Financial Management Essentials Series: Public Accounts of Canada (COR2-V08)

Transcript: Public Accounts of Canada

[00:00:01 Text appears on screen that reads "Welcome".]

[00:00:06 The screen fades to Jocelyne Charron in a video chat panel.]

Jocelyne Charron (Executive Director, Treasury Board of Canada Secretariat): Hello everyone and thank you for joining me today for our series on the fundamentals of financial management. Today, together, we will look at and discover the Public Accounts of the Government of Canada. So, I am happy to be here with you today for a third series brought to you by the Office of the Comptroller General. Most of you have probably already seen me on our other two preliminary series, but just in case, my name is Jocelyne Charron. I am the Executive Director of Community Development and sit in the Office of the Comptroller General. It's really a pleasure to be with you today. Before we begin, I'm going to do a little land acknowledgement. So, I want to highlight that I am joining you from the traditional, unceded territory of the Algonquin Anishinabe Nation. As many of you, you are joining us from different parts of the country. So we probably have people joining us from the province of British Columbia, possibly Newfoundland, and the Yukon. So, I encourage you to also take a moment to acknowledge and honour the traditional Indigenous territory you find yourself on.

So, it's a pleasure to be here today with you and at our third session. And this time, we are exploring the Public Accounts of the Government of Canada. I'm going to say it's one of the richest data sets we have about financial transactions, financial insights, and about telling Canadians and parliamentarians about how governments have spent their taxpayers' money, and some of the results that we received for that, for the spending. So, they are tabled in Parliament. There's often a lot of parliamentary questions related to this. There's a lot of insights and a lot of interest by some of our senior leaders. Public accounts have to be approved when we're looking at your respective departments by your accounting officers or often your deputy heads. A huge role for the financial management community in terms of the integrity, the quality of the accounts, as well as the narrative that goes with it. So, we have the privilege of having some experts with us today, and we hope that you'll find this session interesting. It is a bilingual session, so we'll have some segments in French and some segments in English.

[00:02:35 A slide is shown with the title "Reminders" above the text:

• Wooclap – Code: EJSOQY

Questions

• There will be time for questions at the end
• Submit questions at any time using the Q&A feature

Reference Materials

• English Presentation
• French Presentation.]

And I will try to make sure that I forewarn you when we're switching in one of the two languages, but you do have the interpretation services that can accompany you throughout and you have access through that, through the interpretation services of the platform, and you can select there the language of your choice, but I'll try to make sure that you know a little bit when we're switching so you can anticipate. We're also using Wooclap today. So, this is our interactive session or interactive way for you to reach us. We have a Q&A segment. And so, question and answer segment, and you have here on the screen the code. So, you can go to the Wooclap website and enter this code that will allow you to send us your question, and please do that throughout. We have some time at the end of the session to go through that. As well, you can access the reference material located in the reference section of the platform.

I also invite you to go look at the available references. They are available in both official languages and, in addition to just the presentation today, we have also added additional material on public accounts. So, probably for you, I will tell you about some interesting and rich resources to keep as reference material in your role. So, for today's session, we have two main speakers and discussions will also follow. So, we're going to do a bit more of a literacy session and then really delve deeper with a conversation in addition to a question and answer portion, which is an opportunity for you to learn a little from our experts.

[00:04:22 Martin Krumins appears in a separate video chat panel.]

So, before we begin, we asked my boss, Martin Krumins, who is the Assistant Comptroller General of the Government of Canada's financial function, to give you some opening remarks. So, really, this is a bit of an opportunity to describe how he sees public accounts and why it's such an important exercise. And what, in fact, is important for you to learn? And/or a bit of wealth on the financial function and the role regarding public accounts.

So, I'm switching to English now and I'm asking Martin to come and give a few opening remarks. Thank you for being here with us today, Martin.

Martin Krumins (Assistant Comptroller General, Treasury Board of Canada Secretariat): Great. Thank you, Jocelyne, and good afternoon, everyone. My name is Martin Krumins, and it is a pleasure to join you for the third session of the Financial Management Essential Series. I definitely want to thank the Canada School of Public Service for organizing this event and creating a space for us to learn, share, and grow as a community. Today, we're focusing on a cornerstone of financial transparency, the Public Accounts of Canada. These accounts are more than numbers. They are the official record of how public funds are spent. They represent truth and trust in government financial management, and they are essential for accountability to Canadians. As financial professionals, continuous learning is vital. Our field is dynamic, policies change, technology advances and expectations from Canadians evolve. Staying current means leading with confidence and agility, and sessions like this help us strengthen our skills and ensure we're ready to meet new challenges.

[00:05:57 A slide is shown with a picture of Martin Krumins and the text:

Martin Krumins – CPA, CMA" Assistant Comptroller General"

• Financial Management Sector, Office of the Comptroller General
• Treasury Board of Canada Secretariat
• martin.krumins@tbs-sct.gc.ca".]

So, I began my career as a financial officer and I've worked in departments including Fisheries and Oceans, Treasury Board, Secretariat in the Public Health Agency of Canada, where I worked during the pandemic that we all worked through. That experience reinforced a lesson I've carried throughout my career. Financial management is about trust and truth. Principles at the heart of the Public Accounts.

The Public Accounts are Canada's official consolidated financial statements, the definitive record of how public funds are spent. Audited and published for all Canadians, they reflect transparency, accountability and stewardship. So, think of them as Canada's financial report card showing what was delivered, not just what was planned. In a world of forecasts and estimates, the Public Accounts are the final word.

And they're not just for accountants, ministers and deputy ministers use them as a key accountability tool. Canadians look to them as a measure of trust and for financial officers. While they may feel like a reporting burden, they represent our commitment to integrity and sound management. Today, discussions connect directly to the Financial Management Competency Compass, which outlines the competencies needed for excellence in our field.

[00:07:08 A slide is shown with the title "Financial Management Competency Compass" above the text:

THINKING THINGS THROUGH

• Interpreting, linking, and analyzing information to understand issues and provide relevant insight
• Situational Awareness
• Strategic Thinking
• Innovative Mindset

WORKING EFFECTIVELY WITH OTHERS

• Working collaboratively with others to effectively achieve common goals
• Stakeholder-Centric
• Communication
• Collaboration and Mobilization

SHOWING INITIATIVE & BEING ACTION-ORIENTED

• Focusing personal efforts on achieving results and making a difference
• Digital Acumen
• Change Leadership
• Operational Agility

FUNCTIONAL COMPETENCIES

• Strengthening the foundation of comptrollership abilities
• Financial Literacy
• Oversight and Risk Management
• Compliance

Demonstrating integrity and respect

• Developing and maintaining openness and transparency in establishing networks while demonstrating a high degree of integrity.]

The Public Accounts align closely with five key competencies. Situational awareness, understanding the context and implications of financial decisions. Communication, which is explaining complex financial information clearly and effectively. Collaboration, which is working across teams and departments to achieve shared goals. Financial literacy, interpreting and applying financial policies with confidence. And finally, compliance, upholding standards, policies and legal requirements with integrity.

So, these competencies, they're not just theoretical. They guide how we work everyday. They help us navigate complexity, manage risk, and build trust in the financial systems Canadians rely on. We're fortunate to have an excellent group with us today to explore these themes in depth. I look forward to learning from our speakers and from all of you as we continue to strengthen a trusted financial community, one that Canadians can count on. With that, I'll turn it over to introduce our two speakers. You'll first hear from John Daley, a senior director here at the Office of the Comptroller General.

[00:08:20 John Daley and Mélanie Boisvert appear on screen.]

John leads government-wide accounting policy initiatives, ensuring alignment with public sector standards and best practices. With extensive experience in central agencies, John advises on complex accounting issues, supports financial reporting frameworks and promotes transparency in government operations. He's also held roles in federal departments and Crown corporations. Later on in the session, we will hear from Mélanie Boisvert, who was a senior director responsible for the Public Accounts at the Receiver General for Canada. Her team has the critical role of supporting the receiver general in preparing and publishing the Public Accounts of Canada, which is the government's annual financial report in accordance with sections 33 to 60… sorry, 63 to 65 of the Financial Administration Act. This includes maintaining accurate financial records, ensuring robust internal controls, and providing audit supports to uphold the integrity of consolidated financial statements. So, once again, thank you for joining us for this important discussion today. And over to you, John.

John Daley (Senior Director, Office of the Comptroller General): Good afternoon, everyone. My name is John Daley. I'm very excited to be here with you today. I think what we're going to start is we're going to start with some Wooclap questions to kind of get us going, and I'll give a little bit of an introduction of myself as well as provide an overview of what our objectives are for the day. So, I think we're already starting to get some results in from the Wooclap question, but as an introduction, as we're going through that, so my name is John Daley. I am the Senior Director of Public Accounts and Advisory Services at the Office of the Auditor General of Canada.

