-cash items included in Net Operating Results

Amortization 3,221 4,625

Grants in Kind 157,943 -

(Gain)/ Loss on Disposal of Tangible Capital Assets (6,000) 1,000

(362,944) (596,731)

(Increase) Decrease in Accounts Receivable (17,906) (358,029)

Increase (Decrease) in Accounts Payable and Accrued Liabilities 42,337 41,078

Increase (Decrease) in Unearned Revenue (1,076) 5,432

Cash Provided by (Applied to) Operating Transactions (339,589) (908,250)

Capital Transactions

Acquisition of Tangible Capital Assets (a)(d) (171,073) (8,894)

Proceeds on Disposal/Sale of Tangible Capital Assets(b)(d) 18,100 2,000

Cash Provided by (Applied to) Capital Transactions (152,973) (6,894)

Investing Transactions

Loans and Advances (21,747) (28,403)

Repayment of Loans and Advances 20,000 14,000

Cash Provided by (Applied to) Investing Transactions (1,747) (14,403)

Financing Transactions

Repayment of Liabilities under Public Private Partnerships (1,000) (2,000)

Net Financing Provided from (for) General Revenues (d) 494,803 880,742

Cash Provided by (Applied to) Financing Transactions 493,803 878,742

Increase (Decrease) in Cash and Cash Equivalents (506) (50,805)

Cash and Cash Equivalents at Beginning of Year(c) 9,027 59,832

Cash and Cash Equivalents at End of Year(c) 8,521$ 9,027$


Instructional Notes:(a)

Acquisition of Tangible Capital Assets, donated capital assets, and P3s should match with IMAGIS CapitalAsset Transfer account.

(b)Journal entries for Disposal of Tangible Capital Assets should be prepared according to section 7.3.4 in theFinancials Year End Manual.

(c)Cash and Cash Equivalents beginning of the year and end of the year should match with IMAGIS.

(d)If there is a non-cash Tangible Capital Asset transfer between two Departments, Net Financing Provided from(for) General Revenues and Acquisition of Tangible Capital Assets/Proceeds on Disposal/Sale of Tangible CapitalAssets should be footnoted, disclosing the amount transferred.

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DEPARTMENT OF XXXXXXXXXX

NOTES TO THE FINANCIAL STATEMENTS

(Include only those notes applicable to your Department. Please note instructional comments are bolded and

italicized in the notes and schedules.)

NOTE 1 AUTHORITY

The Department of XXX operates under the authority of theGovernment Organization Act, Chapter G-10,

Revised Statutes of Alberta 2000.

The Offices of the Legislative Assembly do not operate under the Government Organization Act.

The Department may decide to include a brief (5 10 lines) summary of the purpose of the

Department. This information should be consistent with the Departments mission/mandate/ vision

statements, and provide the reader with an understanding of the Departments operations. If it is

decided to include this brief summary, then the title of this note should be changed to AUTHORITY

AND PURPOSE.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICES

These financial statements are prepared in accordance with Canadian public sector accounting standards.

(a) Reporting Entity

The reporting entity is the Department of XXX, which is part of the Ministry of YYY and for which the

Minister of YYY is accountable. Other entities reporting to the Minister are the XXX Commission,

YYY Foundation, and the ZZZ Foundation. The activities of these organizations are not included in

these financial statements. The Ministry Annual Report provides a more comprehensive accounting

of the financial position and results of the Ministrys operations for which the Minister is accountable.

All departments of the Government of Alberta operate within the General Revenue Fund (the Fund).

The Fund is administered by the Minister of Finance. All cash receipts of departments are deposited

into the Fund and all cash disbursements made by departments are paid from the Fund. NetFinancing Provided from (for) General Revenues is the difference between all cash receipts and all

cash disbursements made.

(b) Basis of Financial Reporting

Revenues

All revenues are reported on the accrual basis of accounting. Cash received for which goods or

services have not been provided by year end is recorded as unearned revenue.

