2011–2012 Future-Oriented Financial Statements

Statement of Management Responsibility

Departmental management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 15, 2010 and reflect the plans described in the Report on Plans and Priorities.

The original version was signed by
Karen E. Shepherd
Commissioner of Lobbying

and

Johanne Blais
Chief Financial Officer

Ottawa, Canada
January 26, 2011

Future-Oriented Statement of Operations (Unaudited)

For the year ending March 31 (in dollars)	Estimated Results 2011	Forecast 2012
Expenses
Registration of Lobbyists	1,441,873	1,378,005
Education and Research	1,029,223	1,048,065
Reviews and Investigations under the Lobbying Act and the Lobbyists' Code of Conduct	1,225,721	1,308,300
Internal Services	1,546,784	1,640,670
Net cost of operations	5,243,601	5,375,040

Segmented information (Note 11)

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

Future-Oriented Statement of Financial Position (Unaudited)

As at March 31 (in dollars)	Estimated Results 2011	Forecast 2012
Assets
Financial assets
Due from Consolidated Revenue Fund	145,528	144,229
Accounts receivable and advances (Note 6)	200	200
Total financial assets	145,728	144,429
Non-financial assets
Tangible capital assets (Note 7)	1,631,606	1,412,209
Total non-financial assets	1,631,606	1,412,209
	1,777,334	1,556,638
Liabilities and equity of Canada
Liabilities
Accounts payable and accrued liabilities (Note 8)	145,528	144,229
Vacation pay and compensatory leave	138,454	146,812
Employee future benefits (Note 9)	541,835	575,168
	825,817	866,209
Equity of Canada	951,517	690,429
	1,777,334	1,556,638

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

Future-Oriented Statement of Equity of Canada (Unaudited)

For the year ending March 31 (in dollars)	Estimated Results 2011	Forecast 2012
Equity of Canada, beginning of year	1,111,096	951,517
Net cost of operations	(5,243,601)	(5,375,040)
Net cash provided by Government	4,619,657	4,637,923
Change in due from the Consolidated Revenue Fund	6,899	(1,299)
Services provided without charge from other government departments (Note 10)	457,466	477,328
Equity of Canada, end of year	951,517	690,429

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

Future-Oriented Statement of Cash Flow (Unaudited)

For the year ending March 31 (in dollars)	Estimated Results 2011	Forecast 2012
Operating activities
Net cost of operations	5,243,601	5,375,040
Non-cash items:
Amortization of tangible capital assets (Note 7)	(205,848)	(219,397)
Services provided without charge from other government departments (Note 10)	(457,466)	(477,328)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	(39,551)	0
Decrease (increase) in liabilities	8,921	(40,392)
Cash used in operating activities	4,549,657	4,637,923
Capital investing activities
Acquisitions of tangible capital assets (Note 7)	70,000	0
Cash used in capital investing activities	70,000	0
Net cash provided by Government of Canada	4,619,657	4,637,923

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

Notes to the Future-Oriented Financial Statements (Unaudited)

1. Authority and Objectives

The mandate of the Office of the Commissioner of Lobbying (OCL) is derived from the Lobbying Act. Its purpose is to ensure transparency and accountability in the lobbying of public office holders in order to contribute to the integrity of government decision making.

Registration of Lobbyists

Lobbying the federal government is a legitimate activity but it must be done transparently. The Lobbying Act requires that individuals who are paid to lobby public office holders must disclose certain details of their lobbying activities. OCL approves lobbyists' registration and makes them available for searching in an electronic registry that is accessible on the Internet.

Education and Research

OCL develops and implements educational and research programs to foster awareness of the requirements of the Lobbying Act and the Lobbyists' Code of Conduct. The primary audiences for the programs are the lobbyists, their clients and public office holders.

Reviews and Investigations under the Lobbying Act and the Lobbyists' Code of Conduct

OCL validates information provided by registered lobbyists to ensure accuracy. Allegations of non-registration or misconduct by lobbyists are reviewed and formal investigations are carried out when required.

Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

1. OCL's activities will remain substantially the same as the previous year.
2. Expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
3. Estimated year end information for 2010–11 is used as the opening position for the 2011–12 forecasts.

These assumptions are adopted as at December 15, 2010.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010–11 and for 2011–12, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements OCL has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
2. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, OCL will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

1. Parliamentary Authorities
   OCL is financed by the Government of Canada through Parliamentary authorities. The cash accounting basis is used to recognize transactions affecting Parliamentary authorities. The future-oriented financial statements are based on accrual accounting. Consequently, items presented in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the basis of reporting.
2. Net Cash Provided by Government
   OCL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCL is deposited to the CRF and all cash disbursements made by OCL 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. Amounts Due from/to the CRF
   Amounts due from/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 OCL is entitled to draw from the CRF without further appropriations to discharge its liabilities.
4. Expenses
   Expenses are recorded on the accrual basis:
   • 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, the employer's contribution to the health and dental insurance plans and worker's compensation coverage are recorded as operating expenses at their estimated cost.
5. Employee Future Benefits
   1. Pension Benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. OCL's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require OCL to make contributions for any actuarial deficiencies of the Plan.
   2. Severance Benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.
6. Accounts Receivable
   Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
7. Tangible Capital Assets
   All tangible capital assets having an initial cost of $5,000 and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost and amortized on a straight-line basis over their estimated useful life as follows:

