Annual Report of the Internal Audit Committee of the Public Service Commission (January 2012 – March 2013)
Date: 24 May 2013
Table of contents
- Context of reconstitution
- Issues and observations
- Key areas of responsibility
- Departmental Audit Committee assessment
- Annex A: Membership and operations of the Audit Committee
- Annex B: Internal Audit Committee annual activity – 2012-2013
- Annex C: Internal Audit Committee Plan 2013-2014
This Annual Report of the PSC Internal Audit Committee (IAC) covers a 15-month period. In June 2012, the IAC decided to shift the reporting period for its annual report from the calendar year to the fiscal year to align with other PSC annual reports. This report is the transition one and covers the period of 1 January 2012 to 31 March 2013.
The report begins with an overview of key issues and observations of the IAC during this period. It then provides a summary of activities and results in each of the IAC's key areas of responsibility, and a synopsis of the results of the annual self-assessment conducted by the IAC and an externally validated self-assessment of the audit function conducted by the Internal Audit Directorate (IAD). The Annex provides additional information about the membership and operations of the Committee. This format follows closely the guidance provided in Practice Guide: Departmental Audit Committee Annual Reports released in April 2012 by the Treasury Board Secretariat (TBS).
Context of reconstitution
It is important in reading this report to understand that this reporting period was one of reconstitution for the IAC. Shortly after her arrival in early 2012, the new president needed to make some important decisions about internal audit at PSC. First, under the new criteria established in the new Treasury Board Internal Audit Policy that became effective on April 1, 2012, PSC was reclassified as a small department from its former classification as a large one. This change in status gave the president discretion about whether to continue with an independent audit function and audit committee. Second, given that the Financial Administration Act requires that external members of all departmental audit committees be appointed by Treasury Board, the new president had to decide, if she wanted to continue with an audit committee, when and how to bring PSC into compliance since external members of the IAC had been previously appointed under direct contractual arrangements with PSC. 1
In this context, consistent with the advice of the IAC, the president decided to continue with an independent internal audit function and audit committee, and to move quickly to appoint external members through the Treasury Board process. She also decided to strengthen the independence of the IAC by having an external member serve as chair. However, these decisions corresponded very closely in time with the planned departure of two founding members of the IAC which took place in May 2012. The third external member at this time, who had replaced the other founding member in August 2011, was nominated by the new president and subsequently appointed by Treasury Board to serve as the external chair of the reconstituted IAC. Following nomination, two new external members were also appointed by Treasury Board.
While it has taken considerable time to implement these critical steps in the reconstitution process, the IAC was able to continue to move essential business forward throughout this reporting period. The process is now complete with the IAC fully reconstituted. Further details about how the membership of the IAC has changed over this reporting period are provided in 2Annex A.
Issues and observations
Based on the results of internal audits and IAC discussions during this reporting period, the IAC does not have any fundamental concerns to highlight or recommendations to make in this report. While there is, as noted in the following sections, a need to continue to focus on making improvements in specific areas, the IAC believes that PSC is in relatively good shape with respect to risk management, control and governance. The organization has benefited from the full engagement of the president and other senior managers, and management's responses to audit recommendations and other inputs have met all of the expectations of the IAC.
The IAC is particularly pleased with the way that senior management is making progress in building its approach to risk management. Although this important initiative clearly needs to continue, the IAC is encouraged that the main elements of an effective approach, which were previously missing, have been falling into place over this reporting period. The IAC is also particularly pleased with management's response to the Audit of Human Resources Planning. The management actions taken in response to this audit will, when fully implemented, result in a much more integrated and effective approach to business planning across the organization. These are two areas in which PSC has effectively engaged the IAC, sought and taken its advice, and moved forward to significantly strengthen its approaches.
Looking ahead, the key challenge for the reconstituted IAC will be to work with the president to add as much value as possible. As outlined in this report, some of the specific areas where it needs to focus its attention and support in the near term are helping IAD find ways to deliver on the internal audit plan, continuing to strengthen the corporate approach to risk management, ensuring that internal controls remain robust in the context of ongoing fiscal restraint, and assisting in efforts to improve performance measurement and public performance reporting.
Key areas of responsibility
Assessment of internal audit function
The IAC believes the internal audit function at PSC has performed well during this reporting period. While IAD was not able to deliver fully on the risk-based audit plan for 2012-13 due to some significant staffing challenges, the quality of audit products has been consistently high.
During this period the IAD delivered two major audits, one on human resources planning and one on time reporting. Both audits required considerable discussion in the IAC to ensure the recommendations were framed in a way that would help reorient management's approach in these areas most effectively. To achieve this, the chief audit executive (CAE) worked very effectively with the chair to ensure the right discussions took place at the IAC, and with senior management to ensure that the action plans presented to the IAC would fully address the key issues and recommendations. The result is that the IAC has full confidence that the action plans now being implemented will improve the overall business planning process and tighten up the discipline around time reporting.
At the same time, IAD has provided excellent support in the transition to the reconstituted IAC with new membership and an external chair. This has included coordinating PSC's input into the Treasury Board appointment process, providing orientation training and administrative support to new members, and putting in place new processes to support an external chair. New Terms of Reference have been approved for the IAC that align with the revised internal audit policy and reflect the process changes needed with an external chair.
During this 15-month reporting period, IAD also produced two results-based audit plans, one approved in February 2012 for 2012-15 and one approved in February 2013 for 2013-16. Both of these plans were based on a thorough analysis of risk with appropriate input from both senior management and the IAC.
Overall, the IAC is satisfied with the quality of the work done by IAD during this period. Integral to this view is an assessment that the quality improvement program maintained by IAD is consistent with policy requirements and appropriate professional standards. The centrepiece of this program is a periodic external review which was done during this period in the form of an externally validated self-assessment of the audit function by IAD (practice inspection). In this exercise, former and current members of the IAC provided input to the external reviewer. The final report was reviewed by the IAC in May 2012 and, on the advice of the IAC, approved by the president. It concluded that PSC's internal audit function "generally conforms" to all Treasury Board and professional requirements. This is the highest performance rating given in these exercises and accurately reflects, in the judgment of the IAC, the professionalism and competence of the IAD function. 3
In this context, the IAC does not have any specific recommendations to make about the internal audit function at this time. It does, however, have an important observation to make about IAD's capacity to deliver on PSC's annual audit plan. While IAD has been sufficiently resourced to do this in terms of positions and non-salary budget, it has recently experienced difficulties in staffing vacant positions. These difficulties have negatively impacted its ability to deliver planned audits, a reality that is the primary reason for the latest Management Accountability Framework (MAF) rating by TBS of "opportunity for improvement" for internal audit at PSC. The IAC believes this highlights the need for more effective contingency and succession planning for the audit function.
Follow-up on management action plans
Throughout this period, solid discipline was in place with respect to following up on management action plans to internal audits. IAD tracks implementation of all items in these action plans closely and presents its findings regularly at IAC meetings. Where there is slippage, the reasons are discussed and new milestones are agreed. The tracking is rigorous enough to ensure that managers are accountable while allowing for some flexibility to adjust to changing circumstances.
In terms of actual progress by management in implementing all actions to which it commits in response to recommendations in internal audits, the IAC is generally satisfied. This overall assessment is based on the results of a recent study done by IAD for this reporting period which demonstrates a satisfactory rate of progress. IAD also makes individual assessments of the "reasonableness of progress" for open action items for discussion at an update session every six months. At the last update in February 2013, these assessments, which the IAC accepted, indicate that four out of five audits with remaining action items were at a high level of reasonableness of progress and the other one was at a medium level. The IAC believes that these results represent a good level of discipline and show the positive impact that internal audit is having on the organization. 4
The IAD assessment for this period also demonstrated excellent discipline around prompt implementation of action plans in response to a 2011 review of advanced contract award notices (ACANs) by the Office of the Procurement Ombudsman with all items now closed. However, it found a slower pace of implementation of PSC's internal action plan in response to a 2008 government-wide audit by PSC's Audit and Data Services Branch on executive appointments with one small action item still not fully implemented. In this context, the IAC plans to monitor closely the implementation of future action plans in response to external assurance providers.
Overall, the IAC believes that senior management at PSC takes very seriously the need for effective implementation of action plans in response to internal audits and to audits and reviews by external assurance providers. It also believes that the pace of implementation is generally reasonable.
