Financial Statements for the Year Ended March 31, 2023

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, 2023, and all information contained in these statements rests with the management of Public Safety and Emergency Preparedness (PSEPC). 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 PSEPC's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in PSEPC'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 and applied throughout PSEPC 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, 2023 was completed in accordance with the Treasury Board Policy on Financial Managementand the results and action plans are summarized in the annex.

The effectiveness and adequacy of PSEPC's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of PSEPC's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting.

The financial statements of PSEPC have not been audited.

Original Signed by Shawn Tupper

Shawn Tupper,
Deputy Minister
Ottawa, Canada
Date: August 28, 2023

Original Signed by Patrick Amyot

Patrick Amyot, CPA
Chief Financial Officer
Ottawa, Canada
Date: August 28, 2023

Statement of Financial Position (Unaudited)
As at March 31 (in thousands of dollars)
2023 2022
Liabilities
Accounts payable and accrued liabilities (note 4) $ 1,520,821 $ 895,147
Vacation pay and compensatory leave 10,988 11,355
Employee future benefits (note 5) 3,685 3,741
Disaster Financial Assistance Arrangements (DFAA) (note 6) 4,729,930 7,233,867
Total liabilities 6,265,424 8,144,110
Financial assets
Due from Consolidated Revenue Fund 1,518,027 893,313
Accounts receivable and advances (note 7) 7,759 9,508
Total financial assets 1,525,786 902,821
Departmental net debt 4,739,638 7,241,289
Non-financial assets
Tangible capital assets (note 8) 27,241 6,223
Total non-financial assets 27,241 6,223
Departmental net financial position $ (4,712,397) $ (7,235,066)
Contractual obligations (note 9) Contingent liabilities (note 10) The accompanying notes form an integral part of these financial statements

Original Signed by Shawn Tupper

Shawn Tupper,
Deputy Minister
Ottawa, Canada
Date: August 28, 2023

Original Signed by Patrick Amyot

Patrick Amyot, CPA
Chief Financial Officer
Ottawa, Canada
Date: August 28, 2023

Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
2023 Planned Results 2023 Actual 2022 Actual
Expenses
Community Safety $ 609,868 $ 604,815 $ 347,216
Emergency Management 347,355 66,574 5,296,061
Internal Services 76,223 93,961 79,544
National Security 28,822 33,514 33,731
Total expenses 1,062,268 798,864 5,756,552
Revenues
Interdepartmental provision of internal support services 2,700 2,543 2,693
Miscellaneous revenues 50 467 26
Revenues earned on behalf of Government (50) (467) (26)
Total revenues 2,700 2,543 2,693
Net cost of operations before government funding and transfers 796,321 5,753,859
Government funding and transfers
Net cash provided by Government of Canada 2,666,866 819,105
Change in due from Consolidated Revenue Fund 624,714 224,682
Services provided without charge by other government departments (note 11) 27,410 23,210
Transfer of assets from / to other government department 0 2
Net cost of operations after government funding and transfers (2,522,669) 4,686,860
Departmental net financial position – Beginning of year (7,235,066) (2,548,206)
Departmental net financial position – End of year $(4,712,397) $(7,235,066)
Segmented information (note 13) 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)
2023 Actual 2022 Actual
Net cost of operations after government funding and transfers $(2,522,669) $4,686,860
Change due to tangible capital assets
Acquisition of tangible capital assets 22,044 74
Amortization of tangible capital assets (1,026) (1,025)
Proceeds from disposal of non-tangible capital assets (7) (4)
Net gain on disposal of non-capital assets 7 4
Transfer to other government departments (note 8) 0 2
Total change due to tangible capital assets 21,018 (949)
Increase (decrease) in departmental net debt (2,501,651) 4,685,911
Departmental net debt – Beginning of year 7,241,289 2,555,378
Departmental net debt – End of year $4,739,638 $7,241,289
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)
2023 2022
Operating activities
Net cost of operations before government funding and transfers $ 796,321 $5,753,859
Non-cash items:
Amortization of tangible capital assets (1,026) (1,025)
Services provided without charge by other government departments (note 11) (27,410) (23,210)
Gain (loss) on disposal of non-capital assets 7 4
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances (1,749) 1,894
Decrease (increase) in accounts payable and accrued liabilities (625,674) (224,920)
Decrease (increase) in vacation pay and compensatory leave 367 (413)
Decrease (increase) in employee future benefits 56 290
Decrease (increase) in DFAA program 2,503,937 4,687,444
Cash used in operating activities 2,644,829 819,035
Capital investing activities
Acquisition of tangible capital assets 22,044 74
Proceeds from disposal of non-tangible capital assets (7) (4)
Cash used in capital investing activities 22,037 70
Net cash provided by Government of Canada $2,666,866 $819,105
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)

1. Authority and objectives

The Department of Public Safety and Emergency Preparedness (PSEPC) was created in 2003 to ensure coordination across all federal departments and agencies responsible for national security and the safety of Canadians. PSEPC operates under the Department of Public Safety and Emergency Preparedness Act (2005, c.10) that received Royal assent on March 23, 2005. 

