Financial Statements: 2019-20

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 statements rests with the management of the Leaders' Debates Commission (the Commission). 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 Commission's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada 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 Commission 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 financial statements of the Commission have not been audited.

 

Ottawa, Canada

Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)	2020	2019
Liabilities
Accounts payable and accrued liabilities (note 4)	604	18
Vacation pay and compensatory leave	-	8
Employee future benefits (note 5b)	-	4
Total liabilities	604	30
Assets
Financial assets
Due from Consolidated Revenue Fund	592	18
Accounts receivable and advances (note 6)	23	-
Total net financial assets	615	18
Departmental net debt	(11)	12
Departmental net financial position	11	(12)
Contractual obligations (note 7) The accompanying notes form an integral part of these financial statements.

 

Ottawa, Canada

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the Year Ended March 31
	Planned Results
(in thousands of dollars)	2020	2020	2019
Expenses
Organize Leaders' Debates for federal general elections	4,850	3,772	163
Total Expenses	4,850	3,772	163
Net cost of operations before government funding and transfers		3,772	163
Government funding and transfers
Net cash provided by Government of Canada		3,156	124
Change in due from the Consolidated Revenue Fund		574	18
Services provided without charge by other government departments (note 8a)		65	9
Net cost of operations after government funding and transfers		(23)	12
Departmental net financial position - Beginning of year		(12)	-
Departmental net financial position - End of year		11	(12)
Segmented information (note 9)
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	(23)	12
Net increase (decrease) in departmental net debt	(23)	12
Departmental net debt - Beginning of year	12	-
Departmental net debt - End of year	(11)	12
The accompanying notes form an integral part of these financial statements.

Statement of Cash Flow (Unaudited)

For the Year Ended March 31
(in thousands of dollars)		2020	2019
Operating activities
Net cost of operations before government funding and transfers		3,772	163
Non-cash items:
	Services provided without charge by other government departments (Note 8a)	(65)	(9)
Variations in Statement of Financial Position:
	Increase in accounts receivable and advances	23	-
	Decrease (increase) in accounts payable and accrued liabilities	(586)	(18)
	Increase in vacation pay and compensatory leave	8	-
	Decrease (increase) in future employee benefits	4	-
Cash used in operating activities		3,156	124
Net cash provided by Government of Canada		3,156	124

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

Notes to the Financial Statements (Unaudited)

For the Year Ended March 31

1. Authority and objectives

On October 29, 2018, the Governor in Council, on recommendation of the Minister of Democratic Institutions, established the Leader's Debates Commission (the Commission) with Orders in Council 2018-1322, 2018-1394 and 2018-1469. The Commission received its funding on November 19, 2018. It is led by a Debates Commissioner, and supported by a seven-member Advisory Board.

Part of the Commission's mandate is to advance the public interest by ensuring that the national debates are as accessible as possible, on a variety of platforms. The 2019 debates will encourage the use of new media, and reach to new audiences, including a mandate to ensure debates are available in accessible formats. The Leaders' Debates Commission will make the debates a more predictable, reliable, and stable element of federal election campaigns.

The Commission's mandate also includes the preparation of a report to Parliament, following the 2019 debates (and no later than March 31, 2020), outlining findings, lessons learned, and recommendations to inform the potential creation of a more permanent Leaders' Debates Commission going forward.

The Commission articulates its plans and priorities based on its core responsibility and programs noted below:

Core Responsibility

Organize leaders' debates for federal elections. The Commission will organize two leaders' debates for the 2019 federal general election – one in each official language. In order to execute its core responsibility, the Commission will apply mandated criteria to confirm the participation of eligible party leaders in leaders' debates during general election periods, issue a call for proposals for debate production that seeks to ensure that Canadians have access to these broadcasts, and communicate with Canadians to raise awareness of when, where and how debates can be accessed.

Programs

Ensuring the leaders' debates are available to all Canadians: The Commission will undertake an awareness raising campaign and outreach activities to ensure that Canadians know when, where and how to access the leaders' debates. Following the debates, the Commission will conduct an evidence-based assessment of the leaders' debates that it has organized, including with respect to the number of persons to whom the debates were accessible and the number of persons who actually accessed them. The Commission will ensure that the leaders' debates are broadcast free of charge and otherwise made available in an accessible way to persons with disabilities. The Commission will seek to ensure that the debates reach as many Canadians as possible, including those living in remote areas and those living in official language minority communities, through a variety of media and other fora.