Internal Government Transfers

Internal government transfers are transfers between entities within the government reporting entity

where the entity making the transfer does not receive any goods or services directly in return.Internal government transfers are recognized as revenue when received.

Transfers from Government of Canada

Transfers from Government of Canada are recognized as revenue when authorized by federal

legislation or federal/provincial agreements, eligibility criteria if any are met and a reasonable

estimate of the amounts can be made.

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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICES (Contd)

Credit or Recovery

Credit or Recovery initiatives provide a basis for authorizing spending. Credits or Recoveries are

shown in the details of the Government Estimates for a supply vote. If budgeted revenues are not

fully realized, spending is reduced by an equivalent amount. If actual credit or recovery amounts

exceed budget, the Department may, with the approval of the Treasury Board Committee, use the

excess to fund additional expenses of the program. Schedule 2 discloses information on the

Departments credit or recovery initiatives.

Expenses

Directly Incurred

Directly incurred expenses are those costs the Department has primary responsibility and

accountability for, as reflected in the Governments budget documents.

In addition to program operating expenses such as salaries, supplies, etc., directly incurred expenses

also include:

amortization of tangible capital assets. pension costs, which are the cost of employer contributions for current service of employees

during the year.

valuation adjustments which include changes in the valuation allowances used to reflect financialassets at their net recoverable or other appropriate value. Valuation adjustments also represent

the change in managements estimate of future payments arising from obligations relating to

vacation pay, guarantees and indemnities.

Where relevant, the accounting policy relating to grants should be described (for example:

grants are recognized as expenses when authorized, eligibility criteria if any are met, and a

reasonable estimate of the amounts can be made). For major grants, additional details shouldbe provided for what constitutes authorization, what are the specific eligibility conditions and

if/how they are distinguished from payment conditions.

Incurred by Others

Services contributed by other entities in support of the (Ministry/Department/Agency) operations are

not recognized and are disclosed in Schedule 8 and allocated to programs in Schedule 9.

Assets

Financial assets are assets that could be used to discharge existing liabilities or finance future

operations and are not for consumption in the normal course of operations. Financial assets of the

Department are limited to financial claims, such as advances to and receivables from other

organizations, employees and other individuals, as well as inventories held for resale.

Cash and Cash EquivalentsInclude policy if significant to the Department.

Assets acquired by right are not included. Tangible capital assets of the Department are recorded athistorical cost and amortized on a straight-line basis over the estimated useful lives of the assets.

The threshold for capitalizing new systems development is $250,000 and the threshold for major

systems enhancements is $100,000. The threshold for all other tangible capital assets is $5,000. All

land is capitalized.

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DEPARTMENT OF XXXXXXXXXXNOTES TO THE FINANCIAL STATEMENTS


Where appropriate, the relevant parts of ICT Capitalization Policy should be included.

Donated tangible capital assets are recorded at their fair value at the time of contribution.

Amortization is only charged if the tangible capital asset is in use.

When physical assets (tangible capital assets and inventories) are gifted or sold for a nominal sum,

the fair values of these physical assets less any nominal proceeds are recorded as grants in kind.

Liabilities

Liabilities are recorded to the extent that they represent present obligations as a result of events and

transactions occurring prior to the end of the fiscal year. The settlement of liabilities will result in

sacrifice of economic benefits in the future.

Public Private Partnership (P3)

Include this note only if it is relevant to the Department.

A public private partnership (P3) is defined as a cooperative venture based on contractual obligationsbetween one or more public/private/not-for-profit partners that meet clearly defined public needs for

the provision of goods or services.

The Department accounts for P3 projects in accordance with the substance of the underlying

agreements. Agreements that transfer substantially all the risks and rewards of ownership of the

assets are classified as capital leases and are accounted for as follows:

The capital asset value and the corresponding liabilities are recorded at the net present value(NPV) of the minimum lease payments discounted using the Government of Albertas borrowing

rate for long term debt.

During construction, the capital assets (classified as work in progress) and the correspondingliability are recorded based on the estimated percentage complete.