PSEPC contributes to the public safety of Canadians through the promotion and maintenance of a just, peaceful and safe society, it has four main core responsibility programs:

2. Summary of significant accounting policies

These financial statements have been prepared using PSEPC'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:

(a) Parliamentary authorities

PSEPC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to PSEPC do 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 Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2022-2023 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2022-2023 Departmental Plan.

(b) Net cash provided by Government

PSEPC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the PSEPC is deposited to the CRF, and all cash disbursements made by PSEPC 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.

(c) Amounts due from or to the CRF

Amounts due from or to 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 represent the net amount of cash that PSEPC is entitled to draw from the CRF without further authorities to discharge its liabilities

(d) Revenues

Revenues from regulatory fees are recognized based on the services provided in the year. Revenues are then recognized in the period in which the related expenses are incurred. Other revenues are recognized in the period the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge PSEPC's liabilities. While the Deputy Minister is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the entity's gross revenues.

(e) Expenses

Transfer payments are recorded as an expense in the year the transfer is authorized, and all eligibility criteria have been met by the recipient. Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment. Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their carrying value.

(f) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government. PSEPC's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. PSEPC'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 accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Accounts receivable

Accounts receivable are initially recorded at cost and where necessary, are discounted to reflect their concessionary terms. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.

(h) Non-financial assets

The costs of acquiring land, buildings, equipment, and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 8. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable and intangible assets. 

Inventories are valued at cost and are comprised of spare parts and supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.

(i) Contingent liabilities

Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in note 10 of the financial statements.

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets.

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.

(k) Related party transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

  1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
  2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

PSEPC receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, PSEPC 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)
2023 2022
Net cost of operations before government funding and transfers $ 796,321 $5,753,859
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (1,026) (1,025)
Services provided without charge by other government departments (27,410) (23,210)
Decrease (increase) in vacation pay and compensatory leave 367 (413)
Decrease (increase) in employee future benefits 56 290
Refund of prior years' expenditures 8,084 7,344
Decrease (increase) in accruals for DFAA 2,503,937 (4,687,444)
Bad debt expense 0 (373)
Adjustments to previous years' payables at year-end 9,026 17,472
Total items affecting net cost of operations but not affecting authorities 2,493,034 4,687,359
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 22,044 74
Salary overpayments charged to the Appropriation 575 1,075
Salary advances to employees charged to Appropriation 12 15
Proceeds from disposal of surplus Crown assets (7) (4)
Total items not affecting net cost of operations but affecting authorities 22,624 1,160
Current year authorities used $ 3,311,979 $1,067,660
(b) Authorities provided and used (in thousands of dollars)
2023 2022
Authorities provided:
Vote 1 - Operating expenditures $ 271,293 $ 216,683
Vote 5 - Grants & Contributions 3,174,192 979,601
Statutory amounts 21,346 18,037
Less:
Authorities available for future years (7) (4)
Lapsed authorities (154,845) (146,657)
Current year authorities used $3,311,979 $1,067,660

4. Accounts payable and accrued liabilities

The following table presents details of the PSEPC's accounts payable and accrued liabilities (in thousands of dollars)
2023 2022
Accounts payable - Other government departments and agencies $5,544 $3,240
Accounts payable - External parties 1,500,595 881,790
Total accounts payable  1,506,139 885,030
Accrued liabilities 14,682 10,117
Total accounts payable and accrued liabilities  $1,520,821 $895,147

5. Employee future benefits

(a) Pension benefits

PSEPC's employees participate in the Public Service Pension Plan (the “Plan”), which is sponsored and administered by the Government of Canada. 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/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and PSEPC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2022-2023 expense amounts to $13,877,744 ($12,105,912 in 2021-2022). For Group 1 members, the expense represents approximately 1.02 times (1.01 times in 2021-22) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2021-22) the employee contributions.

PSEPC'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.

(b) Severance benefits

Severance benefits provided to PSEPC's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2023, all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows (in thousands of dollars)
2023 2022
Accrued benefit obligation - Beginning of year $3,741 $4,031
Expense for the year (411) (456)
Benefits paid during the year 355 166
Accrued benefit obligation - End of year $3,685 $3,741

6. Disaster Financial Assistance Arrangements (DFAA)

In the event of a natural disaster in Canada, the federal government provides financial assistance to provincial and territorial governments through the Disaster Financial Assistance Arrangements program to help meet the basic costs of response and recovery when such expenditures exceed what an individual province or territory could reasonably be expected to bear on its own. The current outstanding liabilities of $4,729,929,907 is the estimated cost to PSEPC of 68 natural disaster events for which the Federal Government has agreed to share the costs and final payments have not yet been made.