Values and ethics
During the reporting period, the IAC reviewed PSC's implementation of its 2012-15 Values and Ethics Action Plan approved by PSC's Executive Management Committee (EMC) in May 2011, including implementation of the new PSC Code of Conduct. It received a comprehensive update on the all aspects of implementation in February 2013 and provided supportive reactions and practical suggestions to help move the action plan forward over the next couple years.
The IAC considers the program for values and ethics at PSC to be comprehensive and well organized. It supports the way the organization has, in light of its mandate, embraced non-partisanship as an additional core value; it agrees with the way roles and responsibilities have been clarified, and monitoring and reporting have been built in; and it is encouraged by the emphasis that is being placed on training, informal processes and effective internal communication. In short, the IAC considers this program to be robust and on the right track. The most recent PSC rating by TBS of "strong" for PSC in the area of values and ethics is consistent with this assessment.
Since the implementation of PSC's 2012-2015 Values and Ethics Action Plan will be ongoing over the next couple of years and is, given PSC's unique role, an area of such critical importance, the IAC will continue to monitor progress. The results of the program will therefore be reviewed at least annually by the IAC as well as by EMC.
Significant progress has also been achieved in maturing PSC's approach to risk management. At the beginning of the reporting period this was an area where the IAC believed PSC's approach needed to be strengthened, and the IAC agreed with the TBS assessment in the 2012 MAF exercise that risk management at PSC was an area where there was an "opportunity for improvement".
The IAC has provided input and advice over the past 15 months and is satisfied with the progress PSC has recently been making in this area. It considers PSC's efforts to integrate its approach to risk management into its annual business planning process and to develop an improved corporate risk profile to be quantum steps forward. The PSC approach is now much more aligned with the principles in the Treasury Board Framework for the Management of Risk, and the IAC is particularly encouraged by the full engagement of senior managers in this process.
At the same time, the IAC believes that strong efforts must continue to mature PSC's approach by continuing to refine its corporate risk profile and by promoting principles, practices and culture that support dialogue about risk tolerance and risk-informed decision making. In this context, the IAC intends to remain fully engaged during the coming year to monitor progress and provide advice.
Management control framework and reporting
The IAC considers internal control arrangements to be reasonable and adequate for an organization the size of PSC where both formal and informal controls need to complement each other to enable management to achieve its objectives. This view is based on a comprehensive ongoing dialogue with PSC senior management and regular review of key reports and other information relevant to the core mandate of the IAC in risk management, control and governance.
In this regard, the president provides an update on all major developments and issues at the start of IAC meetings and other members of EMC participate fully in these IAC meetings. This encourages frank discussion about all core aspects of internal control including compliance, accomplishment of objectives, integrity of information, effectiveness and efficiency, and safeguarding of assets. The review of key reporting documents, including a monthly report to the EMC on operations and other activities, has also helped the IAC to engage fully on a broad range of issues relevant to developing an accurate assessment of internal control mechanisms.
In terms of specific control issues, the IAC was especially engaged during this reporting period in providing advice to the president about how ongoing assurance might be provided about the soundness of financial management, including internal control over financial reporting. The IAC's advice was sought by the president following the decision of the Office of the Auditor General (OAG) to no longer conduct an external audit of PSC's financial statements following issuance of its opinion on PSC's financial statements for 2011-12.
Consistent with the advice of the IAC, EMC has made a decision to request focused assurance engagements each year in the form of cyclical internal audits of financial controls. Given the unqualified opinions of the OAG for the past several years, including 2011-12, PSC begins this next phase in excellent shape. Ensuring that financial controls remain robust in the current context of fiscal constraint represents a significant challenge, but the IAC is confident that the new formula now being implemented will provide sufficient assurance.
In light of these considerations, the IAC considers that the current management framework and reporting regime are adequate for internal control purposes. However, looking ahead, the IAC will continue to examine other aspects of internal control in the context of ongoing budget reductions to assist management with monitoring for possible impacts on internal controls. It also intends to engage management on the issue of whether taking a more comprehensive approach to documenting PSC's management control framework might provide additional helpful support to the president in her role as accounting officer.
External assurance providers
There were no completed audits by external assurance providers directly implicating PSC during this reporting period. The only issue for the IAC in this area was ongoing implementation of one outstanding action item in response to the government-wide audit on executive appointments. This item requires finalization of one small component before it can be closed. All other previous audits by external assurance providers were closed.