Amortization on a straight-line basis over the estimated useful life commences when the asset isin service.

Net Assets/Net Liabilities

Net assets/net liabilities represent the difference between the carrying value of assets held by the

Department and its liabilities.

Current Canadian public sector accounting standards require a net debt presentation for the

statement of financial position in the summary financial statements of governments. Net debt

presentation reports the difference between financial assets and liabilities as net debt or net

financial assets as an indicator of the future revenues required as a result of past transactions and

events. These financial statements do not report a net debt indicator because the reporting of net

debt in financial statements other than the summary financial statements of governments is not

required under current public sector accounting standards, and the applicability of the net debt

presentation to the financial statements of public sector entities other than summary financial

statements of governments has not been established.

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Measurement Uncertainty

(in thousands)

Where an item is subject to measurement uncertainty, include the following disclosure:

Measurement uncertainty exists when there is a variance between the recognized or disclosed

amount and another reasonably possible amount. (Reference to financial statement item),

recorded/disclosed as $XXX in these financial statements, is subject to measurement uncertainty.

(Disclose the nature and extent of the uncertainty that is material when it is reasonably

possible that the amount could change by a material amount in the near term for each item.

For example, assuming the provision for doubtful debts is material to the financial

statements.) The provision for doubtful accounts, recorded as $16,310 in these financial statements,

is based on the assumption that 5% of the amount receivable at March 31, 2012 will not be collected.

It is possible that the unrecoverable amount could be as high as 7% by March 31, 2012 resulting in

an increase in the provision for doubtful accounts by $6,524.

Where appropriate, key assumptions, changes to past assumptions and reasons for

sensitivity should be disclosed. See PSA Handbook PS 2130.15 for further explanation.

(c) Change in Accounting Policy

(in thousands)

This note should be included only if relevant. See PSA Handbook PS 2120 for guidance on

when/how to disclose accounting policy changes.

NOTE 3 DISCONTINUED PROGRAMS/OPERATIONS

(in thousands)

This note applies to situations where the department discontinues through sale, abandonment,

shutdown or disposal by other means of a component of the department. A component comprises

operations and cash flow that can be clearly distinguished operationally for financial reporting

purposes from the rest of the department.

In most cases, the government changes the method a service is delivered rather than discontinues

the service altogether. Changing the method a service is delivered does not qualify as

discontinuance. Therefore, this note should be rare.

This discontinued operations note also does not apply to a transfer of an existing program between

ministries (see below for further instruction on program transfers).

The revenues and expenses of discontinued operations should be separately disclosed in theStatement of Operations or notes to the financial statements (actual, comparatives and budget).

A description of the facts and circumstances leading to the disposal or expected disposal, the

expected manner of disposal and timing of disposal and the carrying amounts of the major classes

of assets and liabilities included as part of a disposal group should be provided.

If not separately presented on the face of the Statement of Operations, the gain or loss on disposal

and the caption in the Statement of Operations that includes the gain or loss should also be

disclosed.

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NOTE 5 LOANS AND ADVANCES

(in thousands)

Loans and advances include Type A and B accountable advances as well as Type C accountable

advances that have been provided outside the reporting entity. This note may not be required ifDepartment only has travel advances and they are insignificant in total.

2012 2011

Gross Allowance Net Net

Amount for Doubtful Realizable Realizable

Accounts Value Value

Travel advances 6,789$ -$ 6,789$ 8,724$

Loans receivable 9,999 638 9,361 5,679

16,788$ 638$ 16,150$ 14,403$

A loan was provided under the Child Welfare Actto provide funding for the construction of a residence

administered by the Eye Glasses Foundation. The loan is repayable in equal annual payments over thenext XX years, plus interest charged at X % per annum.

A comment should also be added about the advances if they are significant in amount and unique in

nature.

Refer toparagraphs 7.1.7 & 8.1.2 of the Financials Year End Manual related to Accountable

Advances for petty cash and change funds. Petty cash advances Type C that support internal

operations within the entity should be reclassified to cash at year-end.

