Statement of Management Responsibility Including Internal Control Over Financial Reporting 2013-2014

Return to Departmental Performance Report 2013-2014

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2014, and all information contained in these statements rests with the management of the Canadian Radio-television and Telecommunications Commission (CRTC). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality.  To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the CRTC’s financial transactions.  Financial information submitted in the preparation of the Public Accounts of Canada, and included in the CRTC’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the CRTC and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR to comply with the Policy on Internal Control (PIC).  

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The CRTCwill be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to the Treasury Board PIC.

In the interim, the CRTC’s has undertaken a risk based assessment of the system of ICFR for the year ended March 31, 2014 in accordance with the Treasury Board PIC, and the results and action plan are summarized in the annex.

The financial statements of the CRTC have not been audited.

 

(the original version was signed by)

Jean-Pierre Blais
Chairman and Chief Executive Officer
Gatineau, Canada
August 1, 2014
(the original version was signed by)

John Traversy
Secretary General
Gatineau, Canada
August 1, 2014

 

Canadian Radio-television and Telecommunications Commission
Statement of Financial Position (Unaudited)
As at March 31, 2014
(in thousands of dollars)
2014 2013
Liabilities
Accounts payable and accrued liabilities (note 4) 2,611 3,742
Vacation pay and compensatory leave 1,857 1,903
Deferred revenue (note 5) 37 3,722
Employee future benefits (note 6) 2,070 5,420
Total gross liabilities 6,575 14,787
Liabilities held on behalf of Government
Deferred revenue (note 5) (37) (3,722)
Total liabilities held on behalf of Government (37) (3,722)
Total net liabilities 6,538 11,065
Financial assets
Due from Consolidated Revenue Fund 2,326 3,739
Accounts receivable and advances (note 7) 603 318
Total gross financial assets 2,929 4,057
Financial assets held on behalf of Government
Accounts receivable and advances (note 7) (163) (198)
Total financial assets held on behalf of Government (163) (198)
Total net financial assets 2,766 3,859
Departmental net debt 3,772 7,206
Non-financial assets
Prepaid expenses 163 260
Tangible capital assets (note 8) 3,393 3,460
Total non-financial assets 3,556 3,720
Departmental net financial position (216) (3,486)
The accompanying notes form an integral part of these financial statements.

 

(the original version was signed by)

Jean-Pierre Blais
Chairman and Chief Executive Officer
Gatineau, Canada
August 1, 2013
(the original version was signed by)

John Traversy
Secretary General
Gatineau, Canada
August 1, 2013
Canadian Radio-television and Telecommunications Commission
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31, 2014
(in thousands of dollars)
2014
Planned Results
2014 2013
Expenses
Canadian Content Creation 22,584 20,224 22,819
Connection to the Communication System 25,930 24,739 24,542
Internal services 15,064 15,798 16,242
Expenses incurred on behalf of Government (75) (99) (29)
Total expenses 63,503 60,662 63,574
Revenues
Rights and privileges 106,428 106,323 104,752
Regulatory fees 60,235 55,606 59,277
Miscellaneous revenues 167 1,009 243
Revenues earned on behalf of Government (120,342) (115,746) (122,549)
Total revenues 46,488 47,192 41,723
Net cost of operations before government funding and transfers 17,015 13,470 21,851
Government funding and transfers
Net cash provided by Government 14,336 11,735 14,990
Change in due from Consolidated Revenue Fund 192 (1,413) (406)
Services provided without charge by other government
departments (note 9) 6,392 6,418 6,284
Net cost (revenue) of operations after government funding and transfers (3,905) (3,270) 983
Departmental net financial position - Beginning of year (2,649) (3,486) (2,503)
Departmental net financial position - End of year 1,256 (216) (3,486)
Segmented information (note 10)
The accompanying notes form an integral part of these financial statements.

