Financial statements

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, 2013 and all information contained in these statements rests with management of the Transportation Safety Board of Canada (TSB). 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 TSB's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the TSB'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 communications aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the TSB 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 on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The TSB is subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

A Core Control Audit was performed by the Office of the Comptroller General of Canada (OCG) on the 2010-11 financial transactions. The Audit Report and related Management Action Plan are posted on the departmental web site at http://www.tsb.gc.ca/eng/divulgation-disclosure/index.asp

The 2012-13 financial statements of the TSB have not been audited.

The original version was signed by

The original version was signed by
Wendy A. Tadros
Chair


Date
Gatineau, Canada
August 6, 2013

The original version was signed by
Chantal Lemyre, CGA
Chief Financial Officer


Date
Gatineau, Canada
August 6, 2013

Transportation Safety Board of Canada
Statement of Financial Position (Unaudited)

Statement of Financial Position (Unaudited) as at March 31 (in thousands of dollars)
  2013 2012
Liabilities

Accounts payable and accrued liabilities (note 4)

$ 1,993 $ 1,985

Vacation pay and compensatory leave

1,063 1,145

Employee future benefits (note 5)

2,935 3,761
Total liabilities 5,991 6,891
 
Financial assets

Due from Consolidated Revenue Fund

1,523 1,476

Accounts receivable and advances (note 6)

41 227
Total financial assets 1,564 1,703
 
Departmental net debt 4,427 5,188
 
Non-financial assets    

Prepaid expenses

54 81

Inventory

114 174

Tangible capital assets (note 7)

5,586 5,186
Total non-financial assets 5,754 5,441
 
Departmental net financial position $ 1,327 $ 253

Contractual obligations (note 8)

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

The original version was signed by

The original version was signed by
Wendy A. Tadros
Chair


Date
Gatineau, Canada
August 6, 2013

The original version was signed by
Chantal Lemyre, CGA
Chief Financial Officer


Date
Gatineau, Canada
August 6, 2013

Transportation Safety Board of Canada
Statement of Operations and Departmental Net Financial Position (Unaudited)

Statement of Operations and Departmental Net Financial Position (Unaudited) For the Year Ended March 31 (in thousands of dollars)
  2013 Planned Results (note 11) 2013 2012
Expenses

Air investigations

$ 15,988 $ 15,189 $ 16,246

Marine investigations

5,089 5,832 5,277

Rail investigations

5,373 5,277 5,771

Pipeline investigations

540 535 534

Internal services

7,810 7,663 7,672
Total expenses 34,800 34,496 35,500
 
Revenues

Air investigations

7 11 14

Marine investigations

1 4 3

Rail investigations

7 3 4

Pipeline investigations

- - -

Internal services

11 35 22
Total revenues 26 53 43
 
Net cost of operations before government funding 34,774 34,443 35,457
 
Government funding

Net cash provided by Government

31,245 31,434 32,062

Change in due from Consolidated Revenue Fund

38 47 (369)

Services provided without charge by other government departments (note 9)

3,819 4,036 4,077
Net cost (surplus) of operations after government funding (328) (1,074) (313)
 
Departmental net financial position – Beginning of year 806 253 (60)
 
Departmental net financial position – End of year $ 1,134 $ 1,327 $ 253

Segmented information (note 10)

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

Transportation Safety Board of Canada
Statement of Change in Departmental Net Debt (Unaudited)

Statement of Change in Departmental Net Debt (Unaudited)
for the Year Ended March 31
(in thousands of dollars)
  2013 Planned Results (note 11) 2013 2012
Net cost (surplus) of operations after government funding $ (328) $ (1,074) $ (313)
Change due to tangible capital assets

Acquisition of tangible capital assets

998 1,472 1,369

Amortization of tangible capital assets

(891) (1,040) (1,084)

Proceeds from disposal of tangible capital assets

(23) (23) (14)

Net (loss) or gain on disposal of tangible capital assets

(15) (9) (15)
Total change due to tangible capital assets 69 400 256
 
Change due to inventories (44) (60) 61
 
Change due to prepaid expenses 5 (27) 2
 
Net increase (decrease) in departmental net debt (298) (761) 6
 
Departmental net debt – Beginning of year 4,263 5,188 5,182
 
Departmental net debt – End of year $ 3,965 $ 4,427 $ 5,188

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

Transportation Safety Board of Canada
Statement of Cash Flows (Unaudited)

