Optional Services Revolving Fund

Public Accounts of Canada 2024 Volume III—Top of the page Navigation

Statement of management responsibility

We have prepared the accompanying financial statements of the Optional Services Revolving Fund as required by the Treasury Board Directive on Charging and Special Financial Authorities in accordance with the Receiver General reporting requirements. These financial statements were prepared by the management of the Fund in accordance with the significant accounting policies set out in note 2 of the financial statements, on a basis consistent with that of the preceding year.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Department's Departmental Results Report is consistent with these financial statements.

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

Approved by:

Wojo Zielonka, CPA
Assistant Deputy Minister and Chief Financial Officer
Public Services and Procurement Canada

Dominic Laporte
Assistant Deputy Minister
Procurement Branch
Public Services and Procurement Canada

June 13, 2024
Gatineau, Canada

**Table 1Statement of authority provided (used) (unaudited) for the year ended March 31, 2024**^{Links to footnote * in table 1}
(in thousands of dollars)
	Estimates^{Links to footnote 1 in table 1}	Actual	Estimates^{Links to footnote 1 in table 1}	Actual
	2024		2023
Net results	185	1,029	(negative 323)	1,347
Items not requiring use of funds	50	–	50	–
Operating source (use) of funds	235	1,029	(negative 273)	1,347
Items requiring use of funds
Transfer of salary overpayments between government departments	–	–	–	2
Net other assets and liabilities	(negative 50)	6,681	(negative 50)	20,830
Authority provided (used)	185	7,710	(negative 323)	22,179
Table 1 notes Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 1 Table note 1 The amounts in the current and previous year "Estimates" columns result from, when available, the current year's Estimates, Part II—Main Estimates. Return to table note 1 referrer in Table 1

**Table 2Reconciliation of unused authority (unaudited) as at March 31, 2024**
(in thousands of dollars)
	2024	2023
Debit balance in the accumulated net charge against the Fund's authority	32,280	5,236
Payables charged against the appropriation at year-end	(negative 22,912)	(negative 1,226)
Receivables credited to the appropriation at year-end	2,266	1,029
Other items	(negative 320)	(negative 1,435)
Net authority provided (used), end of year	11,314	3,604
Authority limit (note 1)	45,000	35,000
Unused authority carried forward	56,314	38,604

**Table 3Statement of financial position (unaudited) as at March 31, 2024**
(in thousands of dollars)
Assets
	2024	2023
Financial assets
Accounts receivable (note 3)	5,297	9,488
Sales tax refundable and other advances	77	60
Total assets	5,374	9,548
Liabilities
Accounts payable and accrued liabilities (note 4)	23,029	1,226
Vacation pay and compensatory leave	176	136
Employee severance benefits (note 5)	50	52
Total liabilities	23,255	1,414
Net assets (liabilities) (note 6)	(negative 17,881)	8,134
Total	5,374	9,548
Table 3 notes General notes: Contractual obligations (note 7) The accompanying notes form an integral part of these financial statements.

**Table 4Statement of operations and net assets (liabilities) (unaudited) for the year ended March 31, 2024**^{Links to footnote * in table 4}
(in thousands of dollars)
Revenues
	2024	2023
Travel and relocation-related services	13,806	10,636
Communication procurement services	3,134	3,151
Vaccines and drugs (note 2a)	190	249,492
Interest on accounts receivable	78	344
Total revenues	17,208	263,623
Cost of sales (note 2a)	(negative 11,169)	(negative 257,562)
Gross profit	6,039	6,061
Operating expenses
Salaries and employee benefits	2,725	2,346
Corporate and administrative services	1,490	1,370
Professional and special services	780	788
Other expenses	17	4
Employee severance benefits (note 5)	(negative 2)	(negative 2)
Interest from drawdown authority limit	–	144
Occupancy costs	–	64
Total operating expenses	5,010	4,714
Net results	1,029	1,347
Net assets, beginning of year	8,134	29,367
Transfer of salary overpayments between government departments	–	2
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (note 6)	(negative 27,044)	(negative 22,582)
Net assets (liabilities), end of year (note 6)	(negative 17,881)	8,134
Table 4 notes General notes: The accompanying notes form an integral part of these financial statements. Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 4

**Table 5Statement of cash flows (unaudited) for the year ended March 31, 2024**^{Links to footnote * in table 5}
(in thousands of dollars)
Operating activities
	2024	2023
Net results	1,029	1,347
Variations in statement of financial position
Decrease (increase) in cash in transit	–	11
Decrease (increase) in accounts receivable	4,191	21,305
Decrease (increase) in sales tax refundable and other advances	(negative 17)	(negative 2)
Increase (decrease) in accounts payable and accrued liabilities	21,803	(negative 101)
Increase (decrease) in vacation pay and compensatory leave	40	22
Increase (decrease) in employee severance benefits	(negative 2)	(negative 2)
Net financial resources provided (used) by operating activities	26,015	21,233
Transfer of salary overpayments between government departments	–	2
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority, during the year (note 6)	27,044	22,582
Accumulated net charge against the Fund's authority, beginning of year	5,236	(negative 17,346)
Accumulated net charge against the Fund's authority, end of year	32,280	5,236
Table 5 notes General notes: The accompanying notes form an integral part of these financial statements. Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 5

