Courts Administration Service
Symbol of the Government of Canada
CAS Home > Departmental Performance Reports > Financial Statement Discussion and Analysis 2011-12 -Archive

Financial Statement Discussion and Analysis 2011-12


Warning This Web page has been archived on the Web.

Archived Content

Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats by contacting us.

INTRODUCTION

This Financial Statement Discussion and Analysis (FSD&A) should be read in conjunction with the unaudited Financial Statements and accompanying notes of the Courts Administration Service (CAS) for the fiscal year ended March 31, 2012. These Financial Statements have been prepared in accordance with Treasury Board accounting standards and year-end instructions issued by the Receiver General, which are based on Canadian public sector accounting standards. The FSD&A has been prepared following the Public Sector Statement of Recommended Practice (SORP-1).

Responsibility for the preparation of the FSD&A rests with the management of CAS. The purpose of the FSD&A is to enhance the users’ understanding of the organization’s financial position and results of operations while demonstrating its accountability for its resources. Additional information on the organization’s performance is available in the CAS Departmental Performance Report (DPR).

Following this introduction, the FSD&A consists of three distinct segments:  Overview; Highlights (financial and non-financial); and Discussion and Analysis. The latter covers Risks and Uncertainties and Financial Analysis.

Please note that all financial information presented herein is denominated in Canadian dollars, unless otherwise indicated.

Special note regarding forward-looking statements

The words “estimate”, “will”, “intend”, “should”, “anticipate”, and similar expressions are intended to identify forward-looking statements that reflect assumptions and expectations of CAS, based on its experience and perceptions of trends and current conditions. Although CAS believes the expectations reflected in such forward-looking statements are reasonable, they may prove to be inaccurate; consequently CAS’ actual results could differ materially from expectations set out in this FSD&A. In particular, the risk factors described in the “Risks and Uncertainties” section of this report could cause actual results or events to differ materially from those contemplated in forward-looking statements.

OVERVIEW

The Courts Administration Service (CAS) was established in 2003 by the Courts Administration Service Act, S.C. 2002, c. 8. The role of CAS is to provide effective and efficient registry, judicial and internal services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court of Canada and the Tax Court of Canada (hereafter referred to as “the Courts”). The Chief Administrator of CAS serves as Deputy Head.

CAS was created to ensure the effective and efficient provision of administrative support to the four federal courts; to enhance judicial independence by placing administrative services at arm’s length from the Government and affirming the roles of the chief justices and judges in the management of the Courts ; and to enhance accountability for the use of public money in support of court administration. This in turn ensures timely and fair access to the judicial system, which is essential to constitutional governance.

The CAS budget is allocated through authorities approved by Parliament. CAS has one voted authority for program expenditures and statutory authorities for contributions to employee benefit plans, spending of proceeds from the disposal of surplus Crown assets, and refunds of amounts credited to revenues in previous years. Total CAS parliamentary authorities in 2011-12 amounted to $78,677 thousand.

Authorities provided to CAS 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 Financial Position and in the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 of the Financial Statements provides a reconciliation between the bases of reporting.

The Financial Statements of CAS are not audited.

HIGHLIGHTS

Parliamentary Authorities

The parliamentary authorities available to CAS include funding received through the Main Estimates, Supplementary Estimates, Transfers, Adjustments and Warrants. These authorities increased by $13,775 thousand, from $64,902 thousand in 2010-11 to $78,677 thousand in 2011-12. This was the net result of several factors.

The chart shows a $2,266 thousand decrease to $64,894 thousand in 2010-2011 from $67,160 thousand in 2009-2010. This was the net result of several factors.

An increase in funding of $2,264 thousand was provided for changes to the refugee determination process introduced in Bill C-11, an Act to amend the Immigration and Refugee Protection Act (Balanced Refugee Reform Act) and the Federal Courts Act. Related funding authorities were initially received in the third quarter of 2010-11, with full-year funding authorities available starting in 2011-12. Funding for the implementation of Bill C-11 is, however, entirely frozen, as access is contingent upon the appointment of judges in support of the reform of Canada’s refugee determination system. No such appointment has yet been made.