 

Canadian Radio-television and Telecommunications Commission
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31, 2014
(in thousands of dollars)
2014
Planned Results
2014 2013
Net cost (revenue) of operations after government funding and transfers (3,905) (3,270) 983
Change due to tangible capital assets
Acquisition of tangible capital assets 2,372 1,334 1,334
Amortization of tangible capital assets (1,456) (1,401) (1,472)
Loss on write-offs of tangible capital assets - - (150)
Total change due to tangible capital assets 916 (67) (288)
Change due to prepaid expenses (60) (97) (149)
Net increase (decrease) in departmental net debt (3,049) (3,434) 546
Departmental net debt - Beginning of year 6,712 7,206 6,660
Departmental net debt - End of year 3,663 3,772 7,206
The accompanying notes form an integral part of these financial statements.

 

Canadian Radio-television and Telecommunications Commission
Statement of Cash Flows (Unaudited)
For the Year Ended March 31, 2014
(in thousands of dollars)
2014 2013
Operating activities
Net cost of operations before government funding and transfers 13,470 21,851
Non-cash items:
Amortization of tangible capital assets (1,401) (1,472)
Services provided without charge by other government
departments (note 9) (6,418) (6,284)
Loss on write-offs of tangible capital assets - (150)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 320 (87)
Increase (decrease) in prepaid expenses (97) (149)
Decrease (increase) in accounts payable and accrued liabilities 1,131 445
Decrease (increase) in vacation pay and compensatory leave 46 (60)
Decrease (increase) in future employee benefits 3,350 (438)
Cash used in operating activities 10,401 13,656
Capital investing activities
Acquisitions of tangible capital assets 1,334 1,334
Cash used in capital investing activities 1,334 1,334
Net cash provided by Government of Canada 11,735 14,990
The accompanying notes form an integral part of these financial statements.

1. Authority and objectives

The Canadian Radio-television and Telecommunications Commission (CRTC) was created by Parliament in 1968 under the Canadian Radio-television and Telecommunications Commission Act.  The CRTC reports to Parliament through the Minister of Canadian Heritage and Official Languages.

The CRTC is vested with the authority to regulate and supervise all aspects of the Canadian broadcasting system, as well as the telecommunications services providers and common carriers that come under federal jurisdiction.  The CRTC’s powers in the area of broadcasting regulation derive from the Broadcasting Act.  Its powers over telecommunications come from the Telecommunications Act and from various “special acts” of Parliament passed for specific telecommunications companies.

In December 2010, Royal Assent was granted for Anti-spam legislation entitled An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act (hereinafter referred to as Anti-spam legislation).Under this legislation, the CRTC has new investigative and enforcement responsibilities and powers to counter spam and malware.  This Act will come into force on July 1, 2014.  

The following are the program descriptions for the CRTC:

Canadian Content Creation (formerly Canadian Broadcasting in 2013)

This program focuses on ensuring that a wealth of Canadian content is created and made available to all Canadians on a variety of platforms. Through its orders, decisions, licensing frameworks and other regulatory activities, the CRTC encourages the creation of diverse programming that reflects the attitudes, opinions, ideas, values and artistic creativity of Canadians. By requiring the display of Canadian content in entertainment programming and the provision of information and analysis concerning Canada, the CRTC is enabling Canadians to better participate in their country’s democratic and cultural life.

Connection to the Communication System (formerly Canadian Telecommunications in 2013)

The CRTC facilitates the orderly development of a communication system for all Canadians in order to strengthen the social and economic fabric of Canada and enhance the safety and interests of Canadians. This program focuses on ensuring that Canadians can connect to a choice of accessible, innovative and quality communication services at affordable prices, and can have access to compelling and creative Canadian content. Through this program, the CRTC promotes compliance with and enforcement of its various laws and regulations, including unsolicited communications. It helps to ensure that Canadians have access to emergency communication services such as 9‑1‑1 service and alerting systems. As a result, Canadians have increased protection and benefit from a more secure communications system.

