Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting of the Public Service Commission of Canada for the 2018–19 Fiscal Year (Unaudited)
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 2018-19 Departmental Plan and 2018–19 Departmental Results Report.
2. Public Service Commission 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:
- organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers for control management in their areas of responsibility
- values and ethics
- ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control
- monitoring of, and regular updates to, internal control management, as well as providing related assessment results and action plans to the President and senior management and to the PSC’s Internal Audit Committee
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
- Public Services and Procurement Canada centrally administers the payments of salaries and benefits, procures goods and services that exceed the PSC’s delegated contracting authority, and provides real property services
- Treasury Board of Canada Secretariat provides the PSC with information used to calculate the accrued severance liability
- Justice Canada provides legal services to the PSC
- Shared Services Canada provides information technology infrastructure services to the PSC in the areas of data centre and network services
2.2.2 Specific arrangements
- Public Services and Procurement Canada provides the PSC with My GCHR product support services and user licences
3. Public Service Commission assessment results for the 2018–19 fiscal year
The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan.
|Previous fiscal year’s rotational ongoing monitoring plan for current fiscal year||Status|
|Revenues and accounts receivable||Completed as planned|
|Payroll – Targeted testing||Completed as planned|
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 assessment of the revenue and accounts receivable business process and conducted targeted testing on the payroll process. The design effectiveness of key controls was assessed for the revenue and accounts receivable process. 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.
3.2 Areas for improvement
- Revenue and accounts receivable process: Observations were about the need to strengthen the efficiency of controls by providing tools and implementing procedures and related documentation.
- Payroll process: Observations were about the need to strengthen the efficiency of controls by ensuring use and compliance with existing procedures and related documentation.
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.
|Key control areas||2019–20 fiscal year||2020–21 fiscal year||2021–22 fiscal year|
|Planning and budgeting||Yes||No||No|
|Payroll (Note 1)||Targeted testing||Yes||Targeted testing|
|Expenses and accounts payable||No||Yes||No|
|Revenue and accounts receivable||No||No||Yes|
|Information Technology General Controls under the PSC’s management||No||No||Yes|
Note 1: The Public Service Commission will conduct targeted testing for the payroll process in 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’s HR-to-Pay Integrated Team.
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