Maintaining the highest standards for the leaders' debates: The Commission will conduct any necessary research or rely on any applicable research to ensure that the leaders' debates are of high quality. The Commission will ensure that any reproduction of the leaders' debates is subject to only the terms and conditions that are necessary to preserve the integrity of the debates. The Commission will also provide advice and support in respect of other political debates related to the general election, including candidates' debates, as the Debates Commissioner considers appropriate.

Internal Services

Internal Services are those groups of related activities and resources that the Federal Government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refer to the activities and resources of ten distinct services that support program delivery in the organization, regardless of the Internal Services delivery model in a department. These services are: Acquisition Management Services, Communications Services, Financial Management Services, Human Resources Management Services, Information Management Services, Information Technology Services, Legal Services, Materiel Management Services, Management and Oversight Services, Real Property Management Services.

2. Summary of significant accounting policies

These financial statements are prepared using the government 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

The Commission is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Commission 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 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.

(b) Net cash provided by Government

The Commission operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF, and all cash disbursements made by the Commission 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 the Commission is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Expenses

Expenses are recorded on the accrual basis:

• Vacation pay and compensatory leave are accrued as the benefits are earned by the employees under their respective terms of employment.
• Services provided without charge by other government departments for employer contributions to the health and dental insurance plans are recorded as operating expenses at their carrying value.

(e) Employee future benefits

• Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Commission's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Commission'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.

(f) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of liabilities 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 item where estimates are used is 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 Commission receives 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, the Commission 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)	2020	2019
Net cost of operations before government funding and transfers	3,772	163
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments	(65)	(9)
Decrease/(Increase) in vacation pay and compensatory leave	8	(8)
Decrease/(Increase) in future employee benefits	4	(4)
Refund of prior years' expenditures	8	-
Total items affecting net cost of operations but not affecting authorities	(45)	(21)
Adjustments for items not affecting net cost of operations but affecting authorities:
Accounts receivable and advances	6	-
Total items not affecting cost of operations but affecting authorities	6	-
Current year authorities used	3,733	142
(b) Authorities provided and used
(in thousands of dollars)	2020	2019
Authorities provided:
Vote 1 - Operating expenditures	4,521	258
Statutory amounts	96	15
Less:
Lapsed: Operating	(884)	(131)
Current year authorities used	3,733	142

4. Accounts payable

The following table presents details of the Commission's accounts payable:

(in thousands of dollars)	2020	2019
Accounts payable - Other government departments and agencies	81	1
Accounts payable - External parties	523	17
Total accounts payable	604	18

5. Employee future benefits

(a) Pension benefits

The Commission'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 two 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 employer 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 related 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 2019-20 expense amounts to $87,700. For Group 1 members, the expense represents approximately 1.01 times the employee contributions and, for Group 2 members, approximately 1.00 times the employee contributions.

The Commission'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 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, 2018, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities. No severance was paid out to any of the Commission's employees.

The changes in the obligations during the year were as follows:

(in thousands of dollars)	2020	2019
Accrued benefit obligation - Beginning of year	4	-
Expense for the year	(4)	4
Accrued benefit obligation - End of year	-	4

6. Accounts receivable and advances

The following table presents details of LDC's accounts receivable and advances balances:

(in thousands of dollars)	2020	2019
Receivables – Other government departments and agencies	13	-
Receivables – External parties	5	-
Employee advances	5	-
Net accounts receivable	23	-

7. Contractual obligations

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

(in thousands of dollars)	2022	2022	2023	2024	2025	2026 and subsequent	Total
Professional and special services	23	-	-	-	-	-	23
Total	23	-	-	-	-	-	23

8. Related party transactions

The Commission is related as a result of common ownership to all government departments, agencies, and Crown corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms.

