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Departmental Performance Report (5)

Appendix C
Audited Financial Statements

Canadian Transportation Accident Investigation and Safety Board Management Responsibility for Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2004 and all information contained in this report rests with management of the Canadian Transportation Accident Investigation and Safety Board (CTAISB).

We have prepared these financial statements in accordance with the Treasury Board of Canada Accounting Standards based on Canadian generally accepted accounting principles, using management's best estimates and judgements where appropriate. These statements should be read within the context of the significant accounting policies set out in the Notes.

Management has developed and maintains books, records, internal controls and management practices, designed to provide reasonable assurance that the Board's assets are safeguarded and controlled, resources are managed economically and efficiently in the attainment of corporate objectives, and that transactions are in accordance with the Financial Administration Act and regulations as well as other applicable government policies and statutory requirements.

The transactions and financial statements of the CTAISB have been audited by the Auditor General of Canada, the appointed independent auditor for the Board.

>Signatures of the Acting Chairman Charles H. Simpson and the Senior Financial Officer Jean L. Laporte, CGA
Auditor's report signed by Sylvain Ricard, Principal for the Auditor General of Canada

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Canadian Transportation Accident Investigation and Safety Board
Statement of Financial Position
As at March 31
(in thousands of dollars)

  2004 2003
ASSETS
  Financial Assets
  Due from the CRF $ 2,775 $ 3,152
  Receivables and Advances (Note 4) 96 65
  Total Financial Assets 2,871 3,917
  Non-Financial Assets
  Prepayments 32 69
  Inventories not for Re-Sale 115 130
  Property and Equipment (Note 5) 4,312 4,122
  Total Non-Financial Assets 4,459 4,321
Total Assets $ 7,330 $ 8,238
LIABILITIES
  Accounts Payable and Accrued Liabilities $ 2,786 $ 3,317
  Accrual for Employee Vacation and Overtime 960 910
  Employee Severance Benefits 3,402 3,242
  Total Liabilities 7,148 7,469
NET ASSETS 182 769
Total Liabilities and Net Assets $7,330 $ 8,238

Contingent Liabilities and Commitments (note 9 and note 10 respectively)

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

Signatures of the Acting Chairman Charles H. Simpson and the Senior Financial Officer Jean L. Laporte, CGA

Canadian Transportation Accident Investigation and Safety Board
Statement of Operations and Net Assets
for the year ended March 31 (in thousands of dollars)

  2004 2003
Revenues
  Sales of Goods and Services $ 15 $ 27
Other Non-Tax Revenues   11   86
Total Revenues 26 113
Expenses
  Salaries and Wages 19,897 17,924
Employee Benefit Plans 4,982 4,489
Professional and Special Services 3,505 4,384
Transportation and Communications 2,011 1,892
Accommodation 1,745 1,700
Amortization 1,104 1,050
Utilities, Materials and Supplies 622 654
Purchased Repair and Upkeep 600 541
Information 304 1,481
Loss on Disposal of Property and Equipment 197 43
Rentals 75 112
Construction and/or Acquisition of Machinery and Equipment 70 184
Miscellaneous Expenses   18   30
Total Expenses 35,130 34,484
Net Operating Results (35,104) (34,371)
  Other Income (Note 6) 196 326
Other Expenses (Note 6) 196 326
Net Results (35,104) (34,371)
Net Assets, Beginning of Year 769 505
Net Cash Provided by Government (Note 3c) 31,789 31,211
Change in Due from the CRF (377) 416
Services Provided Without Charge (Note 8) 3,105 3,008
Net Assets, End of Year $ 182 $ 769

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

Canadian Transportation Accident Investigation and Safety Board
Statement of Cash Flows
for the year ended March 31 (in thousands of dollars)

  2004 2003
Operating Activities
Net Results $ 35,104 $ 34,371
  Non-Cash Items Included in Net Results
  Services Provided Without Charge (Note 8) 3,105 3,008
Amortization of Property and Equipment 1,104 1,050
Employee Severance Benefits 160 143
Loss on Disposal of Property and Equipment 197 41
Revenues from Other Government Departments - 38
  4,566 4,280
  Statement of Financial Position Adjustments
Change in Liabilities (481) 671
Change in Cash, Receivables and Advances, Prepayments, Inventories not for Re-Sale and Prepaid Expenses  807  (656)
  $ 326 $ 15
Cash Used in Operating Activities 30,212 30,076
Investing Activities
Acquisitions of Property and Equipment 1,577 1,135
Cash Used in Investing Activities   1,577   1,135
Net Cash Provided by Government (Note 3c)  $ 31,789  $ 31,211

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

Canadian Transportation Accident Investigation and Safety Board Notes to the Financial Statements
for the year ended March 31, 2004

1. Authority and Objectives

The Canadian Transportation Accident Investigation and Safety Board (CTAISB) was established in 1990 under the Canadian Transportation Accident Investigation and Safety Board Act and is a departmental corporation named in Schedule II to the Financial Administration Act. In its day-to-day activities the CTAISB is more commonly known by the name Transportation Safety Board of Canada, or simply the TSB. The objective of the CTAISB is to advance transportation safety. It seeks to identify safety deficiencies in transportation occurrences and to make recommendations designed to eliminate or reduce any such safety deficiencies. In addition to investigations, including where necessary public inquiries into selected occurrences, the CTAISB may conduct studies into more general matters pertaining to transportation safety. The CTAISB has the exclusive authority to make findings as to causes and contributing factors when it investigates a transportation occurrence. The CTAISB's operating expenditures are funded by a budgetary lapsing authority, whereas contributions to employee benefit plans are funded by statutory authorities.

2. Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with Treasury Board of Canada Accounting Standards based on Canadian generally accepted accounting principles.

(a) Parliamentary appropriations - the CTAISB is primarily financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the CTAISB do not parallel financial reporting according to Canadian generally accepted accounting principles. They are based in large part on cash flow requirements. Consequently, items recognized in the Statement of Operations and in the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 3a) to these financial statements provides information regarding the source and disposition of these authorities. Note 3b) provides a high-level reconciliation between the two bases of reporting. Note 3c) presents the reconciliation to Net Cash Provided by Government.

(b) Due from the CRF - As a departmental corporation, the CTAISB operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash receipts are deposited to the CRF and all cash disbursements made by the CTAISB are paid from the CRF. Due from the CRF represents the amount of cash that the CTAISB is entitled to draw from the CRF, without further appropriations, in order to discharge its liabilities.

(c) Revenues - these are accounted for in the period in which the underlying transaction occurs that gives rise to the revenues.

(d) Employee severance benefits - are calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole. Employee severance benefits on cessation of employment represent obligations of the CTAISB that are normally funded in future years as they are paid.

(e) Vacation pay and overtime - are expensed in the year that the entitlement occurs.

(f) Contributions to pension plans - are recognized in the period that the contributions are made. The calculation of contributions is an estimate based on a government-wide average adjusted annually. Actuarial surpluses or deficiencies are not recorded in the CTAISB's books but are recognized in the consolidated financial statements of the Government of Canada.

(g) Services provided without charge by other government departments - are recorded as operating expenses. Note 8 provides estimates of the more significant types of services provided to the CTAISB without charge.

(h) Receivables - these are stated at amounts expected to be ultimately realized. A provision is made for receivables where recovery is considered uncertain.

(i) Inventories not for re-sale - these comprise spare parts and supplies that are held for future program delivery and are not intended for re-sale. They are valued at cost. If they no longer have service potential, they are valued at the lower of cost or net realizable value.

(j) Property and equipment - all assets plus leasehold improvements having an initial cost of $2,000 or more are recorded at their acquisition cost. Amortization of property and equipment is done on a straight-line basis over the estimated useful life of the capital asset as follows:

Asset Class  Amortization Period
Buildings  30 years
Furniture  10 years
Office equipment  5 years
Laboratory equipment  10 years
Informatics hardware  4 years
Informatics software  3 years
Motor vehicles  7 years
Other vehicles  15 years
Leasehold improvements  lesser of useful life or term of the lease

(k) Foreign currency transactions - transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in foreign currencies are translated using exchange rates in effect at year-end.

(l) Measurement uncertainty - the preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the useful lives of property and equipment, employee severance benefits, contributions to pension plans and the assessment of contingent liabilities.

3. Parliamentary Appropriations

a) Reconciliation of Parliamentary Appropriations Voted to Authorities Used
(in thousands of dollars) 2004 2003
Parliamentary Appropriations Voted:
Vote 15 - CTAISB Operating expenditures $ 22,304 $ 21,510
Supplementary Vote 15a - 3,995
Supplementary Vote 15b 4,889 1,353
Transfer from Treasury Board - Vote 10 163 406
Transfer from Treasury Board - Vote 15 2,139 1,415
Contribution to employee benefit plans 3,511 3,098
Total Parliamentary Appropriations Voted 33,006 31,777
Less: Lapsed Appropriations  1,045  562
Total Appropriations Voted Used 31,961 31,215
Statutory Authorities:
Spending of proceeds from disposal of surplus Crown assets 96 39
Spending of revenues as per FAA section 29.1  -    22 
Total Statutory Authorities Used 96 61
Total Authorities Used $ 32,057 $ 31,276

b) Reconciliation of Net Results to Appropriations Used

(in thousands of dollars) 2004 2003
Net Results $ 35,104 $ 34,371
Adjustments for Items Not Affecting Appropriations
Less
Services Provided Without Charge 3,105 3,008
Amortization 1,104 1,050
Employee Severance Benefits 160 143
Loss on Disposal of Property and Equipment 197 43
Vacation Pay 50 96
Inventory Used 43 81
Prepayments 37 -
Justice Canada Legal Services 14 -
Spending of Cost Recovery   -   22
  4,710 4,443
Add
Gain on Sale - 2
PAYE Adjustment - 9
Non-tax Revenue 49 85
Refund of Prior Years' Expenditures 9 7
58 103
Adjustments for Items Affecting Appropriations
Add
Capital Acquisitions 1,577 1,121
Prepaids - 43
Inventory Purchased 28 45
Leasehold Improvements - 14
  1,605 1,223
Less
Proceeds from the Disposal of Surplus Crown Assets 96 39
  96 39
Total Appropriations Voted Used $ 31,961 $ 31,215

c) Reconciliation to Net Cash Provided by Government

(in thousands of dollars) 2004 2003
Net cash provided by government $ 31,789 $ 31,211
Revenues 26 113
Net change in non-cash working capital balance charged to the vote 146 (109)
Total Appropriations Used $ 31,961 $ 31,215

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