Financial Statements

For the Year Ended March 31, 2020

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, 2020, 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.

The global COVID-19 pandemic impacted greatly how the Government of Canada delivers its operations. However, the Department of Justice responded quickly to adapt to the impact of the pandemic on operations and the well-being of Justice employees through a measured response ensuring business continuity and mitigating key risks. Internal controls were either already in place, adjusted or introduced to facilitate the delivery of operations in a mostly digital and remote work environment. There have been no changes to departmental accounting policies, judgments or estimates.

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, 2020 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.

Me Nathalie G. Drouin, Ad. E.

Deputy Minister and
Deputy Attorney General of Canada

Bill Kroll, CPA, CMA

Assistant Deputy Minister and
Chief Financial Officer

Ottawa, Canada
Date:

Statement of Financial Position (Unaudited)
As of March 31
(in thousands of dollars)
  2020 2019
Liabilities
Accounts payable and accrued liabilities (note 4) 86,848 103,153
Family Law account (note 5) 17,218 2,912
Transfer payments payable 308,950 289,019
Vacation pay and compensatory leave 38,901 30,079
Employee Future benefits (note 6) 21,266 20,774
Total liabilities 473,183 445,937
Financial assets
Due from Consolidated Revenue Fund 385,692 383,630
Accounts receivable and advances (note 7) 43,303 24,356
Total gross financial assets 428,995 407,986
Financial assets held on behalf of Government
Accounts receivable and advances (note 7) (392) (803)
Total net financial assets 428,603 407,183
Departmental net debt 44,580 38,754
Non-financial assets
Prepaid expenses 70 54
Tangible capital assets (note 8) 38,432 44,026
Total non-financial assets 38,502 44,080
Departmental net financial position (6,078) 5,326

Contractual obligations (note 9)

Contingent liabilities (note 10)

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

Me Nathalie G. Drouin, Ad. E.

Deputy Minister and
Deputy Attorney General of Canada

Bill Kroll, CPA, CMA

Assistant Deputy Minister and
Chief Financial Officer

Ottawa, Canada
Date:

Statement of Operations and Departmental Net Financial Position (Unaudited)
For the year ended March 31
(in thousands of dollars)
  2020 Planned Results 2020 2019
Expenses
Legal Services 510,796 589,078 590,829
Justice System Support 480,354 485,834 457,532
Internal Services 133,612 182,121 158,793
Total expenses 1,124,762 1,257,033 1,207,154
Revenues
Legal Services 366,345 386,629 369,865
Family Law fees 8,245 6,415 6,934
Common Services 2,852 2,328 2,852
Other revenues 1,015 1,197 2,923
Revenues earned on behalf of Government (51,457) (51,596) (52,018)
Total revenues 327,000 344,973 330,556
Net cost of operations before government funding and transfers 797,762 912,060 876,598
Government funding and transfers
Net cash provided by Government of Canada   803,120 762,395
Change in due from Consolidated Revenue Fund   2,062 27,620
Services provided without charge by other government departments (note 11a)   95,298 91,269
Other transfers of assets from / (to) other government departments   176 (118)
Total government funding and transfers   900,656 881,166
Net cost of operations after government funding and transfers   11,404 (4,568)
Departmental net financial position - Beginning of year   5,326 758
Departmental net financial position - End of year   (6,078) 5,326

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)
  2020 2019
Net cost of operations after government funding and transfers 11,404 (4,568)
Change due to tangible capital assets
Acquisition of tangible capital assets (note 8) 5,386 13,028
Amortization of tangible capital assets (note 8) (8,249) (7,469)
Proceeds from disposal of tangible capital assets (31) -
Net loss on disposal of tangible capital assets including adjustments (2,700) (378)
Total change due to tangible capital assets (5,594) 5,181
Change due to prepaid expenses 16 (5)
Net increase in departmental net debt 5,826 608
Departmental net debt - Beginning of year 38,754 38,146
Departmental net debt - End of year 44,580 38,754

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)
  2020 2019
Operating activities
Net cost of operations before government funding and transfers 912,060 876,598
Non-cash items:
Amortization of tangible capital assets (note 8) (8,249) (7,469)
Net loss on disposal of tangible capital assets including adjustments (2,700) (378)
Services provided without charge by other government departments (note 11a) (95,298) (91,269)
Variations in Statement of Financial Position:
Increase / (decrease) in accounts receivable and advances 19,358 (5,805)
Increase / (decrease) in prepaid expenses 16 (5)
Decrease / (increase) in accounts payable and accrued liabilities 16,305 (22,114)
Decrease / (increase) in Family Law account (14,306) 1,675
Decrease / (increase) in transfer payments payable (19,931) 2,757
Decrease / (increase) in vacation pay and compensatory leave (8,822) (5,821)
Decrease / (increase) in employee future benefits (492) 1,080
Other transfer of assets (from) / to other government departments (176) 118
Cash used in operating activities 797,765 749,367
Acquisition of tangible capital assets (note 8)
Acquisitions of tangible capital asset 5,386 13,028
Proceeds from disposal of tangible capital assets (31) -
Cash used in capital investing activities 5,355 13,028
Net cash provided by Government of Canada 803,120 762,395

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