In addition, the Commission has an agreement with Privy Council Office related to the provision of finance and administration services, which is included in section b). During the year, the Commission received common 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 Commission received services without charge from certain common service organizations, related to the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in the Commission's Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)	2020	2019
Employer's contribution to the health and dental insurance plans	65	9
Total	65	9

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 service organizations 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 Services and Procurement Canada are not included in the Commission's Statement of Operations and Departmental Net Financial Position. The costs of information technology infrastructure services provided by Shared Services Canada, following the transfer of responsibilities in November 2011 are also not included in the Commission's Statement of Operations and Departmental Net Financial Position.

b) Other transactions with other government departments and agencies

(in thousands of dollars)	2020	2019
Expenses	1,034	16

9. Segmented information

Presentation by segment is based on the Commission'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 for the Commission's core responsibility, by major object of expense. The segment results for the period are as follows:

(in thousands of dollars)	Organize Leader's Debates for federal general elections	2020	2019
Expenses
Salaries and employee benefits	922	922	141
Professional and special services	1,051	1,051	7
Transportation and communications	70	70	13
Information	1,716	1,716	-
Rentals	-	-	1
Other	13	13	-
Total Expenses	3,772	3,772	163
Net cost of operations before government funding and transfers	3,772	3,772	163

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting for Fiscal Year 2019-20

1. Introduction

This document provides summary information on measures taken by the Leaders' Debate Commission (LDC or the Commission) to maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management, assessment results and related action plans.

Detailed information on the Commission's authority, mandate, and programs can be found in its Departmental Plan: https://debates-debats.ca/en/transparency/departmental-plan-2019-20/

2. Departmental system of internal control over financial reporting

2.1 Internal Control Management

The Commission recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective financial systems of ICFR and are well equipped to exercise these responsibilities effectively. In accordance with a Memorandum of Understanding, the Commission's financial transactions are processed by the Privy Council Office (PCO) within their financial system and are for the most part subject to the same control environment.

The Commission relies on PCO control measures to a large extent; and recognizes the importance of ensuring that it implements its own complementary measures. An approved PCO internal control management framework is in place and is leveraged by the Commission via the MOU in place, which includes:

• Organizational accountability structures as they relate to internal control management to support sound financial management including roles and responsibilities for senior managers in their areas of responsibility for internal control management;
• Values and ethics framework;
• On-going communication and training on statutory requirements, policies, and procedures for sound financial management and control
• Monitoring of, and regular updates on, internal control management, as well as the provision of related assessment results and action plans to departmental senior management and the Departmental Audit Committee (DAC)

2.2 Service Arrangements relevant to financial statements

The Commission relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows:

Common Arrangements:

• Public Services and Procurement Canada (PSPC) centrally administers the payments of salaries and the procurement of certain goods and services and provides accommodation services;
• On behalf of the employer, the Treasury Board Secretariat (TBS) provides the Commission with information used to calculate various accruals and allowances, such as the accrued severance liability; and
• Shared Services Canada (SSC) provides IT infrastructure services to the Commission in the areas of data center and network services. SSC also provides the service for the acquisition and provision of hardware and software for workplace technology devices to the Commission. The scope and responsibilities are addressed in the interdepartmental arrangement between SSC and LDC.

Specific Arrangements:

The Commission's financial transactions are processed by PCO within their financial system and are for the most part subject to the same control environment. These services are encompassed in a broader Corporate Services arrangement which are the subject of a MOU between the two organizations.

3. Departmental assessment results during fiscal year 2019-20

The Commission has established its business processes and implemented its control environment by leveraging the processes and controls implemented at PCO for Hospitality, Travel, Payroll, financial close and reporting, and other financial management processes.

New or significantly amended key controls - The Commission relies on the system of internal control implemented at PCO for the above noted business processes. New or significantly modified internal controls are disclosed in the Annex of PCO's statement of management responsibility.

On-going monitoring program - The Commission's monitoring program for the above noted business processes leverages PCO's rotational on-going monitoring plan disclosed in the Annex of PCO's statement of management responsibility.

4. Departmental action plan

4.1 Progress during fiscal year 2019–20

Progress for the business processes noted in section 3 of the Commission's Annex above is disclosed in the Annex of PCO's Statement of Management Responsibility.

4.2 Action plan for the next fiscal year and subsequent years

Any action plans for the aforementioned business processes are disclosed in the Annex of PCO's Statement of Management Responsibility.