One-time funding of $2,755 thousand was received to address information technology rust out and to relocate CAS corporate functions to the designated Federal Judicial Building in the National Capital Region (the Thomas D’Arcy McGee Building, at 90 Sparks Street). This funding was provided in 2011-12, offset by an equivalent total reduction in reference levels to be applied over a period of five years (to 2016-17).

Program integrity funding of $2,481 thousand was received to fund existing judicial officer appointments on a permanent basis and to provide some essential security measures for the Courts.

There was an increase of $6,044 thousand in the transfer from Treasury Board for pay list requirements. These include severance pay and termination benefits, vacation credits payable upon termination of employment, and parental benefits. The majority (83% or $5,611 thousand) was for payments to employees who have exercised the recently introduced option to immediately receive payment for previously earned and accumulated severance pay.

Finally, the operating budget carry-forward transfer received in 2011-12 was $436 thousand greater than that received in 2010-11, and the costs related to the employee benefit plan were $287 thousand greater in 2011-12. These increases were partially offset by various decreases in funding in 2011-12, including $167 thousand for costs associated with security certificates (Bill C-3), $153 thousand for Budget 2007 cost efficiencies, and $103 thousand for cost containment measures. Various additional decreases in funding totaled $69 thousand.

Financial Highlights

The net cost of CAS’ operations in 2011-12, before government funding and transfers, amounted to $97,187 thousand, an increase of 5% compared to $92,922 thousand in 2010-11. The $4,265 thousand variance represents an increase in expenses of $4,269 thousand and an increase in revenues of $4 thousand. These figures are net of expenses incurred and revenues earned on behalf of Government. Total expense increases were mainly in salaries and employee benefits and accommodations. These variances are explained further in the Financial Analysis section. The departmental net financial position of CAS was ($608) in 2011-12 compared to ($7,230) in 2010-11.

The Treasury Board Accounting Standard 1.2 now requires that the Statement of Financial Position include a net debt indicator and present assets and liabilities net of those held on behalf of Government. Expenses and revenues in the Statement of Operations and Net Financial Position are also presented net of expenses incurred and revenues earned on behalf of Government. The Statement of Equity has been replaced by the Statement of Change in Net Debt. Comparative figures for 2010-11 have been restated accordingly.

A Planned Results column is now presented in the Statement of Operations and Net Financial Position, and revenues are presented by type instead of by program activity. Minor wording changes and changes to tables were required throughout the Notes to the Financial Statements.

The new Policy on Internal Control has introduced additional requirements for the 2011-12 Financial Statements. These include the preparation of an annex which summarizes the results of a risk-based assessment of the system of internal control over financial reporting and a multi-year action plan to address them. The assessment was completed March 31, 2012. Identification of key controls and documentation of control activities has begun with work in progress on Entity Level Controls (ELC) and IT General Controls (ITGC). Three of the key Business Process Controls have been documented:  Payroll and Salaries, Procure to Pay, and Deposit Accounts.

Statement of Financial Position

Liabilities:  CAS’ total liabilities as at March 31, 2012 were $16,946 thousand ($19,697 thousand as at March 31, 2011). These variances are explained further in the Financial Analysis section.

  • Accounts payable and accrued liabilities:  The balance as at March 31, 2012 was $4,900 thousand ($3,247 thousand as at March 31, 2011). The increase of $1,653 thousand is mainly due to increases in accounts payable to external parties.
  • Vacation pay and compensatory leave:  The balance as at March 31, 2012 was $2,158 thousand ($1,820 thousand as at March 31, 2011). Vacation pay and compensatory leave has steadily increased over the past few years.
  • Deposit accounts:  The balance as at March 31, 2012 was $6,529 thousand ($5,949 thousand as at March 31, 2011). Because they reflect many separate decisions of the Courts, deposits cannot be projected and the balance in the deposit accounts varies significantly from year to year.
  • Employee future benefits:  The balance as at March 31, 2012 was $3,359 thousand ($8,681 thousand as at March 31, 2011). In 2011-12, significant changes were made to the employee severance pay program.