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. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Summary of significant accounting policies

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

Significant accounting policies are as follows:

  1. Parliamentary authorities and vote-netting ­ The CRTC is financed in part by the Government of Canada through Parliamentary authorities (e.g. Statutory Vote for Employee Benefits Plans (EBP), Budgetary Vote for the Anti-spam legislation activities) and the balance by vote-netted fees it collects from the regulated industries. Vote-netting is a means of funding selected programs or activities wherein Parliament authorizes a department to apply revenues collected from fee payers towards costs directly incurred for specific activities. CRTC has the authority to use a portion of: a)the Part I licence fees collected from broadcasters; b) the annual telecommunications fees collected from telecommunications carriers; and c) the unsolicited telecommunications fees from telemarketers to finance its regulatory costs it incurs in discharging its statutory responsibilities under the Broadcasting Act and Telecommunications Act (i.e. respendable revenue). The balance of these three fees recovers the costs for items funded through authorities (e.g. EBP) and costs incurred by other government departments on the CRTC’s behalf and are classified as non-respendable revenue. Part II broadcasting licence fees are entirely classified as non-respendable revenue.

    The accounting of fees collected and the charges to the authorities in a given year 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 fee collection and through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-14 Report on Plans and Priorities.

  2. Net cash provided by Government ­ The CRTC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by the CRTC is deposited to the CRF and all cash disbursements made by the CRTC are paid from the CRF.  The net cash provided to 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 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 CRTC is entitled to draw from the CRF without further authorities to discharge its liabilities.
  4. Revenues ­ The CRTC collects fees under the authority of the Broadcasting Act and Telecommunications Act and the regulations made pursuant to these Acts, namely the Broadcasting Licence Fee Regulations, 1997, the Telecommunications Fee Regulations, 2010 and the Unsolicited Telecommunications Fees Regulations. The CRTC’s regulatory fees recover the CRTC’s costs associated with its  program activities.  The Part II licence fees are regulatory charges imposed in relation to a broadcaster’s privilege (i.e. rights and privileges).  These fees recover part of the Government of Canada’s substantial annual investment in the Canadian broadcasting system. Miscellaneous revenues are mainly comprised of revenues received as a result of administrative monetary penalties (AMPs) imposed due to contraventions of the Telecommunications Act relating to the National Do Not Call List (DNCL) and other revenues such as: interest on overdue accounts receivable for CRTC broadcasting licence fees, telecommunications fees and AMPs, miscellaneous non tax revenue (e.g. access to information (ATI) fees), and gain on disposal of non-capital assets to outside parties.  All revenue from AMPs is recorded as non-respendable non-tax revenue.

    Under the authority of the Telecommunications Act, the CRTC created the Unsolicited Telecommunications Fees Regulations, following a public consultation process in 2012-13.  These regulations came into effect on April 1, 2013. During the year, these regulatory fees were used to recover the cost of the CRTC’s compliance and enforcement activities associated with the National Do Not Call List.

    Revenues from regulatory fees are recognized in the accounts based on the services provided in the year. 

    Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

    Funds that have been received are recorded as deferred revenue, provided the CRTC has an obligation to other parties for the provision of goods, services or the use of assets in the future.

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

    Revenues that are non-respendable are not available to discharge the CRTC's liabilities. While the Chairman and Chief Executive Officer is expected to maintain accounting control, he or she 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 in reduction of the entity's gross revenues.

  5. Expenses ­ Expenses are recorded on an 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 are recorded as operating expenses at their estimated cost.

  6. Employee future benefits
    1. Pension benefits ­ Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government.  The CRTC’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan.  The CRTC’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 ­ 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.
  7. Accounts receivables are stated at the lower of costs and net recoverable value; a valuation allowance is established for receivables where recovery is considered uncertain.
  8. Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The CRTC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

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

    Asset Class

    Informatics equipment

    Informatics software

    Vehicles

    Equipment

    Leasehold improvements

    Amortization period

    3 years

    5 years

    5 years

    5 years

    25 years

    1. Measurement uncertainty ­ The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable.  The most significant items where estimates are used are the allowance for doubtful accounts, the liability for employee severance benefits and the useful life of tangible capital assetsActual 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 CRTC receives the major portion of its funding through fees assessed against the regulated industries, as well as a portion from 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. Since Parliamentary authorities are not calculated on the accrual accounting basis, the CRTC 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:

