Financial Statements 2018–19

Statement of Management Responsibility Including Internal Control over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2019 and all information contained in these financial statements rests with the management of the Office of the Commissioner of Official Languages (OCOL). These financial statements have been prepared by management using the Government of Canada's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of OCOL’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada , and included in OCOL’s Departmental Results Report , is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout OCOL and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2019 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex in the 2018- 19 Departmental Results Report .

The effectiveness and adequacy of OCOL's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of OCOL's operations, and by the Audit and Evaluation Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements for approval to the Commissioner.

The Auditor General of Canada, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of OCOL's financial statements, which does not include an audit opinion on the annual assessment of the effectiveness of OCOL's internal controls over financial reporting.

The original version was signed by:
Raymond Théberge
Commissioner of Official Languages

The original version was signed by:
Éric Trépanier, CPA, CGA
Chief Financial Officer
Assistant Commissioner, Corporate Management

 

Gatineau, Canada
July 25, 2019

Independent Auditor’s Report

To the Speaker of the House of Commons and the Speaker of the Senate

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of the Office of the Commissioner of Official Languages (the OCOL), which comprise the statement of financial position as at 31 March 2019, and the statement of operations and net financial position, statement of change in net debt and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the OCOL as at 31 March 2019, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the OCOL in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the OCOL’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the OCOL or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the OCOL’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the OCOL’s internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
  • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the OCOL’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the OCOL to cease to continue as a going concern.
  • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Compliance with Specified Authorities  

Opinion

In conjunction with the audit of the financial statements, we have audited transactions of the Office of the Commissioner of Official Languages coming to our notice for compliance with specified authorities. The specified authorities against which compliance was audited are the Financial Administration Act and regulations and the Official Languages Act.

In our opinion, the transactions of the Office of the Commissioner of Official Languages that came to our notice during the audit of the financial statements have complied, in all material respects, with the specified authorities referred to above.

Responsibilities of Management for Compliance with Specified Authorities

Management is responsible for the Office of the Commissioner of Official Languages’ compliance with the specified authorities named above, and for such internal control as management determines is necessary to enable the Office of the Commissioner of Official Languages to comply with the specified authorities.

Auditor’s Responsibilities for the Audit of Compliance with Specified Authorities

Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting on whether the transactions coming to our notice during the audit of the financial statements are in compliance with the specified authorities referred to above.

The original version was signed by:
Nathalie Chartrand, CPA, CA
Principal for the Auditor General of Canada

 

25 July 2019
Ottawa, Canada

Financial Statements

Statement of Financial Position As at March 31 (in dollars)

  2019 2018
Liabilities: Accounts payable and accrued liabilities (note 4) 2,977,597 2,445,906
Liabilities: Vacation pay and compensatory leave 910,624 915,264
Liabilities: Employee future benefits (note 5) 205,794 313,267
Total liabilities 4,094,015 3,674,437
Financial assets: Due from the Consolidated Revenue Fund 2,694,330 2,061,605
Financial assets: Accounts receivable and advances (note 6) 274,014 406,186
Total financial assets 2,968,344 2,467,791
Net debt 1,125,671 1,206,646
Non-financial assets: Prepaid expenses 161,674 245,173
Non-financial assets: Tangible capital assets (note 7) 1,962,368 1,805,617
Total non-financial assets 2,124,042 2,050,790
Net financial position 998,371 844,144

Contractual obligations (note 8)

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

The original version was signed by:
Raymond Théberge
Commissioner of Official Languages

The original version was signed by:
Éric Trépanier, CPA, CGA
Chief Financial Officer
Assistant Commissioner, Corporate Management

 

Gatineau, Canada
July 25, 2019

Statement of Operations and Net Financial Position For the Year Ended March 31 (in dollars)