Statement of Cash Flows (Unaudited)
for the year ended March 31
(in thousands of dollars)
  2013 2012
Operating activities

Net cost of operations before government funding

$ 34,443 $ 35,457

Non-cash Items:

Amortization of tangible capital assets

(1,040) (1,084)

Gain (loss) on disposal of tangible capital assets

(9) (15)

Services provided without charge by other government departments (note 9)

(4,036) (4,077)
 

Variations in Statement of Financial Position:

Increase (decrease) in accounts receivable and advances

(186) 199

Increase (decrease) in prepaid expenses

(27) 2

Increase (decrease) in inventory

(60) 61

Decrease (increase) in accounts payable and accrued liabilities

(8) (145)

Decrease (increase) in vacation pay and compensatory leave

82 (138)

Decrease (increase) in employee future benefits

826 447
Cash used for operating activities 29,985 30,707
 
Capital investing activities

Acquisition of tangible capital assets

1,472 1,369

Proceeds from disposal of tangible capital assets

(23) (14)
Cash used for capital investing activities 1,449 1,355
 
Net cash provided by the Government of Canada $ 31,434 $ 32,062

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

Transportation Safety Board of Canada
Notes to the Financial Statements (Unaudited)

For the Year Ended March 31

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 also known by the name Transportation Safety Board of Canada, or simply the TSB. The objective of the TSB 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 TSB may conduct studies into more general matters pertaining to transportation safety. The TSB has the exclusive authority to make findings as to causes and contributing factors when it investigates a transportation occurrence. The TSB’s operating expenditures are funded by a budgetary lapsing authority whereas contributions to employee benefit plans are funded by statutory authorities.

The TSB has four key programs, which are the conduct of safety investigations in the following four transportation sectors:

  • Air investigations
  • Marine investigations
  • Rail investigations
  • Pipeline investigations

Within each program, personnel conduct independent safety investigations into selected transportation occurrences. They identify causes and contributing factors, assess risks to the system, formulate recommendations to improve safety, publish investigation reports, communicate safety information to stakeholders, undertake outreach activities with key change agents, as well as assess and follow up on responses to recommendations. These activities are carried out by highly qualified investigators who are experts in the transportation operational sectors. They also work closely with personnel who are responsible for executing specialized work in the following fields: engineering and technical, macro-analysis, human performance and communications.

The Internal Services program also contributes to the achievement of TSB’s strategic outcome. This program includes the functions and resources required to support the needs of the programs of the four transportation modes and to meet the department’s corporate obligations in areas such as human resources, finance, administration, communications, information management and information technology.

2. Summary of Significant Accounting Policies

The financial statements have been prepared using the Government’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

  1. Parliamentary authorities

    The TSB is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the TSB does not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Financial Position and, the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the two bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-2013 Report on Plans and Priorities.

  2. Net cash provided by the Government of Canada

    The TSB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the TSB is deposited to the CRF and all cash disbursements made by the TSB are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

  3. Due from the Consolidated Revenue Fund

    Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represents the net amount of cash that the TSB is entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. Revenues

    Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenue takes place.

  5. Expenses

    Expenses are recorded on an accrual basis:

    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation, workers' compensation, the employer’s contribution to health and dental insurance plans, and external audit services are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government. The TSB's contributions to the Plan are charged to expenses in the year incurred and represent the total TSB obligation to the Plan. The TSB’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
    • Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. Accounts receivable and advances

    Accounts receivables and advances are stated at the lower of cost and net recoverable value.

  8. Contingent liabilities

    Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the financial statements.

  9. Inventories

    Inventories consist of personal protective clothing, corporate communications clothing and supplies held for future program delivery and not intended for resale. Inventory is valued at cost using the average cost method. If there is no longer any service potential, inventory is valued at the lower of cost or net realizable value.

  10. Tangible capital asset

    All tangible capital assets having an initial cost of $2,000 or more are recorded at their acquisition cost. In addition, acquisitions of all general-purpose furniture and informatics hardware are recorded as tangible capital assets.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

    Tangible capital asset
    Tangible Capital Asset Class Amortization Period
    Building 40 years
    Furniture 10 years
    Office equipment and tools 5 years
    Laboratory equipment 15 years
    Informatics hardware 4 years
    Informatics software (purchased) 7 years
    Informatics software (in house developed) 10 years
    Motor vehicles 7 years
    Other vehicles 15 years
    Leasehold improvements Betterments Lesser of the remaining term of the lease or useful life of the improvement.
    Betterments Over the useful life of the asset to which the improvement was made or the useful life of the betterment if significantly shorter.

    Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

  11. Measurement uncertainty

    The preparation of these 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 life of tangible capital assets and the liability for employee future benefits. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Authorities

The TSB receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Financial Position and, the Statement of Operations and Departmental Net Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the TSB has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year authorities used:
(in thousands / of dollars)
  2013 2012
Net cost of operations before government funding 34,443 35,457
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (4,036) (4,077)
Amortization of tangible capital assets (1,040) (1,084)
Gain (loss) on disposal of tangible capital assets (9) (15)
Decrease (increase) in employee future benefits 826 447
Decrease (increase) in vacation pay and compensatory leave 82 (138)
Refund of previous years' expenses 9 17
Revenues 53 43
Decrease (increase) in accrued liabilities not charged to authorities (57) (288)
Total items affecting net cost of operations but not affecting authorities (4,172) (5,095)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 1,472 1,369
Increase (decrease) in prepaid expenses (27) 2
Increase (decrease) in inventory (60) 61
Total items not affecting net cost of operations but affecting authorities 1,385 1,432
Current year authorities used 31,656 31,794
(b) Authorities provided and used:
(in thousands of dollars)
  2013 2012
Authorities provided:
Operating expenditures - Vote 10 26,479 26,683
Transfer from TB - Vote 15- Compensation adjustments 628 322
Transfer from TB - Vote 25- Operating Budget Carry Forward 1,334 1,318
Transfer from TB- Vote 30- Paylist requirements 1,041 1,260
Statutory contributions to employee benefit plans 3,547 3,486
Statutory spending of proceeds from disposal of surplus Crown assets 54 57
Spending of revenues as per Financial Administration Act Section 29.1 37 36
  33,120 33,162
Less:
Authorities available for future years (28) (15)
Lapsed: Operating (1,436) (1,353)
Current year authorities used 31,656 31,794

Budget 2012 was tabled in Parliament on March 29, 2012, after the tabling of the Main Estimates on February 28, 2012. As a result, the measures announced in the Budget 2012 could not be reflected in the 2012-13 Main Estimates. Treasury Board established frozen allotments in departmental votes to prohibit the spending of funds identified as savings measures in Budget 2012. The TSB lapse amount of $1,436,000 for 2012-13 includes a frozen allotment of $619,000.

4. Accounts Payable and Accrued Liabilities

The following table presents details of the department’s accounts payable and accrued liabilities:

Department’s accounts payable and accrued liabilities:
(in thousands of dollars)
  2013 2012
Accounts payable to other government departments and agencies 152 176
Accounts payable to external parties 748 871
Total accounts payable 900 1,047
Accrued liabilities 1,093 938
Total accounts payable and accrued liabilities 1,993 1,985

5. Employee Future Benefits

  1. Pension benefits

    The TSB’s employees participate in the Public Service Pension Plan which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

    Both the employees and the TSB contribute to the cost of the Plan. The 2012-13 expense amounts to $2,532,456 ($2,506,150 in 2011-12), which represents approximately 1.7 times (1.8 in 2011-12) the contributions by employees.

    The TSB’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.

  2. Severance benefits

    The TSB provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

Severance benefits
(in thousands of dollars)
  2013 2012
Accrued benefit obligation, beginning of year 3,761 4,208
Expense for the year (59) 602
Benefits paid during the year (767) (1,049)
Accrued benefit obligation, end of year 2,935 3,761

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, commencing in 2012 the accumulation of severance benefits under the employee severance pay program ceased for these employees. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the expense and the outstanding severance benefit obligation.

6. Accounts Receivable and Advances

The following table presents details of the department’s accounts receivable and advances:

Accounts Receivable and Advances
(in thousands of dollars)
  2013 2012
Receivables from other government departments and agencies 30 216
Receivables from external parties 2 2
Employee advances 9 9
Total accounts receivable and advances 41 227