NOTE 6 VALUATION OF FINANCIAL ASSETS AND LIABILITIES

(Departments have the option of incorporating this note into Note 2 (b), Basis of Financial

Reporting.)

Fair value is the amount of consideration agreed upon in an arms length transaction between

knowledgeable, willing parties who are under no compulsion to act.

The fair values of cash and cash equivalents, accounts receivable, loans and advances, and accounts

payable and accrued liabilities are estimated to approximate their carrying values because of the short term

nature of these instruments. Fair values of loans are not reported due to there being no organized financial

market for the instruments and it is not practicable within constraints of timeliness or cost to estimate the fair

value with sufficient reliability.

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NOTE 7 TANGIBLE CAPITAL ASSETS

(in thousands)

See Schedule 13 on page 58 of 2010-11 Government of Alberta Annual Report, for the list of

categories of assets. Only the categories of tangible capital assets provided in this list should be

used in the Department financial statements. Use only the ones that apply to your Department.

Computer

Hardware

and 2012 2011

Land Equipment(1)

software Total Total

Estimated Useful Life Indefinite 10 years 3 years

Historical Cost(2)

Beginning of year 2,000$ 2,158$ 16,310$ 20,468$ 15,574$

Additions - 1,520 169,553 171,073 8,894

Disposals, including

write-downs - (462) (175,400) (175,862) (4,000)2,000$ 3,216$ 10,463$ 15,679$ 20,468$

Accumulated Amortization

Beginning of year - 566 7,413 7,979 4,354

Amortization expense - 265 2,956 3,221 4,625

Effect of disposals - - (5,819) (5,819) (1,000)

- 831 4,550 5,381 7,979

Net Book Value at

March 31, 2012 2,000$ 2,385$ 5,913$ 10,298$

Net Book Value at

March 31, 2011 2,000$ 1,592$ 8,897$ 12,489$

(1)Equipment includes SuperNet, vehicles, heavy equipment, fire protection equipment, office equipmentand furniture, and other equipment.

(2)Historical cost includes work-in-progress at March 31, 2012 totaling $XXXX comprised of: equipment$XXX (2011 - $XXX); and computer hardware and software $XXX (2011 - $XXX).

Disclose donated tangible capital assets if significant.

Where relevant, provide a reconciliation of additions and disposals with the Statement of CashFlows.

For additional detailed instructions refer to the template for Schedule A Tangible Capital AssetsContinuity Schedule provided by Treasury Board and Enterprise for consolidation purposes.

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NOTE 10 CONTRACTUAL OBLIGATIONS

(in thousands)

Contractual obligations are obligations of the Department to others that will become liabilities in the future

when the terms of those contracts or agreements are met.

2012 2011

Obligations under operating leases, contracts and programs 97$ 80$

Loans and advances approved* 68 55

Obligations under capital leases and public private partnerships

Operations and maintenance payments 152 110

Capital payments 290 246

607$ 491$

Estimated payment requirements for each of the next five years and thereafter are as follows:

Obligations Under Operating Leases, Contracts and Programs

Total

2012-13 22$

2013-14 21

2014-15 20

2015-16 16

2016-17 10

Thereafter 8

97$

* If applicable, add 5 years multi-year breakdown.

Obligations under Capital Leases and Public Private Partnerships

Operations and Maintenance Payments

Total

2012-13 50$

2013-14 36

3014-15 30

2015-16 17

2016-17 10

Thereafter 9152$

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NOTE 10 CONTRACTUAL OBLIGATIONS (Contd)

Total

2012-13 $ 632013-14 57

2014-15 43

2015-16 23

2016-17 20

Thereafter 84

290

Less amount representing interest (136)

Total NPV of Capital payments at scheduled completion date $ 154

Capital Payments

Inter-Entity contractual obligations need to be eliminated in the Government of Alberta Consolidated

Financial Statements, hence, this information needs to be provided by the ministries. For more

detailed information, please refer to the template for Schedule D Inter-Entity ContractualObligations, provided by Treasury Board and Enterprise for consolidation purposes.

