Independent Auditor’s Report, August 14, 2015
To the Internal Audit Services Branch of Employment Services and Social Development Canada
We have audited the accompanying Consolidated Statement of Administrative Costs Charged to the Canada Pension Plan (CPP) Account by Employment and Social Development Canada (ESDC) for the year ended March 31, 2015 and the related schedules (together “the financial information”). The financial information has been prepared by management of ESDC based on the financial reporting provisions established in the 2014-2015 Memorandum of Understanding between the CPP and ESDC dated April 8, 2015 (the MoU).
Management’s responsibility for the financial information
Management of ESDC is responsible for the preparation of the financial information in accordance with the financial reporting provisions of the MoU, and for such internal control as management determines is necessary to enable the preparation of the financial information that is free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial information based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial information is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to ESDC’s preparation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of ESDC’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial information for the year ended March 31, 2015 is prepared, in all material respects, in accordance with the financial reporting provisions of the MoU.
Basis of accounting and restriction on distribution and use
Without modifying our opinion, we draw attention to Schedule 1 - Note 1 of the financial information, which describes the basis of accounting. The financial information has been prepared to assist ESDC to comply with the financial reporting requirements of the MoU between ESDC and the CPP. As a result, the financial information may not be suitable for another purpose. Our report is intended solely for ESDC and the CPP and should not be used by parties other than ESDC and the CPP.
(Chartered professional accountants, licensed public accountants)
Overview of schedules
|
Cost in thousands of dollars |
| 2015 |
2014
(Schedule 1 - Note 3) |
| Deputy Minister’s Office (Schedule 2) |
293 |
Not applicable |
| Chief Operating Officer (Schedule 3) |
215 |
Not applicable |
| Income Security and Social Development Branch (Schedule 4) |
14,418 |
16,785 |
| Social Security Tribunal (Schedule 1 - Note 2 and Schedule 5) |
12,877 |
15,544 |
|
ESDC Corporate Secretariat (Schedule 6) |
1,699 |
1,574 |
| Public Affairs and Stakeholder Relations Branch (Schedule 7) |
3,149 |
2,848 |
| Human Resources Services Branch (Schedule 8) |
10,811 |
15,357 |
|
ESDC Legal Services Branch (Schedule 9) |
4,777 |
4,371 |
| Internal Audit Services Branch (Schedule 10) |
683 |
28 |
| Strategic and Service Policy Branch (Schedule 11) |
3,168 |
1,663 |
| Processing and Payment Services Branch (Schedule 12) |
173,666 |
183,073 |
| Citizen Service Branch (Schedule 13) |
12,894 |
16,896 |
| Integrity Services Branch (Schedule 14) |
7,447 |
3,267 |
| Social Insurance Registry (Schedule 15) |
683 |
28 |
| Innovation, Information and Technology Branch (Schedule 16) |
57,154 |
77,715 |
| Chief Financial Officer Branch (Schedule 17) |
37,885 |
40,209 |
| Strategic Services Bureau and Regional Assistant Deputy Ministers (Schedule 18) |
2,967 |
2,590 |
| Enabling Services Renewal Program (Schedule 19) |
2,572 |
4,140 |
| Total Administrative Costs |
351,739
|
390,724
|
Schedule 1: Notes to consolidated statement of administrative costs charged to the Canada Pension Plan account
1. Introduction
Under the Canada Pension Plan (CPP) Legislation, the Minister of Employment and Social Development Canada (ESDC) has the responsibility for the administration of Parts II and III (except for some sections of Part III), which concern the general administration of the CPP. The CPP is administered by ESDC, with support from the Income Security and Social Development Branch (ISSDB), the Department of Finance, the Canada Revenue Agency, Public Works and Government Services Canada, the Office of the Superintendent of Financial Institutions, the Royal Canadian Mounted Police and the CPP Investment Board.
The 2014-2015 Memorandum of Understanding (MoU) between the CPP and ESDC was approved in April 2015. This 2014-2015 MoU is comprised of two parts: the first part (Part A) sets out the framework and basic principles regarding the services to be provided to the CPP. The second part (Part B) specifies the cost allocation methodologies used by ESDC to calculate the charges for its services to the CPP, in accordance with the costing principles approved by Treasury Board in January 1988.
