Financial Statements

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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, 2012, and all information contained in these statements rests with the management of the Department of Justice. These financial statements have been prepared by management using the Government'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 the Department of Justice’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Department of Justice’s Departmental Performance 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 the Department of Justice 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, 2012 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

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

The financial statements of the Department of Justice have not been audited.

Statement of Financial Position (unaudited)
As at March 31
(In thousands of dollars)

	2012	2011 Restated (note 14)
Liabilities
Accounts payable and accrued liabilities (Note 4)	62,966	63,667
Family Law account (Note 5)	3,173	4,962
Transfer payments payable	429,873	392,331
Vacation pay and compensatory leave	19,253	19,157
Employee future benefits (Note 6)	87,076	91,517
Total liabilities	602,341	571,634
Financial assets
Due from the Consolidated Revenue Fund	451,461	424,418
Accounts receivable and advances (Note 7)	23,997	24,488
Total gross financial assets	475,458	448,906
Financial assets held on behalf of Government
Accounts receivable and advances (Note 7)	(10,181)	(10,290)
Total net financial assets	465,277	438,616
Departmental net debt	137,064	133,018
Non-financial assets
Prepaid expenses	124	70
Tangible capital assets (Note 8)	51,530	43,916
Total non-financial assets	51,654	43,986
Departmental net financial position	(85,410)	(89,032)

• Contingent liabilities (Note 9)
• Contractual obligations (Note 10)

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

Statement of Operations and Departmental Net Financial Position (unaudited)
For the year ended March 31
(In thousands of dollars)

	2012 Planned Results	2012 Actuals	2011 Restated note 14)
Expenses
Services to government	513,836	481,735	484,068
Justice policies, laws and programs	475,516	454,452	458,526
The Office of the Federal Ombudsman for Victims of Crime	-	1,346	1,394
Internal Services	169,303	183,668	176,495
Total expenses	1,158,655	1,121,201	1,120,483
Revenues
Legal services	334,798	349,752	328,641
Family Law fees	9,156	7,653	8,091
Common Services	-	6,145	6,277
Other revenues	-	620	914
Revenues earned on behalf of Government	(9,156)	(8,273)	(9,005)
Total revenues	334,798	355,897	334,918
Net cost from continuing operations	823,857	765,304	785,565
Transferred Operations (Note 12)
Expenses	-	7,447	12,789
Net cost of transferred operations		7,447	12,789
Net cost of operations before government funding and transfers	823,857	772,751	798,354
Government Funding and Transfers
Net cash provided by Government		663,710	725,345
Change in due from the Consolidated Revenue Fund		27,043	(20,497)
Services provided without charge by other government departments (Note 11)		86,419	85,396
Transfer of assets to other government departments (Note 12)		(799)	-
Net cost or (revenue) of operations after government funding and transfers		(3,622)	8,110
Departmental net financial position - Beginning of year		(89,032)	(80,922)
Departmental net financial position - End of year		(85,410)	(89,032)

• Segmented Information (Note 13)

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

Statement of Change in Departmental Net Debt (unaudited)
For the year ended March 31
(In thousands of dollars)

	2012	2011
Net cost of operations after government funding and transfers	(3,622)	8,110
Change due to tangible capital assets
Acquisitions of tangible capital assets (Note 8)	20,935	15,023
Amortization of tangible capital assets (Note 8)	(12,386)	(11,389)
Proceeds from disposal of tangible capital assets	(136)	(11)
Gain on disposal of capital assets	-	11
Transfer to other government departments (Note 12)	(799)	-
Total change due to tangible capital assets	7,614	3,634
Change due to prepaid expenses	54	(15)
Net increase in departmental net debt	4,046	11,729
Departmental net debt - Beginning of year	133,018	121,289
Departmental net debt - End of year	137,064	133,018

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

Statement of Cash Flows (unaudited)
For the year ended March 31
(In thousands of dollars)

	2012	2011 Restated note 14)
Operating activities
Net cost of operations before government funding and transfers	772,751	798,354
Non-cash items
Amortization of tangible capital assets (Note 8)	(12,386)	(11,389)
Gain on disposal of capital assets	-	11
Services provided without charge by other government departments (Note 11)	(86,419)	(85,396)
Variations in Statement of Financial Position
Decrease in accounts receivable and advances	(382)	(4,953)
Increase (decrease) in prepaid expenses	54	(15)
(Increase) decrease in liabilities	(30,707)	13,721
Cash used by operating activities	642,911	710,333
Capital investment activities
Acquisitions of tangible capital assets (Note 8)	20,935	15,023
Proceeds from disposal of tangible capital assets	(136)	(11)
Cash used by capital investment activities	20,799	15,012
Net cash provided by Government	663,710	725,345

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

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