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Notes to the Financial Statements (unaudited)

Notes to the Financial Statements (unaudited)

For the year ended March 31

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 has one strategic outcome: harmonious labour relations in the federal public service and in Parliament. According to the approved Program Activity Architecture (PAA), the Statement of Operations was detailed by the following Program Activities (Business Lines):

Adjudication, mediation and compensation analysis and research

Hold hearings with respect to grievance adjudication, complaints and other types of proceedings, throughout Canada. The Board provides conciliation and arbitration services to assist parties in the renewal and negotiation of new collective agreements; mediation services to help parties work together to resolve grievances and complaints; and, an interactive training session on interest- based negotiations and mediation. A compensation analysis and research function consists of delivering information on comparative rates of pay, employee earnings, conditions of employment and benefits in the public and private sectors. The Board is required by statute to provide physical and administrative support services to the National Joint Council (NJC), but plays no direct role in its operations.

Internal Services

Internal Services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of the Board. Internal Services include only those activities and resources that apply across the Board, not those provided specifically to a program.

2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary authorities

The Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Board 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 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.

(b) 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 Government.

(c) Due from the CRF

Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Board is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses

Expenses are recorded on the accrual basis:

(f) Employee future benefits

(g) Accounts receivables

Receivables recorded by the Board are from other government departments. Recovery is considered certain and a provision has not been made.

(h) 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 assets as follows:

Asset class Amortization Period
Informatics Hardware and Software 3 years
Furniture and equipment 5 years

(i) Measurement uncertainty

The preparation of these financial statements 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 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 Authorities

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

(in dollars)

  2011 2010
Net cost of operations 15,074,302 14,882,756
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
 
Services provided without charge by other government departments (2,767,388) (2,768,945)
Decrease (increase) in employee future benefits (76,936) 136,015
Decrease (increase) in vacation pay and compensatory leave 10,156 (58,987)
Refund of previous year expenditures 41,208 27,720
Amortization of tangible capital assets (104,930) (179,949)
Loss on disposal of tangible capital assets (648,863) -
Revenue not available for spending - 64
  (3,546,753) (2,844,082)
Adjustments for items not affecting net cost of operations but affecting authorities:
Add (Less):
 
Acquisition of tangible capital assets 361,227 828,632
  361,227 828,632
 
Current year authorities used 11,888,776 12,867,306

3. Parliamentary Authorities (continued)

(b) Authorities provided and used

(in dollars)

  2011 2010
Authorities provided:
Vote 110 - Program expenditures 12,892,947 12,982,248
Statutory authorities 1,221,153 1,251,476
Less:
Lapsed authorities (2,225,324) (1,366,418)
Current year authorities used 11,888,776 12,867,306

4. Tangible capital assets

Cost
(in dollars)
Opening Balance Acquisitions Adjustments, Disposals
and Write-Offs
Closing Balance
Informatics Hardware and Software 1,229,427 273,717 (648,863) 854,281
Furniture and equipment 268,955 87,510 - 356,465
  1,498,382 361,227 (648,863) 1,210,746

Accumulated amortization
(in dollars)
Opening Balance Amortization Adjustments, Disposals
and Write-Offs
Closing Balance
Informatics Hardware and Software 476,656 53,689 - 530,345
Furniture and equipment 64,976 51,241 - 116,217
  541,632 104,930 - 646,562

Net book value
(in dollars)
Opening
Balance
    Closing
Balance
Informatics Hardware and Software 752,771     323,936
Furniture and equipment 203,979     240,248
  956,750     564,184

5. Accounts payable and accrued liabilities

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

(in dollars) 2011 2010
Accounts payable - other government departments
and agencies
22,841 533,161
Accounts payable - external parties 716,854 669,273
  739,695 1,202,434
Accrued liabilities 301,532 229,419
  1,041,227 1,431,853

6. Employee future benefits

(a) Pension benefits

The Board's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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 2010-11 expense amounts to $ 857,204 ($ 903,566 in 2009-10), which represents approximately 1.9 times (1.9 times in 2009-10) 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 authorities. Information about the severance benefits, measured as at March 31, is as follows:

(in dollars) 2011 2010
Accrued benefit obligation, beginning of year 1,526,179 1,662,194
Expense for the year 209,057 (22,712)
Benefits paid during the year (132,121) (113,303)
Accrued benefit obligation, end of year 1,603,115 1,526,179

7. Related party transactions

The Board is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The Board enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Board has an agreement with the Public Service Staffing Tribunal related to the provision of finance and administration services. During the year, the Board received common services which were obtained without charge from OGD as disclosed below:

a) Common services provided without charge by other government departments

During the year the Board received services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Board's Statement of Operations as follows:

(in dollars) 2011 2010
Accommodation 2,153,653 2,141,298
Employer's contribution to the health and
dental insurance plans
613,735 627,647
  2,767,388 2,768,945

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in the Board's Statement of Operations.

(b) Other transactions with related parties

(in dollars) 2011 2010
Accounts receivable from other government
departments and agencies
105,334 26,022
Accounts payable to other government
departments and agencies
22,841 533,161
Expenses - Other Government
departments and agencies
1,365,068 1,383,533

8. Segmented Information

Presentation by segment is based on the Board's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in dollars) Adjudication,
mediation and
compensation
analysis and research
Internal Services 2011 2010
Operating expenses
Salaries and employee benefits 6,646,569 2,438,283 9,084,852 9,203,651
Accommodation 1,593,703 559,950 2,153,653 2,141,298
Professional and special services 1,181,342 272,766 1,454,108 1,692,568
Other operating expenses 649,603 - 649,603 2,351
Transportation and telecommunications 393,733 133,811 527,544 704,680
Rentals 297,020 199,646 496,666 492,816
Machinery and equipment 44,822 249,793 294,615 128,585
Utilities, materials and supplies 55,788 117,089 172,877 204,876
Amortization of tangible capital assets - 104,930 104,930 179,949
Repair and maintenance 3,517 85,171 88,688 61,712
Communication 16,429 30,337 46,766 70,334
Total Operating expenses 10,882,526 4,191,776 15,074,302 14,882,820
Revenues
Other Revenues - - - 64
Total Revenues - - - 64

Net cost of operations
10,882,526 4,191,776 15,074,302 14,882,756

9. Adoption of new accounting policies

During the year, the Board adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Board for the 2010-11 fiscal year. The major change in the accounting policies of the Board required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

(in dollars) 2010
As previously
stated
Effect
of the
adjustment
2010 Revised
amount
Statement of Financial Position
Assets 983,772 1,401,365 2,385,137
Equity of Canada (2,417,224) 1,401,365 (1,015,859)