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, 2014, 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, 2014 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)

	2014	2013
Liabilities
Accounts payable and accrued liabilities (Note 4)	54,348	68,905
Family Law account (Note 5)	1,503	4,332
Transfer payments payable	288,065	375,184
Vacation pay and compensatory leave	19,019	19,620
Employee future benefits (Note 6)	35,290	83,007
Total liabilities	398,225	551,048
Financial assets
Due from the Consolidated Revenue Fund	304,113	395,336
Accounts receivable and advances (Note 7)	30,322	37,522
Total gross financial assets	334,435	432,858
Financial assets held on behalf of Government
Accounts receivable and advances (Note 7)	(5,545)	(11,432)
Total net financial assets	328,890	421,426
Departmental net debt	69,335	129,622
Non-financial assets
Prepaid expenses	66	88
Tangible capital assets (Note 8)	43,604	50,298
Total non-financial assets	43,670	50,386
Departmental net financial position	(25,665)	(79,236)

Notes:

• 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)

	2014 Planned Results	2014 Actuals	2013
Expenses
Legal Services to Government Program	501,428	487,934	479,148
Stewardship of the Canadian Legal Framework	425,940	415,360	459,432
Office of the Federal Ombudsman for Victims of Crime	1,440	1,315	1,294
Internal Services	186,503	174,197	169,525
Total expenses	1,115,311	1,078,806	1,109,399
Revenues
Legal services	363,118	338,851	332,753
Family Law fees	7,653	8,376	6,764
Common Services	6,200	6,014	8,062
Other revenues	-	853	634
Revenues earned on behalf of Government	(7,653)	(9,229)	(7,398)
Total revenues	369,318	344,865	340,815
Net cost from continuing operations	745,993	733,941	768,584
Government Funding and Transfers
Net cash provided by Government	748,134	788,285	738,332
Change in due from the Consolidated Revenue Fund	(45,343)	(91,223)	(56,125)
Services provided without charge by other government departments (Note 11)	95,827	91,950	92,551
Transfer of assets to other government departments (Note 12)	-	(1,488)	-
Transfer of tangible capital assets to other government departments (Note 8)	-	(12)	-
Net cost or (revenue) of operations after government funding and transfers	(52,625)	(53,571)	(6,174)
Departmental net financial position - Beginning of year	(64,047)	(79,236)	(85,410)
Departmental net financial position - End of year	(11,422)	(25,665)	(79,236)

Note:

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)

	2014 Planned Results	2014	2013
Net cost of operations after government funding and transfers	(52,625)	(53,571)	(6,174)
Change due to tangible capital assets
Acquisitions of tangible capital assets (Note 8)	22,235	8,814	12,954
Amortization of tangible capital assets (Note 8)	(14,610)	(14,008)	(14,186)
Transfer to other government departments (Note 12)	-	(1,488)	-
Transfer of tangible capital assets to other government departments (Note 8)	-	(12)	-
Total change due to tangible capital assets	7,625	(6,694)	(1,232)
Change due to prepaid expenses	-	(22)	(36)
Net increase in departmental net debt	(45,000)	(60,287)	(7,442)
Departmental net debt - Beginning of year	117,940	129,622	137,064
Departmental net debt - End of year	72,940	69,335	129,622

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)

	2014	2013
Operating activities
Net cost of operations before government funding and transfers	733,941	768,584
Non-cash items
Amortization of tangible capital assets (Note 8)	(14,008)	(14,186)
Services provided without charge by other government departments (Note 11)	(91,950)	(92,551)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances	(1,313)	12,274
Decrease in prepaid expenses	(22)	(36)
Decrease in liabilities	152,823	51,293
Cash used by operating activities	779,471	725,378
Capital investment activities
Acquisitions of tangible capital assets (Note 8)	8,814	12,954
Cash used by capital investment activities	8,814	12,954
Net cash provided by Government	788,285	738,332

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

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