Financial Statements - For the year ended March 31, 2018
Public Service Commission
Statement of Management Responsibility Including Internal Control over Financial Reporting
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2018, and all information contained in these financial statements rests with the management of the Public Service Commission of Canada (the Agency). These financial statements have been prepared by management using the Government of Canada's accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Agency's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency's Departmental Results Report, is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Agency and through conducting an annual risk-based assessment of the effectiveness of the system of internal control over financial reporting.
The system of internal control over financial reporting is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
A risk-based assessment of the system of internal control over financial reporting for the year ended March 31, 2018, was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.
The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Agency's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the President of the Agency.
The financial statements of the Public Service Commission have not been audited.
Patrick Borbey
President
Phil Morton, CPA, CGA
Chief Financial Officer
Gatineau, Canada
September 5, 2018
2018 | 2017 | |
---|---|---|
Liabilities | ||
Accounts payable and accrued liabilities (Note 4) | $10,259 | $9,146 |
Vacation pay and compensatory leave | 4,099 | 2,883 |
Employee future benefits (Note 5) | 3,188 | 3,132 |
Total liabilities | 17,546 | 15,161 |
Financial assets | ||
Due from the Consolidated Revenue Fund | 3,000 | 4,698 |
Accounts receivable and advances (Note 6) | 8,158 | 8,308 |
Total financial assets | 11,158 | 13,006 |
Departmental net debt | 6,388 | 2,155 |
Non-financial assets | ||
Tangible capital assets (Note 7) | 2,503 | 2,206 |
Total non-financial assets | 2,503 | 2,206 |
Departmental net financial position | $(3,885) | $51 |
Contractual obligations (Note 8) Contingent liabilities (Note 9) The accompanying notes form an integral part of these financial statements. |
Patrick Borbey
President
Phil Morton, CPA, CGA
Chief Financial Officer
Gatineau, Canada
September 5, 2018
2018 Planned Results | 2018 | 2017 | |
---|---|---|---|
Expenses | |||
Staffing Services and Assessment | $49,950 | $44,529 | $39,135 |
Internal Services | 37,025 | 36,656 | 35,109 |
Staffing System Integrity and Political Impartiality | 14,970 | 17,170 | 11,808 |
Oversight of Integrity in Staffing and of Non-Partisanship | 18,653 | 15,958 | 16,427 |
Total expenses | 120,598 | 114,313 | 102,479 |
Revenues | |||
Assessment and counselling services revenus | 14,252 | 8,381 | 8,375 |
Miscellaneous revenues | 1,303 | 1,218 | 1,227 |
Revenues earned on behalf of Government | (1,284) | (1,216) | (1,221) |
Total revenues | 14,271 | 8,383 | 8,381 |
Net cost of operations before government funding and transfers | 106,327 | 105,930 | 94,098 |
Government funding and transfers | |||
Net cash provided by Government of Canada | 83,062 | 77,011 | |
Change in due from Consolidated Revenue Fund | (1,698) | (2,126) | |
Services provided without charge by other government departments (Note 10) | 20,690 | 21,813 | |
Transfer of assets to other government department | (54) | - | |
Transfer of the transition payments for implementing salary payments in arrears | (6) | - | |
Net cost of operations after government funding and transfers | 3,936 | (2,600) | |
Departmental net financial position – Beginning of year | 51 | (2,549) | |
Departmental net financial position – End of year | $(3,885) | $51 | |
Segmented information (Note 11) The accompanying notes form an integral part of these financial statements. |
2018 | 2017 | |
---|---|---|
Net cost of operations after government funding and transfers | $3,936 | $(2,600) |
Change due to tangible capital assets | ||
Acquisition of tangible capital assets | 929 | 531 |
Amortization of tangible capital assets | (616) | (576) |
Net (loss) or gain on disposal of tangible capital assets including adjustments | (16) | (16) |
Total change due to tangible capital assets | 297 | (61) |
Change due to prepaid expenses | - | (450) |
Net increase (decrease) in departmental net debt | 4,233 | (3,111) |
Departmental net debt - Beginning of year | 2,155 | 5,266 |
Departmental net debt - End of year | $6,388 | $2,155 |
The accompanying notes form an integral part of these financial statements. |
2018 | 2017 | |
---|---|---|
Operating activities | ||
Net cost of operations before government funding and transfers | $105,930 | $94,098 |
Non-cash items: | ||
Amortization of tangible capital assets | (616) | (576) |
Loss on disposal of tangible capital assets including adjustments | (16) | (16) |
Services provided without charge by other government departments (Note 10) | (20,690) | (21,813) |
Transfer of assets to other government departments | 54 | - |
Transition payments for implementing salary payments in arrears | 6 | - |
Variations in Statement of Financial Position: | ||
Decrease (increase) in accounts receivable and advances | (150) | 5,067 |
Increase (decrease) in prepaid expenses | - | (450) |
Decrease (increase) in accounts payable and accrued liabilities | (1,113) | (1,708) |
Decrease (increase) in vacation pay and compensatory leave | (1,216) | (88) |
Decrease (increase) in employee future benefits | (56) | 1,943 |
Cash used in operating activities | 82,133 | 76,457 |
Capital investment activities | ||
Acquisition of tangible capital assets | 929 | 531 |
Cash used in capital investment activities | 929 | 531 |