Although PSC was not one of the Departments directly included in the audits, the IAC also considered two horizontal audits conducted by the Office of the Comptroller General (OCG). The first was the Horizontal Audit of Electronic Recordkeeping which the IAC reviewed and then provided advice on PSC's self-assessment against the OCG's recommendations. The second was the Horizontal Internal Audit of Integrated Business and Human Resources Planning which provided a useful reference point for the IAC relative to the audit of Human Resources Planning. Another recent audit by the OCG, the Horizontal Internal Audit of Compliance with the Policy on Management, Resources and Results Structures, which was released near the end of the reporting period, will be considered at an upcoming IAC meeting.
In addition, the IAC has considered its role in the forthcoming staffing audit of the PSC that is being conducted by PSC's Audit and Data Services Branch under special arrangements designed, with the input of the IAC external members, to ensure independence and objectivity. As a result, the IAC is well positioned and ready to provide independent advice to the president on management's response to this audit. The IAC will also closely monitor the implementation of whatever action plan might be necessary to respond to recommendations.
Financial statements and public accounts reporting
For the past several years, at the initiation of the former president, the OAG conducted an annual audit of PSC's financial statements. As a result of budgetary considerations, the OAG decided that the last time it could support PSC with this external audit would be for 2011-12. During its final audit, the OAG provided the IAC with regular updates and a comprehensive briefing when it was completed in August 2012. As in previous years, the OAG issued an unqualified opinion for 2011-12 with no audit adjustment or management letter, thus providing a high level of assurance to PSC and the IAC about PSC's financial statements.
The IAC also reviewed PSC's annual Statement of Management Responsibility Including Internal Control over Financial Reporting and is satisfied that this statement accurately reflects the reality that the organization has sound financial management practices in place. This view is consistent with the results of the OAG's recent annual audits of PSC's financial statements, and with the MAF assessments by TBS over the past few years for financial management and control at PSC which have consistently found practices that exceed TBS expectations in most areas.
Given the decision by the OAG to no longer audit PSC's financial statements, the IAC engaged in discussions with management about how PSC can be assured through other mechanisms that financial management, including internal control over financial reporting, remains sound. The IAC fully supports management's decision to do this through cyclical internal audits of financial controls.
In this context, the IAC has begun to play a more active role in reviewing and providing input to financial statements, including quarterly financial reports. To assist the IAC in this effort, PSC has recently established a new procedure for the IAC to review these statements and provide comments following review by the chief financial officer (CFO) but before sign off by the president. This new procedure will include a statement in these reports that they have been reviewed by the IAC.
Given the results of audits by the OAG and the IAC's ongoing engagement on related issues this past year, the IAC is confident that PSC's controls are robust in this area. The challenge now will be to ensure that these controls remain strong as the organization moves forward with the new formula for assurance. To assist in this effort, the IAC intends to monitor developments in this area closely, especially during this transition period.
During this reporting period the IAC reviewed copies of PSC's Report on Plans and Priorities (RPP), Departmental Performance Report (DPR) and other significant accountability reports such as PSC's Annual Report. Although the recent Directive on Internal Auditing in the Government of Canada requires only that audit committees receive these reports, the president has asked the IAC to more fully engage and provide substantive input and advice on the RPP and DPR. The IAC has done this and is encouraged that its advice has been taken very seriously and incorporated into the documents where appropriate and possible. The IAC is also encouraged by the way that the president has personally engaged on these core documents in the context of strengthening both business planning and public performance reporting.
Looking ahead, this is an area where the IAC believes it can have a positive impact over the next few years in assisting PSC in its efforts to make continued improvements, especially in the area of performance measurement and reporting.
Departmental audit committee assessment
In accordance with the Directive on Internal Auditing in the Government of Canada, the IAC has conducted a self-assessment for the reporting period. The key findings of this assessment are as follows:
- Now that the reconstitution process is complete and three external members have been appointed by Treasury Board, the IAC has an appropriate number of members with the necessary skills, expertise and experience, inside and outside government covering finance, accounting, policy and operations, to fulfill its mandate.
- The appointment of an external chair has strengthened significantly the independence of the IAC.