Assets:  Total assets signify the ability of CAS to provide future services to the Courts and thereby to ensure access to justice for Canadians. Total assets as at March 31, 2012 were $16,338 thousand ($12,467 thousand as at March 31, 2011). These variances are explained further in the Financial Analysis section.

  • Gross financial assets:  Gross financial assets increased to $11,436 thousand in 2011-12 from $9,230 thousand in 2010-11. This was mainly due to an increase in the amount due from the Consolidated Revenue Fund (CRF). This amount represents the net amount of cash that CAS is entitled to withdraw from the CRF without generating additional charges against its authorities.
  • Financial assets held on behalf of Government:  Financial assets held on behalf of Government increased to $1,614 thousand as at March 31, 2012 from $1,286 thousand as at March 31, 2011. These consist primarily of accounts receivable from another governmental organization; an example is the charging to HRSDC of the costs of administering EI cases in the Courts. The Deputy Head is required to maintain accounting controls over these transactions but has no authority with respect to their disposition.
  • Net financial assets:  CAS’ total net financial assets as at March 31, 2012 were $9,822 thousand ($7,944 thousand as at March 31, 2011). This amount represents gross financial assets less financial assets held on behalf of the Government.
  • Non-financial assets:  Total non-financial assets at March 31, 2012 were $6,516 thousand ($4,523 thousand as at March 31, 2011). Non-financial assets consist of the tangible capital assets that are essential for the successful delivery of services required by the Courts. Computer hardware and software (including assets under construction) totaled 46% of non-financial assets in 2011-12, while leasehold improvements (including assets under construction) accounted for 50%. Combined, these categories currently account for 96% of CAS’ tangible capital assets.

Re-investment in capital assets is crucial for maintaining secure modern facilities, updating technological infrastructure and information systems, and maintaining a reliable fleet of vehicles. In terms of the acquisition of tangible capital assets, CAS spent $2,623 thousand in 2011-12, an important increase from $643 thousand in 2010-11. Of this amount, $1,220 thousand (47%) related to computer hardware and $809 thousand (31%) to leasehold improvements, including associated assets under construction. The latter largely reflected construction costs for the data centre, mail room and relocation of corporate functions to the TDM Building. Other acquisitions included computer software, motor vehicles, furniture and fixtures, computer software, and machinery and equipment.

Net Debt:  CAS’ net debt (liabilities less total net financial assets) was $7,124 thousand as at March 31, 2012, a decrease from $11,753 thousand as at March 31, 2011. The net debt indicator provides a measure of the future authorities required to pay for past transactions and events. The fluctuations in net debt are presented in the Statement of Change in Departmental Net Debt. These variances are explained further in the Financial Analysis section.

Net Financial Position:  This represents the net resources (financial and non-financial) that will be used to provide future services to the Courts and thereby to benefit Canadians. The Net Financial Position of CAS consists of Non-Financial Assets less Net Debt.

As at March 31, 2012, CAS’ net financial position was ($608) thousand, compared to ($7,230) thousand as at March 31, 2011. The change is mainly due to a decrease in total liabilities and an increase in tangible capital assets. These variances are explained further in the Financial Analysis section.

Statement of Operations and Departmental Net Financial Position

Expenses:  Net expenses were $97,194 thousand in 2011-12 ($92,925 thousand in 2010-11). The largest components in the increase of $4,269 thousand (5%) were increases of $1,802 thousand in salaries and employee benefits and $1,766 in accommodations. These variances are explained further in the Financial Analysis section.

 Salaries  and employee benefits
[text version]

Salaries and employee benefits:  Over half of CAS’ total expenses consist of salaries and employee benefits. These costs increased by $1,802 thousand (3%) to $53,560 thousand in 2011-12 compared to $51,758 thousand in 2010-11 (and $49,755 thousand in 2009-10). The most recent increase is primarily the result of changes in the severance pay program and wage increases in newly signed collective bargaining agreements.

Operating:  CAS’ operating costs increased by $2,467 thousand (6%) to $43,634 thousand in 2011-12 compared to $41,167 in 2010-11, and $49,755 in 2009-10. The increase is mainly attributable to increases of $1,766 thousand in accommodations and $633 thousand in professional and special services.