2014 2013
(in thousands of dollars)
Net cost of operations before government funding and transfers 13,470 21,851
Adjustments for items affecting net cost of operations but not affecting authorities:
Decrease (increase) in employee future benefits 3,350 (438)
Services provided without charge by other government departments (6,418) (6,284)
Amortization of tangible capital assets (1,401) (1,472)
Refund of prior years' expenditures and adjustments to payables at year end 96 105
Decrease (increase) in vacation pay and compensatory leave 46 (60)
Loss on write-offs of tangible capital assets 0 (150)
Sub-total (4,327) (8,299)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 1,334 1,334
Increase (decrease) in prepaid expenses (97) (149)
Proceeds from the disposal of surplus Crown assets 0 (3)
Sub-total 1,237 1,182
Current year authorities used 10,380 14,734

(b) Authorities provided and used

2014 2013
(in thousands of dollars)
Authorities provided:
Vote 50 - Operating expenditures  6,839 12,541
Statutory amounts 6,625 6,325
Less:
Lapsed: Operating  (3,084) (4,132)
Current year authorities used 10,380 14,734

4. Accounts payable and accrued liabilities

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

2014 2013
(in thousands of dollars)
Accounts payable - Other government departments and agencies  164 147
Accounts payable - External parties 1,197 1,916
Total accounts payable  1,361 2,063
Accrued liabilities 1,250 1,679
Total accounts payable and accrued liabilities 2,611 3,742

5. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties for fees prior to services being performed.  During  March 2014 a number of broadcasting undertakings paid their 2014-15 Part I broadcasting licence fees in advance of the April 22, 2014 due date. As a result of this partial collection of the Part I broadcasting licence fees, which are restricted to fund the expenditures related to the CRTC broadcasting activities for the government fiscal year 2014-2015, the CRTC has recorded this amount as deferred revenue.  Revenue is recognized in the period that these expenditures are incurred or the service is performed. Details of the transactions related to this account are as follows:

2014 2013
(in thousands of dollars)
Opening balance 3,722 1,411
Amounts received 37 3,722
Revenues recognized (3,722) (1,411)
Gross closing balance 37 3,722
Deferred revenues held on behalf of Government (37) (3,722)
Net closing balance  - -

6. Employee future benefits

(a) Pension benefits:

The CRTC'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 the CRTC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s 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 2013-2014 expense amounts to $4.7 million ($4.5 million in 2012-2013).  For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-2013) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-2013) the employee contributions.

The CRTC'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:

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

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for

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

2014 2013
(in thousands of dollars)
Accrued benefit obligation - Beginning of year 5,420 4,982
Adjustment for the year (1,436) 1,769
Benefits paid during the year (1,914) (1,331)
Accrued benefit obligation - End of year 2,070 5,420

7. Accounts receivable and advances

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

2014 2013
(in thousands of dollars)
Receivables - Other government departments and agencies  437 117
Receivables - External parties 297 376
Standing advances - Petty Cash 3 3
Subtotal 737 496
Allowance for doubtful accounts on receivables from external parties (134) (178)
Gross accounts receivable 603 318
Accounts receivable held on behalf of Government  (163) (198)
Net accounts receivable 440 120

8. Tangible capital assets (in thousands of dollars)

Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Disposals and write-offs Closing balance Opening balance Amortization Disposals and write-offs Closing balance 2014 2013
Equipment 232 8 - 240 230 2 - 232 8 2
Vehicles 54 - - 54 41 5 - 46 8 13
Informatics equipment 3,046 593 - 3,639 2,392 371 - 2,763 876 654
Informatics software 7,904 733 304 8,333 5,425 1,009 304 6,130 2,203 2,479
Leasehold improvements 347 - - 347 35 14 - 49 298 312
Total 11,583 1,334 304 12,613 8,123 1,401 304 9,220 3,393 3,460

