Current Reports

Audit, Assurance, and Ethics Committee
Briefing Note
ATTEST AUDITS OF PWGSC REVOLVING FUND FINANCIAL STATEMENTS
for the fiscal year ended March 31, 2005

Purpose

This briefing note has been prepared to comment on the objective and results of the following six attest audits of departmental revolving fund operations for the fiscal year ended March 31, 2005:

• Translation Bureau Revolving Fund (TBRF) (Project 2005-701)
• Real Property Disposition Revolving Fund (RPDRF) (Project 2005-702)
• Consulting and Audit Canada Revolving Fund (CACRF) (Project 2005-703)
• Telecommunications and Informatics Common Services Revolving Fund (TICSRF) (Project 2005-704)
• Optional Services Revolving Fund (OSRF) (Project 2005-705)
• Real Property Services Revolving Fund (RPSRF) (Project 2005-706)

Background

Public Works and Government Services Canada (PWGSC) has conducted annual attest audits since 1994 on the financial statements of its departmental revolving fund operations. The Department currently has authority to operate the following seven revolving funds (one inactive):

Translation Bureau Revolving Fund (TBRF). The Translation Bureau, which was established in 1934 and became a Special Operating Agency (SOA) effective April 1, 1995, provides translation, interpretation and terminology services to promote communication in Canada's two official languages. The Translation Bureau operates as a Revolving Fund on an optional, fee-for-service basis, with a current maximum draw-down authority limit of $10 million. The Bureau also receives funding from a PWGSC Parliamentary Appropriation for the provision of translation in the official languages, interpretation and terminology services to Parliament, as well as interpretation and terminological services to federal departments and agencies.

Real Property Disposition Revolving Fund (RPDRF). The RPDRF was established in 1996 and currently has a maximum draw-down authority limit of $5 million. The RPDRF is a revenue dependency regime for the services offered by the Real Property Services Branch for the disposal of federal real property, where disposal costs are funded from the proceeds of sales. Any year-end accumulated surplus in the RPDRF in excess of $5 million is deposited to the Consolidated Revenue Fund.

Consulting and Audit Canada Revolving Fund (CACRF). Consulting and Audit Canada (CAC) is a special operating agency accountable to Parliament through the Minister and Deputy Minister of PWGSC. CAC provides comprehensive auditing, consulting, and related services on an optional and fee-for-service basis to federal departments and agencies across Canada, to other levels of government within Canada, and to foreign governments and international organizations. CAC operates under a Revolving Fund established in 1992, with a current maximum draw-down authority limit of $20 million.

Telecommunications and Informatics Common Services Revolving Fund (TICSRF). The TICSRF, formerly known as the Government Telecommunications Agency (GTA) Revolving Fund (1963) and the Government Telecommunications and Informatics Services (GTIS) Revolving Fund (1993), was established to plan and provide telecommunications facilities and services for federal departments and agencies. The TICSRF operates on a cost-recovery basis with a current maximum draw-down authority limit of $20 million.

Optional Services Revolving Fund (OSRF). The OSRF was established in 1992 and currently has a maximum draw-down authority limit of $35 million. The OSRF operates for purposes of the Department of Public Works and Government Services Act with respect to acquisition and provision of articles, supplies, machinery, equipment and other materiel, and printing and publishing services. The following programs were approved by Treasury Board as part of the OSRF mandate: the Benchmarking and Software Brokerage Programs; the Vaccine Program; the Government Travel Service; the recording of the cost of product of Traffic Management operations and the Buy for Lease program.

Real Property Services Revolving Fund (RPSRF). The RPSRF, formerly the Public Works Revolving Fund, was established in 1980 and currently has a maximum draw-down authority limit of $150 million. Since 1988, the objective of the RPSRF is to operate as a financially self-sufficient entity charging service fees in accordance with a Treasury Board approved rate structure for services provided to acquire, build, manage, maintain and dispose of facilities required by the federal government to serve Canadians. These architectural, engineering, real estate, property management and other professional and technical services are provided on an optional fee-for-service basis. Since 1999, the RPSRF is used exclusively for providing services to other government departments and third parties.

Defence Production Revolving Fund (DPRF). The DPRF is currently inactive. It was established in 1951 under section 15 of the Defence Production Act for the purpose of financing defence supplies and making loans and advances to aid in defence procurement.

Audit Authority and Objective

The revolving fund financial attest audits were undertaken as part of the annual Internal Audit Services Business Plan approved by the departmental Audit, Assurance and Ethics Committee (AAEC). These attest audits are conducted in accordance with the requirements of the Treasury Board Policy on Special Revenue Spending Authorities. The audit objective is to attest to the fair presentation of financial position, results of operations and cash flow as reported in the each Fund's financial statements.

Audit Results

The six revolving fund financial attest audits for the fiscal year ended March 31, 2005 were conducted by the public accounting firm PricewaterhouseCoopers and resulted in unqualified Auditors' Reports (opinions) on the fairness of each Fund's financial statements.

It should be noted that the 2005 financial statements for all but one of the Funds fully reflect Treasury Board accounting standards, which are consistent with generally accepted accounting principles (GAAP) for the public sector. The one exception is the Consulting and Audit Canada Revolving Fund, which employed a basis of accounting for employee termination benefits which differs from GAAP for the public sector with respect to the exclusion of a portion of expense and liability not funded by the Fund. This matter is disclosed in the notes to the financial statements.

Copies of each Fund's financial statements and related Auditors' Reports are tabled for information. The audited financial statements will be published by the Receiver General as part of the annual Public Accounts for the fiscal year ended March 31, 2005.