Notes to the financial statements for the year ended March 31, 2024

1. Authority and purpose

The Optional Services Revolving Fund (the Fund) provides specialized services to federal departments, agencies and provincial and territorial governments. The Fund procures vaccines and drugs, zero-emission vehicles, and provides travel and relocation-related services, as well as communication procurement services. The Fund was established under the Appropriation Act No. 4, 1991–1992 which was repealed in 1996 and replaced by section 5.5 of the Revolving Funds Act.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $45,000,000 at any time. Previously at $35,000,000, the authority limit was increased to $45,000,000 in 2023–2024 through the Appropriation Act No. 4, 2023-24. This adjustment is associated with the introduction of a new procurement activity for federal departments and agencies related to zero-emission vehicles, in support of the Greening Government Strategy.

2. Significant accounting policies

These financial statements have been prepared in accordance with the significant accounting policies set out below to comply with the reporting requirements for revolving funds described in Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada. The basis of accounting used in these financial statements differs from Canadian public sector accounting standards mainly because:

no liability is recorded for sick leave
the net debt indicator and statement of changes in net debt are not presented in the financial statements
budgeted expenses are not disclosed in the Statement of operations and net assets (liabilities)
employee severance benefits liability is based on actuarial valuations for the Government as a whole provided by the Treasury Board of Canada Secretariat to management
contractual rights, financial instruments and inter-entity transactions and related parties disclosures are not presented in the financial statements

The significant accounting policies are as follows:

(a) Adoption of new Public Sector Accounting Standard

Section Public Sector Accounting Standard (PS) 3400—Revenue

Effective April 1, 2023, the Government of Canada prospectively adopted the new Public Sector Accounting Standard PS 3400, "Revenue" which establishes standards for the recognition, measurement, presentation and disclosure of revenues. The adoption of this new standard led to changes in terms of the assessment of whether the Fund acts as a principal or an agent for some of its revenue transactions. An organization is acting as a principal when it has control of the goods or services prior to delivery to a client, while the organization is considered acting as an agent when it is arranging for the provision of goods or services to a client on behalf of another party.

The evaluation of the characteristics of the revenue transactions for the travel and relocation-related and communication services established that the Fund is acting as principal as it assumes the primary responsibility of offering the services. Revenues are recognized at a gross basis upon settling of the performance obligation therefore not requiring changes to the revenue recognition. The presentation of these revenues are consistent with previous years.

However, the evaluation of the characteristics of the revenue transactions established that the Fund is acting as an agent for the vaccines and drugs procurement services. The Fund does not have the controls over purchased vaccines and drugs prior to delivery to federal departments, agencies and provincial and territorial governments, as the suppliers remain primary responsible for providing the vaccines and drugs directly to clients. When acting as an agent, the Fund's revenues for the vaccines and drugs have to be recognized on a net basis, meaning that only the annual fees earned by the Fund on the vaccines and drugs transactions are recognized as revenue.

Previously, the Fund recognized the gross amount of revenue which included the cost of the vaccines and drugs purchased by federal departments, agencies and provincial and territorial governments and the Fund annual fees charged to provincial and territorial governments.

The change in revenue recognition treatment resulted in adjustments to the reported revenue and cost of sales of the vaccines and drugs from the adoption date forward. While the adoption leads to adjustments in the presentation in the statement of operations and net assets (liabilities), this change did not impact the net results reported in a year.

(b) Revenue recognition

Revenues are comprised of revenues earned from non-tax sources. They include exchange transactions where goods or services are provided for consideration where a performance obligation exists. A performance obligation consists of an enforceable promise to provide specific goods or services to a specific client. The Fund's revenue transactions are recurring in nature. Recurring transactions are viewed as ongoing, routine activities that form part of the normal course of operations and can be used to indicate if they can be reasonably expected to be earned again in future years. Revenues are recorded when performance obligations are satisfied and collection is reasonably certain, as describe below:

Starting April 1, 2023, the vaccines and drugs revenues earned in the year are recognized on a net basis and only annual fees charged to provincial and territorial governments are recognized as revenues. Note 2a provides information about the adoption of the new Public Sector Accounting Standard on revenues.
Travel and relocation-related services revenue consist of fees charged on relocation costs, fees related to the accommodation and car rental directory, and fees charged to carriers on transportation costs services. Revenues are recognized when services are rendered.
Revenue earned on communication procurement services consist of fees charged to departments based on the value of contract awarded. Revenue is recognized when services are rendered using the completed contract method.