9. Related party transactions

The CRTC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations.  CRTC enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the CRTC 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 CRTC receives services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans and worker’s compensation coverage.  These services provided without charge have been recorded in the CRTC's Statement of Operations and Departmental Net Financial Position as follows:

2014 2013
(in thousands of dollars)
Employer's contribution to the health and dental insurance plans 3,207 3,120
Accommodation  3,115 3,022
Worker's compensation 96 142
Total 6,418 6,284

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 payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General of Canada, are not included in the CRTC's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties:

2014 2013
(in thousands of dollars)
Accounts receivable - Other government departments and agencies 437 117
Accounts payable - Other government departments and agencies  164 147
Expenses - Other government departments and agencies 2,310 2,251
Expenses and revenues disclosed in note (b) exclude common services provided without charge, which are already disclosed in (a).

10. Segmented information

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

(in thousands of dollars) Canadian Content Creation Connection to the Communication System Internal services 2014  Total 2013 Total
Expenses
Salaries and employee benefits 15,493 19,149 12,533 47,175 49,191
Professional and special services 1,132 1,641 1,599 4,372 4,567
Accommodation 1,058 1,284 773 3,115 3,022
Transportation and telecommunications 582 795 266 1,643 1,729
Amortization  696 697 8 1,401 1,472
Rentals 374 420 145 939 288
Information 468 161 150 779 1,038
Repair and maintenance 236 272 158 666 793
Machinery and equipment 93 145 64 302 740
Utilities, materials and supplies 77 91 101 269 577
Bad debt  15 84 - 99 29
Other - - 1 1 7
Loss on write-offs of tangible capital assets - - - - 150
Expenses incurred on behalf of Government (15) (84) - (99) (29)
Total expenses 20,209 24,655 15,798 60,662 63,574
Revenues
Rights and privileges  106,323 - - 106,323 104,752
Regulatory fees  21,209 23,408 10,989 55,606 59,277
Other revenues  8 1,001 - 1,009 243
Revenues earned on behalf of Government (108,866) (6,880) - (115,746) (122,549)
Total revenues 18,674 17,529 10,989 47,192 41,723
Net cost of operations before government funding and transfers 1,535 7,126 4,809 13,470 21,851

Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting - Fiscal Year 2013-2014 (unaudited)

1. Introduction

In support of an effective system of internal control, the Canadian Radio-television and Telecommunication Commission (CRTC) annually assesses the performance of it financial controls to ensure:

The CRTC will leverage the results of the periodic Core Control Audit performed by the Office of the Comptroller General. Below is a summary of the results of the assessment conducted during fiscal year 2013-2014.

2. Assessment results during fiscal year 2013-2014

During 2013-14, the CRTC completed all operating effectiveness testing of key control for its entity level controls, information technology (IT) general controls and business processes, including Financial Close and Reporting; Procure to Payment; Payroll; Capital Assets and Revenues.

For the most part, controls related to payment for goods and services and payment authority were functioning well and form an adequate basis for the CRTC system of internal control. As a result of the operating effectiveness testing for these financial controls, the CRTC identified the following remediation action that is required: Payroll - improvements in planning regarding the changes for the consolidation of pay services to Miramichi, including the development of an action plan to address the changes in the payroll processes and the impact on CRTC; and improvements in some IT General Controls.  Remediation is currently in progress for these items.  

Revenues are a significant and material component of the CRTC’s financial statements.  Operating effectiveness testing for the revenue process in 2013-2014 concluded that there are effective key controls in place.

3. Assessment plan

The CRTC will continue to monitor the performance of its system of internal control with a focus on the core controls related to financial transactions. 

Once remediation on higher risks processes is complete, CRTC strategy is to continue its remediation activities on the lower risks processes and to develop an on-going monitoring plan in the 2015-2016 fiscal year. 

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