Annex - Assessment of Internal Control over Financial Reporting

Annex – Assessment of Internal Control over Financial Reporting for the fiscal year ending March 31, 2014 - Unaudited

1. Introduction

This document provides summary information on the measures taken by the Office of the Public Sector Integrity Commissioner (the Office) to maintain an effective system of internal control over financial reporting (ICFR), including information on internal control management, assessment results and related action plans.

Detailed information on the Office’s authority, mandate and program activities can be found in the 2013-14 Departmental Performance Report, the 2013-14 Report on Plans and Priorities and the 2013-14 Annual Report.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

The Office has a well-established governance and accountability structure to support its assessment efforts and oversight of its system of internal control. An internal control framework, approved by the Commissioner, 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;
  • A code of values and ethics;
  • Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
  • At least annual monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and senior management and, as applicable, the Audit Committee.

The Audit Committee is mandated to provide advice to the Commissioner on the adequacy and functioning of the department's risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The Office relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows:

Common Arrangements

  • Public Works and Government Services Canada centrally administers the payments of salaries and the procurement of goods and services in accordance with the Office's Delegation of Authority, and provides accommodation services;
  • The Treasury Board of Canada Secretariat provides the Office with information used to calculate various accruals and allowances.

Specific Arrangements

  • The Canadian Human Rights Commission (CHRC) administers the information technology (IT) infrastructure services, provides a financial system platform to capture and report all financial transactions and performs financial transaction processing and reporting on behalf of the Office. The scope and responsibilities are addressed in the interdepartmental arrangement between CHRC and the Office, as well as in the attestation and summary of results prepared by CHRC on its ICFR in regards to the impact it has on its clients. The Office relies on CHRC's internal controls over financial reporting and financial management system to process the financial data that has been approved, authorized and transmitted by the Office. The Office is responsible to ensure that the financial reports are accurate and fairly present their financial position.

3. Departmental assessment results during fiscal year 2013-14

The key findings and significant adjustments required from the current year's assessment activities are summarized below.

New or significantly amended key controls: In the current year, as a follow up from the assessment of controls in prior years, desk top procedures for the contribution program were developed. In 2013-14 the Office developed and implemented a Policy on Conflict of Interest and Post Employment that took effect January 1, 2014.

Ongoing monitoring program: As part of its ongoing monitoring plan, the Office reviews and updates annually its process flows and narratives, which include documenting controls. No significant control issues were found. During the year the Staffing sub-delegations and Financial delegation instruments and were updated. In 2013-14 refresher training was provided to staff on expenditure initiation and contracting requirements, in addition training on the changes and updates to the travel, hospitality, events and conferences directive was delivered. In an environment of centralized operations, limited types of transactions recorded and micro size, finance utilizes substantive procedures and detailed variance reporting to efficiently obtain additional internal assurance over the financial reporting.

4. Departmental action plan

4.1 Progress during fiscal year 2013-14

Progress During Fiscal Year 2013-14
Previous year's rotational ongoing monitoring plan for current yearStatus
Operating expenditures (2012-13) Remedial actions completed
Contributions (2012-13) Remedial actions completed
Entity-level controls (2013-14) Completed as planned; no remedial actions required.
Financial close (2013-14) Completed as planned; no remedial actions required.
Master data on vendors (2013-14) Delayed

4.2 Action plan for the next fiscal year and subsequent years

The Office's rotational ongoing monitoring plan over the next three years, based on an annual validation of the high-risk processes and controls and related adjustments to the ongoing monitoring plan as required, is shown in the following table.

Rotational Ongoing Monitoring Plan
Key control areasFiscal year
2014-15
Fiscal year
2015-16
Fiscal year
2016-17
Entity-level controls Yes Yes Yes
IT general controls* Yes No No
Contributions No Yes No
Operating expenditures* No Yes No
Financial close* No Yes No
Master data on vendors Yes No No
Payroll* Yes No Yes

* under Office management

2015-09-29