[00:09:57 A slide is shown with the Wooclap question "Which community best describes your role?" above the following responses:

• A) Financial management – 71% (136)
• B) Procurement – 4% (7)
• C) Internal Audit – 6% (11)
• D) Other – 20% (38)]

I have approximately 20 years of experience in reporting for governments and for government crown corporations. So, this includes the preparation of the consolidated financial statements, as well as working with departments, agencies and other stakeholders in terms of advising on the appropriate application of accounting standards. I think one thing that's incredibly exciting here today is that I've been told I think we have approximately 2000 people who've actually subscribed to this event. So, I really want to take this moment before we get further in, just to thank you for taking your interest in the Public Accounts. It's something that holds dear to my heart. So, again, I thank you very much for coming and being here with us today. So, we'll start by looking at maybe at the results of the first kind of Wooclap question, which is related to which community best describes your role.

So, which community best describes your role?

So, very interesting to see the results here that we have a very large contingent of individuals from the financial management community. So, thank you very much for being here, as well as some members from procurements, internal audit as well as others. So, we'll give maybe a few more seconds for the results to come in. But essentially, what we wanted to discuss here is regardless of what community you're part of, be it within the financial management community, the procurement community, internal audit, your roles touch the Public Accounts in one way or the other. And even if you're within the other category, if you are a policy analyst or if you work in communications technology, what have you, everything that we do, be it through the objectives that we have as departments, results in expenses, and those expenses are then compiled within the Public Accounts of Canada. So, again, very happy to see a good contingent on the financial management community in here, really looking forward to giving you a bit more of an update on what's included in the Public Accounts. I'm not sure if we have an opportunity to see the other Wooclap questions, so maybe we'll give it a second for that one to come through.

[00:12:03 A slide is shown with the Wooclap question "How would you assess your level of knowledge of the Public Accounts of Canada? above the following responses:

• A) High – I consult and use them regularly in my work – 15% (36)
• B) Moderate – I have consulted them occasionally – 30% (73)
• C) Limited – I know they exist but have never used them – 49% (119)
• D) None – I have no knowledge of the Public Accounts – 8% (19)]

Again, this question asks, "How would you assess your level of knowledge of the Public Accounts of Canada?" So, how would you rate your level of knowledge of Canada's public accounts?

So, I'm very curious about this one because I'm going to try to adjust my presentation a little based on kind of where we fall within this question.

Jocelyne Charron: John, I think it's safe to say that no one other than Mélanie has as much knowledge than both of you have. I think I would get a D if you sent me to school on the Public Accounts, in comparison to you that should ace this.

John Daley: Definitely, and we'll get into this in the presentation. That's a great point. And it can look overwhelming, the Public Accounts, especially when we start going into the details and what's involved and all the departments, agencies, Crown corporations, other government organizations, it can seem overwhelming, but I think really the way that the Public Accounts are set up, we'll get into this, is that it's very scalable. You could really kind of go from one place to the other and where you want to go and where you want to find the information, it's all there. So, I think this is great, this is a very good turnout. I'm seeing a mix between moderate, limited, and none, and a couple of those who have very high knowledge.

So, I think those who are under the high category, I'm going to ask you to send me an e-mail and you can actually do the second half of this presentation on my behalf. But joking aside, we're looking forward to going through it and having a great presentation. So, this is a great turnout. I'm very, very happy to see the level that we have in terms of knowledge because our presentation is going to be focused on those that have moderate, limited or ultimately no knowledge on the Public Accounts. Okay, that's great. Very wonderful presentation.

[00:13:54 A slide is shown with the text:

Learning Objectives

• Understand the Purpose and Importance of the Public Accounts of Canada
• Explore the Structure, Content, and Key accounting policies of the Public Accounts of Canada
• Navigate and Use the Public Accounts of Canada]

Maybe let's move to the objective slide. So, ultimately, the objectives of today's session are going to be to ultimately understand the Public Accounts and their importance to explore the structure and key accounting policies of the Public Accounts, as well as the ability to navigate and the usage of the Public Accounts. So, to summarize, why is it important? What is in it? And how do I find and how do I use it? So, I'll be focusing on the importance of the Public Accounts, where my colleague Mélanie will give you more of an introduction of detailed information, of what's included in there, as well as how to navigate and how to use it. Okay, so let's start. Let's go right to the next slide. So, essentially, what are the Public Accounts?

[00:14:33 A slide is shown with the title "What are the Public Accounts?" above the text:

Volume I

• Audited consolidated financial statements of the Government
• Accrual

Volume II

• Details of financial operations by ministries and departments
• Modified Cash

Volume III

• Additional information and analyses
• Accrual/Modified Cash]

So, as Martin said, they are the government's report card essentially on spending. It is the financial results for the government as a whole for the year ending March 31st. It includes over 100 departments and agencies, 60 Crown corporations and other government organizations that are all consolidated into one set of financial statements that people can review and revise as a whole. It contains three separate volumes, about 2500 pages of information or grosso modo, 80,000 different numbers, and I actually haven't counted the numbers myself but I do want to say that it is a very large amount of detailed information, and not to use props in terms of my presentations, but if you were to take a look at the printed copy of the Public Accounts, it is about that big.

So, essentially, I would argue to say that it is arguably likely to be the most comprehensive set of financial statements that exist within this country. I'm biased because I am also work on that team, but that is my opinion. So, that's a lot of information. So, ultimately, how is it presented? I think that's a great question to kind of think about. It is presented in three separate volumes.

The first volume contains what is called the financial statement discussion and analysis, which is management's commentary on the results for that year. It includes the consolidated financial statements of the Government of Canada, like I said, the combination of all 100 departments and agencies and over 60 Crown corporations, and it includes supplemental detailed information that is tied to those financial statements. It follows what's called accrual-based accounting, which means that we need to record revenues when they are earned and record expenses when they are incurred, regardless of when cash is received or when cash is paid.

Volume two includes details of information by ministries and by departments. In other words, it shows appropriations which are monies provided by Parliament. Revenues such as taxes, taxes received or other revenues such as passport revenue or policing services, and it includes expenditures, which includes mostly what we have of our transfer payments or monies paid, which are monies paid to provinces, territories or persons directly. This volume follows what is called modified cash accounting, which means that transactions are recorded primarily when cash is paid or received during the year. And this ties very close to our expenditure management cycle from an appropriation perspective with certain adjustments that are required for year end payables, receivers, receivables or other types of specified adjustments.

Finally, we have volume three. Volume three is a compilation of additional data either required by the Financial Administration Act or been previously reported. Examples I could provide, it provides information about revolving funds and revolving fund financial statements. It provides details on professional and special services, as well as items such as ministerial office expenditures. So, it's additional detailed information that's not necessarily required by a public sector set of accounting standards, but is either required by the Financial Administration Act or historically reported on. It is actually a very popular volume because it includes details such as money spent on consultants, write-offs of debt, or even if you've lost a cell phone, it winds up in the Public Accounts of Canada. So, it's like I said before, a very detailed set of information. Okay, let's move on to the next slide.

[00:18:28 A slide is shown with the text:

Purpose & Users of the Public Accounts

• The Public Accounts are the Government's main document of financial accountability
• Users: Parliamentarians, Government Central Departments, Rating Agencies, Medias, Public, Researchers…
• The Public Accounts act as Canada's financial "report card". They close the accountability loop between Parliament's authorizations and actual spending]

So, after what it is, let's focus on the who and the why. So, why? Why do we have the Public Accounts of Canada? And it's easily said, it's required by law. So, we have a Financial Administration Act, and the Financial Administration Act explicitly states that the government is to produce the Public Accounts of Canada, including the Government of Canada's consolidated financial statements, and they are, and that set of consolidated financial statements, is to be audited by the Office of the Auditor General, and we'll talk a little about rules and responsibilities in a little bit.

Otherwise saying, the Public Accounts are one of the government's key documents regarding financial accountability and it contains the financial results of the government as a whole, and those results are independently verified by the Office of the Auditor General. In fact, the Office of the Auditor General was created originally for the purposes of auditing these financial statements.

As you may know, their role has evolved since then to also include things called performance audits, but that's not part of today's discussions, so we'll stay focused on the Public Accounts of Canada. So, we are very proud to say that the Government of Canada has received an unqualified audit opinion on their consolidated financial statements, which means that an independent third party believes that in all material aspects that our financial statements are complete and fairly presented.

In other words, the results are the results and politicians, the media, the public, all can be at ease knowing full well that when we present this information that they could be relied upon for decision-making purposes. That's incredibly important and it definitely is what I am very proud of as working here within the Office of Comptroller General, is that having this many years, 27 straight years of unqualified audit opinions is actually quite rare on a global scale. So, it's something certainly that that we as a country should certainly be proud of.

So, in addition to knowing that the results are complete, users can then use these results to measure to see to what extent we raised revenues relative to what expenses we incur. They are used by parliamentarians, central departments, rating agencies, the media, the public in general, researchers, and even the results of our public accounts are used to secure debt financing with our Securities Exchange Commissions. So, it has a multitude of purposes. Ultimately, you can really use the Public Accounts to review a multitude of different things. So, say, for example, you're curious to what point has Canada made investments in other organizations. Well, that information is the Public Accounts of Canada. How much money did the government spend on the health transfer to provinces and territories? That information is available on the Public Accounts of Canada. And as we said before, and Mélanie will provide more detail on this, it's all presented in a scalable, easy way to find and available, all-in-one comprehensive set.

[00:21:47 A slide is shown with the title "Public Accounts Results – Consolidated Financial Statements" above a graph of the 2024-25 consolidated statement of financial position in billions and a graph of the 2024-25 consolidated statement of operations, revenues vs. expenses.]

So, if we want to look at the next slide, I just want to provide a little bit of context for you in terms of results. Now, these are the results of the previous years, Public Accounts of Canada which were published approximately a month ago, and one thing I want to do before we get into that is just clarify what I spoke about when I spoke about the OAG's role, and I think what's incredibly important, because as we talked about before, there are multiple volumes within the Public Accounts of Canada, but the Office of the Auditor General provides an audit opinion on the consolidated financial statements alone. The other information is provided to us by departments and agencies. So, to provide a bit of context, the audit opinion is essentially on about 70 pages of that 2500 pages that I spoke about.

So, ultimately, the audit opinion contains… it's hard to see with my camera, so I apologize, but it only contains a section of what the overall item is audited upon. However, because a lot of the financial information relies on that audit and everything else is supplemental to what's included to the consolidated financial statements, it is something that we can truly still rely on and have pride and to know that those numbers are accurate and that those numbers are correct.

Okay, so on this slide, we're going to talk about the results. So, I just wanted to present this slide to you. I know there's lots of pie charts and information here, but it's just to give you some context in terms of, how big are the Public Accounts of Canada from a dollar wise perspective? So, ultimately, to better understand our country's financial statements, as at March 31st of 2025, the government had $789 billion worth of assets on its balance sheet. That is made up of items such as buildings, vehicles, boats, loans, cash, anything that you would imagine that would fit on a balance sheet. That's what's included in our balance sheet. We also have $2.2 trillion worth of liabilities, in other words, monies that the Government of Canada owes either to third parties, to employees, other countries. That's exactly what exists.

So, for the most part, we carry a lot of our liabilities in what's called unmature debt. It's monies that we've raised to fund the government's operations. It also includes items such as accounts payable or even our public sector pension plans. Overall, we currently have a deficit of $1.3 trillion. So, ultimately, at the end of the day, the amount of assets we have is less than our liabilities. So overall, the government is running an accumulated operating deficit and that deficit, as I said before, is approximately 1.3 trillion.

In terms of an annual context, last year we had revenues of approximately 498 billion, and that amount is made up mostly of personal tax, corporate tax, other taxes and duties, and we had $534 billion worth of expenses, which include items such as transfers to persons, provinces and territories. So, for example, health transfer, equalization transfer, employment insurance, all of those come at a cost, and that is what makes up a large portion of what we spend as a country. We also have other things such as interest charges on our debt. So, we can't have debt without having to pay for it. So, we have interest charges on our debt and other expenses such as personnel or potentially environmental cleanup costs that we've accepted, costs to retire our assets at the end of their useful lives.

So, ultimately, at the end of the day, we've brought in about 500 billion total in expenses and spent about 530 billion. So, what that means is that at the end of this last year, the government had spent approximately 36 billion more than what it brought in, adding $36 billion to our overall deficit. So, I just wanted to share that for your information, because I thought that would just kind of help contextualize kind of ultimately grosso modo, how big are the statements. So, I want to move to the next slide.

[00:26:02 A slide is shown with the text:

Roles and Responsibilities – Public Accounts of Canada

• Office of the Comptroller General
• Receiver General
• Departments, Agencies and Crown corporation
• Department of Finance
• Office of the Auditor General
• President of Treasury Board]

So, in terms of roles and responsibilities, one thing I wanted to talk a little bit about before we get into that is that the Public Accounts is a key accountability document. I just showed you. I was able to explain exactly how much money was brought in relative to how much expenses were in the previous year, but it also is a key accountability document that fits in with a whole bunch of other reports that exist. So, the Public Accounts of Canada isn't the only report that exists, and I'll provide some examples more for contextual purpose to see kind of where the Public Accounts fits in relation to some of these other reports. I'm not an expert on these other reports, so if you have lots of questions about them, I'm not sure I'll be the right person to ask the question to, but if you have a question, don't hesitate to ask.

So, essentially, what we have is we have a budget. So, that's now in the fall now. It used to be in the spring. We have a fall budget. Within the budget, the federal government presents its annual plan that outlines how much money it will bring in and how it intends to spend in order to achieve these objectives. It includes a budget that actually is used in the Public Accounts of Canada, of which we compare our financial results to. So, usually when you hear the presentation of the budget and it's announced that the government was on budget or off budget, those results are actually the Public Accounts of Canada's results.

Other areas we have is the main estimates process. The main estimates process provides detailed spending plans that gives departments the authority to use funds for the upcoming year, and these are based on programs already approved by the Government of Canada. Included in those areas are what's called departmental plans. Departmental plans provide details in which how departments aim to achieve the objectives in which they've been provided. Usually, it contains target measures which will be later measured upon in the departmental results report.

Throughout the year, we also have supplementary estimates, so it's called supplementary estimates A, B, and C. This provides departments the opportunity to re-seek authority three times throughout the year. In order for finding approval of these supplementary estimates processes, we have appropriation acts. So, an appropriation act is an act that's passed by law to officially give the legal authority for departments to spend money.

Finally, at the end of the year, departments have what are called departmental results reports, and departmental results reports include commentary on how departments spent their objectives per their departmental plan. It also includes what are called departmental financial statements which our team provides guidance and support on, and what that is is a set of financial statements that exists at the departmental level. So, at a greater level of detail than what you'd see in the consolidated version of the Public Accounts of Canada. So, that's ultimately where the Public Accounts fits in. It is essentially the final document or one of the final documents in this expenditure management cycle that includes a consolidated view of all the revenues brought in and all the expenses made.

So, now, our rules of responsibility. So, who is involved? I'm going to go right around the corner. I'm going to end with you, with the ministers and with departments, organizations, and Crown corporations. So, first of all is the Office of the Comptroller General, the team that I am a part of. Our team is responsible for government-wide financial functional leadership on accounting standards, departmental financial statements and the Public Accounts of Canada. It's a good Wooclap question that maybe could have been had about how big do we think the team within the Office Comptroller General is in relation to providing that guidance, and just think about it. Maybe think of a number in your head, 50, 100, 20, 6. The answer is about 20.

So, we're not a very big team but we're a mighty team. We have the Department of Finance who drafts the financial statements discussion and analysis. They prepare the budget, as you know, and they prepare what's called an annual financial report, which is a condensed version of our public accounts, financial statements and has many, many different uses, such as I said before, securing funding and the ability to borrow with security exchange commissions. We have the Receiver General of Canada who is responsible to compile the data of those hundred departments and agencies and 60 Crown corporations and actually publish the Public Accounts in both official languages in a fully accessible HTML. Then, we have the Office of the Auditor General, which is responsible for auditing the consolidated financial statements, providing an opinion, an audit opinion, on the audits of Crown corporations and other specified organizations, and also to publish what is called the commentary on the financial audits.

Finally, we have the President. The President tables the Public Accounts with the Ministry of Finance. That's right. The President of the Treasury Board publishes or tables the Public Accounts within the House of Commons, as well as works with the Minister of Finance to determine the form and content of the Public Accounts. Lastly, ministers… sorry, departments, Crown Corporations and other organizations. That's you. So, ultimately you are the most important. You are the most important (inaudible) in all of these roles, responsibilities. It is because departments, agencies and Crown corporations are ultimately responsible for all of the transactions that they record within their departments. So, really, ultimately, without the work within the financial communities and all those that support the financial communities, there's no way that the Public Accounts would be possible. So, thank you. Okay, let's go to the next slide because I'm pretty sure we're running a little low on time.