Financing activities | ||
Lease payments for tangible capital assets | - | 23 |
Cash used in financing activities | - | 23 |
Net cash provided by Government of Canada | $83,062 | $77,011 |
The accompanying notes form an integral part of these financial statements. |
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31, 2018
1. Authority and objectives
The Public Service Commission (the Agency) is an independent agency established under the Public Service Employment Act and listed in schedules 1.1 and IV of the Financial Administration Act.
The Agency reports independently to Parliament and is dedicated to building a public service that strives for excellence by protecting merit, non-partisanship, and representativeness of Canadian society and the use of both official languages. This responsibility is performed in the best interests of the public service as part of Canada's governance system, by administering and applying the provisions of the Public Service Employment Act and by carrying out responsibilities as provided for in the Employment Equity Act and the Official Languages Act.
The Agency has four programs that contribute to the achievement of its objectives:
The Staffing System Integrity and Political Impartiality program is focused on independently safeguarding merit and non-partisanship in the federal public service. This program includes developing and advancing strategic policy positions and directions, conducting policy research, establishing Agency policies and standards, providing advice, interpretation and guidance, administering delegated and non-delegated authorities, including official languages, the political activities regime and Priority Administration.
The Staffing Services and Assessment program maintains the systems that link Canadians and public servants seeking employment opportunities in the federal public service with hiring departments and agencies. It provides assessment-related products and services in the form of research and development, consultation, assessment operations and counselling for use in recruitment, selection and development throughout the federal public service. This program also includes delivering staffing services, programs and products to departments and agencies, to Canadians and to public servants, through client service units located across Canada.
The Oversight of Integrity in Staffing and of Non-Partisanship program provides an accountability regime for the implementation of the appointment policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring staffing is free from political influence. This program includes monitoring departments' and agencies' staffing performance and compliance with legislative requirements; conducting audits and studies; carrying out investigations; and reporting to Parliament on the integrity of public service staffing and the non-partisanship of the public service.
Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal Services include only those activities and resources that apply across an organization and not to those provided to a specific program.
2. Summary of significant accounting policies
These financial statements are prepared using the Agency'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:
- Parliamentary authorities
- The Agency is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Agency 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 2017-2018 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 2017-2018 Departmental Plan.
- Net cash provided by Government
- The Agency operates within the Consolidated Revenue Fund, which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the Consolidated Revenue Fund and all cash disbursements made by the Agency are paid from the Consolidated Revenue Fund. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
- Amounts due from the Consolidated Revenue Fund
- Amounts due from the Consolidated Revenue Fund are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the Consolidated Revenue Fund. Amounts due from the Consolidated Revenue Fund represent the net amount of cash that the Agency is entitled to draw from the Consolidated Revenue Fund without further authorities to discharge its liabilities.
- Revenues
- Revenues are recognized in the period the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the deputy head is expected to maintain accounting control, he or she 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 as a reduction of the entity's gross revenues.
- Expenses
- Expenses are recorded on an 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, employer contributions to the health and dental insurance plans, information technology services, legal services and workers' compensation are recorded as operating expenses at their carrying value.
- Employee future benefits
- Pension benefits
- Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Agency's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Agency'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.
- 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.
- Pension benefits
- Accounts receivable
- Accounts receivable are stated at the lower of cost and net recoverable value. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to an amount that approximates its net recoverable value.
- Contingent liabilities
- Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
- Tangible capital assets
- The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and 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 $5,000 or more are recorded at their acquisition cost. Amounts included in assets under construction are transferred to the appropriate class of asset upon completion, and are then amortized.
- 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 as 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 contingent liabilities, the liability for employee future 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 Agency 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, the Agency 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:
- | 2018 | 2017 |
---|---|---|
Net cost of operations before government funding and transfers | $105,930 | $94,098 |
Adjustments for items affecting net cost of operations but not affecting authorities: | ||
Services provided without charge by other government departments | (20,690) | (21,813) |
Amortization of tangible capital assets | (616) | (576) |
Miscellaneous revenues | 5 | 5 |
Proceeds from disposal of crown assets | - | 1 |
Increase (decrease) in employee future benefits | (56) | 1,943 |
Increase (decrease) in vacation pay and compensatory leave | (1,216) | (88) |
Refunds of program expenditures | (192) | 865 |
Loss on disposal of tangible capital assets including adjustments | (16) | (16) |
Accrued liability for contingency | - | (30) |
Other | 451 | 302 |
Total items affecting net cost of operations but not affecting authorities | (22,330) | (19,407) |
Adjustments for items not affecting net cost of operations but affecting authorities: | ||
Acquisitions of tangible capital assets | 929 | 531 |
Decrease in lease obligations for tangible capital assets | - | 23 |
Transition payments for implementing salary payments in arrears | 6 | - |
Salary overpayments | 1,054 | 970 |
Employee advances | 80 | 58 |
Decrease in prepaid expenses | - | (450) |
Total items not affecting net cost of operations but affecting authorities | 2,069 | 1,132 |
Current year authorities used | $85,669 | $75,823 |
- | 2018 | 2017 |
---|---|---|
Authorities provided | ||
Vote 1 – Program expenditures (Operating) | $79,549 | $75,695 |
Statutory amounts | 9,839 | 9,109 |
Total authorities provided | 89,388 | 84,804 |
Lapsed: Operating | (3,719) | (8,981) |
Current year authorities used | $85,669 | $5,823 |
4. Accounts payable and accrued liabilities
- | 2018 | 2017 |
---|---|---|
Accounts payable – Other government departments and agencies | $919 | $701 |
Accounts payable – External parties | 7,863 | 7,852 |
Total accounts payable | 8,782 | 8,553 |
Accrued liabilities | 1,477 | 593 |
Total accounts payable and accrued liabilities | $10,259 | $9,146 |
5. Employee future benefits
- Pension benefits
- The Agency's employees participate in the Public Service Pension Plan. The Plan 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/Quebec Pension Plan benefits and they are indexed to inflation.
- Both the employees and the Agency 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 2017-18 expense amounts to $6,698 thousand ($6,346 thousand in 2016-2017). For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 2016-2017) the employee contributions and, for Group 2 members, approximately 1.00 times (1.08 times in 2016-2017) the employee contributions.
- The Agency'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.
- Severance benefits
- Severance benefits provided to the Agency'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. By March 31, 2018, all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.
- | 2018 | 2017 |
---|---|---|
Accrued benefit obligation – Beginning of year | $3,132 | $5,075 |
Expense for the year | 254 | (1,310) |
Benefits paid during the year | (198) | (633) |
Accrued benefit obligation – End of year | $3,188 | $3,132 |
6. Accounts receivable and advances
- | 2018 | 2017 |
---|---|---|
Receivables – Other government departments and agencies | $5,734 | $6,285 |
Receivables – External parties | 2,305 | 1,965 |
Employee advances | 119 | 58 |
Accounts receivable | $8,158 | $8,308 |
7. Tangible capital assets
Asset class | Amortization period |
---|---|
Office equipment | 3 to 15 years |
Informatics hardware and infrastructure | 4 to 5 years |
Computer software | 3 to 5 years |
Furniture and fixtures | 10 years |
Vehicles | 6 years |
Leasehold improvements | 10 years |
Assets under construction | Once in service, in accordance with asset type |
- | Cost | Amortization period | 2018 | 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Capital Asset Class | Opening Balance | Acquisitions | Transfers | Disposals, Write-offs | Closing Balance | Opening Balance | Amortization | Adjustments | Disposals, Write-offs | Closing Balance | Net Book Value | Net Book Value |
Office equipment | 134 | - | - | (29) | 105 | 111 | 8 | - | (27) | 92 | 13 | 23 |
Informatics hardware and infrastructure | 16 | - | - | - | 16 | 16 | - | - | - | 16 | - | - |
Computer software | 32,403 | - | 399 | - | 32,802 | 30,875 | 578 | - | - | 31,453 | 1,349 | 1,528 |
Furniture and fixtures | 28 | - | - | - | 28 | 9 | 2 | - | - | 11 | 17 | 19 |
Vehicles | 24 | - | - | - | 24 | 6 | 4 | - | - | 10 | 14 | 18 |
Leasehold improvements | 251 | - | - | (237) | 14 | 208 | 24 | - | (223) | 9 | 5 | 43 |
Assets under construction | 575 | 929 | (399) | - | 1,105 | - | - | - | - | - | 1,105 | 575 |
Total | 34,431 | 929 | - | (266) | 34,094 | 31,225 | 616 | - | (250) | 31,591 | 2,503 | 2,206 |
8. Contractual obligations
The nature of the Agency's activities may result in some large multi-year obligations whereby the Agency will be obligated to make future payments when the services are received.
- | 2019 | 2020 | 2021 | 2022 | 2023 and there after | Total |
---|---|---|---|---|---|---|
Service contracts | $1,720 | $1,585 | $26 | - | - | $3,331 |
9. Contingent liabilities
Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. There is no claim outstanding at March 31, 2018 ($30 thousand at March 31, 2017).
10. Related party transactions
The Public Service Commission of Canada 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.
The Agency 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, the Agency received services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans, legal services, workers' compensation coverage and information technology services.
- | 2018 | 2017 |
---|---|---|
Accommodation | $9,347 | $9,906 |
Employer's contribution to the health and dental insurance plans | 6,316 | 5,792 |
Information technology services | 4,358 | 4,736 |
Legal services | 639 | 1,334 |
Workers' compensation | 30 | 45 |
Total | $20,690 | $21,813 |
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 Services and Procurement Canada is not included in the Agency's Statement of Operations and Departmental Net Financial Position.
- | 2018 | 2017 |
---|---|---|
Expenses | $21,275 | $16,474 |
Revenues | $8,319 | $8,322 |
Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).
Expenses disclosed in (b) include other information technology services and legal services that are specific to the needs of the Agency and are received with charge from common service organizations. The cost of these services has been recorded in the Agency's Statement of Operations and Departmental Net Financial Position.
11. Segmented information
Presentation by segment is based on the Agency'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.
Revenues from assessment and counselling services are derived from the provision of services and products developed by the Agency to help public sector managers select and develop competent staff. These services and products are provided by the Agency's Personnel Psychology Centre and the Agency’s 5 regional offices. The Agency has the authority to re-spend these revenues to offset expenditures incurred in the same year for the provision of assessment and counselling services and products.
The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major object of expense and by major type of revenue.
- | 2018 | 2017 | ||||
---|---|---|---|---|---|---|
Staffing Services and Assessment | Internal Services | Staffing System Integrity and Political Impartiality | Oversight of Integrity in Staffing and of Non-partisanship | Total | Total | |
Salaries and employee benefits | $32,386 | $25,593 | $13,551 | $12,723 | $84,253 | $72,806 |
Professional and special services | 3,763 | 7,153 | 2,053 | 1,436 | 14,405 | 14,205 |
Accommodation | 3,641 | 2,997 | 1,404 | 1,305 | 9,347 | 9,906 |
Transportation and telecommunications | 393 | 153 | 84 | 51 | 681 | 827 |
Amortization of tangible capital assets | 593 | 22 | 1 | - | 616 | 576 |
Informatics, office equipment, furniture and fixtures | 12 | 1,111 | 5 | 1 | 1,129 | 775 |
Repair and maintenance | 1 | 1,513 | - | - | 1,514 | 258 |
Rentals | 684 | 550 | 18 | 356 | 1,608 | 2,373 |
Printing and publications services | 108 | 383 | 26 | - | 517 | 389 |
Utilities, materials and supplies and other | 2,948 | (2,819) | 28 | 86 | 243 | 364 |
Total expenses | 44,529 | 36,656 | 17,170 | 15,958 | 114,313 | 102,479 |
Assessment and counselling services | 8,381 | - | - | - | 8,381 | 8,375 |
Miscellaneous revenues | 1,218 | - | - | - | 1,218 | 1,227 |
Revenues earned on behalf of Government | (1,216) | - | - | - | (1,216) | (1,221) |
Total revenues | 8,383 | - | - | - | 8,383 | 8,381 |
Net cost of operations before government funding and transfers | $36,146 | $36,656 | $17,170 | $15,958 | $105,930 | $94,098 |
12. Comparative information
Certain comparative figures have been reclassified to conform to the current year's presentation.
Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting of the Public Service Commission for Fiscal Year 2017-18 (Unaudited)
1. Introduction
This document provides summary information on the measures taken by the Public Service Commission (the Agency) to maintain an effective system of internal control over financial reporting including information on internal control management, assessment results and related action plans.
Detailed information on the Agency's authority, mandate and program activities can be found in the 2017-18 Departmental Plan and the 2017-18 Departmental Results Report
2. Public Service Commission system of internal control over financial reporting
2.1 Internal control management
The Agency has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An approved organizational internal control management framework 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;
- Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
- Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the President and senior management and to the Agency’s Internal Audit Committee, if applicable.
The Internal Audit Committee provides advice to the President on the adequacy and functioning of the Agency’s risk management, control and governance frameworks and processes.
2.2 Service arrangements relevant to financial statements
The Agency relies on other departments and agencies for the processing of certain transactions that are recorded in its financial statements as follows:
Common arrangements
- Public Services and Procurement Canada centrally administers the payments of salaries and benefits, procures goods and services that exceed the Agency’s delegated contracting authority, and provides real property services;
- The Treasury Board of Canada Secretariat provides the Agency with information used to calculate the accrued severance liability;
- Justice Canada provides legal services to the Agency; and
- Shared Services Canada provides information technology infrastructure services to the Agency in the areas of data centre and network services.
Specific arrangements
- Public Services and Procurement Canada provides the Agency with My GCHR product support services and user licences.
3. Public Service Commission assessment results for fiscal year 2017-18
The key findings and significant adjustments required from the current year’s assessment activities are summarized below.
3.1 New or significantly amended key controls
In 2017-18, the design of the Payroll process and its key controls were reviewed due to changes resulting from the implementation of the new government-wide pay system. There were no changes in any other existing business process.
3.2 Ongoing monitoring program
As part of its rotational ongoing monitoring plan, the Agency completed the assessment of 2 business processes in 2017-18. The design effectiveness of key controls was assessed for both the Payroll and the Expenses and Accounts Payable processes. Tests were performed in both processes to ensure the operating effectiveness of key controls. For the most part, the key controls tested performed as intended.
Areas for improvement
- Payroll process: Observations were about the need to strengthen the efficiency of controls by providing tools and implementing procedures and related documentation.
- Expenses and Accounts Payable process: Observations were about the need to strengthen the efficiency of controls by ensuring the use and compliance with existing procedures and related documentation.
4. Public Service Commission action plan
4.1 Progress during fiscal year 2017-18
The Agency continued to perform its ongoing monitoring in accordance with its rotational plan with changes as indicated in the following table:
Rotational ongoing monitoring plan | Status |
---|---|
Payroll | Completed as planned; remedial actions started |
Expenses and accounts payable | Completed as planned; remedial actions to start in 2018-19 |
Revenues and accounts receivable | Postponed to 2018-19 |
System access | Cancelled; this process will be incorporated into the review of business processes in future years |
4.2 Action plan for the next 3 fiscal years
The following table shows the Agency’s rotational ongoing monitoring plan over the next 3 fiscal years. This plan will be revised annually based on the validation of high-risk processes and controls.
Business Process Cycle | Ongoing Monitoring Rotation | ||
---|---|---|---|
2018-19 | 2019-20 | 2020-21 | |
Revenues and accounts receivable | Yes | No | No |
Payroll (Note a) | Targeted Testing | Targeted Testing | Yes |
Entity-level controls | No | Yes | No |
Information technology general controls under Agency management | No | No | Yes |
Expenses and accounts payable | No | No | Yes |
Capital assets (Note b) | No | No | No |
Financial reporting (Note b) | No | No | No |
Note a: The Public Service Commission will conduct targeted testing for the Payroll process in 2018-19 and 2019-20 as required to assess the improvements related to recommendations provided in the 2017-18 Internal Control Action Plan. Targeted testing will also be conducted for any changes to this business process resulting from recommendations made by the Government of Canada’sHR-to-Pay Integrated Team. Note b: The Capital Assets and Financial Reporting processes will not be assessed in the next 3 fiscal years due to the implementation of the Government of Canada Financial Management system solution (SAP) scheduled for 2020. The 2 processes will be assessed in 2021-2022. |
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