Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting of the Public Service Commission of Canada for the 2024 to 25 Fiscal Year (Unaudited)

1. Introduction

This document provides summary information on the measures taken by the Public Service Commission of Canada (PSC) to maintain an effective system of internal control over financial management (ICFM), particularly with respect to Internal Controls over Financial Reporting (ICFR), assessment results and related action plans.

Detailed information on the PSC’s authority, mandate and core responsibilities can be found in the PSC’s 2024-25 Departmental Plan and the 2023-24 Departmental Results Report.

2. Departmental system of internal control over financial reporting

The Policy on Financial Management requires the establishment and maintenance of a risk-based system of ICFM.

In this context, PSC must perform the ongoing monitoring of the design and operation of its internal controls and remediate identified deficiencies. This also provides reasonable assurance that public resources are used prudently, and that financial legislation, regulations and policies are being complied with.

2.1 Internal control management

The PSC has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its overall system of internal control. An 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 the legislative and policy requirements for sound financial management and control
• monitoring and regular updates on internal control management, as well as provision of related assessment results and action plans to the President and senior management and to the PSC’s Internal Audit Committee

The Internal Audit Committee is an independent advisory committee to the President. It is responsible to provide 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 administers the payment of salaries, the procurement of goods and services that exceed the PSC’s delegated contracting authority, and provides accommodation services
• Treasury Board of Canada Secretariat provides information on public service insurance and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans
• Department of Justice Canada provides legal services
• Shared Services Canada provides information technology infrastructure services

Readers of this annex may refer to the annexes of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.

The PSC relies on one other department for the processing of certain information or transactions that are recorded in its financial statements, as follows:

2.2.2 Specific arrangements

Public Services and Procurement Canada provides the PSC with support and maintenance of the MyGCHR application.

3. Public Service Commission of Canada assessment results for the 2024 to 2025 fiscal year

Ongoing monitoring is intended to ensure that ICFM, including ICFR, continue to operate effectively and as designed, following the guidance received from the Office of the Comptroller General.

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan. It should be noted that the PSC was in the process of upgrading its departmental financial and materiel system in 2024 to 2025. This upgrade will have an impact on the capital assets key controls. For this reason, it was decided to defer capital assets control testing to the following year.

Table 1: Progress during the 2024 to 2025 fiscal year

The key findings and significant adjustments required from the current year’s assessment activities are summarized in the following sub-sections.

3.1 New or significantly amended key controls

In the current fiscal year, there were no significantly amended key controls in existing processes that required a reassessment.

3.2 Ongoing monitoring program

In accordance with its rotational ongoing monitoring plan, the Department completed the reassessment of the key control areas presented in Table 1.

The majority of key controls that were tested performed as intended. No high-risk observations were made. However, there is a room for improvement as presented in Table 2. Lower risk areas for control improvements are as follows:

Table 2: Key control areas assessment results

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

The PSC’s rotational ongoing monitoring plan over the next 5 fiscal years is shown in the following table. The ongoing monitoring plan is based on:

• an annual validation of high-risk processes and controls
• related adjustments to the ongoing monitoring plan as required

Table 3: Rotational ongoing monitoring plan

Note 1: The PSC will conduct targeted testing for the payroll process from fiscal year 2024 to 2025 to fiscal year 2027 to 2028, as required, to assess the improvements related to recommendations provided in previous internal control action plans. It will also conduct targeted testing for any changes to this business process resulting from recommendations made to improve HR and pay by the Government of Canada’s HR-to-Pay Integrated Team and by the Office of the Chief Human Resources Officer.