Revenues:  Gross revenues were $4,395 thousand in 2011-12 ($7,977 thousand in 2010-11). Gross revenues consist largely of revenues earned on behalf of Government. Such revenues are non-respendable, meaning they cannot be used by CAS, and are deposited directly into the CRF.

Revenues earned on behalf of Government were $4,388 thousand in 2011-12 ($7,974 thousand in 2010-11). One major source of such revenues is fines and filing fees collected pursuant to the legislation and rules governing the Courts. Other revenues are generated by charges for photocopies of court documents; in 2011-12, however, sales, printing and distribution of copies of judgments and orders were discontinued as electronic copies were made available on-line, free of charge. Another source of revenue earned on behalf of Government consists in charges to Human Resources and Skills Development Canada (HRSDC) for the costs associated with the administration of Employment Insurance (EI) cases in the Courts.

CAS’ net revenues were $7 thousand in 2011-12 ($3 thousand in 2010-11). This reflects a small amount of respendable revenue from sale of Crown assets.

Gross Revenues
[text version]

Non-Financial Highlights

During 2011-12, CAS took major steps to review its strategic approach and priorities for the next five years. It improved governance, risk management and investment planning, while strengthening decision-making and enhancing internal controls. These efforts to strengthen the overall management framework will ensure better organizational control and utilization of human and financial resources.

Within the context of an emerging five-year plan, CAS redefined its overall priorities to reflect key challenges. The new approach emphasized the need to deliver fully on the organization’s mandate, to enhance security measures and services, to provide a robust, reliable and secure IM/IT infrastructure and to modernize judicial support systems.
Other important priorities that were identified involve dealing with the long-term financial viability of the organization, establishing a work environment that addresses employee needs, and reviewing governance to better respond to the specific needs of each court.

In terms of the operational priorities of the past year, highlights included the upgrading of the IM/IT infrastructure to meet the growing needs of the Courts and their support systems, the relocation and consolidation of CAS’ corporate functions to enhance efficiency and security, and development of new initiatives and programs for court security.

As part of the work to strengthen governance and promote cooperation and transparency, the CAS Chief Justices’ Steering Committee was established to provide direction to the Chief Administrator with respect to CAS priorities, risks, budget allocation, and other significant matters affecting the conduct of the Courts . It is supported by three National Judges’ Advisory Committees that involve the judiciary in the key areas of security, IM/IT and accommodations.

Investment planning was another area in which an improved governance structure was developed. This will help ensure that investment decisions fully support the priorities of the organization and the needs of the Courts. The investment planning process is designed to enable CAS to identify priorities, allocate funding and monitor investments in assets, acquired services and projects. It is critically important in a time of limited resources and growing demands. The first five-year CAS Investment Plan, covering 2012-13 through 2016-17, was completed at the end of 2011-12 for submission to the Treasury Board of Canada Secretariat.

An essential element in developing and implementing the Investment Plan is the Project Management Framework created during 2011-12. The Framework will apply to all investment projects to ensure they make efficient use of available resources and remain focused on the evolving needs of the Courts. The new CAS Project Management Office will ensure that projects are properly managed within the Framework.

In the area of financial management, CAS made good progress in 2011-12 in meeting government requirements pursuant to the Policy on Internal Control, as can be seen in the annex to the CAS Financial Statements, where a detailed action plan is presented. CAS also took the necessary steps to meet new requirements for financial reporting. This included delivering quarterly financial statements and annual future-oriented financial statements.

Integrated risk management continued to evolve at CAS, to the point where all levels of risk are now being identified and managed to ensure that the organization delivers on its mandate and achieves its intended results.

During the year, the development of proposals for improved operational efficiency, required under the Government’s Deficit Reduction Action Plan, led to the formulation of a number of initiatives. This effort was a major focus of CAS attention for several months.

DISCUSSION AND ANALYSIS

Risks and Uncertainties

Funding

During 2011-12, the financial situation of CAS remained difficult and continued to be an important source of risk to the organization’s ability to fulfill its mandate.