NOTE 11 CONTINGENT LIABILITIES

(in thousands)

A contingent liability should be recognized in the financial statements when:

(a) it is likely that a future event will confirm that a liability has been incurred at the date of the

financial statements; and

(b) the amount can be reasonably estimated (PSA Handbook PS 3300.15).

The existence of a contingent liability at the date of the financial statements should be disclosed innotes to the financial statements when:

(a) the occurrence of the confirming future event is likely but the amount of the liability cannot be

reasonably estimated;

(b) the occurrence of the confirming future event is likely and an accrual has been made, but

there exists an exposure to liability in excess of the amount accrued; or

(c) the occurrence of the confirming future event is not determinable (PSA Handbook PS

3300.27).

The following information should be disclosed in notes or schedules relative to a contingent liability,

unless its occurrence is unlikely:

(a) the nature;

(b) the extent, except in those cases where the extent cannot be measured or disclosed of the

extent or disclosure of the extent would have an adverse effect on the outcome;

(c) the reason(s) for any non-disclosure of the extent; and

(d) when each estimate of the amount has been made, the basis of the estimate (PSA Handbook PS

3300.28).

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NOTE 11 CONTINGENT LIABILITIES (Contd)

This note should quote the total amount of claims if the information is available unless exposure to aliability is unlikely. Where the Department is jointly named with other government entities in theclaim, the Department should report the number of joint claims and the amount of these claims.

The claims that are covered by Alberta Risk Management Fund should also be disclosed andsuitably explained.

At March 31, 2012 the Department is a defendant in fourteen legal claims (2011 twelve legal claims).

Eleven of these claims have specified amounts totaling $278 and the remaining three have no specified

amount (2011 ten claims with a specified amount of $254 and two with no specified amount). Included in

the total legal claims are six claims amounting to $108 (2011 seven claims amounting to $110) in which

the Department has been jointly named with other entities. Two claims amounting to $17 (2011 five claims

amounting to $20) are covered by the Alberta Risk Management Fund.

The resulting loss, if any, from these claims cannot be determined.

NOTE 12 TRUST FUNDS UNDER ADMINISTRATION(in thousands)

The Department administers trust funds that are regulated funds consisting of public money over which the

Legislature has no power of appropriation. Because the Province has no equity in the funds and administers

them for the purpose of various trusts, they are not included in the Departments financial statements.

At March 31, 2012 trust funds under administration were as follows:

2012 2011

Health Givers Trust Fund 54,666$ 45,333$

The Clean Eye Glasses Trust Fund 12,123 11,456

66,789$ 56,789$

The amount for trust funds under administration is normally the trust equity, i.e. trust assets less

trust liabilities. Additional disclosure on the trust assets under administration may be appropriate,

particularly if trust assets approximate trust liabilities.

NOTE 13 PAYMENTS UNDER AGREEMENT

(in thousands)

The following would be used as a guideline where the Department has entered agreements under

section 25 of the Financial Administration Act with third parties pursuant to Treasury Board

approval.

The Department has entered into agreements to deliver programs and services that are fully funded by

[name of program sponsors or reference to program sponsors below]. Costs under these agreements

are incurred by the Department under authority in Section 25 of theFinancial Administration Act. Accounts

receivable includes $300 (2011 $50) and accounts payable includes $256 (2011 $100) relating to

payments under agreement.

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NOTE 13 PAYMENTS UNDER AGREEMENT

Amounts paid and payable under agreements with program sponsors are as follows:

2012 2011

Government of Canada (program sponsor)

Women in Doctoral Studies 400$ 200$

Faculty St. Jean 50 100

450$ 300$

NOTE 14 BENEFIT PLANS

(in thousands)

The Department participates in the multi-employer pension plans: Management Employees Pension Plan,

Public Service Pension Plan and Supplementary Retirement Plan for Public Service Managers. The

expense for these pension plans is equivalent to the annual contributions of $x* for the year ended

March 31, 2012 (2011 $x). Departments are not responsible for future funding of the plan deficit other

than through contribution increases.

