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, 2017, 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 Results Report (formerly the 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, 2017 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)

	2017	2016
Liabilities
Accounts payable and accrued liabilities (note 4)	78,097	63,799
Family Law account (note 5)	3,617	3,130
Transfer payments payable	233,560	283,867
Vacation pay and compensatory leave	21,285	20,269
Employee future benefits (note 6)	23,103	46,244
Total liabilities	359,662	417,309
Financial assets
Due from Consolidated Revenue Fund	293,098	317,740
Accounts receivable and advances (note 7)	30,481	34,037
Total gross financial assets	323,579	351,777
Financial assets held on behalf of Government
Accounts receivable and advances (note 7)	(787)	(751)
Total net financial assets	322,792	351,026
Departmental net debt	36,870	66,283
Non-financial assets
Prepaid expenses	67	853
Tangible capital assets (note 8)	33,658	33,318
Total non-financial assets	33,725	34,171
Departmental net financial position	(3,145)	(32,112)

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)

	2017 Planned Results	2017	2016
Expenses
Legal services to Government Program	511,584	498,292	485,957
Stewardship of the Canadian Legal Framework	434,292	443,133	414,554
Office of the Federal Ombudsman for Victims of Crime	1,441	1,082	1,218
Internal Services	119,792	107,993	158,553
Total expenses	1,067,109	1,050,500	1,060,282
Revenues
Legal services	335,446	349,707	333,098
Family Law fees	7,721	8,502	8,132
Common services	2,893	2,825	3,352
Other revenues	936	2,164	5,361
Revenues earned on behalf of Government	(50,796)	(57,131)	(56,366)
Total revenues	296,200	306,067	293,577
Net cost of operations before government funding and transfers	770,909	744,433	766,705
Government funding and transfers
Net cash provided by Government		708,256	736,471
Change in due from Consolidated Revenue Fund		(24,642)	(58,945)
Services provided without charge by other government departments (note 11)		89,799	89,506
Transfer of the transition payments for implementing salary payments in arrears		(13)	(193)
Transfer of tangible capital assets to other government departments		-	(1)
Net cost of operations after government funding and transfers		(28,967)	(133)
Departmental net financial position - Beginning of Year		(32,112)	(32,245)
Departmental net financial position - End of Year		(3,145)	(32,112)

Segmented information (note 12)

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)

	2017	2016
Net cost of operations after government funding and transfers	(28,967)	(133)
Change due to tangible capital assets
Acquisitions of tangible capital assets (note 8)	12,038	10,213
Amortization of tangible capital assets (note 8)	(11,664)	(12,487)
Net loss on disposals and write-offs of tangible capital assets including adjustments (note 8)	(34)	(565)
Transfer of tangible capital assets to other government departments	-	( 1)
Total change due to tangible capital assets	340	(2,840)
Change due to prepaid expenses	(786)	795
Net increase in departmental net debt	(29,413)	(2,178)
Departmental net debt - Beginning of Year	66,283	68,461
Departmental net debt - End of Year	36,870	66,283

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)

	2017	2016
Operating activities
Net cost of operations before government funding and transfers	744,433	766,705
Non-cash items:
Amortization of tangible capital assets (note 8)	(11,664)	(12,487)
Loss on disposals and write-offs of tangible capital assets including adjustments (note 8)	(34)	(565)
Services provided without charge by other government departments (note 11)	(89,799)	(89,506)
Transition payments for implementing salary payments in arrears	13	193
Variations in Statement of Financial Position:
Decrease (increase) in accounts receivable and advances	(3,592)	1,448
Decrease (increase) in prepaid expenses	(786)	795
Increase in accounts payable and accrued liabilities	(14,298)	(1,548)
Increase (decrease) in Family Law account	(487)	2,435
Decrease in transfer payments payable	50,307	61,997
Increase in vacation pay and compensatory leave	(1,016)	(605)
Decrease (increase) in employee future benefits	23,141	(2,604)
Cash used in operating activities	696,218	726,258
Capital investment activities
Acquisitions of tangible capital assets (note 8)	12,038	10,213
Cash used in capital investment activities	12,038	10,213
Net cash provided by Government of Canada	708,256	736,471

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

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