2023-2024 Annual Financial Statements

1. Authority and Objectives

The Veterans Review and Appeal Board was established in 1995 pursuant to the Veterans Review and Appeal Board Act. The Veterans Review and Appeal Board received full departmental status by Order in Council in 2009.

Veterans Review and Appeal Board is a division of the public service named in Schedule I.1 of the Financial Administration Act. The Minister of Veterans Affairs is designated the appropriate Minister for the Veterans Review and Appeal Board in Parliament and at Cabinet.

The Veterans Review and Appeal Board program provides Canada’s traditional Veterans, Canadian Armed Forces members and Veterans, Royal Canadian Mounted Police members, qualified civilians and their families with full opportunity to request review and appeal hearings to ensure a fair adjudicative process for disability pension, disability award, and War Veterans Allowance applications.

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the board’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

    Veterans Review and Appeal Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to Veterans Review and Appeal Board 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” section of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2023-2024 Departmental Plan. 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 2023-2024 Departmental Plan.

  2. Net cash provided by Government

    Veterans Review and Appeal Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by Veterans Review and Appeal Board is deposited to the CRF and all cash disbursements made by Veterans Review and Appeal Board 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. Amounts due from or to the CRF

    Amounts due from or to 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 Veterans Review and Appeal Board is entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. 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 the employer contribution to the health and dental insurance plans are recorded as operating expenses at their carrying value.

  5. Employee future benefits

    1. Pension benefits

      Pension benefits - Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. Veterans Review and Appeal Board’s contributions to the Plan are charged to expense in the year incurred and represent its total obligation to the Plan. Veterans Review and Appeal Board’s responsibility with regards 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 accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

  6. Non-financial assets

    The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined by the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.

  7. Measurement uncertainty

    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government’s best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the useful life of tangible capital assets and the liability for employee future benefits. 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.

  8. Related party transactions

    Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

    Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

    1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
    2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

 

3. Parliamentary Authorities

Veterans Review and Appeal Board receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, Veterans Review and Appeal Board 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:

(a) Reconciliation of net cost of operations to current year authorities used (in thousands of dollars)
  2024 2023
Net cost of operations before government funding and transfers 19,402 14875
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (3) (8)
Services provided without charge by other government departments (1,670) (1,319)
Decrease (increase) in vacation pay and compensatory leave (75) 12
Decrease (increase) in employee future benefits (41) 27
Refund of prior years' expenditures 506 0
Other 5 33
Net cost of operations after government funding and transfers 18,124 13,620
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 0 0
Total items not affecting net cost of operations but affecting authorities 0 0
Current year authorities used $ 18,124 $ 13,620
(b) Authorities provided and used (in thousands of dollars)
  2024 2023
Authorities provided:
Vote 1 - Operating expenditures $ 18,231 $ 13,766
Statutory amounts 1,922 1,466
  20,153 15,232
Less:
Lapsed: Operating (2,029) (1,612)
  (2,029) (1,612)
Current year authorities used $ 18,124 $ 13,620

4. Accounts Payable and accrued liabilities

The following table presents details of the Veterans Review and Appeal Board’s accounts payable and accrued liabilities:

Accounts payable and accrued liabilities (in thousands of dollars)
  2024 2023
Accounts payable to other government departments and agencies $ 43 $ 44
Accrued liabilities 1,786 1,221
Total accounts payable and accrued liabilities $ 1,829 $ 1,265

5. Employee future benefits

(a) Pension benefits

Veterans Review and Appeal Board employees participate in the Public Service Pension Plan (the “Plan”), which is sponsored and administered by the Government of Canada. 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 Veterans Review and Appeal Board contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2023-2023 expense amounts to $1,138,062 ($958,087 in 2022-2023). For Group 1 members, the expense represents approximately 1.02 times (1.02 times for 2022- 2023) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2022-2023) the employee contributions.

Veterans Review and Appeal Board’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.

(b) Severance benefits

Severance benefits provided to the Board’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

Changes in the obligations of future benefits (in thousands of dollars)
  2024 2023
Accrued benefit obligation - beginning of year $ 263 $ 290
Expenses for the year 50 (27)
Benefits paid during the year (9) 0
Accrued benefit obligation - end of year $ 304 $ 263

6. Accounts receivable and advances

The following table presents details the Board’s accounts receivable and advances balances:

Accounts receivable and advances (in thousands of dollars)
  2024 2023
Receivables - external parties $ 7 $ 29
Receivables - other Government departments and agencies and other receivables 0 0
Employee advances 15 16
Sub-total 22 45
Allowance for doubtful accounts on external receivables (1) 0
Gross accounts receivable 21 45
Accounts receivable held on behalf of Government 0 0
Net accounts receivable $ 21 $ 45

7. Tangible capital assets

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

Asset Class

Informatics
Machinery and Equipment

Amortization Period

2-5 years
5-15 years

The following tables present details of tangible capital assets:

Tangible capital assets cost (in thousands of dollars)
Cost
Capital Asset Class Opening balance Acquisitions Disposals and Write-Offs Adjustments Closing balance
Informatics $ 60 0 0 0 $ 60
Total $ 60 0 0 0 $ 60
Accumulated Amortization (in thousands of dollars)
Capital Asset Class Opening balance Amortization Disposals and Write-Offs Adjustments Closing balance
Informatics $ 56 $ 3 0 0 $ 59
Total $ 56 $ 3 0 0 $ 59
Net Book Value (in thousands of dollars)
Capital Asset Class 2024 Net Book Value 2023 Net Book Value
Informatics $ 1 $ 4
Total $ 1 $ 4

8. Related Party Transactions

Veterans Review and Appeal Board is related as a result of common ownership to all government departments, agencies and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

Veterans Review and Appeal Board enters into transactions with these entities in the normal course of business and on normal trade terms.

a) Common services provided without charge by other government departments: During the year, Veterans Review and Appeal Board 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 at the carrying value in the Veterans Review and Appeal Board’s Statement of Operations and Departmental Net Financial Position as follows:

Cost of services without charge (in thousands of dollars)
  2024 2023
Accommodation $ 373 $ 365
Employer's contribution to the health and dental insurance plans 1,297 954
Total $ 1,670 $ 1,319

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 cost of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in the Veterans Review and Appeal Board's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties (in thousands of dollars)
  2024 2023
Accounts receivable - Other government department and agencies 0 38
Accounts payable - Other government department and agencies 43 44
Expenses - Other Government departments and agencies 121 83
Total $ 164 $ 127

Expenses disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

9. Segmented Information

Presentation by segment is based on the Veterans Review and Appeal Board’s core responsibility. 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 by major object of expense. The segmented results for the period are as follows:

Expenses incurred by major object of expense (in thousands of dollars)
  2024 2023
Operating
Salaries and employee benefits $ 17,221 $ 13,313
Transportation and communications 493 385
Accommodation 373 365
Professional and special services 717 496
Utilities, materials and supplies 322 208
Repairs and maintenance 272 100
Other 4 8
Total operating expenses 19,402 14,875
Total expenses 19,402 14,875
Net cost from continuing operations $ 19,402 $ 14,875
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