[00:31:28 A slide is shown with the text:

Policy and standards applicable to the Public Accounts

• Financial Management Policy
• Directive on Accounting Standards
• Public Sector Accounting Standards
• Government of Canada Accounting Handbook
• Guidelines (e.g. Illustrative Departmental Financial Statements)]

Note: Certain Crown Corporations use International Financial Reporting Standards

So, ultimately, what did we want to get across here is, so how does the OCD, the Office of Comptroller General, provide support? Well, the best place to start is with the policy on financial management. So, the policy on financial management provides basically the cornerstone of the roles and responsibilities when it comes to financial management, as well as the creation of financial statements, as well as determining who is responsible ultimately for what, and it is clear within that policy. And then, you might think it's the Chief Financial Officer, but no, actually, it's not. It is the deputy minister of each department that is the accounting officer for your organization, and they have the responsibility, like I said before in the roles and responsibilities, they have the responsibility for ensuring that the transactions that are recorded are accurate and in accordance with the county standard. In fact, departments and agencies must advise OCG, the Office of the Comptroller General, our office, of any significant or unusual transactions.

From policy, we have a directive and the directive is called the Directive on Accounting Standard, and the Directive on Accounting Standard makes it clear that for the creation of our financial statements, we are to follow a set of accounting standards called the Public Sector Accounting Standards, which are published by the public sector Accounting Board. This group is an independent third party that provides the rules of engagement for the creation of our financial statements. It tells you how to recognize things, when to recognize, how to recognize, and what to disclose. We supplement that information with what's called the Government of Canada Accounting Handbook. So, this specific book provides additional guidance and information for departments and agencies and Crown corporations to use in terms of deciphering various aspects of public sector accounting standards. It provides advice when policy options are available, as well as detailed guidance on items such as capitalization of capital assets, which we won't go into a lot of detail on.

Finally, we have a lot of guidance, so there's a lot of guidance that our team prepares in terms of helping departments and agencies not only help us produce the Public Accounts of Canada but also to produce your own departmental financial statements. This includes illustrative department of financial statements. We've got coding guides. We have guidance on specific standards. It is really all available to you, and if you don't know where to find it, you can e-mail me directly and I will send you the link. Okay, so I think we're wrapping up on time soon, so I want to finish off my last slide.

[00:34:15 A slide is shown with the text:

History of Public Accounts

• 1867 – Confederation & Consolidated Revenue Fund
• 1868 – First Public Accounts
• 1878 – Auditor General's Office
• 1906 – Fiscal Year-End Change
• 1951 – Financial Administration Act
• 1961 – Introduction of Volumes I & II
• 1973 – Introduction of Volume III
• 1995 – First Electronic Public Accounts
• 2001 – Financial Information Strategy
• 2003 – Adoption of Accrual Accounting
• 2012 – First HTML Public Accounts
• 2013 – First Open Data Publication]

I hope I've kind of given you a good overview of what it is and why it's important, but I thought this was actually a very interesting slide just for everyone to appreciate just how old or how much of an institution the Public Accounts is, because the Public Accounts actually followed the Year of Confederation. So, as a country, we entered Confederation in 1867 and by the following new year, we had our first Public Accounts. So, it's actually great to be part of a tradition that's well over 150 years old. So, I won't go into a lot of further detail on these items but there's been an evolution of the Public Accounts over the years, such as the introduction of the Office of the Auditor General. We've changed our financial reporting dates. We've introduced new volumes and additional information. We've adapted to technology over time in terms of making sure we got online, respecting all accessibility laws of information available for our Public Accounts. It's available in both official languages, and it really is a multitude of information.

And I know my colleague Mélanie will go into a little bit more detail about what's in those volumes, but this is kind of what I really wanted to cap off on, is that it's important. It is a key accountability document. It is large. It is scalable. It may look overwhelming but it is actually very easy to review and get through and find what you're looking for, and it's incredibly important. So, I'll leave it there. I want to thank you again for letting me come and speak, and I'm looking forward to the rest of the discussion.

Jocelyne Charron: Thank you, John. We see that you love the Public Accounts, and honestly, you share it with such ease, and I learned a lot listening to you as well. So, takeaways as well, these are important for your deputies as they are the accounting officers. And because of the level of detail, granularity, integrity, John spoke to you about the standards that are there, the coding, and we'll speak about that in a little bit, but even financial officers or administrative officers that are coding travel claims or using training or if you're picking professional services and it's not, these will kind of lead in to those errors when you're looking at the consolidated data for your department or ultimately into how that expense will translate into which category, and that's where we are trying to create those standards in alignment and consistency. So, when you look at a number, we've interpreted it the same across the 105 federal department and agencies and Crown (inaudible), so it can be meaningful when you're trying to tell that story to Canadians or parliamentarians or trying to inform even, so super interesting. Thank you very much.

So, we're going to lead into a bit of a panel discussion, so bringing in Mélanie as well. So, the Public Accounts are, I'm going to say, an important collaboration between you and the departments, the Office of the Comptroller General, so John and his team, as well as the Receiver General. So, there's a bit of a tango that happens when you're submitting your trial balances, when the receiver general will send, sometimes they'll send you error reports. All of those things have a reason as we have kind of two of those experts now that are going to help us with some of the panel discussions as well ultimately into that transparency and integrity with the Auditor General. But John, so why is it important to Canadians to have access to the detailed financial information about their government? I don't know. Can we just skip this whole thing?

John Daley: No, I think that's a great question. I think, number one, I'd say transparency and accountability is key, right? So, ultimately, to put it simplistically, it's our tax dollars. So, we as Canadians have a right to understand how that money is spent. By having a document like this that is audited by an independent third party, we really build on that transparency and accountability aspect. It really ensures the government is open on how public funds are managed and it builds trust between citizens and its government institutions in terms of that degree of accountability. I think another thing I'd like to highlight with that too is really when it comes to democratic oversight. So, we do live in that democratic institution. And like I said, it's all our tax dollars. So, it's incredibly important that we're aware of that. So, by having a consolidated view of all of the revenues and expenses of the government, we allow the parliament, the media, the population as a whole to review, analyze, and scrutinize, if necessary, our spending and our revenue. And really, what it does at the end of the day, in my opinion, it supports informed debates and decision-making, because if we have one set where we truly see what are the results, then we know where we're headed as a country.

Jocelyne Charron: That's very good. And as well, even the members that are part of the Public Accounts Committee receive training to make sure that when there is that conversation, that debate within the committee, there's a bit of that financial literacy that goes with it, because we can understand many of us on here are probably accountants, but some of our parliamentarians may not have our same accounting literacy, so important for them to understand and there is some complexity in there. It can be overwhelming, like John mentioned, when you're looking at the thickness and even the sheer volume of it. So, there's just for you to know. That's something I've learned sitting in the Office of the Comptroller General. So, Mélanie, given the extensive nature of the Public Accounts, why is it important that we record each transaction appropriately? How many transactions are in the public account? Why does it matter which financial coding I pick?

Mélanie Boisvert (Senior Director, Public Services and Procurement Canada): Great question. So, I mean, John touched a bit on this when he talked about rules and responsibilities for departments and agencies and Crown corps. The Public Accounts are essentially built on every transaction that is entered every day into the financial systems. So, it's really important for that transparency piece that we appropriately choose the right financial authorities, that we pick the right coding so that we can report back on what was actually spent. Because if we pick the wrong coding, then we're giving the wrong indication as to where we spent our public funds. So, for that accountability piece, it's really, really key, and we can't do the Public Accounts or we can't have that integrity for the Public Accounts if each individual transaction is not entered properly.

Jocelyne Charron: Exactly, and that's why we have those accounting standards. That's why we have the coding manuals. And that's why if you don't know where they are, you have to e-mail John. Hopefully not, but maybe. I have two homework for the audience. The first one is we're going to go to Wooclap to ask you a question, so you can kind of go and take a peek right now and start to answer the question, because that's going to help us in that next conversation, but I also wanted to invite you to join the chat so you're able to ask us some questions. We have a Q&A segment at the end but you need to join the chat to be able to interact with us and ask us your questions. So, you have homework as we continue down this conversation. I have another question for you, John. How does the public account fit into the overall reporting cycle on government spending? You had a little bit of that chart about or that explanation, right? It kind of sits at the end or maybe at the beginning too?

John Daley: I think that's another great question. So, again, yes, if you look at the detailed information within the detailed slides that we provided, there actually is a slide within that deck that walks through kind of a very high-level look at the expenditure management cycle, and it's something that we touched on a little bit during the presentation, is that absolutely, Jocelyne, you're correct. It does sit, ultimately, I see it at the end of the expenditure management cycle. You start off with a budget which basically is the government's plan for spending. And then, you finalize with the Public Accounts, which is the report on what was your spending for the previous year, and what a great accountability aspect with the Public Accounts provides you is actually in the Public Accounts, we provide that comparison between what was the forecasted annual operating deficit relative to what the actual results were, and that's a great tool that that Canadians and the public can quickly use and pinpoint to say, were we within plan or was there something else that happened that makes us have to re-think about, well, what was the plan and then what happened? The world is a complicated place and the government is a very large, complicated set of different organizations, and having that consolidated view is incredibly important. So, ultimately, yes, you're right, right at the end.