For some years, CAS had lacked the permanent funding necessary to enable the organization to fully meet its commitments and address major program integrity issues. Budget 2011 addressed part of this need, providing CAS with approximately $3 million per year for program integrity measures. Meanwhile, however, Government cost containment measures froze appropriations, requiring departments to absorb the cost of negotiated salary increases, an important consideration given the large proportion of the CAS budget devoted to salaries.

A loan in the amount of $2,750 thousand, to be repaid over five years, was provided by Treasury Board in 2011-12 and enabled CAS to construct a new data centre, address IT rust-out, and consolidate corporate functions in the TDM Building.

Funding restraints severely limited the resources available for strategic projects needed to address critical risk areas and allow the organization to become more effective and efficient in its delivery of services to the judiciary and Canadians. CAS will continue to work with Central Agencies to identify solutions to this longstanding problem.

Risk Management

Given the challenges of managing financial and other pressures, CAS put emphasis during 2011-12 on developing its risk assessment and risk management capacity.

Court management is a responsibility of the judiciary and imposes requirements that are beyond CAS control. A majority of the non-salary operating expenses incurred by CAS are contracted costs for services supporting the judicial process and court hearings. They include translation, court reporters, transcripts, and security services, and they are mostly driven by the number, type and duration of hearings conducted in any given year. A risk management strategy to monitor these costs and manage their fluctuation and related impacts on other key areas was further developed during the year.

Another example where CAS made progress in developing new approaches to risk was the provision of security services for the Courts  and their users. This area remains a key concern, and consequently the limited resources available must be applied efficiently and effectively to anticipate and avoid security risks, as well as to deal with those that do materialize.

Likewise, maintaining an efficient and secure IM/IT infrastructure to support the operations of the Courts and CAS and to protect the integrity of court information was another area where tangible progress was made in overcoming rust-out and addressing risks and problems. Much further work in this area will be needed in coming years to support the growing needs of the Courts and registries.

Financial Analysis

The following analysis explains the main items appearing on the financial statements, as well as significant variances and financial trends.

Liabilities

Accounts payable and accrued liabilities:

The CAS accounts payable and accrued liabilities balance as at March 31, 2012 was $4,900 thousand, compared to $3,247 thousand as at March 31, 2011. The overall increase of $1,653 thousand reflects three factors:

  • An increase of $1,381 thousand in accounts payable to external parties.
  • An increase of $379 thousand in accrued liabilities. This mainly represents salary earned in 2011-12 for which payment had not been made because the final pay period ended on March 28th, resulting in a two-day accrual of salaries.
  • A decrease of $107 thousand in accounts payable to other departments and agencies.

 Accounts payable and  accrued liabilities
[text version]

Vacation pay and compensatory leave:  CAS’ vacation pay and compensatory leave balance as at March 31, 2012 was $2,158 thousand ($1,820 thousand as at March 31, 2011). The increase of $338 thousand reflects a steady rise in vacation pay and compensatory leave related to the general increase in overall salary expenditures and a decrease in the utilization of vacation leave.

Employee future benefits:  The future benefits balance for CAS employees as at March 31, 2012 was $3,359 thousand, a substantial reduction from $8,681 thousand as at March 31, 2011. These amounts represent an allowance for severance benefits payable to employees within the Public Service.

In 2011-12, significant changes were made to the employee severance pay program. As of 2012, the accumulation of severance benefits for certain employee groups ceased. Employees affected were given the option of either receiving the full or partial value of benefits earned to date or deferring receipt until their termination from the public service. This change led to a decrease in the employee future benefits liability of $5,322 thousand compared to the prior fiscal year.

Deposit accounts:  The balance in the CAS deposit accounts as at March 31, 2012 was $6,529 thousand ($5,949 thousand as at March 31, 2011). CAS maintains two Specified Purpose Accounts (SPAs), one for deposits by litigants appearing before the Federal Court of Appeal or the Federal Court, and the other for those appearing before the Tax Court of Canada. These two accounts were established pursuant to Section 21.1 of the Financial Administration Act under, respectively, Order in Council P.C. 1970 4/2 and Order in Council P.C. 1970-300. Pursuant to an order of the Court, amounts are held in trust and eventually released with accrued interest. Because payments into or out of the accounts are determined by the Courts, depending on the particular case, the balance is unpredictable and may vary significantly from year to year.

