Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting of the Public Service Commission of Canada for the 2019–20 Fiscal Year (Unaudited)

1. Introduction

This document provides summary information on the measures taken by the Public Service Commission of Canada (the PSC) 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 PSC’s authority, mandate and core responsibilities can be found in the PSC’s 2019–20 Departmental Plan and 2019–20 Departmental Results Report.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

The PSC 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:

The Internal Audit Committee provides advice to the President on the adequacy and functioning of the PSC’s risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The PSC relies on other departments and agencies for processing certain transactions that are recorded in its financial statements, as follows:

2.2.1 Common service arrangements

2.2.2 Specific arrangements

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan.

3. Public Service Commission assessment results for the 2019–20 fiscal year

Progress during the 2019–20 fiscal year
Previous fiscal year’s rotational ongoing monitoring plan for current fiscal year Status
Entity-level controls Completed as planned
Payroll – Targeted testing Completed as planned
Planning and budgeting (new process) Completed planned design effectiveness
Financial reporting Postponed to 2020–21

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

3.1 Ongoing monitoring program

As part of its rotational ongoing monitoring plan, the PSC completed the reassessment of entity-level controls and conducted targeted testing on the payroll process. Tests were performed in both processes to ensure the operating effectiveness of key controls. For the most part, the tested key controls performed as intended and no significant control issues were found. The design effectiveness of key controls was established for the planning and budgeting process and the tests to ensure the operating effectiveness of these key controls will be performed in 2020–21. A forecasting section will also be added in 2020–21.

As requested by the Treasury Board Secretariat of Canada, the PSC conducted a summary review of key controls related to internal control over financial reporting that may have been affected by the COVID-19 outbreak and the teleworking situation of all employees during the fiscal year-end period. The assessment of a list of changes drawn from financial management functions and responsibilities revealed no significant issues or deficiencies related to financial reporting. The PSC will conduct in-depth analysis or review of processes and controls on an ongoing basis starting fiscal year 2020–21, to identify any new risks and areas for improvement.

3.2 Areas for improvement

4. Public Service Commission action plan for the next fiscal year and subsequent fiscal years

The PSC’s rotational ongoing monitoring plan over the next 3 fiscal 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 areas

2020–21 fiscal year

2021–22 fiscal year

2022–23 fiscal year

Payroll (Note 1)

Yes

Targeted testing

Targeted testing

Financial reporting

Yes

No

No

Planning, budgeting and forecasting

Yes

No

No

Expenses and accounts payable

No

Yes

No

Capital assets

No

Yes

No

Revenue and accounts receivable

No

No

Yes

Entity-level controls

No

No

Yes

Information technology general controls under the PSC’s management

No

No

Yes

In addition, the PSC will review the key controls of all business processes in 2020–21 to identify any new risks related to COVID-19 and the teleworking situation to implement corrective actions where required.

Note 1: The PSC will conduct targeted testing for the payroll process in 2021–22 and 2022–23 as required to assess the improvements related to recommendations provided in previous internal control action plans. Targeted testing will also be conducted for any changes to this business process resulting from recommendations made by the Government of Canada’s HR-to-Pay Integrated Team.

Page details

Date modified: