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Notes to the Financial Statements (unaudited)

Notes to the Financial Statements (unaudited)

1. Authority and Objectives

The mandate of the Public Service Labour Relations Board (the Board), established in 2005 by the enactment of Public Service Labour Relations Act and successor to the former Public Service Staff Relations Board established in 1967, is to effectively and efficiently administer the systems of collective bargaining and grievance adjudication established under the Public Service Labour Relations Act and the Parliamentary Employment and Staff Relations Act, as well as certain provisions of Part II of the Canada Labour Code concerning occupational safety and health applicable to employees in the Public Service. The Board also administers the Yukon Public Service Labour Relations Act and the Yukon's Education Labour Relations Act.

2. Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

  1. Parliamentary appropriations
    The Board is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Board do not parallel financial reporting according to Canadian generally accepted accounting principles. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.
  2. Net Cash Provided by Government
    The Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Board is deposited to the CRF and all cash disbursements made by the Board are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
  3. Change in net position in the Consolidated Revenue Fund
    Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
  4. Revenues
    Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  5. Expenses
    Expenses are recorded on the accrual basis:
    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation, the employer’s contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Board's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. Current legislation does not require the Board to make contributions for any actuarial deficiencies of the Plan.
    • Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. Accounts receivable
    Receivables recorded by the Board are from Other Government Departments. Recovery is considered certain and a provision has not been made.
  8. Contingent Liabilities
    In the normal course of its operations, the Board may become involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements. The Board has no contingent liabilities as at March 31, 2009.
  9. Tangible capital assets
    All tangible capital assets plus leasehold improvements having an initial cost of $3,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value. Amortization of capital assets is done on a straight-line basis over the estimated useful life of the tangible capital asset as follows:
    Tangible Capital Asset class Amortization Period
    Furniture and equipment 5 years
    Informatics hardware and software 3 years
  10. Foreign currency transactions
    Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars using exchange rates in effect on March 31st. Gains and losses resulting from foreign currency transactions are included in the statement of operations.
  11. Measurement uncertainty
    The preparation of these financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the useful lives of tangible capital assets, the assumptions underlying the employee severance benefits liability and the assessment of contingent liabilities. 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 Appropriations

The Board receives its funding through annual Parliamentary appropriations. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Board 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 Parliamentary appropriations used:

(in dollars) 2009 2008
Net cost of operations 16,137,473 14,153,814
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Services received without charge (2,853,681) (2,339,873)
Increase in employee severance benefit liability (335,727) (39,348)
Amortization of tangible capital assets (142,084) (187,186)
Increase vacation pay and compensatory leave liability (96,319) (8,169)
Refunds of prior years expenditures 10,455 13,638
Revenue not available for spending 40 146
Other (2) -
  12,720,155 11,593,022
     
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (Less):
Acquisition of tangible capital assets 212,767 133,688
Current year Parliamentary appropriations used 12,932,922 11,726,710

(b) Parliamentary appropriations provided and used:

(in dollars) 2009 2008
Vote 85 - Program expenditures 5,996,000 10,617,000
Vote 85a - Supplementary - 2,548,500
Vote 85b - Supplementary 5,401,410 -
Transfer from Treasury Board - Vote 5 130,191 -
Transfer from Treasury Board - Vote 15 80,155 79,000
Transfer from Treasury Board - Vote 22   853,650
Transfer from Treasury Board - Vote 25 530,850  
Transfer from Treasury Board - Vote 30 47 999  
Disposal of surplus Crown assets - 141
Contributions to employee benefit plan 1,121,992 1,082,950
Total autorities 13,308,597 15,181,241
Less: Lapsed appropriations - Operating (375,675) (3,454,531)
Current year Parliamentary appropriations used 12,932,922 11,726,710

3. Parliamentary Appropriations

(c) Reconciliation of net cash provided by Government of Canada to current year Parliamentary appropriations used:

(in dollars) 2009 2008
Net cash provided by Government of Canada 13,185,156 11,439,908
Refunds of prior years expenditures 10,455 13,638
Revenue not available for spending 40 146
     
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances (100,118) (61,243)
Variation in accounts payable and accrued liabilities (162,609) 334,261
Other (2) -
  (262,729) 273,018
Current year Parliamentary appropriations used 12,932,922 11,726,710

4. Tangible Capital Assets

Cost
(in dollars)
Opening Balance Acquisitions Disposals Closing Balance
Informatics Hardware and Software 1,207,555 32,620 - 1,240,175
Furniture and equipment 96,558 180,147 - 276,705
  1,304,113 212,767 - 1,516,880
 
Accumulated
amortization

(in dollars)
Opening Balance Amortization Disposals Closing Balance
Informatics Hardware and Software 983,386 125,263 - 1,108,649
Furniture and equipment 83,343 16,821 - 100,164
  1,066,729 142,084 - 1,208,813
 
Net book value
(in dollars)
Opening Balance   Closing Balance
Informatics Hardware and Software 224,169   131,526
Furniture and equipment 13,215   176 541
Net Book Value 237,384   308,067

Amortization expense for the year ended March 31, 2009 is $142,084 ($187,186 in 2007-2008)

5. Employee Benefits

(a) Pension benefits

The Board's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Board contribute to the cost of the Plan. The 2008-09 expense amounts to $810,078 ($789,470 in 2007-08), which represents approximately 2.0 times for 2008-09 (2.1 times in 2007-08) the contributions by employees. The amount reported for 2007-08 in last years notes ($132,422) has been adjusted to reflect the Board's accounts.

The Board'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.

(b) Severance benefits

The Board provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

(in dollars) 2009 2008
Accrued benefit obligation, beginning of year 1,326,467 1,287,119
Expense for the year 346,219 132,422
Benefits paid during the year (10,492) (93,074)
Accrued benefit obligation, end of year 1,662,194 1,326,467

6. Related Party Transactions

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

(a) Services received without charge:

During the year the Board received without charge from other departments, accommodation and the employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the Board’s Statement of Operations as follows:

(in dollars) 2009 2008
Accommodation 2,276,300 1,826,920
Employer’s contribution to the health and dental insurance plans 577,381 512,953
TOTAL 2,853,681 2,339,873

7. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.