- Members have in the past been openly encouraged to express their views and the appointment of an external chair has reinforced this. Where differences have occurred they have been resolved to the satisfaction of all members and the chair is committed to ensuring this continues with the newly-reconstituted IAC.
- The IAC has in the past been provided with sufficient time to review, discuss and consider matters brought before it. Agendas are flexible and meetings are extended as needed. To ensure that meeting time is used as effectively as possible with the reconstituted IAC, arrangements are now in place for members to provide inputs on routine items between meetings by e-mail.
- External members of the IAC fully understand and respect the line between their role and the role of management. While responding positively to the invitation of the president to also provide their broad advice on major issues, they understand that their primary role is to provide advice to her on risk management, control and governance issues. In all areas, they are committed to respecting the prerogatives of management.
- In-camera meetings are held as part of each IAC meetings. These include sessions with only members present and sessions with only members and the CAE present. These discussions have been frank and productive, but the chair and president want to strengthen this process with the reconstituted IAC.
- The IAC plays a strong role in supporting the independence and objectivity of the internal audit function. It will remain vigilant about this, but has no current concerns in this area.
There were no issues raised in the recent practice inspection that relate to the operation and functioning of the IAC. The inspection did, however, raise three matters for consideration by the president and the IAC. The first was a recommendation that the Practice Inspection Report, the Independent Validator Statement and the accompanying action plan should be accepted by the president. Consistent with the advice of the IAC, the president has done this.
The other two matters that were raised for consideration by the president and the IAC in the practice inspection relate to strengthening mitigation strategies to ensure the ongoing independence of the CAE in the context of an administrative reporting relationship to the vice president corporate management, and increasing the participation of the CAE in senior management meetings. The IAC is satisfied with the action plan now being implemented to address these issues and will monitor whether additional steps might be appropriate over time.
Annex A: Membership and operations of the Audit Committee
Membership of Audit Committee
As explained in this report, the IAC was reconstituted during this reporting period. It now has four members. This includes three external members, Keith Coulter (chair), Hélène Fortin and Jim Lahey, and one internal member, President of the Public Service Commission Anne-Marie Robinson.
The IAC complies with all of the membership provisions in Section 6.4 of the Directive on Internal Auditing in the Government of Canada:
- Three of the four members are external members recruited from outside the federal public administration. The internal member is the deputy head.
- The three external members were jointly selected by the president and the comptroller general, and their appointments were approved by Treasury Board.
- External members have an appropriate diversity of skills, knowledge and experience. One is a former deputy minister who also has senior management experience in the Canadian Armed Forces and the private sector. Another is a former associate deputy minister with a wealth of experience in public administration including recent experience in the Privy Council Office directly supporting implementation of the clerk's priorities on public service renewal. The third has extensive private sector experience in accounting, finance and governance, including service on boards of directors.
- This is the first term for all external members. The chair was appointed to a three-year term (December 2012 to December 2015). Another member was appointed to a three-year term (March 2013 to March 2016) and the other to a four-year term (December 2012 to December 2016). This built-in stagger, coupled with careful decisions about term lengths for any renewals, should help ensure good continuity in the coming years.
- The IAC approach now follows "the preferred model" defined in the Directive with an external member serving as the chair.
- All external members are familiar with public sector financial reporting, especially since they all have previous experience on the audit committees of other departments. One member is a practicing Chartered Accountant with FCA, FCPA and ICD.D designations.
- Consistent with the Terms of Reference for the IAC, the chief financial officer (vice president corporate management), the chief audit executive and the director general finance and administration attend all IAC meetings as ex-officio members.
- Also consistent with these Terms of Reference, the quorum for meetings is a simple majority of members and no alternates are permitted.
- In addition to the vice president corporate management, the other four vice presidents also attend the IAC meetings as observers. OAG representatives, who previously attended all meetings in support of the OAG's audit of PSC's financial statements, will now be invited periodically.
- External IAC members are all free of any real or perceived conflict of interest, and they fully understand that any such conflict, real or perceived, should be discussed immediately with the chair and the president.
Operations of Audit Committee
The IAC has comprehensive Terms of Reference which are reviewed and updated each year, and approved by the president. During this reporting period they were adjusted to reflect recent changes in policy and the appointment of an external member as chair. These Terms of Reference outline in a comprehensive and practical way the roles, responsibilities and operations of the IAC, and are closely aligned with the new Policy on Internal Audit and Directive on Internal Auditing in the Government of Canada. The PSC’s Policy on Internal Audit was similarly reviewed and updated.