Vacation pay and compensatory leave
[text version]

Assets

Financial Assets

Due from the Consolidated Revenue Fund (CRF):  This account represents the net amount of cash that CAS is entitled to withdraw from the CRF in order to discharge its liabilities without generating any additional charges against its authorities in the year of the withdrawal. This includes expenses incurred but not yet paid and amounts received by CAS that can be paid out in future years, offset by accounts receivable from other government departments and agencies.

The balance in the category “Due from the CRF” was $9,447 thousand as at March 31, 2012 ($7,640 thousand as at March 31, 2011). The increase of $1,807 thousand consisted of a $946 thousand increase in accounts payable to external parties (net of taxes), a $580 thousand increase in the deposit accounts, and other minor variances totaling an increase of $281 thousand.

Accounts receivable and employee advances:  The gross accounts receivable and employee advances balance was $1,989 thousand as at March 31, 2012 ($1,590 thousand as at March 31, 2011). Gross accounts receivable are offset by accounts receivable held on behalf of Government. These are not available to discharge the department’s liabilities (i.e., they represent receivables from non-respendable revenues). The Deputy Head is required to maintain accounting controls over these transactions even though he has no authority regarding their disposition.

  • Accounts receivable from other government departments and agencies:  The balance for gross accounts receivable from other government departments was $1,973 thousand as at March 31, 2012 ($1,531 thousand as at March 31, 2011). The increase of $442 represents a $343 thousand increase in the amount receivable for Employment Insurance Operating Account cost recoveries, plus an increase of $143 thousand in the GST refundable advance account, offset by minor variances totaling a reduction of $44 thousand.
  • Accounts receivable from external parties:  The balance of gross accounts receivable from external parties balance was $23 thousand as at March 31, 2012 ($49 thousand as at March 31, 2011). The external parties involved include litigants and members of the general public being charged for photocopies. Accounts receivable declined mainly because reasons for judgments, which had previously been provided as photocopies, are now available online free of charge to all Canadians. At the same time, CAS carefully reviewed the associated allowance for doubtful accounts (those receivables deemed to be uncollectable). The result was an increase in the allowance to $16 thousand as at March 31, 2012 ($1 thousand as at March 31, 2011).
  • Accounts receivable held on behalf of Government:  The balance of accounts receivable held on behalf of Government was $1,614 thousand as at March 31, 2012 ($1,286 thousand as at March 31, 2011). The $328 thousand increase reflects a $343 thousand increase in Employment Insurance Operating Account cost recoveries, offset by various minor amounts totalling $15 thousand.

CAS’ net accounts receivable and employee advances balance was $375 thousand as at March 31, 2012 ($304 thousand as at March 31, 2011).

Non-financial Assets

Tangible capital assets:  The net book value of tangible capital assets was $6,516 thousand as at March 31, 2012 ($4,519 thousand as at March 31, 2011). The increase of $1,997 thousand was accounted for by total tangible capital asset acquisitions of $2,623 thousand, amortization of $621 thousand, and adjustments, disposals and write-offs totalling ($5) thousand.

CAS spending of $2,623 thousand on tangible capital asset acquisitions during 2011-12, ($643 thousand in 2010-11) resulted primarily from important capital projects that commenced in 2011-12. Of the total for acquisitions, $1,220 thousand (47%) related to computer hardware. Tangible capital assets acquisitions in 2011-12 were as follows:

  • Data centre project:  leasehold improvements under construction $451 thousand, computer hardware $744 thousand.
  • Mailroom project:  leasehold improvements under construction $184 thousand, equipment $22 thousand.
  • Consolidation of corporate functions in the TDM Building (90 Sparks):  leasehold improvements $174 thousand.
  • Judicial support systems projects:  software under construction $200 thousand (for development of documentation associated with a Court and Registry Management System and for development of the On-line Law Clerk Application system).
  • Corporate human resources information system:  computer software $201 thousand, hardware $12 thousand.
  • IT rust-out project:  computer hardware $435 thousand, software $119 thousand, equipment $18 thousand.
  • Purchase of a new motor vehicle:  $28 thousand.
  • Other minor capital asset acquisitions:  $35 thousand.