At December 31, 2011, the Management Employees Pension Plan reported a deficiency of $xxx

(2010 deficiency $397,087), the Public Service Pension Plan reported a deficiency of $xxx (2010

deficiency $2,067,151) and the Supplementary Retirement Plan for Public Service Managers reported a

deficiency of $xxx (2010 deficiency $39,559).

The Department also participates in two multi-employer Long Term Disability Income Continuance Plans. At

March 31, 2012, the Bargaining Unit Plan reported an actuarial deficiency of $ xxx(2011 deficiency $4,141)

and the Management, Opted Out and Excluded Plan an actuarial surplus of $xxx (2011 surplus $7,020).

The expense for these two plans is limited to the employers annual contributions for the year.

This note will be updated annually by Financial Accounting and Standards when the information isavailable.

* Represents employers annual contributions to MEPP, PSPP and the Supplementary Retirement

Plan, and related Reserve Fund for Public Service Managers.

NOTE 15 SUBSEQUENT EVENTS

(in thousands)

This note should be included only if relevant.

Financial statements should not be adjusted for, but disclosure should be made of, those events

occurring between the date of the financial statements and the date of their completion that do not

relate to conditions that existed at the date of the financial statements but:

(a) cause significant changes to assets or liabilities in the subsequent period; or

(b) will, or may, have a significant effect on the future operations of the department (PSA

Handbook PS 2400.13).

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NOTE 15 SUBSEQUENT EVENTS (Contd)

Disclosure of a subsequent event that does not require adjustment of the financial statements

should include:

(a) a description of the nature of the event; and

(b) an estimate of the financial effect, when practicable, or a statement that such an estimate

cannot be made (PSA Handbook PS 2400.15).

The date of completion is the auditors report date. The auditor will consider the effect of events and

transactions of which the auditor became aware and that occurred up to that date.

NOTE 16 COMPARATIVE FIGURES

Certain 2011 figures have been reclassified to conform to the 2012 presentation.

NOTE 17 APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Senior Financial Officer and the Deputy Minister.

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Schedule 1


SCHEDULE TO FINANCIAL STATEMENTS

Revenues

2011

Actual

Budget Actual (Restated)

(in thousands)

Internal Government Transfers 101,000$ 101,000$ 10,000$

Transfers from the Government of Canada

A 624,000 624,980 607,957

B 520,000 492,875 580,837

C 30,000 32,321 32,160

D 23,000 23,852 24,241

E 4,000 3,513 2,002

1,201,000 1,177,541 1,247,197

Premiums, Fees and Licences

A 1,800 1,838 2,259

Other Revenue

A 5,010 6,008 29

B

B1 10,000 10,526 17,481

B2 1,438 590 1,300

B3 450 539 450

B4 2 2 2

C 1,562 1,805 1,606

18,462 19,470 20,868

Total Revenues 1,322,262$ 1,299,849$ 1,280,324$

Note: Revenue classification should be consistent with Budget 2011 Fiscal Plan.


2012

If there are significant sources of Other Revenue (including recoveries), provide a breakdown. Gains from

Disposals of Tangible Capital Assets are included in Other Revenue. Loss on Disposal and Write-down ofTangible Capital Assets allocated are part of program expense.

Revenue from the federal government under the Canada Social Transfer is now reported in the Department ofFinance. Previously this revenue had been reported in each of the ministries of Advanced Education andTechnology, Children and Youth Services, Employment and Immigration and Seniors and Community Supports.

For those Departments where Canada Social Transfer has been removed from the budget, restate thecomparatives and this should also be discussed in Note 3.

The transfer of the Lottery Fund revenue to the General Revenue Fund is now reported in the Department ofFinance. Previously this revenue had been reported in each of those departments allocated amounts from theLottery Fund.

