Internal Audit Committee Annual Report 2018-2019

Introduction

This annual report of the external members of the Internal Audit Committee (the Committee) of the Public Service Commission (the agency) covers fiscal year 2018-2019.

Although the Treasury Board Policy and Directive on Internal Audit no longer includes a requirement for departmental audit committees to produce an annual report, the Committee has concluded that an annual report is helpful in assessing its performance over the past year and in establishing priorities for the next year.

Context

There were changes to the membership of the Committee over the past year. One of the external members was appointed chair and one new external member was appointed, both in May 2018. Orientation was undertaken to support integration of the new external member.

There was also a change in reporting relationship of the Chief Audit and Evaluation Executive (CAEE) over the past year. The Committee was very pleased to support the President in reclassifying the CAEE position to support the increased role that the CAEE is playing and the CAEE now reports to the President.

This reporting period marked the third full year of implementation of the New Direction in Staffing (NDS). This initiative, which was designed to simplify and strengthen the staffing system across the federal public service, remains a critical part of the agency's work. Successful implementation of this initiative requires cultural change in departments as well as within the agency.

Also during this reporting period, the agency began to brief the Committee on project plans around a major Information Technology (IT) project, the transformation of the Public Service Resourcing System (PSRS), the federal government's online recruitment platform. This project is now called GC Jobs Transformation and is being undertaken at the same time as the Treasury Board of Canada Secretariat-led Next Generation Human Resources and Pay project.

Summary of the Committee’s work

During 2018-19 the Committee held 4 meetings. During the morning before each of these meetings, the external members, along with the CAEE, met with agency officials to receive a variety of briefings on specific topics. These morning meetings were followed by an in-camera working lunch with the President before the start of the formal Committee meetings to discuss key risks and challenges and opportunities facing the organization. Separate in-camera discussions were also held with the President, Chief Financial Officer and the CAEE following the Committee meetings.

With respect to formal reports produced by the Internal Audit and Evaluation Division (IAED) during this period, the Committee provided advice on the following: 4 audits (the Audit of IT General Controls Phase 2, the Audit of Project Governance and Resource Allocation, the Internal Audit of PSC Recruitment and Staffing, and the Audit of GC Jobs Transformation: Phase 0); 2 evaluations (the Formative Evaluation of Integrated Intelligence and the Evaluation of Recruitment of Policy Leaders Program); one assessment (the Assessment of PSC Innovation Capacity); and one consulting engagement (Duty to Accommodate). The Committee was engaged throughout the year in each of the mandatory areas of responsibility defined in the Directive on Internal Audit: values and ethics; risk management; management control framework; internal audit function; external assurance providers; follow-up on management action plans; financial statements and public accounts reporting; and accountability reporting.

In addition to the mandatory areas of responsibility, the Committee had set 3 priorities for 2018-2019:

• Continue to build strength as a committee under the leadership of the new chair and with a new external member:
  • The Committee worked with the CAEE to put new processes in place to improve the documentation provided to external members to support discussions at meetings, and to establish a new annual planning document that captures all Committee requirements.
  • An orientation plan was developed to support the integration of the new member into the team.
• Support the agency's efforts to implement effective performance management, implement the NDS well internally, renew its mission-critical IT systems and strengthen its knowledge integration capacity by providing independent perspective and advice:
  • The Committee received regular updates on NDS implementation both inside the agency and across government and reviewed an internal audit of PSC recruitment and staffing focused on human resources governance, planning and staffing 2 years into NDS implementation.
  • The Committee had 2 pre-meeting agenda discussions on PSC performance management and was briefed on the work the agency is doing to start to strengthen performance measurement practices across the Agency.
  • Each Committee meeting included an element related to IT systems and mission-critical PSC IT systems.
• Support the efforts of the CAEE to fully implement the Internal Audit and Evaluation Plan for fiscal years 2018 to 2021, thereby improving the flow of products to senior management and the Committee by providing timely input and advice:
  • The CAEE delivered all products planned for 2018-19 and one that was not (Duty to Accommodate consulting engagement).

Assessment of the Public Service Commission

During this reporting period, the Committee had a positive view about how the agency is managed. However, the agency continues to face risks, primarily in relation to NDS implementation and the GC Jobs Transformation project, but has mitigation measures in place.

In terms of NDS, there continue to be risks that it may not be implemented in departments in a way that achieves the system-wide objectives the agency seeks from this initiative. This is a risk for the public service as well as for the agency. In terms of mitigation, the agency is continuing to work with departments on NDS implementation and has met with the community of departmental staffing advisors in "Exchanges", which increase knowledge of innovative approaches to staffing. The Agile Staffing project is working to encourage hiring managers to use all flexibilities at their disposal in order to make the staffing system better, more efficient and responsive. The agency is also using innovative approaches for its own hard-to-staff positions, including an employee referral program, and is supporting pilot projects with other departments to encourage hiring managers to assess candidate language proficiency up to the BBB language level.

The GC Jobs Transformation project, as a large IT project, potentially connected to another major IT project, the TBS HR to Pay project, also presents risks. In terms of mitigating risk, the Internal Audit and Evaluation Directorate is providing assurance throughout the project, and an external firm has conducted a project readiness assessment. The GC Jobs team has close working relations with the TBS HR to Pay team.

Assessment of the internal audit and evaluation functions

The CAEE has continued to provide strong leadership, and the Internal Audit and Evaluation Directorate has produced increased numbers of audit products.

Both the internal audit function and the evaluation function met our expectations with respect to standards of performance and quality of products. The Committee is pleased with the priority that the President continues to place on audit and evaluation functions and with the direct reporting to the President by the CAEE.

Results of the annual Internal Audit Committee self-assessment

Overall, DAC members are satisfied with the functioning of the Committee. Members believe that they have the competencies and abilities to perform their work and view the infrastructure and operations of the Committee positively. Members are satisfied with the administration supporting audit committee meetings. Ex-officio members were also satisfied with the functioning of the Committee.

Proposed priorities

In addition to supporting the CAEE to fully implement the Internal Audit and Evaluation Plan 2019-2022, the external members of the Committee will focus on the following issues in 2019-20:

• Pursue the implementation of NDS, both inside the agency and across the public service, with a particular focus on the design and implementation of appropriate performance measures and indicators;
• Effective project management for the GC Jobs Transformation project; and
• Implementation of knowledge/data integrated intelligence across the agency.