The Consolidated Statement of Administrative Costs Charged to the CPP focuses on authority for payments in a fiscal year and is prepared for on a near-cash basis.
2. Social Security Tribunal
The Social Security Tribunal (SST) is an independent administrative tribunal that provided independent appeal processes for Employment Insurance (EI), the Canada Pension Plan (CPP), and Old Age Security (OAS) decisions. Following passage of Bill C-51, the Economic Action Plan 2014 Act, effective November 1st, 2014 the SST is now part of the Administrative Tribunals Support Service of Canada (ATSSC) under the Department of Justice portfolio. However, ESDC has provided internal support services to the ATSSC on behalf of the SST for fiscal year 2014-2015 and will continue doing so for two more transitional years as required.
3. Comparative information
Comparative figures have been reclassified to conform to the current year's presentation. The costs for 2014 reflect the amalgamation of the Service Canada Services Management Branch within the Strategic and Service Policy Branch and the Human Resources Services Branch.
Schedule 2: Administrative costs charged to the Canada Pension Plan account by Deputy Minister’s Office
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Deputy Minister’s Office |
237 |
Not applicable |
| Contributions to Employee Benefit Plan |
36 |
Not applicable |
| Management Insurance Plan |
20 |
Not applicable |
| Total |
293
|
Not applicable |
Schedule 3: Administrative costs charged to the Canada Pension Plan account by Chief Operating Officer
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Chief Operating Officer |
174 |
Not applicable |
| Contributions to Employee Benefit Plan |
26 |
Not applicable |
| Management Insurance Plan |
14 |
Not applicable |
| Total |
214
|
Not applicable |
Schedule 4: Administrative costs charged to the Canada Pension Plan account by Income Security and Social Development Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Income Security and Social Development Branch |
11,680 |
13,650 |
| Contributions to Employee Benefit Plan |
1,789 |
2,072 |
| Management Insurance Plan |
949 |
1,063 |
| Total |
14,418
|
16,785
|
Schedule 5: Administrative costs charged to the Canada Pension Plan account by Social Security Tribunal
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Social Security Tribunal |
10,667 |
12,780 |
| Contributions to Employee Benefit Plan |
1,444 |
1,826 |
| Management Insurance Plan |
766 |
938 |
| Total |
12,877
|
15,544
|
Schedule 6: Administrative costs charged to the Canada Pension Plan account by ESDC Corporate Secretariat
|
Cost in thousands of dollars |
| 2015 |
2014 |
|
ESDC Corporate Secretariat |
1,392 |
1,280 |
| Contributions to Employee Benefit Plan |
201 |
194 |
| Management Insurance Plan |
106 |
100 |
| Total |
1,699
|
1,574
|
Schedule 7: Administrative costs charged to the Canada Pension Plan account by Public Affairs and Stakeholder Relations Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Public Affairs and Stakeholder Relations Branch |
2,587 |
2,340 |
| Contributions to Employee Benefit Plan |
367 |
336 |
| Management Insurance Plan |
195 |
172 |
| Total |
3,149
|
2,848
|
Schedule 8: Administrative costs charged to the Canada Pension Plan account by Human Resources Services Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Human Resources Services Branch |
9,017 |
12,857 |
| Contributions to Employee Benefit Plan |
1,172 |
1,652 |
| Management Insurance Plan |
622 |
848 |
| Total |
10,811
|
15,357
|
Schedule 9: Administrative costs charged to the Canada Pension Plan account by ESDC Legal Services Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
|
ESDC Legal Services Branch |
4,415 |
4,097 |
| Contributions to Employee Benefit Plan |
236 |
181 |
| Management Insurance Plan |
126 |
93 |
| Total |
4,777
|
4,371
|
Schedule 10: Administrative costs charged to the Canada Pension Plan account by Internal Audit Services Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Internal Audit Services Branch |
580 |
28 |
| Contributions to Employee Benefit Plan |
67 |
Not applicable |
| Management Insurance Plan |
36 |
Not applicable |