Jocelyne Charron: Right at the end. And then, as well, through the public account, we kind of officially will provide the financial position for the government, right? So, are we in a deficit or a surplus? But that information is also used to do a little bit of that fiscal update, right? To kind of understand where we sit to inform the next cycle, the next budget cycle? Am I correct in saying so?

John Daley: Absolutely. Absolutely right. So, ultimately, at the end of the day. There's always talk of returning to fiscal balance or returning to a positive number, because I think as we brought forward with our results, I did present the fact that the Government of Canada currently has a $1.3 trillion deficit, and a lot of that deficit has been influenced by how much the government did in relation to the COVID-19 pandemic. So, the amount of programs that the government introduced as a result of that pandemic was a reason why we've had an increase in our deficit. So, you can see there's a clear correlation between the activities of the government and its associated deficits. So, certainly, you're right, it could be certainly used as a tool to say, okay, well, what do we do as a country to reduce that deficit going forward?

Jocelyne Charron: Exactly. So, it's used for fiscal update and fiscal policy or even informing kind of policy decisions about their next round of spending, right? So, very important, and I didn't know that, that that kind of is the only place that we'll find the official deficit or surplus number for our country, which I think is a really important number that probably a lot of our senior leaders are looking into, I'm going to say.

Okay, so I'm going to switch over. So, we have a segment coming up with Mélanie. So, we're going to hear a bit of a different perspective on the Public Accounts. But firstly, we have a Wooclap question that we had asked about who is responsible for publishing the Public Accounts of Canada. So, you have a multiple choice question and we want to see if people have it right.

John Daley: And I think, Jocelyne, if you don't mind me jumping in, it was a bit of a trick question, I have to admit, because it is the President of the Treasury Board that tables the Public Accounts, but the actual publishing of putting it on our website is actually done by the Receiver General. So, maybe it's a bit of a trick question.

Jocelyne Charron: I think so. We are tricking the audience. Interesting, okay. But then, we're seeing if they're paying attention to those nuances. You are right that the President does table them, and it's just literally a tabling as well, right? Depositing the book officially in committee, and then the publishing is the Receiver General. Interesting. Interesting. Okay, which volume include the audited consolidated financial statements? That's the other Wooclap question. So, we're going to give you a moment. Mélanie, is there something interesting we should tell the audience about the publishing? What happens in the publishing process?

Mélanie Boisvert: Well, I mean, the publishing process is very extensive in the sense that we have different formats for the Public Accounts. So, as you mentioned, we actually table physical books as part of the tabling. But then, once that's done, we also provide an accessible HTML version. There's a PDF version as well. And if people want to download data from the Public Accounts, there's also data that's available on the open government portal and people can do their own analysis on what happened, how the money was spent. So, sometimes, universities actually download these data sets and they kind of supplement their own research that they're doing on the public sector.

Jocelyne Charron: Interesting. So, we make it accessible to Canadians or whoever is interested in looking at some of the funding for government in Canada. Interesting. And to the question we asked about which volume, so I think John showed you of the big, big pile. There was only a few pages or around 70 pages, right, John? That you mentioned, that were actually the audited part?

[00:47:08 A slide is shown with the Wooclap question "Which Volume includes the Audited consolidated Financial statements of Canada?" above the following responses:

• A) Volume 1 – 76% (164)
• B) Volume 2 – 12% (26)
• C) Volume 3 – 12% (25)]

So, the question was which volume, and the audience is getting it pretty much right here on volume one, so 76%. I think they were listening to you, John. That's very good news. We captured their attention and they're getting high grades as part of our quiz. I'm happy to see a good job.

That's great. So, we're going to change things up a bit in the French language. So, we're changing here into French, so for those of you that have to adjust your interpretation service. So, Mélanie, you're up for the next segment on public accounts. So, where are we? In what volume?

Mélanie Boisvert: Thank you very much, Jocelyne. So, John has already explained to you in essence that the Public Accounts are published in the fund in three volumes.

[00:47:54 A slide is displayed with the title "Public Accounts of Canada – Volume I" and the text:

Section 1 – Analysis of Financial Statements

Actual Amounts

• Actual Data vs. Results From the Previous Fiscal Year and Budget
• Information Regarding Significant Variances

Economic Situation

• Current State of the Economy Through Various Ratios and Indicators

Risks and Uncertainties

• Risks and Uncertainties Facing the Government

Ten-Year Comparison

• Historical Data From Financial Statements Over Ten Fiscal Years]

In this section, we're really going to go through the key sections of each volume to help guide you if you're looking for specific information regarding financial information. So, let's begin. The first section, in volume one, is basically the financial analysis or results analysis. So, we take the information that is published in the financial (inaudible) and we contextualize it. So, we're talking about the actual amounts, and that allows us to get a bit of an idea about the Government's performance in relation to these plans. Next, we will look at some more economic indicators, such as gross domestic product growth, inflation, and employment trends. Then we will contextualize the results through this view or this magnifying glass. That is, an analysis. You can't talk about analysis without necessarily talking about risks. So, we're going to talk about some budgetary risks, some strategic risks, that may influence the results in the future. And finally, we'll put that on a 10-year trend. So, we're basically going to look at a 10-year overview to see what the trends are in terms of debt, income, and expenses? So, this allows us to really see a global picture of the situation. So, section one of volume one, it allows us to contextualize, to tell the story, in the fund, behind the financial statements that will be presented in the next section. So, next slide.

[00:49:27 A slide is displayed with the title "Public Accounts of Canada – Volume I" and the text:

Section 2 – Consolidated Financial Statements of the Government of Canada and Report and Observations of the Auditor General of Canada

• Statement of Responsibility
• Report of the Independent Auditor
• Consolidated Financial Statements of the Government of Canada and Notes to the Financial Statements]

So, the next section in volume one is section two. So, basically, you will find the consolidated financial statements for the fiscal year ending March 31. So, the first thing you're going to find is the statement of responsibilities. So, basically, it is the senior managers, therefore the signatories of the financial statements, who will, in the fund, sign a declaration stating that they are responsible for producing financial statements in accordance with Canadian public sector accounting standards. And attesting in the fund that rigorous controls have been put in place to ensure the accuracy of financial information. Then, as John mentioned to us, it is the Office of the Auditor General that audits the financial statements. And then, it is in this section that you will find the opinion of the Auditor General in the fund to see if the results of the Canadian government are accurately represented. And then if they meet the standards. So, as John mentioned earlier, for 27 consecutive years we have faithfully represented results to Canadians and parliamentarians in the fund. This is an accomplishment that not many countries can boast about. Next, the third section in this volume, or the next component, which is the financial statements themselves. So, this is where we consolidate in the fund the information from the 170 organizations and the Crown corporations with the agencies, for a total of about 170 organizations. And then, we also include explanatory notes to better understand certain information presented in the financial statements. Next slide.

[00:51:14 A slide is displayed with the title "Public Accounts of Canada – Volume II" and the text:

Summarizing the Government's Financial Operations by Departmental Portfolio, in Part II of Main Estimates Format

Summary Tables

• Summary of Financial Operations
• Cash Accounting Modified to Accrual Accounting (Tables 1, 2a, 3a, 4a)

Departmental Sections

• Departmental Portfolio Summary Statements
• Budgetary Details & Appropriations
• Core Responsibilities
• Transfer Payments & Income]

So, we're going to change the volume. We're going to talk about volume two. So, volume two is a little different from volume one. Volume one, as John explained, is presented under accrual accounting. Volume two, however, will present a completely different view and will use a modified cash accounting system. So, one of the key sections that will allow you to reconcile a little bit between volume one and volume two is Summary Tables. So here, we are really making a connection between the results presented in volume one and volume two. Then, it also allows you to have an overview of how budgetary and non-budgetary authorities have been used. Next, the results are presented in the Fund by departmental portfolio. So, you can go and see in the Fund what revenues were generated? How were the funds allocated and spent? What are the transfer payments and the different programs for each of the ministries? So, it really gives you a departmental view of the results that have been achieved. Next slide.

[00:52:20 A slide is displayed with the text:

Tips for Financial Officers

• Understanding the Differences Between Accrual Accounting and Modified Cash Accounting
• Familiarize yourself with your department's section in Volume II
• Take the time to Know your credit types
• Compare with the Main Estimates
• Familiarize yourself with your department's operations]

So, we are often asked, because there is a lot of information in the Public Accounts, how can I, on a daily basis, use the Public Accounts to better understand what is happening? So, when we get that question, we point people toward volume two. So, if you want to better understand your department's operations, you can go to the sections on your departmental portfolio and analyze the results a little. You can look in the budget which gives you some of the expenses that were planned. Then, you can look at the actual expenses in the fund. You will also have, as I mentioned, information on transfer payments, the different programs and the different authorities. What kind of funds are used in your department? So, it's difficult to understand your current department's operations, but also interesting if you are preparing for an interview and don't know the department you're going to very well. This can give you key insights into how this department works. Next slide.

[00:53:27 A slide is displayed with the title "Public Accounts of Canada – Volume III" and the text:

Section 2

• Additional Information Required by the FAA
• Remittances, Write-Off or Waived Claims
• Public Fund and Property Losses

Sections 3 & 6

• Professional and Special Services and Transfer Payments

Section 8

• Payments of Claims Against the Crown, Exemption Payments and Amounts Awarded by a Court

Section 10

• Other Information Relating to the Whole of the Government]

So volume three, as John mentioned, is additional information that is not included in volume one or volume two. This is probably the volume most consulted by parliamentarians and the media because it contains slightly more in-depth or perhaps slightly more detailed information on certain things. So, we're going to go through the different key sections for that. Therefore, section two provides additional information that is required in the fund by the Financial Administration Act. So, this is where we will find, for example, the cell phone that John lost earlier in his example. It will be found in section two of volume three. We will also talk about debts that are written off or waived, the various remittances or losses of funds.

So, if there is any theft, this is where you will find information about it. Section three, in the fund, is for professional services. What expertise did the government seek during that financial year? Any contract exceeding $100,000 will be included in this section. You will be able to find them here. The same applies to transfer payments. It's in section six. And then all transfer payments of $100,000 or more will be here with the identified department. Section eight is a little different. So, this is where we will find the payments of claims against the State, the gratuitous payments, the amounts determined by the Court. So, for example, when there were amounts paid out regarding damages related to Phoenix, it was in section eight that this information could be found. In section ten, well, that's where we find the expenses of departmental offices in the fund. So, the services or salaries of the staff, the professional services that were used here. And if there was travel as part of their job, well you'll be able to see the (inaudible) on their trip here. So, next section.

[00:55:31 A slide is displayed with the title "Production Schedule" and the text:

November – March

• Planning: Master Plan, Instructions, Change Requests, Year-End Session, Pro Forma Statements, Audit Planning

April – May

• Submission: Trial Balances, Plates and Forms, Additional Information

June – August

• Preparation: Post-Closing Entries, Drafts, Office of the Auditor General Audit

September

• Finalization: Signatures, Final Draft and Printing

October

• Completion: Filing and Publication in All Formats]

So, we mentioned in the fund, we did a really quick (inaudible) of the three volumes, the key sections, where you can find the information. But as you can imagine, when you have to produce information, consolidate it for 170 organizations, it requires a bit of planning, and then a good schedule to follow. So, we're going to go through a little bit of the production schedule for the Public Accounts. So, from November to March, that's really our planning period. So right now, we are in the middle of our planning period for the production of public accounts, which will end on March 31. So, what we do here, we, the Receiver General, start by making our master plan. So, it's a plan with all the activities, deliverables, key dates for central agencies, to ensure that we meet our deadlines, which are indicated by law. We are also updating the instructions for the Public Accounts. So, the instructions for the Public Accounts, this is where we give lifelong advice to departments and organizations on how to provide us with information to ensure that it is complete, accurate, and then limit the number of errors in the fund.

We will also indicate if there have been any changes compared to last year. We will also, jointly with the Office of the Comptroller General, hold an end-of-year session where organizations will be able to ask slightly more detailed questions about the schedule and the changes taking place in the fund. We review the instructions with them, then we highlight certain key sections. We also produce pro forma financial statements. So when there are changes, it allows us to see what the financial statements will look like at the end of the year with this new program that has been added or a new accounting standard that is coming into effect. What is the shell of our financial statements? What does it look like? There is also the audit plan that will be presented by the Office of the Auditor General to the signatories of the financial statements during the protocol meeting. So, this year, this meeting will take place in March. Then, after all that, we have the data collection period; so, from April to May, the organizations will send the information to the Receiver General. So, the final trial balance, the information for the Public Accounts. Therefore, the forms and the plates and all other information required for public accounts.

After all of that is the preparation. So, from June to August, we have a three-month period to consolidate all this great information, validate it and ensure that it is compliant. So, this is also where we will prepare the various drafts which will be reviewed by the Office of the Comptroller General and also verified by the Office of the Auditor General. When everyone is in place, everything has been completed, and the financial statements have been verified, that is when the Office of the Auditor General sits down with the financial statement reporters and presents the results of the audit to the fund. We also sign at that time the statement of responsibilities mentioned earlier, which can be found in volume one and the central declaration letter. Once these documents are signed, that's where the Auditor General will officially put her opinion on the financial statements. Next, the draft of the Public Accounts is prepared, the final draft which will be printed for submission to the chamber. In October, that's where we'll sign the letter of transmission for the Public Accounts before it is tabled in the House of Commons. And then, normally, the Public Accounts will be filed… we are still aiming for October, November. But technically, by law, we have until December 31 to file the Public Accounts. Next slide.

[00:59:28 A slide is displayed with the title "Production Process" and the text:

Data Collection

• Instructions, Call Letters, Trial Balances, Forms and Plates

Drafting and Reviewing

• Sections of Public Accounts, Quality Assurance by Receiver General, Office of the Comptroller General and Finance

Auditing

• Audit of the Office of the Auditor General and Signatures

Publication

• Printing, Filing, Publication in All Formats]

So, the Public Accounts process is essentially just another overview of the information that we have just presented, which we are going to discuss in the schedule. So, the first part is data collection. So, it's about making sure that we have clear, precise instructions that will support organizations in submitting information to us. And all the submission of information from plates and forms. Next come the drafts, then the revision. This is where we will ensure quality. So, the information we receive from the trial balances and from the forms and the plates, we validate it. So, we make sure that there are no differences between these pieces of information.

So, that's a lot of information to validate. There are more than six… well I would say, I'll round it up there, but 6,500 plates that we have to review before we can start preparing to make our drafts. So, that's a lot of information to validate. After all that, we take all that information, we put it in our publication file to the Receiver General and we produce the different drafts which are reviewed by the Office of the Comptroller General, the Department of Finance and then in the fund, which are used by the OAG to validate, to verify the financial statements. So, how do we mention it? Sometimes there are different versions of the Public Accounts. There is a paper version which is filed with the House of Commons. Following that, we have the HTML version which is accessible. We have the PDF and then the datasets. And these three versions are published in the fund once the filing has been completed with the House of Commons. Next slide.

[01:01:14 A slide is displayed with the title "Tip for Navigating Public Accounts" and the text:

PUBLIC ACCOUNTS HOME PAGE

• Use the main home page to access all volumes in different formats

PDF BOOKMARKS

• Use the PDF Bookmarks panel to quickly move between sections and use the PDF search function for specific terms or items

TABLES OF CONTENTS

• Use the internal tables of contents for quick navigation

HTML HYPERLINKS

• Use HTML hyperlinks to quickly move from one section to another and to the footnotes

OPEN DATA

• Use the datasets for your custom analyses or queries]

So, a few tips for navigating all this great information in the versions I've mentioned can be found in the fund on the site where the Public Accounts are found. The PDF version gives you something like bookmarks, which will give you something like an interactive table of contents, allowing you to navigate from one section to another. There is also a search function that allows you to quickly find really specific information in the fund, in the Public Accounts, the HTML version, but in the fund, you navigate using links, hyperlinks. And then, you can easily check the notes at that time too. But the datasets are available on the open government portal and basically allow you to download information that is represented in the Public Accounts to conduct further analysis, whether in terms of, as I was saying earlier (inaudible), a complement to their research on the public service. So, it brings a different perspective to things. So basically, it's... that covers everything.

Mélanie Boisvert: That's what I wanted to present.

Jocelyne Charron: Then, Mélanie, we were saying earlier, basically, it was John's team, it's basically your team that's preparing all this. Then, the 6,500 plates you receive, then the tight deadline you have to face.

Mélanie Boisvert: Well, my team is a little bit bigger than John's. There are about 30 of us.

Jocelyne Charron: Okay, but it's still not much. When you look at the scope of the exercise, the importance of the exercise, and also the level of integrity detail that must be invested to arrive at a finished product that is of quality and, ultimately, will not receive comments from the Auditor General. So, that's it. Very interesting. I was talking with my team during your segments, and I was saying how much I was learning from you, from the segment. So, I hope it was the same for the audience. I have a question, and I think it's already been asked by the group. Why is there such a tight deadline? There's always the time, then the (inaudible), it seems like we never have enough time to finalize our plates, then finalize our (inaudible), then 12-2, the adjustments afterwards. Why, when you look at it, you know, how, when the department has to submit, compared to when the Public Accounts are finally filed?