Disaster Financial Assistance Arrangements (DFAA) (in thousands of dollars)
2023 2022
Opening balance $7,233,867 $2,546,423
Disbursements (2,422,036) (445,750)
Accrued expenses for the year (81,901) 5,133,194
Closing balance $4,729,930 $7,233,867

7. Accounts receivable and advances

The following table presents details of PSEPC's accounts receivable and advances balances (in thousands of dollars)
2023 2022
Receivables – Other government departments and agencies $1,666 $3,852
Receivables – External parties 5,886 5,425
Employee advances 287 311
Subtotal 7,839 9,588
Allowance for doubtful accounts on receivables from external parties (80) (80)
Total accounts receivable and advances $7,759 $9,508
The following table provides an aging analysis of accounts receivable from external parties and the associated valuation allowances used to reflect their net recoverable value (in thousands of dollars)
2023 2022
Accounts receivable from external parties
Not past due $4,070 $4,013
Number of days pas due:
1 to 30 244 191
31 to 60 18 0
61 to 90 0 0
91 to 365 691 996
Over 365 881 225
Sub-total 5,903 5,425
Less: Valuation allowance 80 80
Total $5,823 $5,345

8. 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:

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. PSEPC does not posess intangible capital assets such as, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

Tangible capital assets
Asset Class Amortization Period
Computer hardware 4 to 7 years
Computer software 3 to 5 years
Other equipment including furniture 5 years
Machinery and Equipment 5 years
Motor Vehicles 3 years
Leasehold improvements Over the useful life of the improvement or the lease term, whichever is shorter
Assets under construction once in service, in accordance with asset type

Assets under construction are recorded in the applicable asset class in the year they are put into service and are not amortized until they are put into service.

Tangible capital assets (in thousands of dollars)
Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Adjustments Disposals and write-offs Transfer in Transfer out Closing balance Opening balance Amortization Adjustments Disposals and write-offs Transfer in Transfer out Closing balance 2023 2022
Computer hardware 3,311 117 0 0 0 0 3,428 3,245 17 0 0 0 0 3,262 166 66
Machinery and equipment 28 0 0 0 0 0 28 0 6 0 0 0 0 6 22 28
Computer software 1,809 0 0 0 0 0 1,809 1,551 129 0 0 0 0 1,680 129 258
Other equipment including furniture 1,342 0 0 0 0 0 1,342 1,342 0 0 0 0 0 1,342 0 0
Vehicles 106 0 0 0 0 0 106 79 10 0 0 0 0 89 17 27
Leasehold improvements 25,760 0 0 0 0 0 25,760 19,916 864 0 0 0 0 20,780 4,980 5,844
Assets under construction 0 21,927 0 0 0 0 21,927 0 0 0 0 0 0 0 21,927 0
Total 32,356 22,044 0 0 0 0 54,400 26,133 1,026 0 0 0 0 27,159 27,241 6,223

9. Contractual obligations

The nature of PSEPC's activities may result in some large multi-year contracts and obligations whereby PSEPC will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual obligations (in thousands of dollars)
Year Transfer Payments Other obligations with related parties Total
2024 232,166 0 232,166
2025 171,938 0 171,938
2026 78,384 0 78,384
2027 46,508 0 46,508
2028 and subsequent 56,875 0 56,875
Total 585,871 0 585,871

10.Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

Claims and litigation

Claims have been made against PSEPC in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management are NIL at March 31, 2023 (Nil in 2021-2022).

11. Related party transactions

PSEPC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

PSEPC enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, PSEPC has agreements with Correctional Services Canada and with Royal Canadian Mounted Police related to the provision of human resources and finance system services. During the year, PSEPC received common services which were obtained without charge from other Government departments as disclosed below:

12. Related party transactions (continued)

During the year, PSEPC received services without charge from certain common service organizations related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in PSEPC's Statement of Operations and Departmental Net Financial Position as follows:

(a) Common services provided without charge by other government departments (in thousands of dollars)
2023 2022
Accommodation $12,308 $10,487
Employer's contribution to the health and dental insurance plans 13,096 11,625
Legal services 2,006 1,098
Total $27,410 $23,210

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common services organization so that one department performs services for all other departments and agencies without charge. The costs of these services, such as payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in PSEPC's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies (in thousands of dollars)
2023 2022
Accounts receivable $1,666 $3,852
Accounts payable 5,544 3,240
Expenses 23,380 12,298
Revenues 2,543 2,693