  Planned results (note 2a)
2019
2019 2018
Expenses: Protection of rights related to official languages 8,709,767 9,320,236 8,781,273
Expenses: Advancement of English and French in Canadian society 8,126,508 8,180,805 8,509,556
Expenses: Internal Services 7,696,001 7,250,831 6,825,819
Net cost of operations before government funding 24,532,276 24,751,872 24,116,648
Government funding: Net cash provided by Government of Canada 21,457,281 21,159,469 20,391,353
Government funding: Change in due from Consolidated Revenue Fund (152,411) 632,725 607,612
Government funding: Services provided without charge by other government departments (note 9) 3,024,210 3,046,574 3,169,220
Government funding: Transfer of accounts receivables from other government departments - 67,331 -
Net cost (revenue) of operations after government funding 203,196 (154,227) (51,537)
Net financial position - Beginning of year 509,038 844,144 792,607
Net financial position - End of year 305,842 998,371 844,144

Segmented information (note 10)

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

 

Statement of Change in Net Debt For the Year Ended March 31 (in dollars)

  Planned results (note 2a)
2019
2019 2018
Net cost (revenue) of operations after government funding 203,196 (154,227) (51,537)
Change due to tangible capital assets: Acquisition of tangible capital assets (note 7) 30,000 509,063 150,920
Change due to tangible capital assets: Amortization of tangible capital assets (note 7) (303,258) (352,312) (342,912)
Total change due to tangible capital assets (273,258) 156,751 (191,992)
Change due to prepaid expenses - (83,499) 114,867
Net decrease in net debt (70,062) (80,975) (128,662)
Net debt - Beginning of year 1,310,425 1,206,646 1,335,308
Net debt - End of year 1,240,363 1,125,671 1,206,646

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

 

Statement of Cash Flows For the Year Ended March 31 (in dollars)

Operating activities 2019 2018
Net cost of operations before government funding 24,751,872 24,116,648
Non-cash items: Amortization of tangible capital assets (note 7) (352,312) (342,912)
Non-cash items: Services provided without charge by other government departments (note 9) (3,046,574) (3,169,220)
Non-cash items: Transfer of accounts receivable from other government departments (67,331) -
Variations in Statement of Financial Position: Decrease in accounts receivable and advances (132,172) (5,176)
Variations in Statement of Financial Position: Increase (decrease) in prepaid expenses (83,499) 114,867
Variations in Statement of Financial Position: (Increase) in accounts payable and accrued liabilities (note 4, 7) (283,554) (566,365)
Variations in Statement of Financial Position: Decrease in vacation pay and compensatory leave 4,640 52,227
Variations in Statement of Financial Position: Decrease in employee future benefits 107,473 87,385
Cash used in operating activities 20,898,543 20,287,454
Capital investing activities: Acquisition of tangible capital assets (note 7) 260,926 103,899
Cash used in capital investing activities 260,926 103,899
Net cash provided by Government of Canada 21,159,469 20,391,353

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

 

Notes to the Financial Statements For the Year Ended March 31

1. Authority and objectives

The Parliament of Canada adopted the first Official Languages Act in 1969. This Act provided that English and French would henceforth have “equality of status and equal rights and privileges as to their use in all the institutions of the Parliament and Government of Canada”.

Under the Act , therefore, the Commissioner of Official Languages is required to take every measure within his power to ensure that the three main objectives of the Official Languages Act are met:

  • the equality of the status and use of English and French in Parliament, the Government of Canada, the federal administration and the institutions subject to the Act ;
  • the development of official language communities in Canada; and
  • the advancement of the equality of English and French in Canadian society.

The Commissioner of Official Languages is appointed by commission under the Great Seal, after approval by resolution of the House of Commons and the Senate, for a seven-year term. The Commissioner of Official Languages reports directly to Parliament.

The Office of the Commissioner of Official Languages (OCOL), which serves the public from its offices in Gatineau and its five regional offices, supports the Commissioner of Official Languages in fulfilling his mandate.

OCOL has three programs which are described below:

Through the Protection of rights related to official languages program, OCOL takes the appropriate steps, including complaints processing, audits and interventions, to ensure compliance with the Official Languages Act and language rights in Canada.

Through the Advancement of English and French in Canadian society program, OCOL raises awareness of issues related to the advancement of the equal status of English and French in federal institutions and Canadian society, while supporting the development and vitality of Official Language Minority Communities.

The Internal Services program involves those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are Management and Oversight Services, Communications Services, Legal Services, Human Resources Management Services, Financial Management Services, Information Management Services, Information Technology Services, Real Property Services, Materiel Services and Acquisition Services.

Since legal remedies are set out in the Act , the Office of the Commissioner of Official Languages’ Legal Services are excluded from its Internal Services and are an integral part of its Protection of rights related to official languages program. As well, given their specific mandate, its Communications Services are not included in Internal Services, but rather form part of its Advancement of English and French in Canadian society program.

OCOL is named in Schedule I.1 of the Financial Administration Act (FAA) and is funded through annual parliamentary authorities.

2. Summary of significant accounting policies

These financial statements are prepared using the Government of Canada's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

OCOL is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to OCOL do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” section of the Statement of Operations and Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2018-19 Departmental Plan. The planned results amounts in the “Government funding” section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt were prepared for internal management purposes and have not been previously published.

Liquidity risk is the risk that OCOL will encounter difficulty in meeting its obligations associated with financial liabilities. OCOL’s objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board.

Each year, OCOL presents information on planned expenditures to Parliament through the tabling of Estimates publications. These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures. OCOL exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

Consistent with Section 32 of the Financial Administration Act , OCOL’s policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

OCOL’s risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.

(b) Net cash provided by Government of Canada

OCOL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCOL is deposited to the CRF, and all cash disbursements made by OCOL are paid from the CRF. The net cash provided by Government of Canada is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government of Canada.

(c) Due from 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 OCOL is entitled to draw from the CRF without further authorities to discharge its liabilities. This amount is not considered to be a financial instrument.

(d) Expenses

Expenses are recorded on the accrual basis. Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

(e) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. OCOL’s contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. OCOL’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 accumulation of severance benefits for voluntary departures ceased for applicable employee groups. Due to the size of OCOL, the remaining obligation for employees who did not withdraw benefits is calculated using employee specific information.

(f) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. OCOL is not exposed to significant credit risk. OCOL provides services to other government departments and agencies and to external parties in the normal course of business. Accounts receivable are due on demand. The majority of accounts receivable are due from other Government of Canada departments and agencies where there is minimal potential risk of loss. The maximum exposures OCOL has to credit risk equal to the carrying value of its accounts receivable.

(g) Contingent liabilities

Contingent liabilities are potential liabilities, which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(h) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. OCOL does not capitalize intangible assets.

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

Asset Class Amortization Period
Equipment and material 5 years
Informatics hardware 4 years
Furniture 5 years
Informatics software 3 years
Motor vehicles 7 years
Leasehold improvements Lesser of the remaining term of the lease or the useful life of the improvement
Assets under construction Once in service, in accordance with asset type
 

(i) Related party transactions

Inter-entity transactions

OCOL is related, in terms of common ownership, to all government departments, agencies, and Crown corporations. OCOL enters into transactions with these entities in the normal course of business, which are measured at the carrying amount, except for the following:

  1. Inter-entity transactions are measured at the exchange amount when undertaken on similar terms and conditions to those adopted if the entities where dealing at arm’s length, or where costs provided are recovered.
  2. Goods or services received without charge between commonly controlled entities, when used in the normal course of the operations and would otherwise have been purchased, are recorded as revenues and expenses at their carrying amount.
Other related party transactions

Related parties also include key management personnel (KMP) having authority and responsibility for planning, directing and controlling the activities of OCOL, as well as their close family members. OCOL has defined its KMP to be the Commissioner, Assistant Commissioners, and General Counsel.

These related party transactions are recorded at the exchange amount.

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect OCOL's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the liability for vacation pay, employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

OCOL receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, OCOL 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) Reconciliation of net cost of operations to current year authorities used
(in dollars)
  2019 2018
Net cost of operations before government funding 24,751,872 24,116,648
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 9)
(3,046,574) (3,169,220)
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (note 7)
(352,312) (342,912)
Adjustments for items affecting net cost of operations but not affecting authorities:
Decrease in employee future benefits
107,473 87,385
Adjustments for items affecting net cost of operations but not affecting authorities:
Refund of prior years' expenses
61,556 68,395
Adjustments for items affecting net cost of operations but not affecting authorities:
Decrease in vacation pay and compensatory leave
4,640 52,227
Adjustments for items affecting net cost of operations but not affecting authorities:
Other
(49,699) (30,720)
Total items affecting net cost of operations but not affecting authorities (3,274,916) (3,334,845)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (note 7)
509,063 150,920
Adjustments for items not affecting net cost of operations but affecting authorities:
Increase (decrease) in prepaid expenses
(83,499) 114,867
Total items not affecting net cost of operations but affecting authorities 425,564 265,787
Current year authorities used 21,902,520 21,047,590
 
(b) Reconciliation of authorities provided and used
(in dollars)
  2019 2018
Authorities provided: Vote 1 – Program expenditures 20,511,019 20,072,432
Authorities provided: Statutory – Contributions to employee benefit plans 2,152,246 2,119,222
Authorities provided: Statutory – Proceeds from the disposal of surplus Crown assets 4,427 3,853
Total authorities provided 22,667,692 22,195,507
Less: Lapsed: Operating (765,172) (1,144,064)
Less: Authorities available for future years - (3,853)
Current year authorities used 21,902,520 21,047,590

4. Accounts payable and accrued liabilities

Accounts payables and accrued liabilities are measured at cost, the majority of which are due within three months of year-end.

The following table presents details of the OCOL’s accounts payable and accrued liabilities:

Accounts payable and accrued liabilities (in dollars)
  2019 2018
Other government departments and agencies 111,300 332,839
External parties 1,158,397 889,609
Total accounts payable 1,269,697 1,222,448
Accrued liabilities 1,707,900 1,223,458
Total accounts payable and accrued liabilities 2,977,597 2,445,906

5. Employee future benefits

(a) Pension benefits

OCOL’s employees participate in the Public Service Pension Plan (the ''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 Plan benefits and they are indexed to inflation.

Both the employees and OCOL contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 related to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2018–19 expense amounts to $1,500,977 ($1,443,190 in 2017–18). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2017–18) the employee contributions and, for Group 2 members, approximately 1.00 time (1.00 time in 2017–18) the employee contributions.

OCOL’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.

(b) Severance benefits

Severance benefits provided to OCOL's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. As at March 31, 2019, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

Severance benefits (in dollars)
  2019 2018
Accrued benefit obligation - Beginning of year 313,267 400,652
Expense for the year (11,994) (51,718)
Benefits paid during the year (95,479) (35,667)
Accrued benefit obligation - End of year 205,794 313,267

6. Accounts receivable and advances

The following table presents details of OCOL's accounts receivable and advances balances:

Accounts receivable and advances (in dollars)
  2019 2018
Receivables - Other government departments and agencies 182,355 308,504
Employee advances and overpayments 91,659 97,682
Total accounts receivable and advances 274,014 406,186

7. Tangible capital assets

Cost
(in dollars)
  Opening Balance Acquisitions Disposals and Write-Offs Closing Balance
Equipment and material 606,521 148,964 - 755,485
Informatics hardware 656,936 159,150 - 816,086
Furniture 459,219 - - 459,219
Informatics software 250,337 - - 250,337
Motor vehicles 30,557 - - 30,557
Leasehold improvements 1,852,136 79,717 - 1,931,853
Assets under construction - 121,232 - 121,232
Total Cost 3,855,706 509,063 - 4,364,769
Accumulated Amortization
(in dollars)
  Opening Balance Amortization Disposals and Write-Offs Closing Balance
Equipment and material 439,819 75,042 - 514,861
Informatics hardware 549,804 63,903 - 613,707
Furniture 337,621 80,042 - 417,663
Informatics software 250,337 - - 250,337
Motor vehicles 364 4,365 - 4,729
Leasehold improvements 472,144 128,960 - 601,104
Total Accumulated Amortization 2,050,089 352,312 - 2,402,401
Net Book Value
(in dollars)
  Opening Balance Closing Balance
Equipment and material 166,702 240,624
Informatics hardware 107,132 202,379
Furniture 121,598 41,556
Informatics software - -
Motor vehicles 30,193 25,828
Leasehold improvements 1,379,992 1,330,749
Asset under construction - 121,232
Total Net Book Value 1,805,617 1,962,368

The "Acquisition of tangible capital assets” and the “(Increase) in accounts payables and accrued liabilities” presented in the Statement of Cash Flows include an amount of $82,307 in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 2017-18 that were to be paid in 2018-19 and excludes an amount of $330,444 as the amount relates to capital investing activities in 2018-19 that remain to be paid as at March 31, 2019.