Consistent with the Terms of Reference, the IAC meets four times each calendar year. It met five times during this 15-month reporting period. A summary of IAC’s activities for this period is provided in Annex B.
All meetings were face-to-face and all members attended all meetings. However, during this period of reconstitution, the external membership changed as former members left and new members were appointed. In addition, the chair met with commissioners of the Public Service Commission to present the previous annual report. 5
The incremental cost of running the IAC over the 15-month period was approximately $48,800. Most of this amount ($43,000) was for direct compensation to external members, initially under contractual arrangements and, following the Treasury Board appointments, in the form of payroll expenses. With only one former member and one current member commuting from nearby locations (Quebec City and Montreal respectively), travel expenses of $3,200 represented only a small proportion (6.5%) of overall expenditures. The remainder of the cost ($2,600) was for miscellaneous expenses including translation and hospitality.
In-camera meetings were held as part of each IAC meeting. This included sessions with the CAE present, sessions with specific vice presidents present and sessions with members only present. As the reconstituted IAC builds its approach in the coming months, the IAC intends to strengthen these in-camera sessions to include more focused sessions with members only present and sessions with members and the CFO.
To ensure the IAC addresses its responsibilities, the chair prepares, with the assistance of IAD and in consultation with other IAC members, a forward agenda and activity plan for each upcoming year which is approved each year by the president. The annual plan for the next fiscal year is provided in Annex C. There has been excellent discipline around the way that this plan has been implemented in past years, and this discipline should serve the reconstituted IAC well. The forward agenda is discussed at each meeting, so members have an opportunity to provide input on a regular basis.
Since the chair was, in the context of reconstituting the IAC, the only external member who was present for the entire period, he personally drafted this report with IAD providing information as requested. The draft report was then circulated to the other external members for comments and this final report reflects their input. The president was also asked, as the only other IAC member present for the entire period, for her comments on the draft report. However, consistent with the requirements outlined in the recent Directive on Internal Auditing in the Government of Canada, the views expressed in this annual report are entirely and exclusively those of the independent external members.
|#||Audit Committee Action Item Description||Purpose/Action||Frequency|| Feb.
| Sp. Mtg./
|Departmental Audit Committee Infrastructure|
|1.||Departmental audit committee Charter (4.4.1)||Review||Annually||✓|
|2.||Audit committee annual plan (for upcoming fiscal year) (4.4.2)||Approve ~ 1 year ahead||Ongoing||✓||✓||✓||✓||✓|
|3.||Audit committee member competency profile (4.3.3)||Review||Annually|
|4.||Orientation/ongoing professional development requirements||Determine||Annually|
|Internal Audit Oversight Responsibilities|
|5.|| Departmental internal audit charter/
|Review and recommend for approval||Annually||✓|
|6.||Adequacy of internal audit resources (4.2.2)||Review||Annually||✓||✓|
|7.||Risk-based internal audit plan (4.2.2)||Review and recommend for approval||Annually||✓||✓||✓||✓|
|8.||Performance of the internal audit function/chief audit executive (4.2.2)||Review/Advise||Annually||✓|
|9.||Departmental internal audit reports and management action plans to address internal audit recommendations (4.2.2)||Review and recommend for approval||Ongoing||✓||✓||✓|
|10.||Audit engagements or tasks that do not result in a report to the audit committee (4.2.2)||Receive for information||Ongoing|
|11.||Follow-up reports on management actions taken (4.2.2)||Review||Ongoing||✓||✓||✓||✓|
|12.||Values and ethics (4.2.1)||Review||Annually||✓|
|13.||Departmental corporate risk profile and risk management arrangements (4.2.1)||Review||Annually|| ✓
|14.||Management control framework (4.2.1)||Review||Annually|| ✓