Mélanie Boisvert: In the fund, the deadlines are tight because, as I explained earlier when we presented the schedule, although six months pass between the end of the fiscal year and the publication of the financial statements in the fund, the departments have two months to submit the information to us. But in reality, the consultation and validation of the information takes place over a period of three months, which is not very long. Furthermore, there is a certain complexity involved. There are certain estimates that are made in relation to taxable income, for example, or in relation to pension, which are also quite complex. Therefore, all this complexity of this information means that the deadlines are tight. Hence the importance of properly coding each financial transaction because it simplifies our task in the end to validate… avoid mistakes, validate the information.

Jocelyne Charron: Interesting. Okay, I explained to you earlier that we had two segments. So, John gave us some high-level information. We went into detail about each of the volumes, their reasons, their content with Mélanie. This brings us to the last part of our segment, which is really your questions, questions from the audience. So, I'm going to go through a bit of what we've received.

We'll hold this session a bit in bilingual format. So, if the question was asked to us in French, we'll answer in French and if it was asked to us in English, we'll answer in English. And then, we'll kind of do this in a little bit more organic way. I'll ask the question and sometimes we may have John that is better positioned to answer or sometimes Mélanie or maybe both. So, we'll kind of try to enlighten you a little bit and answer as much as we can so you can drive this knowledge home and make sure that after the session you have a very solid understanding of why the public account, why it matters what's in there, and what your goal is in relation to that.

So, there was some Q&A about basically the public sector accounting standards, which are unique to the public service or to public sector, and then basically, the general accepted accounting principle that you kind of learn in university that are probably more for businesses. So, maybe, John, can you tell us a little bit of the difference and if they follow the GAAP? Or the public sector, does it follow GAAP?

John Daley: Yeah, it's a great question. So, I guess that the GAAP those accountants use stands for generally accepted accounting principles. So, ultimately, generally accepted accounting principles is essentially the generic term that's used. So, really, in the country of Canada, we've got several different types of sets of accounting standards. So, we have what's called international financial reporting standards, which are adopted across, across the globe that are mostly used by private organizations that raise money on stock exchanges. We have something called accounting standards for private enterprises, or as what's called ASPE, which is a set of accounting standards designated for, again, private enterprises, but maybe not to the same degree of detail or rigor, which is included in national financial reporting standards. We have other items such as not-for-profit standards, but what we do have for the public sector are what's called public sector accounting standards.

So, they are a specific set of accounting rules designed for the uniqueness that is associated with being a public sector entity. So, what I would clearly take away from that is that if you really compare our standards for public sector accounting relative to that of the private sector, is the private sector is focused on profit like the bottom-line revenue generating capability of your organization, whereas public sector accounting standards have, have more focus on what's called service potential. So, what is it that is being brought in and what is it being spent on? So, there's a little bit of a different focus, and there are certain areas such as guidance on transfer payments or guidance on appropriation, things like that that you wouldn't normally see in the private sector, you do see in the public sector. So, that's what those standards focus on.

Jocelyne Charron: That makes sense because the government business is unique and probably private businesses don't have to meddle in equalization payments or as you're saying, transfer payments, for example. So, we kind of need to provide some book rules around what is unique in terms of the government spending and nature of activities. So, that makes sense, but we don't make them up. There's a lot of due diligence and a lot of expertise and governance that goes to making sure that there's integrity behind the standards. So, we had a question in terms of if there is going to be any revisions, like how often are these things revised?

John Daley: So, it's a great question. So, absolutely. So, there is the Public Sector Accounting Board. So, the Public Sector Accounting Board is an independent third party, not part of the government in any way or shape or form that is responsible for the creation and publishing of public sector accounting standards, and they're constantly looking at ways to improve upon our set of accounting standards in order to make them more relevant and useful for users. So, for example, and we won't go into a lot of detail on it, but currently, the Public Sector Accounting Board has published a new standard that will be taking effect in the following fiscal year. So, it will be effective as of April 1st of 2026, a new standard on financial statement presentation. So, the very face of our financial statements will be different as of March 31st of 2027. So, there will be a lot more of guidance and information coming from our office on that and the new feature.

Jocelyne Charron: I agree, it's important for financial officers to stay up to speed and abreast of those changes on accounting standard, especially if you work in the accounting operations or in preparation of financial statements for your department, right? So, taking part in some of those training sessions that the Receiver General provides or even some of the guidance as provided by the OCG as well. So, John, we talked about volume one and volume two and the difference between cash accounting and accrual accounting. Can you provide a little bit more in terms of the challenges of those two methods, especially when you're talking maybe a parliamentarian that is not an accountant? And even for us sometimes in financial functions have maybe a difficulty in understanding why is one accrual and the other one cash.

John Daley: Well, it's a great question and you're right, it can be a little bit confusing at first if you're not truly aware of what is the intent of the two different volumes. So, the first volume does, you're right, focus on accrual-based accounting, and the concept behind accrual-based accounting is to get a full distinct picture of the revenues and the expenses associated with the government's operations, regardless of whether or not cash has actually left the door or not. So, an example I could provide is that accrual accounting requires you to record the cost of your pension each year that you earn it. So, even though those payments won't happen for potentially depending on where you are in the retirement cycle, potentially for many, many years, we are incurring that expense now because we're providing that benefit. The difference with volume two, volume two actually looks at the financial results with a slightly different lens. So, what volume two does, it allows users to review the results of the each individual ministry and department relative to that what is received in appropriation. So, it allows you to have a different look because appropriations are closer tied to the cash that leads out the door. So, that's ultimately the large difference between the two of those items, and that's how I look at it. So ultimately, it's two different lights.

Jocelyne Charron: Two different lights. So, you'd say volume one is more what we learned in university in terms of the financial statement. So, you want to look at all of the assets and all the liabilities, including those future liabilities that have not yet materialized where the cash is still with us to really kind of show the integrity of the financial situation for the business, if I can say it like that, versus the other one, you're kind of more looking at how the government has that whole expenditure management cycle and managing the money and the flow of cash, if you will. Does that make sense? Yes?

John Daley: Absolutely.

Jocelyne Charron: Okay, perfect. I'm trying to make sure that we translate the technical into the more ingestible for our people. There was a quick question on fraud, and I know that fraud is more prevalent, right? We hear of that. I think we have to do better in terms of fraud detection, fraud prevention, but ultimately it can happen. So, a question was, where does it land in the Public Accounts and does it get recognized as a loss?

John Daley: I'll take that question. So, certainly, information on losses can be found in volume three, section two, and it's broken up about different types of losses. So, there's accidental loss, there's intentional loss, as well as information in relation to potential recollectability. So, all that information is available in volume three and it's actually quite an interested and sought out section of the Public Accounts because people are clearly interested in those types of figures, and there's different ways in which the government extinguishes its debts, and that could be done through remissions or waivers, forgiveness write-offs. So, there's a lot of mechanisms that exist and that goes kind of deep into the legal side of how we treat these types of situations. So, I won't go into a lot of detail of there because I'll probably make a mistake, but certainly volume three, section two, that's where you want to go.

Jocelyne Charron: And hopefully that number is really small because we have a lot of fraud detection and prevention methods, and as well, these are tied, close tied, to internal controls as it relates to fraud. We talked about that as our learning essential series number two that we did in September. So, for those of you that were there, hopefully you were listening.

Mélanie, a question for you about the modernization of public accounts. You know, how we go about telling Canadians about the expenses, maybe even about the tools that are used, the preparation. What is the Receiver General doing or planning to do with respect to a possible modernization effort, both for government departments and perhaps even for processing? Can you tell us a little about whether there are any efforts or thoughts on this subject?

Mélanie Boisvert: Yes, definitely. So yes, indeed, the Receiver General is currently looking at how to modernize these various systems that we use to collect the information used in the context of public accounts. So, currently, for this information collection, we have two main systems that are used. So, we have the system for producing public accounts. And then, we have in the fund… well, once I look at my notes because I only know the acronym in English.

Jocelyne Charron: The CFMRS.

Mélanie Boisvert: Yes, that's exactly it.

Jocelyne Charron: I don't know it in French.

Mélanie Boisvert: That's not funny. I wrote it down somewhere because I thought it would come up as a question, but anyway. So, all this to say that we currently have these two systems. We are looking at what improvements we can make to facilitate information gathering in the fund. But on the other hand, for Crown corporations, we still receive information using the famous Excel spreadsheets. So, we are finalizing the development of a tool, a portal in essence, which will be used to facilitate the transmission of information and its validation from the moment information is submitted. And we will be able to have the certificate, in the Crown corporations' fund directly in the portal, which will also help us to perhaps shorten the time it will take to validate the information we receive from these organizations. So, many things to come, many things to develop. We will certainly try to see if there are other efficiencies we can pursue. So, we are very interested to hear the comments from the departments. So, if you have any ideas, feel free to share them with me here, send me a short email with your ideas.

