Publications

FINANCIAL STATEMENT
For the year ended 31 March 1999

CANADIAN TRANSPORTATION ACCIDENT INVESTIGATION
AND SAFETY BOARD
MANAGEMENT REPORT

We have prepared the accompanying financial statement of the Canadian Transportation Accident Investigation and Safety Board (CTAISB) in accordance with the reporting requirements and standards of the Receiver General for Canada. This financial statement was prepared in accordance with the significant accounting policies set out in Note 2 of the statement on a basis consistent with that of the preceding year. Some previous year figures have been reclassified to conform to the current year's presentation.
Responsibility for the integrity and objectivity of data in this financial statement rests with the management of the CTAISB. The information included in the financial statement is based on management's best estimates and judgements with due consideration to materiality. To fulfil its accounting and reporting responsibilities, the CTAISB maintains a set of accounts which provides a centralized record of its financial transactions. Financial information contained in the departmental statements and elsewhere in the Public Accounts of Canada is consistent in all material respects with this financial statement, unless indicated otherwise.

The CTAISB's Corporate Services Branch develops and disseminates financial management and accounting policies, and issues specific directives which maintain standards of accounting and financial management. The CTAISB maintains systems of financial management and internal control which give due considerations to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament and are executed in accordance with prescribed regulations, and are properly recorded so as to maintain accountability of Government funds and safeguard the CTAISB's assets. The CTAISB also seeks to assure the objectivity and integrity of data in its financial statements by the careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.

Management presents this financial statement to the Auditor General of Canada who audits and provides an independent opinion on the fairness of the financial statement. This opinion is appended to the financial statement.

APPROVED BY:
Ken Johnson
Executive Director
Senior Financial Officer

Jean L. Laporte, CGA
Chief, Finance, Planning and Administration
Senior Full-Time Financial Officer
July 29, 1999

CANADIAN TRANSPORTATION ACCIDENT INVESTIGATION AND SAFETY BOARD

Notes to the Statement of Operations
for the year ended March 31, 1999
1. Authority and Purpose
The Canadian Transportation Accident Investigation and Safety Board (CTAISB) was established in 1990 under the Canadian Transportation Accident Investigation and Safety Board Act and is a departmental corporation named in Schedule II to the Financial Administration Act. The objective of the Board is to advance transportation safety. The primary purpose of the Board's investigations is accident prevention. It seeks to identify safety deficiencies in transportation occurrences and to make recommendations designed to eliminate or reduce any such safety deficiencies. In addition to investigations and public inquiries into specific occurrences, the Board may conduct studies into more general matters pertaining to transportation safety. The CTAISB has the exclusive authority to make findings as to causes and contributing factors when it investigates a transportation occurrence. The Board's operating expenditures are funded by a budgetary lapsing authority; employee benefits are authorized by statutory authorities.
2. Significant accounting policies
The statement of operations has been prepared in accordance with the reporting requirements and standards established by the Receiver General for Canada for departmental corporations. The most significant accounting policies are as follows:
a. Expenditure Recognition
All expenditures are recorded on an accrual basis, except normal termination benefits, vacation pay and compensatory leave which are recorded on a cash basis. Termination benefits related to the government downsizing incentive programs are in the accounts of CTAISB. This estimated amount is recorded in the year of the signing of the termination agreement with the employee.
b. Revenue Recognition
Revenues are recorded on a cash basis.
c. Refunds of Previous Years' Expenditures
Refunds of previous years' expenditures are recorded as revenue when received and are not deducted from expenditures.
d. Capital Purchases
Acquisitions of capital assets are charged to operating expenditures in the year of purchase.
e. Services Provided Without Charge by Other Government Departments
Estimated amounts for services provided without charge by other Government departments are included in operating expenditures.
3. Changes in Financial Statement Presentation
The grouping of expenditures in the Statement of Operations has been revised to show financial results on the basis of the approved CTAISB Planning, Reporting and Accountability Structure. This presentation structure is also used in the Main Estimates documents. Comparative figures have been reclassified to conform with the presentation adopted in the current year. The Administration grouping has been renamed Corporate Services. Expenditures of the Board of $871,157 (1998 : $772,594), previously shown as a separate grouping, are now combined under Investigation Operations. Expenditures incurred by the Communications and Informatics Divisions of $3,422,092 (1998 : $3,115,439) were previously included under Operations, whereas they are now included under Corporate Services.
4. Parliamentary Appropriations
1999 1998
($000) ($000)

Privy Council - Vote 15 18,917 19,523
Supplementary Vote 15b 8,173 1,047
Supplementary Vote 15c (note 8) 28,736 -
55,826 20,570

