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, 2018, and all information contained in these financial statements rests with the management of the Department of Justice. These financial statements have been prepared by management using the Government of Canada'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, 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, 2018 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The annex also provides information on the status of the risk-based assessment of the controls over common services provided by the department that have a bearing on a recipient's departmental financial statements.

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)

	2018	2017
Liabilities
Accounts payable and accrued liabilities (note 4)	81,039	78,097
Family Law account (note 5)	4,587	3,617
Transfer payments payable	291,776	233,560
Vacation pay and compensatory leave	24,258	21,285
Future employee benefits (note 6)	21,854	23,103
Total liabilities	423,514	359,662
Financial assets
Due from Consolidated Revenue Fund	356,010	293,098
Accounts receivable and advances (note 7)	30,249	30,481
Total gross financial assets	386,259	323,579
Financial assets held on behalf of Government
Accounts receivable and advances (note 7)	(891)	(787)
Total net financial assets	385,368	322,792
Departmental net debt	38,146	36,870
Non-financial assets
Prepaid expenses	59	67
Tangible capital assets (note 8)	38,845	33,658
Total non-financial assets	38,904	33,725
Departmental net financial position	758	(3,145)

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)

	2018 Planned Results	2018	2017
Expenses
Legal services to Government Program	508,376	492,172	498,292
Stewardship of the Canadian Legal Framework	418,216	458,913	443,133
Office of the Federal Ombudsman for Victims of Crime	1,430	1,302	1,082
Internal Services	109,921	151,490	107,993
Total expenses	1,037,943	1,103,877	1,050,500
Revenues
Legal services	332,017	356,709	349,707
Family Law fees	8,132	8,245	8,502
Common services	2,893	2,832	2,825
Other revenues	822	1,904	2,164
Revenues earned on behalf of Government	(47,664)	(53,382)	(57,131)
Total revenues	296,200	316,308	306,067
Net cost of operations before government funding and transfers	741,743	787,569	744,433
Government funding and transfers
Net cash provided by Government of Canada		639,462	708,256
Change in Due from Consolidated Revenue Fund		(62,912)	(24,642)
Services provided without charge by other government departments (note 11 (a))		89,079	89,799
Transfer of the transition payments for implementing salary payments in arrears		(8)	(13)
Other net transfers of assets from other government departments		27	-
Net cost of operations after government funding and transfers		(3,903)	(28,967)
Departmental net financial position - Beginning of year		(3,145)	(32,112)
Departmental net financial position - End of year		758	(3,145)

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)

	2018	2017
Net cost of operations after government funding and transfers	(3,903)	(28,967)
Change due to tangible capital assets
Acquisitions of tangible capital assets (note 8)	14,218	12,038
Amortization of tangible capital assets (note 8)	(9,013)	(11,664)
Net loss on disposals and write-offs of tangible capital assets including adjustments (note 8)	(18)	(34)
Total change due to tangible capital assets	5,187	340
Change due to prepaid expenses	(8)	(786)
Net decrease (increase) in departmental net debt	1,276	(29,413)
Departmental net debt - Beginning of year	36,870	66,283
Departmental net debt - End of year	38,146	36,870

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)

	2018	2017
Operating activities
Net cost of operations before government funding and transfers	787,569	744,433
Non-cash items:
Amortization of tangible capital assets (note 8)	(9,013)	(11,664)
Loss on disposals and write-offs of tangible capital assets including adjustments (note 8)	(18)	(34)
Services provided without charge by other government departments (note 11 (a))	(89,079)	(89,799)
Transition payments for implementing salary payments in arrears	8	13
Variations in Statement of Financial Position:
Decrease in accounts receivable and advances	(336)	(3,592)
Decrease in prepaid expenses	(8)	(786)
Increase in accounts payable and accrued liabilities	(2,942)	(14,298)
Increase in Family Law account	(970)	(487)
Decrease (Increase) in transfer payments payable	(58,216)	50,307
Increase in vacation pay and compensatory leave	(2,973)	(1,016)
Decrease in future employee benefits	1,249	23,141
Other transfer of assets from other government departments	(27)	-
Cash used in operating activities	625,244	696,218
Capital investing activities
Acquisitions of tangible capital assets (note 8)	14,218	12,038
Cash used in capital investing activities	14,218	12,038
Net cash provided by Government of Canada	639,462	708,256

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

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