Jocelyne Charron: And good because, precisely, there was a question about that. People wanted to know if there was a mechanism for sharing ideas or recommendations to improve the submission process. So you can send them directly to Mélanie. And yes, there are current efforts to look at modernizing the tools and also the process. And also, precisely this week, we had a meeting between my team and John's team because there is also a lot of data analysis that can be done with public accounts. Year-over-year variance analysis as well. So, we have a team here that really likes to play with data and, in fact, has helped to simplify the whole data ingestion process, the CFMRS updates that come in when we prepare and the various times the data updates occur.

Then, instead of doing analyses and having to make repetitive updates manually, we have automated this whole process, which greatly simplifies the analysis, even the variances, the ability to look at the variances, then easily identify the discrepancies and finally just be able to concentrate on the analysis or the narrative instead of being somewhat content with the process of updating, then looking at reconciliation. So, there are also efforts being made. Then, I'm sure that within your own departments too, there are ways you can use data analysis, maybe even automated updates to look at your analyses from year to year, and then how to tell the story to your CFO and your deputy heads about what your year-over-year variances are, what is unusual? What was somewhat of the same magnitude, materiality?

So, encouraging you to look into how data analytics can help you tell a better story and identify anomalies in the preparation of your public accounts for your departments. I think that there's lots of advancement being done there and a lot of innovative tools or innovative processes. A lot of departments are using, I think, Power BI to do such things and kind of identify those outliers so you can tell the story in a little bit more agile way. So, I just kind of wanted to point that out, to stay curious and continue to innovate on that front definitely.

So, we have a little bit more time, and we have lots of questions from the audience. It's just nice that they answered my call when I asked them to go in the chat and join. So, question, I don't know if we have the answer. I think this is a tough one, but why do we have so many different coding structures? And so, we have the general, the Government of Canada accounting, the GWAC, kind of basically that you have to kind of map to be able to consolidate. And then, we have all the departments that have chartered accounts that are all different, and why do we have all of these different coding and is there a need or maybe interest to simplify, to make that a more effective or efficient process?

I don't know, Melanie, if you want to take a kick at this question or John. This is a bit harder. I think that there's different reasons. A lot of departments have a different nature of operations. For example, if you're looking at a DND department, that probably has to purchase very expensive equipment or helicopters that you probably don't purchase a lot in other departments. So, they will need important coding to be able to track that, tell the story. It might be very material for them, and if you're looking for a small department that might have a unique type. So, I think that coding is about telling the right story about your numbers for your department. And then, we try to align it to Government of Canada wide so we can tell that broader story to Canadians, but I'm sure that there's a way to simplify the number of coding structures we have out there. It's just each department often will have its own systems, so kind of a hard objective to get into but curious to see, Mélanie or John, if you have any other insights on that.

Mélanie Boisvert: Well, I mean, as you've explained, each department has their own reality. For us, for in terms of the Receiver General to collect the information, we have that chart of accounts, that government-wide chart of accounts that each individual department needs to map to, and we've decided that we are publishing information at this level of detail, so different realities, different systems. I mean, we can eventually see there are some initiatives where some clusters are trying to develop a common departmental chart of accounts to facilitate when employees are transferring from one department to the other to have that consistency, so they don't have to re-learn another chart of accounts or another set of coding as they change from one to the other. There are some advantages of having a very detailed chart of accounts for everybody. Maybe that's something that we can look into for further modernization. But as it currently exists, there are some differences to basically allow for different realities in different departments.

Jocelyne Charron: Exactly.

John Daley: Maybe I can add just something really quickly to that too. I think that's a great explanation. A thing to keep in mind is that CFMRS, as known as the Central Financial Management Reporting System set of chartered accounts, is a snapshot. So, it only contains a snapshot of the transactions of your individual departments because arguably there are millions upon millions of transactions that make up the final results of the Public Accounts of Canada. So, what we have from a central financial management reporting perspective is just that summary. So, we know how much revenue that you've generated as an organization because you supply that information to us, but what makes up that revenue and all the transactions that are tied to it is information we don't have. So, those are retained within Department of Financial systems, and I think part of an issue would be is just maintaining all of that within one area is probably too large, but it's a great suggestion and I agree 100% with Mélanie and Jocelyne in terms of the uniqueness of your departments as well as initiatives looking at this idea, and it's a great question, so I'll leave it there.

Jocelyne Charron: No, I agree. And hopefully, the audience will recognize that, right? If you had to only align to one and we can only tell the story one way, maybe that would create frustrations or you wouldn't be able to tell the story or brief up to your own senior leaders about the nature of your activities in your department if that was mandated. So, that rigidity might not serve us well, but maybe there's opportunity to simplify a little bit of how many different coding is in the system. So, I think I have time for maybe two more questions, and there's this question that is popping up a lot, and it has to do with the Government of Canada's announcement on a new operational expenditure and long-term investment expenditure when we're looking at capitalized expenditure. So, will that lead to changes to the Public Accounts? So, maybe, John, you can speak to that one.

John Daley: The short answer is no, it will not. So, the Public Accounts of Canada will continue to be presented in accordance with public sector accounting standards. What's being proposed or what is being brought forward by the Department of Finance is to present the budget with this capital versus operating mechanism by which to provide additional insights into what monies are being spent on infrastructure and what monies are being spent on items other than infrastructure.

Jocelyne Charron: That makes sense. Perfect. No, and I wouldn't think that we could trump the public sector accounting standards because we have a new framework, right? We have to kind of keep that integrity and the logic behind in the governance that goes. So, that makes sense. So, thank you for that. There was a quick question about materiality and what the OAG uses and the principle of auditing. So, it's important for, I guess, upper management to look at internal controls and quality assurance team in terms of that error and reviewing transaction, but as well that kind of materiality. Is there anything in terms of your thoughts? Because I know the materiality the OAG looks at is huge, right? And then, when you're looking at departments, materiality is not of the same order of magnitude, right? So, is there something there you can add? And John maybe?

John Daley: No, I think it's a great question, and I've had that question before in terms of the materiality, so the materiality that we've assessed because the management assesses materiality and so does the Office of the Auditor General, so the materiality that we've assessed for the overall Public Accounts of Canada, i.e. in other words, how wrong, for lack of a better way, can the Public Accounts be to what point that it actually impairs your ability to make a decision related to the information that's being presented? That number for the Public Accounts of Canada as a whole is approximately $5 billion. So, as you may say, "Wow, well, why are we focused on my one transaction, which is $300? What does it happen in the grand scheme of things?" And the reality is, it's the law. So, the Financial Administration Act requires you to record transactions accurately and appropriately. So, that's number one.

And although the Public Accounts materiality may be very high, it's been seen in the news and in the media and in many other situations whereby which a much smaller dollar value error can result in significant criticism from the public. So, we as financial officers, we as those who enter invoices into systems, those in procurement who set up contracts with third parties for products and services, we all have a collective responsibility to ensure that these amounts are recorded accurately and completely, because without that, we start to lose the integrity of what we're trying to present. Another item I'll present too is that we provide a lot of information in these books, and these books contain a lot of details and a lot of information, and it's not always necessarily at the billion-dollar level. There are some small dollars in there, so every single transaction matters.

Jocelyne Charron: Thank you, John. I think that's a really good note to leave with, so people understand some of the macro uses and then some of the more micro uses and as well their role and the importance in that integrity piece that kind of stays at the heart of how the Public Accounts tell the story to Canadians about taxpayers and that transparency and integrity of our financial system across the public service. So, thank you for that.

So, I'm going to switch to French. Now we've really come to the end. I would like to thank you for your excellent participation today and for your interest in the subject. I would also like to sincerely thank Mélanie and John. I have personally learned a lot from your discussions. And I also admire that, my team, because my team helps a lot with all of this. They are doing a truly wonderful job, with the School of Public Service as well. We were well-equipped and well-supported. I hope you enjoyed the event as much as I did. Your feedback is appreciated. So, we invite you to complete the short evaluation questionnaire that you will receive by email in the coming hours.

And then, the school as well offers so much more. There's a lot of content and some new training as well. So, I invite you to visit their website to keep up to date and register on future opportunities. We also have another session on learning essentials that's going to come to you. I think it's in February, so please stay tuned for that as well, and thank you so much everyone for the great event. I think this was really important and sits at the heart of our financial management function and at the heart probably as a financial officer that you all have a role to play in the Public Accounts. And then, as well, you see that this is a lot broader, not just within your department but a lot of stakeholders across the system, which we obviously learned from today's session. So, thank you so much again and I hope that you have a great rest of your day.

And we look forward to seeing you in February. Thanks again.

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