Lapsed 1,746 467
54,080 20,103

Spending of proceeds from the disposal
of surplus Crown Assets 17 10
Statutory contributions to employee benefit plans 3,243 2,584
Use of Appropriations 57,340 22,697

Add: - Adjustment for new collective agreements 316 -
- Services provided without charge by other
Government departments (note 6) 2,667 2,814

Deduct: non-tax revenue 26 31
Net Cost of Operations 60,297 25,480


5. Contractual Obligations
As at March 31, 1999, the CTAISB has entered into long-term leases with the Department of National Defence for the provision of goods and services with a total value of $2,138,977, of which there is an outstanding value of $2,055,377 at year-end. The current year's expense related to these contracts amounts to $83,600 and the future minimum payments related to these contracts are as follow:
2000 2001
($000) ($000)

Lease of aircraft hangar at CFB Shearwater 250 167
Lease of CFAV Endeavor 1,001 -
Lease of Deep Seabed Intervention System 637 -
Total 1,888 167
6. Services Provided Without Charge by Other Departments
The table below summarizes the services provided by other departments without charge to the CTAISB.
1999 1998
($000) ($000)

Public Works and Government Services Canada
(accommodation, accommodation
alteration and other services) 1,636 1,868

Treasury Board (employer's contributions to the
health insurance plan) 970 866

Human Resources Development Canada
(administration of workers' compensation) 40 67

Auditor General of Canada (audit services) 21 13
Total 2,667 2,814



7. Specified Purpose Account
The Flight Recorder Software System Account was established in 1997 to record cash contributions and expenditures related to a cost sharing agreement with foreign government safety organizations. Those organizations have acquired under licence a software system developed by the CTAISB for use in aircraft accident investigations and are now contributing financially to its on-going enhancement. These receipts and disbursements are not included in the statement of operations of the CTAISB.
1999 1998
($000) ($000)
Opening Balance 189 98
Receipts 134 211
Disbursements (167) (120)

Closing Balance 156 189
8. Expenditures Related to the Swissair Flight 111 Accident Investigation
On September 2, 1998 Swissair Flight 111 crashed in the Atlantic Ocean at approximately 5 nautical miles from Peggy's Cove, Nova Scotia. Under Canadian legislation and international conventions, the CTAISB has the responsibility to conduct a thorough investigation of the accident. This investigation is very complex and involves considerable resources, much of which were provided by National Defence, Fisheries and Oceans and the Royal Canadian Mounted Police. Supplementary funding was obtained from Parliament as normal CTAISB appropriations were insufficient to cover such a large and complex investigation.
The expenditures relating to the investigation are included in the Statement of Operations and are detailed in Table 1 below. These expenditures include direct costs incurred by the CTAISB and additional costs incurred by other government departments and agencies in support of the CTAISB's investigation. The supplementary funding received by the CTAISB also covered the additional costs incurred by these departments and agencies. Table 2 shows the amounts reimbursed to these entities by the CTAISB for the current year. The investigation is ongoing and additional expenditures are expected in future years.
Various other activities relating to the accident, such as search and rescue operations, were conducted by a number of departments. The costs of these activities are not disclosed in the CTAISB's Statement of Operations but in the accounts of the respective organizations.
Table 1
1999
Expenditures Relating to the Investigation of the Swissair Accident ($000)
(including services provided by other government departments and agencies)
Salaries and employee benefits 10,767
Professional and special services 7,357
Rentals 6,920
Utilities, materials and supplies 3,940
Transportation and communications 2,436
Construction and/or acquisition of
machinery and equipment 1,167
Purchased repair and upkeep 987
Information 247
Construction and/or acquisition of
land, buildings and works 167
Other 4

Total 33,992





Table 2
1999
Amounts Reimbursed for Services Provided by Other Government ($000)
Departments and Agencies Relating to the Investigation
National Defence 10,777
Fisheries and Oceans 8,506
Royal Canadian Mounted Police 5,252
Others 1,787

Total 26,322
9. Uncertainty Due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the CTAISB, including those related to the efforts of suppliers, the federal Government or other third parties, will be fully resolved.
Table 1
1999
SWISSAIR Expenditures ($000)

Salaries and employee benefits 10,767
Professional and special services 7,357
Rentals 6,920
Utilities, materials and supplies 3,940
Transportation and communications 2,436
Construction and/or acquisition of
machinery and equipment 1,167
Purchased repair and upkeep 987
Information 247
Construction and/or acquisition of
land, buildings and works 167
Other 4


Total expenditures 33,992


Table 2
1999
SWISSAIR expenditures paid to ($000)
to other Government departments

National Defence 10,777
Fisheries and Oceans 8,506
Royal Canadian Mounted Police 5,252


Total expenditures 24,535