| Total |
683
|
28
|
Schedule 11: Administrative costs charged to the Canada Pension Plan account by Strategic and Service Policy Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Strategic and Service Policy Branch |
2,858 |
1,368 |
| Contributions to Employee Benefit Plan |
203 |
195 |
| Management Insurance Plan |
107 |
100 |
| Total |
3,168
|
1,663
|
Schedule 12: Administrative costs charged to the Canada Pension Plan account by Processing and Payment Services Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Processing and Payment - Regions |
88,941 |
88,072 |
| Processing and Payment – NHQ
|
41,443 |
52,318 |
| Call Centers (Regions and NHQ) |
13,143 |
13,337 |
| Contributions to Employee Benefit Plans |
19,685 |
19,392 |
| Management Insurance Plan |
10,454 |
9,954 |
| Total |
173,666
|
183,073
|
Schedule 13: Administrative costs charged to the Canada Pension Plan account by Citizen Service Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Service Offerings and Implementation |
76 |
72 |
| Web Channel Office |
260 |
290 |
| In-Person |
8,540 |
10,955 |
| Office of Client Satisfaction |
13 |
14 |
| Marketing |
215 |
421 |
| Provincial Outreach |
780 |
1,123 |
| Interdepartmental Partnerships and ADMO |
395 |
692 |
| Local Offices |
226 |
284 |
| Contributions to Employee Benefit Plans |
1,560 |
2,012 |
| Management Insurance Plan |
829 |
1,033 |
| Total Administrative Costs |
12,894
|
16,896
|
Schedule 14: Administrative costs charged to the Canada Pension Plan account by Integrity Services Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Integrity Services Branch |
6,123 |
2,677 |
| Contributions to Employee Benefit Plans |
865 |
390 |
| Management Insurance Plan |
459 |
200 |
| Total |
7,447
|
3,267
|
Schedule 15: Administrative costs charged to the Canada Pension Plan account by Social Insurance Registry
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Personnel cost |
4,166 |
3,566 |
| Indirect Expenses |
126 |
507 |
| Travel |
1 |
Not applicable |
| Transportation and Communication |
Not applicable |
25 |
| Central Government Services |
667 |
703 |
| Professional and special services |
327 |
347 |
| Information |
415 |
678 |
| Training and Educational Service |
2 |
Not applicable |
| Utilities, Material and Supplies |
2 |
20 |
| Rental, Repairs and Maintenance |
1 |
4 |
| Construction or Acquisition of Machinery and Equipment |
2 |
2 |
| Contributions to Employee Benefit Plan |
651 |
577 |
| Management Insurance Plan |
346 |
296 |
| Total Administrative Costs |
6,706
|
6,725
|
| Less: Funding from Treasury Board |
(1,641) |
(1,642) |
| Less: Revenue from replacement SIN cards |
Not applicable |
(419) |
| Total |
5,065
|
4,664
|
Schedule 16: Administrative costs charged to the Canada Pension Plan account by Innovation, Information and Technology Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Innovation, Information and Technology Branch |
51,994 |
68,685 |
| Contributions to Employee Benefit Plans |
3,370 |
5,967 |
| Management Insurance Plan |
1,790 |
3,063 |
| Total |
57,154
|
77,715
|
Schedule 17: Administrative costs charged to the Canada Pension Plan account by Chief Financial Officer Branch
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Regular Operating |
9,253 |
6,726 |
| National Accommodation Plan |
26,770 |
32,288 |
| Contributions to Employee Benefit Plans |
1,216 |
790 |
| Management Insurance Plan |
646 |
405 |
| Total |
37,885
|
40,209
|
Schedule 18: Administrative costs charged to the Canada Pension Plan account by Strategic Services Bureau and Regional Assistant Deputy Minister
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Strategic Services Bureau & Regional Assistant Deputy Minister |
2,452 |
2,157 |
| Contributions to Employee Benefit Plans |
336 |
286 |
| Management Insurance Plan |
179 |
147 |
| Total |
2,967
|
2,590
|
Schedule 19: Administrative Costs Charged to the Canada Pension Plan Account by Enabling Services Renewal Program
|
Cost in thousands of dollars |
| 2015 |
2014 |
| Enabling Services Renewal Program |
2,341 |
3,815 |
| Contributions to Employee Benefit Plans |
151 |
215 |
| Management Insurance Plan |
80 |
110 |
| Total |
2,572
|
4,140
|