   Tangible Capital Assets with Amortization period

   Asset Class	Amortization Period
   Machinery and Equipment	10 years
   Furniture and Fixtures	10 years
   Informatics Software	10 years
   Leasehold Improvements	Lesser of the remaining term of the lease or useful life of the improvement
   Assets in Development	Once in service, in accordance with asset type

5. Parliamentary Authorities

OCL receives its funding through annual Parliamentary authorities. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, OCL 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:

(b) Reconciliation of Net Cost of Operations to authorities to be used

(in dollars)	Estimated 2011	Forecast 2012
Net Cost of Operations	5,243,601	5,375,040
Adjustments for items affecting Net Cost of Operations but not affecting authorities:
Add (Less):
Amortization of tangible capital assets (Note 7)	(205,848)	(219,397)
Increase in employee future benefits	(40,726)	(33,333)
Decrease (increase) in vacation pay and compensatory leave	17,032	(8,356)
Services provided without charge by other government departments (Note 10a)	(457,466)	(477,328)
	(687,008)	(738,414)
Adjustments for items not affecting Net Cost of Operations but affecting authorities:
Add (Less):
Acquisitions of tangible capital assets (Note 7)	70,000	0
	70,000	0
Authorities to be used	4,626,593	4,636,626

6. Accounts Receivable and Advances

6. Accounts Receivable and Advances

(in dollars)	Estimated Results 2011	Forecast 2012
Accounts receivable	0	0
Petty cash advances	200	200
Total	200	200

7. Tangible Capital Assets

7. Tangible Capital Assets

(in dollars)	Estimated Results 2011	Forecast 2012
Opening balance	1,767,454	1,631,606
Acquisition of tangible capital assets	70,000	0
less: Current year amortization	(205,848)	(219,397)
Net Book Value	1,631,606	1,412,209

8. Accounts Payable and Accrued Liabilities

8. Accounts Payable and Accrued Liabilities

(in dollars)	Estimated Results 2011	Forecast 2012
External parties
Accounts payable and accrued liabilities	85,546	78,432
Accrued salaries	8,956	19,013
Other government departments and agencies
Accounts payable	51,027	46,784
Total	145,529	144,229

9. Employee Future Benefits

(a) Pension benefits:

OCL's employees participate in the Public Service Pension 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 Plans benefits and they are indexed to inflation.

Both the employees and OCL contribute to the cost of the Plan. OCL's forecasted expenses are $296,330 in 2010–11 and $312,326 in 2011–12. OCL's contribution represents approximately 1.9 times the contributions of employees.

OCL'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:

OCL provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, estimated as at the date of these statements, is as follows:

Severance Benefits estimated as at the date of the statements

(in dollars)	Estimated Results 2011	Forecast 2012
Accrued benefit obligation, beginning of year	501,109	541,835
Expense for the year	40,726	33,333
Accrued benefit obligation, end of year	541,835	575,168

10. Related Party Transactions

OCL is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. OCL enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the OCL 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 OCL is forecasted to receive without charge from other departments, accommodation, employer's contribution to the health and dental insurance plans and the workers' compensation coverage. These services without charge have been recognized in OCL's future-oriented Statement of Operations as follows:

Accommodation, employer's contribution to the health and dental insurance plans and the workers' compensation coverage

(in dollars)	Estimated Results 2011	Forecast 2012
Accommodation	259,546	267,232
Employer's contributions to the health and dental insurance plans	197,920	210,096
Total	457,466	477,328

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the department's future-oriented Statement of Operations.

(b) Other transactions with related parties

OCL receives services provided with charge from other government departments through Memoranda of Understanding (MOUs.) The forecasted amount for transactions with related parties is $1.1M for 2010–11 and $1.5M for 2011–12.

11. Segmented Information

Forcasted services provided with charge from other government departments through Memoranda of Understanding

(in dollars)		2012
	2011 Total	Registration of Lobbyists	Education and Research	Reviews and Investigations under the Lobbying Act and the Lobbyists' Code of Conduct	Internal Services	Total
Operating Expenses
Salaries and Employee Benefits	2,972,207	609,626	806,257	1,082,786	669,742	3,168,411
Professional and Special Services	1,592,000	505,000	124,000	124,000	747,000	1,500,000
Accommodation	259,546	58,791	66,808	85,514	56,119	267,232
Amortization	205,848	199,588	—	—	19,809	219,397
Utilities, Material and Supplies	31,000	1,000	1,000	2,000	46,000	50,000
Rental	40,000	—	—	—	40,000	40,000
Travel and Relocation	62,000	1,000	20,000	12,000	2,000	35,000
Acquisition of Equipment	32,000	1,000	3,000	—	31,000	35,000
Telecommunication Services	25,000	2,000	2,000	2,000	19,000	25,000
Information Services	20,000	—	25,000	—	—	25,000
Repair and Maintenance	4,000	—	—	—	10,000	10,000
Net Cost of Operations	5,243,601	1,378,005	1,048,065	1,308,300	1,640,670	5,375,040