8. Contractual obligations

The nature of OCOL’s activities may result in some large multi-year contracts and obligations whereby OCOL will be obligated to make future payments when the services/goods are received. Significant contractual obligations, all related to operating leases, that can be reasonably estimated are summarized as follows:

Contractual obligations (in dollars)
  2019-20 2020-21 2021-22 2022-23 2023-24
Total contractual obligations 35,594 35,594 28,040 28,040 28,040

9. Related party transactions

(a) Services provided without charge by other government departments

During the year, OCOL received services without charge from other government departments, related to accommodation, the employer’s contribution to the health and dental insurance plans, payroll services and audit services. These services provided without charge have been recorded in OCOL’s Statement of Operations and Net Financial Position as follows:

Common services provided without charge by other government departments (in dollars)
  2019 2018
Accommodation 1,645,296 1,693,384
Employer's contribution to the health and dental insurance plans 1,288,565 1,352,594
Audit services 108,000 106,000
Payroll services 4,713 17,242
Total 3,046,574 3,169,220

(b) Other transactions with related parties

OCOL incurred expenses from transactions in the normal course of business with other government departments, agencies and Crown corporations. These expenses exclude services received without charge, which are already disclosed in a). Other transactions with related parties are summarized below :

Other transactions with related parties (in dollars)
  2019 2018
Accounts receivable 182,355 308,504
Accounts payable 111,300 332,839
Expenses 3,433,927 3,108,875
Acquisition of tangible capital assets 185,063 87,766

10. Segmented information

Presentation by segment is based on OCOL's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred for the programs, by major object of expenses. The segment results for the period are as follows:

Segmented information (in dollars)
Operating expenses Protection of rights related to official languages Advancement of English and French in Canadian society Internal Services Total
2019
Total
2018
Salaries and employee benefits 7,732,069 6,024,624 4,743,319 18,500,012 18,085,751
Professional and special services 534,271 892,921 1,118,573 2,545,765 2,435,552
Accommodation 696,575 535,669 413,052 1,645,296 1,693,384
Transportation and telecommunications 57,981 287,029 286,858 631,868 585,467
Small equipments, materials and supplies 85,873 141,435 224,497 451,805 327,554
Amortization of tangible capital assets 149,160 114,705 88,447 352,312 342,912
Rentals 4,037 22,843 312,808 339,688 292,814
Repairs, maintenance and others 59,573 51,372 46,304 157,249 85,706
Communications and printing 697 110,207 16,973 127,877 267,508
Net cost of operations 9,320,236 8,180,805 7,250,831 24,751,872 24,116,648

11. Subsequent Event

On June 12, 2019, an agreement between the Government of Canada and 15 of its public service unions was signed to compensate current and former government employees for damages associated with the Phoenix payroll system. The provisions of this agreement will also be extended to excluded employees from the 15 public service unions, as well as unrepresented government employees and executives. Compensation for fiscal years 2016-17 to 2018-19 includes up to 4 days of leave credits. Those credits are expected to be added to employees’ leave banks in 2019-20. OCOL estimates these additional leave credits at approximately $70,000.

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting (ICFR) (unaudited); for the year ended March 31, 2019

1. Introduction

This document provides summary information on the measures taken by the Office of the Commissioner of Official Languages (OCOL) to maintain an effective system of internal control over financial reporting (ICFR), including information on internal control management, assessment results and related action plans.

Detailed information on OCOL’s authority, mandate and program activities can be found in the 2018-2019 Departmental Results Report and the 2019–2020 Departmental Plan.