7. Tangible Capital Assets

Tangible Capital Assets
(in thousands of dollars)
  Cost Accumulated Amortization Net Book Value
Capital Asset Class Opening balance Acquisitions Disposals and write-offs AdjustmentsFootnote 1 Closing balance Opening balance Amortization Disposals and write-offs Closing balance 2013 2012
Building 2,133 0 0 0 2,133 2,015 12 0 2,027 107 118
Furniture 913 4 0 0 917 484 90 0 574 342 429
Office equipment and tools 242 74 13 0 303 100 37 6 131 172 142
Laboratory equipment 2,588 6 6 0 2,588 1,633 75 7 1,702 886 955
Informatics hardware 2,004 351 271 0 2,084 1,492 239 265 1,465 619 512
Informatics software (purchased) 732 0 66 0 666 553 33 66 520 146 179
Informatics software (in- house developed) 3,377 0 0 305 3,682 1,419 449 0 1,868 1,814 1,958
Motor vehicles 639 102 103 0 638 341 44 83 303 335 298
Other vehicles 102 0 0 0 102 61 7 0 68 34 41
Leasehold improvements 606 16 0 0 622 558 17 0 574 48 48
Betterments 881 25 0 0 906 640 37 0 677 229 241
Assets under construction 265 894 0 (305) 854 - - - - 854 265
TOTAL 14,482 1,472 459 0 15,495 9,296 1,040 427 9,909 5,586 5,186

8. Contractual Obligations

The nature of the TSB’s activities can result in some large multi-year contracts and obligations whereby the TSB will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual Obligations
(in thousands of dollars)
  2013-14 2014-15 2015-16 2016-17 2017-18 Total
Acquisition of goods and services 223 51 5 - - 279

9. Related Party Transactions

The TSB is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The TSB enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the TSB received services which were obtained without charge from other Government departments as disclosed below.

(a) Common services provided without charge by other government departments:

During the year, the TSB received without charge from other departments: accommodation, workers' compensation, the employer’s contribution to health and dental insurance plans, and external audit services. These services without charge have been recognized in the TSB’s Statement of Operations and Departmental Net Financial Position as follows:

Common services provided without charge by other government departments:
(in thousands of dollars)
  2013 2012
Accommodation 2,145 1,999
Employer's contribution to health and dental insurance plans 1,821 1,941
External audit servicesFootnote 2 45 116
Workers' compensation 25 21
Total 4,036 4,077

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the TSB's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties:
(in thousands of dollars)
  2013 2012
Expenses – Other government departments and agencies 5,083 4,909
Revenues – Other government departments and agencies 20 10
Total 5,103 4,919

Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

10. Segmented Information

Presentation by segment is based on the TSB's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

Segmented Information
(in thousands of dollars)
  2013 2012
  Air Marine Rail Pipeline Internal Services Total Total
Operating expenses
Salaries and employee benefits 12,103 4,658 4,249 416 4,812 26,238 26,774
Professional and special services 801 187 208 10 836 2,042 2,312
Accommodation 702 327 260 24 832 2,145 1,999
Transportation and communications 520 315 282 30 488 1,635 1,957
Amortization 536 203 162 43 96 1,040 1,084
Repairs and maintenance 273 33 25 3 74 408 485
Utilities, materials, supplies and equipment 145 39 28 2 252 466 397
Rentals 54 23 18 1 211 307 287
Information 54 47 45 6 54 206 190
Net loss on disposal and write-off of tangible capital assets 1 - - - 8 9 15
Total Expenses 15,189 5,832 5,277 535 7,663 34,496 35,500
Revenues
Miscellaneous revenues 11 4 3 - 35 53 43
Total Revenues 11 4 3 - 35 53 43
Net cost before government funding 15,178 5,828 5,274 535 7,628 34,443 35,457

11. Planned Results

As per the Treasury Board Accounting Standard 1.2 (TBAS 1.2) – Departmental and Agency Financial Statements, departments must include planned financial results published in the 2012-13 Report on Plans and Priorities (RPP) in their year-end Financial Statements. The presentation of planned results in these financial statements differs only in format and terminology from the planned results presented in the 2012-13 RPP. The planned results amounts have not changed. Their presentation in these financial statements has been modified to be consistent with the presentation of year-end results, as required by TBAS 1.2.

Footnotes

Footnote 1

Adjustments include assets under construction of $305,121 that were transferred to the other categories upon completion of the assets.

Return to footnote 1 referrer

Footnote 2

Expenses for audit services recorded in 2012-13 relate to the audit by the Office of the Auditor General (OAG) of the TSB’s 2011-12 financial statements. The OAG no longer audits the TSB’s financial statements as part of their Budget 2012 savings measures.

Return to footnote 2 referrer