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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 (PSLRA) 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 PSLRA 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: the resolution of labour relations issues 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

The Board holds 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 using the Government'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

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 Departmental 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 Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-13 Report on Plans and Priorities.

(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 or to 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

Miscellaneous revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Board's liabilities. While the DH is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross 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. Accounts and loans receivable are stated at the lower of cost and net recoverable value.

(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

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(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 most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental 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, 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) 2013 2012
Net cost of operations before government funding 15,457,416 15,411,270

Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
 
Services provided without charge by other government departments (2,993,620) (3,110,270)
Decrease in employee future benefits 22,696 880,461
Decrease (increase) in vacation pay and compensatory leave (61,188) 61,623
Refund of previous year expenditures 33,274 48,607
Amortization of tangible capital assets (221,264) (179,829)
  (3,220,102) (2,299,408)

Adjustments for items not affecting net cost of operations but affecting authorities:
Add (Less):
 
Acquisition of tangible capital assets 1,325,276 316,480
Variation in prepaid expenses 71,750 18,359
  1,397,026 334,839
 
Current year authorities used 13,634,340 13,446,701

(b) Authorities provided and used

(in dollars) 2013 2012
Authorities provided:
Vote 100 - Program expenditures 13,216,189 14,026,811
Proceeds from the disposal of surplus Crown assets 140 -
Statutory authorities 1,284,279 1,306,699
Less:
Lapsed authorities (866,268) (1,886,809)
Current year authorities used 13,634,340 13,446,701

4. Accounts payable and accrued liabilities

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

(in dollars) 2013 2012
Accounts payable - other government departments
and agencies
20,927 124,178
Accounts payable - external parties 829,443 519,538
Total accounts payable 850,370 643,716
Accrued liabilities 248,624 207,883
Total accounts payable and accrued liabilities 1,098,994 851,599

5. 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 2012-13 expense amounts to $916,975 ($939,517 in 2011-12), which represents approximately 1.7 times (1.8 times in 2011-12) 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 salary at termination of employment. 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:

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

(in dollars) 2013 2012
Accrued benefit obligation, beginning of year 722,654 1,603,115
Expense for the year 3,925 (572,660)
Benefits paid during the year (26,621) (307,801)
Accrued benefit obligation, end of year 699,958 722,654

6. Accounts receivable and advances

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

(in dollars) 2013 2012
Receivables - other government departments
and agencies
117,600 218,540
Employee advances 1,000 1,000
Net accounts receivable 118,600 219,540

7. Tangible capital assets

Cost
(in dollars)
Opening Balance Acquisitions Disposals
and
Write-Offs
Closing Balance
Informatics hardware and software 887,340 229,933 - 1,117,273
Furniture and equipment 437,219 146,247 - 583,466
Assets under construction 202,667 949,096 - 1,151,763
  1,527,226 1,325,276 - 2,852,502

Accumulated amortization
(in dollars)
Opening Balance Amortization Disposals
and Write-Offs
Closing Balance
Informatics Hardware and Software 637,985 136,657 - 774,642
Furniture and equipment 188,406 84,607 - 273,013
  826,391 221,264 - 1,047,655

Net book value
(in dollars)
2012     2013
Informatics Hardware and Software 249,355     342,631
Furniture and equipment 248,813     310,453
Assets under construction 202,667     1,151,763
  700,835     1,804,947

8. 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 and Departmental Net Financial Position as follows:

(in dollars) 2013 2012
Accommodation 2,294,116 2,405,962
Employer's contribution to the health and
dental insurance plans
699,504 704,308
  2,993,620 3,110,270

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 and Departmental Net Financial Position.

(b) Other transactions with related parties

(in dollars) 2013 2012
Expenses - Other government departments
and agencies
1,601,818 1,686,577
Revenues - Other governement departments
and agencies
143,995 143,855

Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

9. 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 2013 2012
Operating expenses
Salaries and employee benefits 7,324,191 2,517,696 9,841,887 9,304,860
Accommodation 1,706,866 587,250 2,294,116 2,405,962
Professional and special services 1,338,714 469,352 1,808,066 1,825,857
Transportation and telecommunications 436,706 148,411 585,117 778,133
Rentals 344,707 167,588 512,295 514,099
Amortization of tangible capital assets - 221,264 221,264 179,829
Utilities, materials and supplies 85,068 46,585 131,653 174,953
Machinery and equipment 4,446 94,194 98,640 246,352
Communication 40,498 28,124 68,622 52,567
Repair and maintenance 902 30,283 31,185 64,532
Other operating expenses 8,285 141 8,426 7,980
Total Operating expenses 11,290,383 4,310,888 15,601,271 15,555,125

Revenues
Miscellaneous revenues 60 143,935 143,995 143,855
Revenues earned on behalf of Government (60) (80) (140) -
Total Revenues - 143,855 143,855 143,855
 
Net cost of operations before governement funding 11,290,383 4,167,033 15,457,416 15,411,270

10. Comparative information

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