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

13. Segmented information

Presentation by segment is based on PSEPC's core responsibility. 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 revenue generated for the main core responsibilities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Segmented information (in thousands of dollars)
2023 2022
Expenses National Security Emergency Management Community Safety Internal Services Total Total
Transfer payments 2,904 17,173 505,192 0 525,269 5,539,177
Operating expenses
Salaries and employee benefits 22,843 36,998 58,511 64,224 182,576 154,953
Professional and special services 4,324 4,228 10,233 14,896 33,681 26,463
Claim against the Crown 11 2 16,002 0 16,015 0
Accommodation 2,173 2,668 3,809 5,395 14,045 13,485
Information 27 2,299 3,109 1,331 6,766 10,554
Ex Gratia payments 1 25 6,094 0 6,120 0
Equipment rentals 266 1,033 231 2,544 4,074 4,415
Equipment 91 359 271 3,462 4,183 3,399
Travel and relocation 709 618 960 582 2,869 421
Repairs 7 854 0 807 1,668 1,395
Amortization 132 222 316 356 1,026 1,025
Utilities, material and supplies 19 66 86 222 393 658
Communication 7 29 1 124 161 145
Miscellaneous 0 0 0 18 18 89
Bad debt expense 0 0 0 0 0 373
Total operating expenses 30,610 49,401 99,623 93,961 273,595 217,375
Total expenses 33,514 66,574 604,815 93,961 798,864 5,756,552
Revenues
Interdepartmental provision of internal support services 0 0 0 2,543 2,543 2,693
Miscellaneous revenues 0 0 0 467 467 26
Revenues earned on behalf of government 0 0 0 (467) (467) (26)
Total revenues 0 0 0 2,543 2,543 2,693
Net cost of operations before government funding and transfers $33,514 66,574 604,815 91,418 796,321 $5,753,859

Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting (Unaudited)

A.1 Introduction

This document provides summary information on the measures taken by Public Safety and Emergency Preparedness Canada (PSEPC) to maintain an effective system of internal control over financial reporting, as well as information on internal control management, assessment results and related action plans.

Detailed information on the department's authority, mandate and core responsibilities can be found in the Departmental Plans 2022-2023 Departmental Plan for the 2022-2023 fiscal year and the Departmental Results Report 2021-2022 Departmental Results Report for the 2021-2022 fiscal year.

A.2 Departmental system of internal control over financial reporting

A.2.1 Internal control management

PSEPC has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its overall system of internal control. A departmental internal control management framework, is in place and comprises:

The Departmental Audit Committee is an independent advisory committee to the deputy head. It is responsible to provide advice to the deputy head on the adequacy and functioning of the department's risk management, control and governance frameworks and processes.

A.2.2 Service arrangements relevant to financial statements

PSEPC relies on other departments for processing certain transactions that are recorded in its financial statements, as follows.

A.2.2.1 Common service arrangements
A.2.2.2 Specific arrangements

Internal controls at the ongoing monitoring stage

A.3 Departmental assessment results for the 2022-2023 fiscal year

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year's rotational plan.

Progress during the 2022-2023 fiscal year
Previous fiscal year's rotational ongoing monitoring plan for the current fiscal year Status
Revenues, grants and contributions and financial close and Reporting. Completed as planned; no remedial actions required.

The key findings and significant adjustments required from the current fiscal year's assessment activities are summarized in subsection A.3.1.

A.3.1 New or significantly amended key controls

In the current fiscal year, there were no significantly amended key controls in existing processes that required a reassessment. However, in response to the risks posed by the Phoenix pay system, PSEPC continues to maintain additional controls and monitoring to mitigate risks of errors or misstatements.

A.3.2 Ongoing monitoring program

As part of its rotational ongoing monitoring plan, the department completed its reassessment of entity-level controls and the financial controls within the business processes of:

For the most part, the key controls that were tested performed as intended, and were shown to be effective. No remedial actions required.

The results of the internal control assessments have yet to be delivered and are planned to be presented to the upcoming DAC meeting.

A.4 Departmental action plan for the next fiscal year and subsequent fiscal years

PSEPC's rotational ongoing monitoring plan over the next three fiscal years is shown in the following table. The ongoing monitoring plan is based on:

Rotational ongoing monitoring plan
Key control areas 2023-2024 fiscal year 2024-2025 fiscal year 2025-2026 fiscal year
Entity-level controls X
Information technology general controls under departmental management X
Grants and contributions X
Disaster Financial Assistance Arrangements (DFAA) X
Operating expenditures X
Capital expenditures X
Financial close and reporting X
Payroll and benefits X
Revenue X
Budgeting and Forecasting X
Costing X X
CFO Attestations X X
Investment planning X
Date modified: