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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. The Board’s three lines of services are Adjudication, Mediation and Compensation Analysis and Research Services, which are supported by its internal services activities.

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.

Siginificant accounting policies are as follows:

  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 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 and the employer’s contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    1. 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.
    2. 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. 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, 2010.
  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 accordancew ith 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 contingent liabilities, the liability for employee severance 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 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 appropriations used:

(in dollars) 2010 2009
Net cost of operations 14,882,756 16,137,473
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
   
Services received without charge (2,768,945) (2,853,681)
Amortization of tangible capital assets (179,949) (142,084)
Decrease (Increase) in employee severance benefit liability 136,015 (335,727)
Revenue not available for spending 64 40
Increase vacation pay and compensatory leave liability (58,987) (96,319)
Refunds of prior years' expenditures 27,720 10,455
Other - (2)
  12,038,674 12,720,155
     
Adjustments for items not affecting net cost of operations but affecting appropriations
Add (Less):
   
Acquisitions of tangible capital assets 828,632 212,767
Current year appropriations used 12,867,306 12,932,922

b) Appropriations provided and used

(in dollars) 2010 2009
Vote 100 - Program expenditures 6,070,766  
Vote 100a - Supplementary 6,096,827  
Vote 85 - Program expenditures   5,996,000
Vote 85b - Supplementary   5,401,410
Transfer from Treasury Board - Vote 5   130,191
Transfer from Treasury Board - Vote 15 341,565 80,155
Transfer from Treasury Board - Vote 25 299,800 530,850
Transfer from Treasury Board - Vote 30 173,290 47,999
Contributions to employee benefit plan 1,251,476 1,121,992
Revenue not available for spending 64 -
Total authorities 14,233,788 13,308,597
Less:    
Appropriations available for future years (64)  
Lapsed appropriations: Operating (1,366,418) (375,675)
Current year appropriations used 12,867,306 12,932,922

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

(in dollars) 2010 2009
Net cash provided by Government of Canada 12,622,318 13,185,156
Revenue not available for spending 64 40
Refunds of prior years' expenditures 27,720 10,455
Change in net position in the Consolidated Revenue Fund    
Variation in accounts receivable and advances 239,999 (100,118)
Variation in accounts payable and accrued liabilities (22,795) (162,609)
Other - (2)
  217,204 (262,729)
Current year appropriations used 12,867,306 12,932,922

4. Tangible Capital Assets

(in dollars)

Cost
(in dollars)
Opening Balance Acquisitions Disposals Closing Balance
Informatics Hardware and Software 1,240,175 758,729 (769,477) 1,229,427
Furniture and equipment 276,705 6 9,903 (77,653) 268,955
Total 1,516,880 828,632 (847,130) 1,498,382

Accumulated amortization
(in dollars)
Opening Balance Acquisitions Disposals Closing Balance
Informatics Hardware and Software 1,108,649 137,484 (769,477) 476,656
Furniture and equipment 100,164 42,465 (77,653) 64,976
Total 1,208,813 179,949 (847,130) 541,632

Net book value
(in dollars)
2010 2009
Informatics Hardware and Software 752,771 131,526
Furniture and equipment 203,979 176,541
Total 956,750 308,067

Amortization expense for the year ended March 31, 2010 is $179,949 ($142,084 in 2008-2009).

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 2009-2010 expense amounts to $903,566 ($810,078 in 2008-09), which represents approximately 1.9 times (2.0 times in 2008-2009) the contributions by employees.

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) 2010 2009
Accrued benefit obligation, beginning of year 1,662,194 1,326,467
Expense for the year (22,712) 346,219
Benefits paid during the year (113,303) (10,492)
Accrued benefit obligation, end of year 1,526,179 1,662,194

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.

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) 2010 2009
Accommodation 2,141,298 2,276,300
Employer’s contribution to the health and dental insurance plans 627,647 577,381
Total 2,768,945 2,853,681

7. Comparative information

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