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Schedule 2



Credit or Recovery


(Shortfall)/Authorized* Actual Excess

(in thousands)

Initiative 1 1,103$ 700$ (403)$

Initiative 2 518 521 3

Initiative 3 825 846 21

2,446$ 2,067$ (379)$ (1)

2012

(1)

Shortfall is deducted from current years authorized budget, as disclosed in Schedules 4 and 5 to the financialstatements.

A brief description of each credit or recovery initiative should be provided. As well, a comment is requiredindicating that the revenue of each initiative is included in Departments revenue. Departments have the optionof indicating where each initiatives credits or recoveries are reported in the Statement of Operations.

* Note: The authorized budget for credits or recoveries should be updated for any Treasury Board approvals.(Refer to Note 2(b)). It should be noted that only expenditures are authorized.

If the original budget differs from the authorized budget, a brief description of any Treasury Board approvalsshould be provided.

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DEPARTMENT OF XXXXXXXXXXX Schedule 3a


Expenses - Directly Incurred Detailed by Object


2011

Budget Actual Actual

(Restated)

(in thousands)

Salaries, Wages and Employee Benefits 212,072$ 196,309$ 218,878$

Supplies and Services 280,652 307,935 289,718

Grants 1,299,698 1,313,742 1,369,642

Financial Transactions and Other 5,155 1,650 2,017

Amortization of Tangbile Capital Assets 3,221 3,221 4,625

Total Expenses before Recoveries 1,800,798 1,822,857 1,884,880Less Recovery from Support Service Arrangements

with Related Parties (a) (5,000) (4,900) (2,200)

1,795,798$ 1,817,957$ 1,882,680$

From Service Provider's Point of View

2012

(a) The Department provides financial and administrative services to the Ministry of ______. Costs incurred by theDepartment for these services are recovered from the Ministry of __________.

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DEPARTMENT OF XXXXXXXXXXX Schedule 3b


Expenses - Directly Incurred Detailed by Object


2012 2011

Budget Actual Actual

(Restated)

(in thousands)

Salaries, Wages and Employee Benefits 205,000$ 220,000$ 195,000$

Supplies and Services 180,000 177,000 160,000

Supplies and Services from Support Service

Arrangements with Related Parties (a) 5,000 4,900 2,200

Grants 960,000 860,000 1,200,000

Financial Transactions and Other 52,000 51,300 1,300

Amortization of Tangible Capital Assets 5,000 5,000 4,500

1,407,000$ 1,318,200$ 1,563,000$

From Service Recipient's Point of View

(a) The Department receives financial and administrative services from the Department of _____________.

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Schedule 4



Budget


Authorized 2011-12

2011-12 Adjustment 2011-12 Supplementary Authorized

Estimates(1)

(a) Budget(2)

(b) Budget

(in thousands)

Revenues

Internal Government Tansfers 101,000$ -$ 101,000$ -$ 101,000$

Transfers from Government of Canada 1,201,000 - 1,201,000 - 1,201,000

Premiums, Fees and Licences 1,800 - 1,800 100 1,900

Other Revenue 18,462 - 18,462 - 18,462

1,322,262 - 1,322,262 100 1,322,362

Expenses - Directly Incurred

Programs

Program / Output 1 37,043 - 37,043 - 37,043

Program / Output 2 725,582 - 725,582 11,500 737,082

Program / Output 3 433,214 - 433,214 - 433,214

Program / Output 4 7,986 (500) 7,486 - 7,486

Program / Output 5 36,471 - 36,471 - 36,471

Program / Output 6 123,808 - 123,808 - 123,808

Program / Output 7 1,694 - 1,694 - 1,694

Program / Output 8 430,000 - 430,000 - 430,000

Credit or Recovery (Shortfall)

(Schedule 2) - (379) (379) - (379)

1,795,798 (879) 1,794,919 11,500 1,806,419

Net Operating Results (473,536)$ 879$ (472,657)$ (11,400)$ (484,057)$

Capital Investment (3) 135,000$ -$ 135,000$ 10,000$ 145,000$

Non-Budgetary Disbursements(4)

5,000$ -$ 5,000$ 1,000$ 6,000$

Note:

(1) The 2011-12 Government Estimates on the Statement of Operations no longer differentiates between statutoryand voted expenses. Valuation adjustments are allocated to each program. This allocation was previouslydisclosed on Schedule 9.