|15.||OAG and central agencies, including audit issues and reports that have departmental or government wide implications and accompanying management responses and action plans (4.2.3)|| Recommend for approval/
|16.||Arrangements to monitor and follow-up on related management action plans (4.2.4)||Review||Annually||✓|
|17.||Departmental financial statements (126.96.36.199)||Review and recommend for acceptance|| Annually/
|18.||Departmental financial statements and/or Public Accounts Audits (including findings, management letters and external auditor performance) (188.8.131.52)||Review||Annually||✓||✓|
|19.||RPP; DPR; CRP and other significant accountability reports (4.2.6)||Review||Annually|| ✓
|20.||CAE’s annual overview report (4.2.2)||Annually||✓||✓||✓|
|21.||Committee self-assessment (4.4.1, 4.4.2)||Review||Annually|
|22.||Advice and briefings re. OAG and central agencies (4.2.3, 4.2.4)||Discussion||Ongoing|| ✓
|23.||Departmental audit committee annual report (4.4.5)||Prepare||Annually||✓||✓||✓|
|24.||Meet commissioners with annual report|| ✓
|In Camera Meetings|
|25.||With DH (if not member), CAE, SFO/ CFO (and OAG rp when attending) (4.4.4)||Discussion||Ongoing||✓||✓||✓||✓||✓|
|Total Number of DAC Agenda Items to be Scheduled||12||10||11||10||3||13|
- X planned
- — if needed
- ✓ addressed
|#||Audit Committee Action Item Description||Purpose/Action||Frequency|| June
| Sp. Mtg./
|Departmental Audit Committee Infrastructure|
|1.||Departmental audit committee Charter (D6.5)||IAC to review, DH to reaffirm||Annually||X|
|2.||Audit committee annual plan, for upcoming fiscal year D6.5.2)||Prepare, DH to approve||Annually||X|
|3.||DH to offer to meet (i) Minister along with audit committee (P6.1.6) and (ii) commissioners||Offer||Annually||X|
|Internal Audit Oversight Responsibilities|
|4.|| Departmental internal audit charter/
|Review and recommend for approval||Annually||X|
|5.||Adequacy of internal audit resources D184.108.40.206d)||Advise||Annually||X|
|6.||Risk-based internal audit plan D220.127.116.11d)||Review and recommend for approval||Annually||X||X|
|7.|| Performance of the internal audit function/
chief audit executive D18.104.22.168d)
|8.||Departmental internal audit reports and management action plans to address internal audit recommendations D22.214.171.124d)||Review and recommend for approval||Ongoing||—||—||—||—|
|9.||Audit engagements or tasks that do not result in a report to the audit committee D126.96.36.199d)||Receive for information||Ongoing||—||—||—||—|
|10.||Update on progress against RBAP D188.8.131.52d)||Review||Ongoing||—||—||—||—|
|11.||Follow-up reports on management actions taken on internal audit recommendations D184.108.40.206f)||Review||Regularly||X||X|
|12.||Values and ethics D220.127.116.11a)||Review||Annually||X|
|13.||Departmental corporate risk profile and risk management arrangements D18.104.22.168.b)||Review||Annually||X|
|14.||Management control framework D22.214.171.124c)||Review||Annually||X
|15.||Audit work undertaken by external assurance providers, including management response and issues raised D126.96.36.199e)||Review and advise DH||Ongoing||—||—||—||—|
|16.||Arrangements to monitor and follow-up on related management action plans responding to external assurance providers D188.8.131.52f)||Review||Regularly||X||X|
|17.||Key financial management reports, including quarterly financial reports, financial statements and Public Accounts D184.108.40.206.g)||Review and advise DH||Annually||X||X
|18.||Statement of Management Responsibility including Internal Control over Financial Reporting, and related assessment plans and results on effectiveness of ICoFR D220.127.116.11.g)||Review and advise DH||Annually||X|
|19.||RPP; DPR; and other significant accountability reports D18.104.22.168.h)||Review||Annually||X
|20.||CAE’s annual overview report D6.6.1)||Receive||Annually||X|
|21.||Departmental audit committee annual report D22.214.171.124)||Prepare and submit to DH||Annually||X||X
|In Camera Meetings|
|22.||With CAE, CFO and any representatives of external assurance providers, when attending D6.5.4)||Discussion||Ongoing||X||X||X||X|
|Total Number of DAC Agenda Items to be Scheduled||6-10||7-11||5-9||7-11||4+|
- X planned
- — if needed
- ✓ addressed
- D specified in the Directive on Internal Auditing in the Government of Canada
- P specified in the Policy on Internal Audit
Note: The draft calendar and IAC annual plan are subject to change.
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