Tangible Capital Assets Acquisitions
[text version]

Expenses

CAS gross expenses rose to $97,208 in 2011-12 from $92,927 thousand in 2010-11, an increase of $4,281 thousand. The two largest categories of expense are:  salaries and employee benefits (55% of total expenses in 2011-12, 56% in 2010-11); and accommodations (28% of total expenses in 2011-12, 27% in 2010‑11).

The CAS net expenses balance was $97,194 thousand for 2011-12, compared to $92,925 thousand for 2010-11. Net expenses include expenses incurred on behalf of Government, which are bad debts related to non-respendable accounts receivable.

Gross Expenses
[text version]

Salaries and employee benefits:  Salaries and employee benefits include such costs as gross salaries and wages, overtime pay, retroactive salary adjustments, employee entitlements and allowances, severance pay, and pension and medical benefits. Total CAS salaries and employee benefits increased to $53,560 thousand in 2011-12, from $51,758 thousand in 2010-11.

The $1,802 thousand increase (3%) was made up of three components:

  • An increase of $800 thousand due to changes to the severance pay program. As explained previously, the accumulation of severance benefits for certain employee groups ceased as of 2012. Employees affected were given the option of either receiving the full or partial value of benefits earned to date or deferring receipt until their termination from the public service. Reflecting this change, the rate provided by TBS for the severance benefits allowance increased by 2.6 percentage points for employee groups which continued to accrue severance, while decreasing by 17.69 percentage points for employee groups whose severance pay was eliminated. In addition growth in CAS’ indeterminate employee payroll resulted in an increase in salaries and employee benefits.
  • A $700 thousand increase resulting from newly signed collective bargaining agreements. Collective bargaining agreements signed in previous years resulted in salary increases averaging 1.5%.
  • A $300 thousand increase due to additional positions filled in the areas of security, IT, project management, and judicial services.

Accommodations:  Accommodations costs increased to $26,919 thousand in 2011-12 from $25,153 thousand in 2010-11, an increase of $1,766 thousand (7%). This amount represents the value of accommodation services, including rent, provided without charge by PWGSC, a common service organization providing accommodation services to the government. The increase is principally the result of two factors. Additional costs were incurred during relocation of staff to the Federal Judicial Building (TDM Building), when rent was still being paid on the previous building at 434 Queen. Furthermore, the cost of space at the TDM Building per unit area exceeds the costs at 434 Queen Street.

Professional and special services:  Professional and special services increased to $8,585 thousand in 2011-12, from $7,952 thousand in 2010-11. The increase of $633 thousand is composed of:  a $434 thousand increase in management consultant costs; a $307 thousand increase in IT; a $258 thousand increase in legal costs; a $341 thousand decrease in court related service contract costs (e.g., court ushers, court reporting, court registrars); and a $25 thousand decrease resulting from other minor variances.

Transportation and telecommunications:  Transportation and telecommunications expenses were essentially stable at $2,559 thousand in 2011-12 compared to $2,536 thousand in 2010-11, an increase of $23 thousand (0.1%).

Materials and supplies:  Material and supplies expenditure include legal books, publications and subscriptions, as well as stationery and supplies. Spending decreased to $2,064 thousand in 2011-12 from $2,137 thousand in 2010-11. The decrease of $73 thousand (3%) resulted primarily from a reduction in the purchase of books, publications and subscriptions by $77 thousand, offset by minor increases in other costs.

Machinery and equipment:  This category covers items costing less than $5 thousand each and includes informatics equipment, office equipment, furniture and parts, and motor vehicle parts. Expenses decreased to $982 thousand in 2011-12 from $1,062 thousand in 2010-11. The reduction of $80 thousand (8%), is accounted for by a decrease in the purchase of office equipment by $82 thousand, offset by minor increases in other costs.