2. Organisational system of internal control over financial reporting

2.1 Internal control management

OCOL has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An organizational internal control management framework, approved by the Commissioner, is in place and includes:

  • Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
  • Values and ethics;
  • Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
  • Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and organizational senior management and, as applicable, OCOL’s Audit and Evaluation Committee (AEC).

The AEC provides advice to the Commissioner on the adequacy and functioning of OCOL’s risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

OCOL relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows:

Common Arrangements
  • Public Services and Procurement Canada (PSPC) centrally administers:
    • the payments of salaries;
    • the procurement of goods and services in accordance with OCOL’s Delegation of Authority; and
    • provides accommodation services;
  • Treasury Board of Canada Secretariat provides information used to calculate various accruals and allowances;
  • Public Service Commission provides OCOL with language evaluation services;
  • The Office of the Auditor General provides audit services; and
  • Shared Services Canada provides information technology infrastructure services to OCOL in the areas of internet connectivity and email security.
Specific Arrangements
  • PSPC provides OCOL with:
    • a financial system platform, the Common Departmental Financial System (CDFS), to capture and report all financial transactions;
    • an employee pay administration service to capture all pay transactions; and
    • translation services;
  • OCOL and the other tenants at 30 Victoria Street, Gatineau, have entered into a Memorandum of Understanding (MOU) for base building security and multi tenants responsibilitiesFootnote 1; and
  • The Canada School of Public Service provides OCOL with some training services1.

3. Organizational assessment results during fiscal year 2018-2019

During 2018-2019, OCOL completed the Design effectiveness testing regarding Entity-Level Controls (ELCs) and Information Technology General Controls (ITGCs) and on-going monitoring for Pay Administration.

The controls in place during the period of testing provided reasonable assurance that the risk of non-compliance to the Financial Administration Act and Treasury Board of Canada policies and directives is substantially limited.

However, the testing revealed that some remediation was recommended, such as:

  • For Salary/Pay Administration controls: train additional resources to decrease reliance on select key individuals;
  • For ELCs: improve documentation related to OCOL’s Integrated Operational Plan and Corporate Risk Profile process;
  • For ITGCs: Development of formally approved plan (i.e. Test Management Strategy, Quality Assurance, Release Management Strategy)

Management action plans addressing the recommendations have been developed by the process owners and are actively monitored and reported to senior management and the Audit Committee.

4. Organizational action plan

4.1 Progress during fiscal year 2018-2019

During 2018-2019, OCOL continued to make significant progress in assessing and improving its key controls. The following table summarizes OCOL’s progress based on the plans identified in the previous fiscal year’s annex.

Elements in previous year’s action plan Status
Travel expenses Remediation of deficiencies related to design and operational effectiveness was completed.
Salaries / Pay administration Ongoing monitoring was completed. Remediation of deficiencies advanced.
Entity Level Controls (ELC) Design effectiveness testing completed and remediation of deficiencies advanced.
Information Technology General Controls (ITGC) Design effectiveness testing completed and remediation of deficiencies advanced.

4.2 Status and action plan for the next fiscal year and subsequent years

Building on progress to date, OCOL is positioned to complete the full assessment of its system of internal control of financial reporting in 2019-2020, excluding Information Technology General Controls (ITGCs) for which operational effectiveness testing and remediation are planned in 2020-2021. In 2019-2020, OCOL will apply its rotational ongoing monitoring of key control areas to reassess control performance on a risk basis. The status and action plan for the completion of the identified control areas for the next fiscal year and for subsequent years are shown in the following table.

Key control areas Design effectiveness testing and remediation Operational effectiveness testing and remediation Ongoing monitoring rotation
Entity-level controls Complete Complete Future years
IT general controls Complete 2020-2021 Future years
Procure to Pay Complete Complete 2019-2020
Salaries / Pay Administration 2019/2020 Complete Future years
Capital Assets Complete Complete 2019-2020
Budgeting and Forecasting Complete Complete 2020-2021
Financial close and reporting Complete Complete 2020-2021
Date modified:
2020-12-18