(2) Budget includes voted expense by program and amounts not required to be voted.

(3) Capital Investment consists of investments in capital projects, equipment purchases and inventory purchases.

(4) Non-Budgetary Disbursements consist of cash payments for the reductions of a liability, expenses to berecognized in a future year, or the acquisition of a financial asset. Financial liabilities for alternatively financedcapital projects are reduced by payments from a non-budgetary disbursement role.

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Schedule 4 (Contd)

(a) Adjustments include encumbrances, credit or recovery increases approved by Treasury Board and Enterprise and

credit or recovery shortfalls. In the event that actual Voted Expense and Capital Investment in the prior year exceeds

the authorized spending the difference is known as an encumbrance. The encumbrance reduces the budgeted amount

voted in the current year. (This column should be included only where applicable.) Any credit or recovery

shortfall is treated as a separate line item within the voted expenses. There is no need to allocate the shortfall

to a specific program. Treasury Board approval is pursuant to section 24(2) of theFinancial Administration Act(fornet budgeted initiatives). There can be other authorized changes to the budget besides voted supplementary.

For example, Treasury Board authorizations can change the authorized budget for statutory programs.

(b) Supplementary Estimates were approved on (date of Royal Assent ofAppropriation Acts).

* If there are any program transfers during the year, the estimates column should be restated as though the

transfer occurred at the beginning of the year. (i.e. Transfer should be shown in Estimates column with

appropriate footnote).

If there are no adjustments or Supplementary Estimates, Schedule 4 is not required.

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DEPARTMENT OF XXXXXXXXXXX Schedule 5


Comparison of Directly Incurred Expense, Capital Investment

and Non-Budgetary Disbursements by Element to Authorized Spending


Authorized 2011-12 Amounts 2011-12 Unexpended

2011-12 Adjust- 2011-12 Supple- Authorized Not Required Authorized 2011-12 (Over

Estimates* ments (a) Budget mentary (b) Budget To Be Voted (c) Spending Actual (d) Expended)

Expense and Capital Investments (in thousands)

Program / Output 1

1.0.1 Minister's Office 15,000$ -$ 15,000$ -$ 15,000$ -$ 15,000$ 9,557$ 5,443$1.0.2 Minister's Committees 3,022 - 3,022 - 3,022 (22) 3,000 2,833 167

1.0.3 Deputy Minister's Office 7,021 - 7,021 - 7,021 - 7,021 6,500 521

1.0.4 Finance and Administrative

Services 12,000 - 12,000 - 12,000 (90) 11,910 10,083 1,827

37,043 - 37,043 - 37,043 (112) 36,931 28,973 7,958

Program/Output 2

2.0.1 Executive Management 15,022 - 15,022 - 15,022 (22) 15,000 29,071 (14,071)

2.0.2 Safety Services 122,000 - 122,000 - 122,000 - 122,000 145,000 (23,000)

2.0.3 Maintenance 150,560 - 150,560 - 150,560 (2,298) 148,262 150,000 (1,738)

2.1 Construction and

Upgrading of Facilities

2.1.1 Accommodation Services

- Expense 288,000 - 288,000 11,500 299,500 - 299,500 301,630 (2,130)

- Capital Investment 6,000 - 6,000 3,000 9,000 - 9,000 12,840 (3,840)

2.1.2 Cross Government Initiatives

- Expense 150,000 - 150,000 - 150,000 - 150,000 116,000 34,000

- Capital Investment 26,000 - 26,000 - 26,000 - 26,000 27,233 (

Item 64812

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