Rentals:  CAS’ rentals expense increased to $1,023 thousand in 2011-12 from $937 thousand in 2010-11. The increase of $86 thousand (9%) represents a $132 thousand increase in office space rental, offset by a $46 thousand decrease in rental of informatics equipment. The office rent was for new facilities in the TDM Building, a leasehold improvement project which was completed part way through 2010; consequently 2011-12 was the first full year of rental costs.

Amortization of tangible capital assets:  Tangible capital assets are expected to yield benefits over several years. Consequently, their cost is amortized on a straight-line basis over the estimated useful life of each asset class. This amortization cost was $621 thousand in 2011-12, down from $670 thousand in 2010-11. The decrease of $49 thousand (7%) reflects the full amortization of several computer hardware assets in 2011-12.

Repairs and Maintenance:  Repair and maintenance costs on CAS’ leased facilities, machinery and equipment were $747 thousand in 2011-12 compared to $628 thousand in 2010-11. The increase of $119 thousand (19%) is due to non-capital costs related to leasehold improvement projects such as the consolidation of corporate functions in the TDM Building.

Information:  Information expenses increased to $131 thousand in 2011-12 from $107 thousand in 2010-11. The $24 thousand increase (22%) is primarily due to an increase of $18 thousand in communications costs.

Miscellaneous:  Miscellaneous expenses include losses on the disposal and write-down of tangible capital assets, interest on overdue supplier accounts, losses on foreign currency transactions and adjustments to the prior year’s payable at year-end (PAYE). Miscellaneous expenses grew to $17 thousand in 2011-12 from ($13) thousand in 2010‑11, with PAYE items being the largest single contributor to the $30 thousand increase.

Expenses incurred on behalf of Government:  These expenses relate to bad debts on Accounts Receivable held on behalf of Government. They increased by $12 thousand, to $14 thousand in 2011-12 from $2 thousand in 2010-11. As previously described, this is a result of CAS no longer distributing and charging for photocopies of judgements, since the judgements are available free of charge on-line. Related accounts receivable deemed uncollectible are being written off.

Revenues

Total gross revenues for CAS, as noted previously, fluctuate widely from year-to-year. Gross revenues were $4,395 thousand in 2011-12, compared to $7,977 thousand in 2010-11, and $13,753 thousand in 2009-10. CAS’ gross revenues consist almost entirely of revenues earned on behalf of Government. Such revenue is non-respendable by CAS and is deposited directly into the CRF. In 2011-12, these revenues totaled $4,388 thousand ($7,974 thousand in 2010-11)

When revenues earned on behalf of Government are removed, what remains are relatively small revenues from Crown assets disposal, which are respendable. The CAS net revenues balance was $7 thousand for 2011-12 compared to $3 thousand for 2010-11.

Gross Revenues
[text version]

Sources of Gross Revenue

  • Fines:  In 2011-12, 24% or $1,066 thousand of CAS’ gross revenues were from court fines (compared to 63% or $5,060 thousand in 2010-11). As noted previously, these fines are imposed by the Courts; consequently the total amount may vary significantly from year to year and cannot be predicted.
  • Employment Insurance (EI) Operating Account cost recoveries:  In 2011-12, 36% or $1,576 thousand of CAS’ gross revenues were from EI Operating Account cost recoveries (15% or $1,233 thousand in 2010-11). At the end of each fiscal year, CAS determines the cost associated with the administration of EI cases and charges this to HRSDC, the department responsible for the EI account. Accordingly, HRSDC reports an expense in its financial statements and CAS reports an equivalent revenue item. This accounting exercise is intended to reflect the total cost of running the federal government's EI program and is strictly internal to the government.
  • Filing fees:  In 2011-12, 37% or $1,644 thousand of CAS revenues were generated from filing fees (19% or $1,484 thousand in 2010‑2011). Filing fees are charged to register court documents pursuant to the legislation and Rules governing the Courts.
  • Miscellaneous:  In 2011-12, 2% or $109 thousand of CAS revenues were generated from miscellaneous revenues (3% or $200 thousand in 2010-11). Miscellaneous revenues is composed of photocopy revenue, gains on disposals of crown assets, and other miscellaneous revenues.