2014-2015 Financial statements

1. Authority and Objectives

The Immigration and Refugee Board of Canada (IRB) is an independent administrative tribunal that was created on January 1, 1989, by an amendment to the Immigration Act. In 2002, the Immigration Act was replaced by the Immigration and Refugee Protection Act (IRPA), which was amended by the Balanced Refugee Reform Act (BRRA) in 2010 and the Protecting Canada's Immigration System Act (PCISA) in 2012. IRB divisions derived their mandates from these acts during the 2014–15 reporting period.

The Board strategic outcome is to resolve immigration and refugee cases efficiently, fairly and in accordance with the law.

Five program activities support this strategic outcome:

• Refugee Protection
  Renders quality decisions and resolves cases in a timely manner regarding:
  • Refugee protection claims made by persons in Canada.
• Refugee Appeal
  Renders quality decisions and resolves cases in a timely manner regarding:
  • Appeals against a decision made on a refugee protection claim of the Refugee Protection Division.
• Admissibility Hearings and Detention Reviews
  Renders quality decisions and resolves cases in a timely manner regarding:
  • Foreign nationals or permanent residents who are alleged to be inadmissible to Canada pursuant to the Immigration and Refugee Protection Act (IRPA);
  • Foreign nationals or permanent residents who are detained under the IRPA authority.
• Immigration Appeal
  Renders quality decisions and resolves cases in a timely manner regarding:
  • Sponsorship applications refused by the Department of Citizenship and Immigration Canada;
  • Certain removal orders made against permanent residents, refugees and other protected persons and holders of permanent resident visas;
  • Permanent residents outside of Canada who have been found not to have fulfilled their residency obligation;
  • Appeals by the Minister of Public Safety and Emergency Preparedness against a decision of the Immigration Division on admissibility.
• Internal Services
  The IRB administers internal services in support of program activities and other corporate obligations. Internal services include management and oversight services, communications services, legal services, human resources management services, financial management services, information management services, information technology services, real property services, material services, acquisition services, and other administrative services.

2. Summary of significant accounting policies

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

Significant accounting policies are as follows:

1. Parliamentary authorities

   The IRB is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the IRB do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the "Expenses" and "Revenues" sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2014-2015 Report on Plans and Priorities. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2014-2015 Report on Plans and Priorities.

2. Net Cash Provided by Government

   The IRB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the IRB is deposited to the CRF and all cash disbursements made by the IRB are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

3. Due from the CRF

   Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the IRB is entitled to draw from the CRF without further appropriations to discharge its liabilities.

4. Revenue

   Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place. The IRB does not charge for its services and its only revenues stem from gains on disposals of crown assets, Access to Information and Privacy fees and interest on overdue accounts receivable.

   Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Head is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

5. Expenses

   Expenses are recorded on the accrual basis:

   • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
   • Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
6. Employee future benefits
   1. Pension benefits: Eligible employees participate in the public service pension plan (the "plan"), a multiemployer pension plan administered by the Government. The IRB's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of the Board to the Plan. The IRB's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
   2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
7. Accounts receivable

   Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

8. Contingent liabilities

   Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

9. Tangible capital assets

   All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

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

   Amortization of tangible capital assets

   Asset class	Amortization Period
   Informatics hardware	4 years
   Informatics software	5 years
   Machinery and Equipment	10 years
   Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement

   Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

10. Measurement uncertainty

    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

The IRB receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the IRB has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

4. Accounts payable and accrued liabilities

The following table presents details of the IRB's accounts payables and accrued liabilities (in thousands of dollars):

In Canada’s Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three years starting in 2012-2013. As a result, the Board has recorded at March 31, 2015, an obligation for termination benefits for an amount of $87,866 ($125,000 in 2013-2014) as part of accrued liabilities to reflect the estimated workforce adjustments costs.

5. Employee future benefits

1. Pension benefits

   The IRB's employees participate in the public service pension plan (the Plan), which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

   Both the employees and the IRB contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provision related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 related to existing plan members as of December 31, 2012 and Group 2 related to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

   The 2014-2015 expense amounts to $8.7M ($9.8M in 2013-2014). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013-2014) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013-2014) the employee contributions.

   The IRB's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

2. Severance benefits

   The IRB provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

   As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation. Information about the severance benefits, measured as at March 31, is as follows (in thousands of dollars)

   Information about the severance benefits, measured as at March 31, is as follows (in thousands of dollars):

6. Accounts receivable and advances

The following table presents details of the IRB's accounts receivable and advances balances (in thousands of dollars):

7. Tangible capital assets

Effective March 18, 2015, IRB transferred equipment with a net book value of $16,256 to Canada Border Service Agency. This transfer is included in the adjustment column.

8. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

1. Claims and litigation

   Claims have been made against the IRB in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Claims and litigations for which outcome is not determinable and a reasonable estimate can be made by management amount to approximately $567,400 ($140,000 in 2013-2014) at March 31, 2015.

9. Related Party Transactions

The IRB is related as a result of common ownership to all government departments, agencies, and Crown corporations. The IRB enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the IRB received common services which were obtained without charge from other government departments as disclosed below.

1. Common services provided without charge by other government departments

   During the year, the IRB received services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the IRB's Statement of Operations and Departmental Net Financial Position as follows (in thousands of dollars):

   Common services provided without charge by other government departments

   	2015	2014
   Accommodation	17,916	16,803
   Employer's contribution to the health and dental insurance plans	6,492	7,050
   Total	24,408	23,853

   The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the IRB's Statement of Operations and Departmental Net Financial Position.

2. Other transactions with related parties (in thousands of dollars)

   Other transactions with related parties

   	2015	2014
   Expenses - Other Government departments and agencies	23,090	20,510

10. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the IRB. However, it did result in the use of additional spending authorities by the IRB. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

11. Segmented information

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

2.1 Internal control management

The Immigration and Refugee Board of Canada has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. A departmental internal control management framework, approved by the Chairperson, is in place and includes:

• Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
• Values and Ethics Office, which provides educational and awareness programs;
• Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control;
• An annually updated Corporate Risk Profile;
• Financial management policies as well as documentation of its main business processes and related key risk and control points to support the management and oversight of its system of ICFR;
• Periodic monitoring of and updates on internal control management;
• Regularly updated delegated authorities matrix; and
• Secure financial and contracting information technology (IT) processing systems to achieve enhanced security, data integrity, and efficiency and effectiveness of transactions.

3. Departmental assessment results during fiscal year 2014-15

During 2014-15 the Board began the operation of a new SAP financial system to comply with the financial system standard promulgated by the Office of the Comptroller General. As a consequence, certain elements of the planned control assessment were modified to focus resources on the new system control environment.

4. Departmental action plan