2020 to 2021 Report on key compliance attributes of the internal audit function at Environment and Climate Change Canada

The Treasury Board Secretariat Directive on Internal Audit requires that departments with an internal audit function publish departmental internal audit performance results in the form of key compliance attributes. The objective of publishing these results is to provide pertinent information to stakeholders, such as Canadians and parliamentarians, on the professionalism, performance and impact of the internal audit function in departments. As well, it is important that the public be aware that heads of government organizations are receiving independent assurance on the effectiveness and soundness of departmental activities.

Introduction

This report presents the state of compliance of the internal audit function at Environment and Climate Change Canada (ECCC) on attributes determined by the Office of the Comptroller General of Canada (OCG). These attributes address questions that stakeholders may have related to the sound management and the oversight of public resources.

The attributes examined in this report relate to the internal audit function in place at ECCC for fiscal year (FY) 2020 to 2021. Compliance in relation to these attributes has allowed the internal audit function to play its assurance and advisory role to the Deputy Minister and senior management. ECCC is the federal lead on environmental issues, including action on clean growth and climate change, preventing and managing pollution, conserving nature and predicting weather and environmental conditions.

Compliance attributes

The internal audit function at ECCC was assessed on the following four key compliance attributes:

• Internal audit training and team
• Conformance with international standards
• Implementation of the Risk-based Audit Plan (RBAP)
• Credibility and value-add of internal audit

Internal audit training and team

These key attributes answer the following questions that stakeholders may have about the oversight of public resources:

• Do internal auditors in departments have the training required to do the job effectively?
• Are multidisciplinary teams in place to address diverse risks?

ECCC results – April 1, 2020 to March 31, 2021

(a)  - % of staff with an internal audit or accounting designation (Certified Internal Auditor (CIA), Chartered Professional Accountant (CPA)): 42%

(b) - % of staff with an internal audit or accounting designation (CIA, CPA) in progress: 33%

(c) - % of staff holding other designations (CGAP, CISA, etc.):  42%

Conformance with international standards

These key attributes answer the following question that stakeholders may have about the oversight of public resources:

• Is internal audit work performed in conformance with the international standards for the profession of internal audit as required by Treasury Board policy?

ECCC results – April 1, 2020 to March 31, 2021

(a) - Date of last comprehensive briefing to the Departmental Audit Committee on the internal processes, tools, and information considered necessary to evaluate conformance with the Institute of Internal Auditors (IIA) Code of Ethics and the Standards and the results of the quality assurance and improvement program (QAIP): June 18, 2020

(b) Date of last external assessment: March 31, 2019. The internal audit function received a rating of “generally conforms”.

Implementation of the Risk-based audit plan

These key attributes answer the following questions that stakeholders may have about the oversight of public resources:

• Are the risk-based audit plans (RBAP) submitted to audit committees and approved by deputy heads implemented as planned with resulting reports published?
• Is management acting on audit recommendations for improvements to departmental processes?

ECCC results – April 1, 2020 to March 31, 2021

Table 1: status of internal audit engagements planned for tabling from 2020 to 2021 and status of engagements with outstanding management action plans as of March 31, 2021

Table 2: list of internal audit engagements in progress or planned for tabling in fiscal year 2021 to 2022

Credibility and value-add of internal audit

These key attributes answer the following question that stakeholders may have about the oversight of public resources:

• Is internal audit credible and adding value in support of the mandate and strategic objectives of the organization?

ECCC results – April 1, 2020 to March 31, 2021

Average overall usefulness rating from senior management (ADM-level or equivalent) of areas audited:

• Using OCG’s scale, the average overall usefulness rating from senior management was “Good”
• ADMs considered broadly that the internal audit function’s assurance and advisory support is adding value to their decision-making processes