During the year, the Fund introduced a new procurement service related to the purchasing of zero-emission vehicles on behalf of federal departments and agencies. The vehicles are procured through the use of the Fund and their costs are invoiced back to federal departments and agencies. No fees are charged and as such, no revenues are recognized for this service.

(c) Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized. An allowance is made on receivables where recovery is considered uncertain.

(d) Expense recognition

All expenses are recorded on an accrual basis in the year they are incurred.

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

(e) Employee future benefits

Pension benefits

Eligible employees of the Fund participate in the Public Service Pension Plan (the Plan), a multiemployer pension plan administered by the Government of Canada. The Fund's contributions to the Plan are charged to expenses in the year in which they are incurred and represent the total Fund obligation to the Plan. The Fund's responsibility with regard to the Plan is limited to the contributions paid. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

Severance benefits

Eligible employees of the Fund were entitled to severance benefits under labour contracts or conditions of employment. These benefits were earned as the services necessary to earn them were 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.

(f) Sick leave

Employees are permitted to accumulate unused sick leave. However, such leave entitlements may only be used in the event of an illness. As per current government practice, unused sick leave upon employee termination is not payable to the employee. Accordingly, no liability has been accrued in these financial statements. Payments of sick leave benefits are included in current operations as incurred.

(g) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses reported in the financial statements. At the time of preparation of these financial statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for vacation pay and compensatory leave, and the liability for employee severance benefits. Actual results could significantly differ from those estimates. 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. Accounts receivable

**Table 6Accounts receivable**^{Links to footnote * in table 6}
(in thousands of dollars)
	2024	2023
Outside parties	3,044	8,459
Other government departments and agencies	2,266	1,029
Total	5,310	9,488
Less: allowance for doubtful accounts on receivables from outside parties	(negative 13)	–
Net accounts receivable	5,297	9,488
Table 6 notes Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 6

4. Accounts payable and accrued liabilities

**Table 7Accounts payable and accrued liabilities**^{Links to footnote * in table 7}
(in thousands of dollars)
	2024	2023
Outside parties	22,847	1,187
Other government departments and agencies	65	39
Total	22,912	1,226
Accrued liabilities	117	–
Total accounts payable and accrued liabilities	23,029	1,226
Table 7 notes Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 7

5. Employee severance benefits

The Fund 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 by future authorities.

Commencing in 2012, as part of collective agreement negotiations and changes to conditions of employment, the accumulation of severance benefits under the employee severance pay program ceased. The employees were given the option to be immediately paid the full or partial value of benefits earned to date or to 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 benefits obligation.

Information about the severance benefits, measured as at March 31, is as follows:

**Table 8Employee severance benefits**
(in thousands of dollars)
	2024	2023
Employee severance benefits obligation, beginning of year	52	54
Expense for the year	(negative 2)	(negative 2)
Employee severance benefits obligation, end of year	50	52

6. Net assets (liabilities)

The accumulated surplus is the accumulation of each fiscal year's surplus net of deficits since the inception of the Fund.

The accumulated net charge against the Fund's authority represents the cumulative receipts and disbursements over the life of the Fund.

**Table 9Net assets (liabilities)**^{Links to footnote * in table 9}
(in thousands of dollars)
	2024	2023
Accumulated surplus, beginning of year	13,370	12,021
Net results	1,029	1,347
Transfer of salary overpayments between government departments	–	2
Accumulated surplus, end of year	14,399	13,370
Accumulated net charge against the Fund's authority, beginning of year	(negative 5,236)	17,346
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year	(negative 27,044)	(negative 22,582)
Accumulated net charge against the Fund's authority, end of year	(negative 32,280)	(negative 5,236)
Net assets (liabilities), end of year	(negative 17,881)	8,134
Table 9 notes Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 9

7. Contractual obligations

The nature of the Fund's activities can result in some large multi-year contracts and obligations whereby the Fund will be obligated to make future payments when the goods and services are received. Estimated future payments are as follows:

**Table 10Contractual obligations**^{Links to footnote * in table 10}
(in thousands of dollars)
Year ending March 31
2025	2,165
2026	95
2027	72
2028	–
2029 and thereafter	–
Total contractual obligations	2,332
Table 10 notes Table note * The dash means that the amount is 0 or is rounded to 0. Return to table note * referrer in Table 10

8. Related party transactions

Through common ownership, the Fund is related to all Government of Canada departments, agencies, and Crown corporations. The Fund enters into transactions with these entities in the normal course of business and on normal trade terms.

9. Comparative figures

Comparative figures have been reclassified to conform to the current year's presentation.

Public Accounts of Canada 2024 Volume III—Bottom of the page Navigation

Date modified:: 2024-12-17

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