Financial Statements

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Statement of 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, 2016, 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, 2016 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 Minister 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)

	2016	2015
Liabilities
Accounts payable and accrued liabilities (note 4)	63,799	62,251
Family Law account (note 5)	3,130	5,565
Transfer payments payable	283,867	345,864
Vacation pay and compensatory leave	20,269	19,664
Employee future benefits (note 6)	46,244	43,640
Total liabilities	417,309	476,984
Financial assets
Due from the Consolidated Revenue Fund	317,740	376,685
Accounts receivable and advances (note 7)	34,037	32,645
Total gross financial assets	351,777	409,330
Financial assets held on behalf of Government
Accounts receivable and advances (note 7)	(751)	(807)
Total net financial assets	351,026	408,523
Departmental net debt	66,283	68,461
Non-financial assets
Prepaid expenses	853	58
Tangible capital assets (note 8)	33,318	36,158
Total non-financial assets	34,171	36,216
Departmental net financial position	(32,112)	(32,245)

Contractual obligations (note 9)

Contingent liabilities (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)

	2016 Planned Results	2016	2015 Restated (note 14)
Expenses
Legal services to Government program	522,333	485,957	492,542
Stewardship of the Canadian Legal Framework	438,649	414,554	416,565
Office of the Federal Ombudsman for Victims of Crime	1,462	1,218	1,143
Internal Services	170,732	158,553	173,661
Total expenses	1,133,176	1,060,282	1,083,911
Revenues
Legal services	337,958	333,098	336,854
Family Law fees	8,376	8,132	7,721
Common services	3,455	3,352	3,518
Other revenues	-	5,361	824
Revenues earned on behalf of Government	(8,376)	(56,366)	(51,692)
Total revenues	341,413	293,577	297,225
Net cost of operations before government funding and transfers	791,763	766,705	786,686
Government funding and transfers
Net cash provided by Government		736,471	632,613
Change in due from Consolidated Revenue Fund		(58,945)	72,722
Services provided without charge by other government departments (note 11)		89,506	88,398
Transfer of the transition payments for implementing salary payments in arrears (note 12)		(193)	(17,849)
Transfer of tangible capital assets to other government departments		(1)	-
Net cost (revenue) of operations after government funding and transfers		(133)	10,802
Departmental net financial position - Beginning of Year		(32,245)	(21,443)
Departmental net financial position - End of Year		(32,112)	(32,245)

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)

	2016	2015
Net cost (revenue) of operations after government funding and transfers	(133)	10,802
Change due to tangible capital assets
Acquisitions of tangible capital assets	10,213	7,450
Amortization of tangible capital assets	(12,487)	(13,550)
Net loss on write off of tangible capital assets	(565)	(1,346)
Transfer of tangible capital assets to other government departments	(1)	-
Total change due to tangible capital assets	(2,840)	(7,446)
Change due to prepaid expenses	795	(8)
Net increase (decrease) in departmental net debt	(2,178)	3,348
Departmental net debt - Beginning of Year	68,461	65,113
Departmental net debt - End of Year	66,283	68,461

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)

	2016	2015 Restated (note 14)
Operating activities
Net cost of operations before government funding and transfers	766,705	786,686
Non-cash items:
Amortization of tangible capital assets (note 8)	(12,487)	(13,550)
Loss on write off of capital assets	(565)	(1,346)
Services provided without charge by other government departments (note 11)	(89,506)	(88,398)
Transition payments for implementing salary payments in arrears (note 12)	193	17,849
Variations in Statement of Financial Position:
Increase in accounts receivable and advances	1,448	2,689
Increase (decrease) in prepaid expenses	795	(8)
Increase in accounts payable and accrued liabilities	(1,548)	(7,903)
Decrease (increase) in Family Law account	2,435	(4,062)
Decrease (increase) in transfer payments payable	61,997	(57,799)
Increase in vacation pay and compensatory leave	(605)	(645)
Increase in future employee benefits	(2,604)	(8,350)
Cash used in operating activities	726,258	625,163
Capital investment activities
Acquisitions of tangible capital assets (note 8)	10,213	7,450
Cash used in capital investment activities	10,213	7,450
Net cash provided by Government of Canada	736,471	632,613

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

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