The following Audit Committee Charter was adopted by the Audit Committee of the Board of The Committee shall meet a least quarterly, or more frequently as . April, , 7 th. May and 9 th. June - At the meeting on 9 th. June , the Audit Committee. Annual Report /15 was. Matters arising from the minutes of the Audit committee meeting held on 15 be incorporated in the report to the Corporation Board on 26 March
The work completed by the IA function both provides the DAC with proper assurance that departmental systems and practice are operating in compliance with laws, regulations, policies and standards as well as recommends appropriate enhancements to ensure compliance. As previously mentioned, a new approach to the governance and accountability for corporate risks was established for the fiscal year.
Risks and related mitigation strategies were monitored and governed by the appropriate and various portfolio governance committees, which we believe sufficiently and directly links risk identification, management, and mitigation within and to the ESDC governance structure.
Senior branch officials were also been identified as the responsible lead for each risk theme and are directly accountable for managing risk under their responsibility with the understanding that where there was shared accountabilities, multiple senior officials were identified.
The DAC commented on and requested stronger linkages between the new risk mitigation strategies and the identified risk. It is our opinion that the new approach is a significant improvement in both identifying risk and associated mitigations.
In addition to internal risks and to our advice and recommendations outlined in Section 1 with respect to Risk Management, the Office of the Auditor General OAG conducted performance audits implicating the department that identified risk in the area of Financial Administration Act FAA compliance Spring Report of the Auditor General of Canada - Chapter 1 - Status Report on Evaluating the Effectiveness of Programsthe risk of loss associated with Employment Insurance income benefit overpayments Spring Report of the Auditor General of Canada - Chapter 9 - Employment Insurance Overpaymentsand risks related to the stewardship of public resources and the effectiveness of internal controls over their financial reporting Fall Report of the Auditor General of Canada - Chapter 1 -Follow-up Audit on Internal Controls Over Financial Reporting.
In reviewing and recommending the supporting MAP s related to these external engagements, the DAC is confident that the department will address and mitigate these identified external risks appropriately and in due time.
Department Audit Committee 2013 - 2014 annual report
Furthermore, in several instances, it was evident that work had already commenced, was already underway, or that existing work could be leveraged and expanded upon to address these risk areas identified by the OAG. We recommend that ESDC senior departmental officials continue toward holistic corporate management of risks identified through these processes. In addition, we encourage the department to build upon and to continually improve on the means, methods, and processes in place to the new approach to the governance and accountability for corporate risks and to utilize new employee orientation to generate potential new or additional risk information and discussions.
Appropriate management control considerations should be considered and coordinated across all areas of the department, as a means of encouraging and supporting corporate coherence.
The DAC requested and received regular updates on the improvements to controls over financial reporting. We have requested regular and ongoing briefings in these areas to support sound financial management moving forward. The department has implemented plans for improvement in both of these areas. The DAC queried areas where controls should be improved, and requested appropriate explanations from the OAG and management when necessary.
The DAC requested and has received regular updates on this ongoing work. We are confident that the Department's Internal Control Framework and the implementation strategy for Internal Controls at ESDC will meet, if not exceed, policy requirements and our expectations.
Regular external audit status reports remained as a standing discussion item at all of our meetings, and assisted us in monitoring and overseeing the work of the various external providers. As previously identified refer to Section 2.
We thoroughly reviewed the corresponding MAP s in response to the external engagements, to address the recommendations.
It is becoming more and more evident by the quality and professionalism of the MAP s that ESDC is maturing in clearly addressing the external audit recommendations. The external audit MAP follow-up exercise further demonstrates this maturity.
This discussion not only allowed the DAC to further enhance the relationship between the OAG and ESDCbut also permitted us to seek the AG 's views on how we can assist with the effort and approach to risk including risk identification, management, and mitigation.
We also capitalized on this opportunity to seek the AG 's views and recommendations to assist with improving committee operations and focus.
The AG underscored our advisory role to the DM and the important challenge function entrusted to us and encouraged the DAC to continuously challenge departmental management by employing and providing our unique and independent views and advice.
We truly believe that our open and candid discussion with the AG has assisted in improving the OAG and ESDC relationship, as the OAG has since been proactive in identifying matters to bring to our attention for discussion. ESDC was responsive to this matter, and included a standing agenda item at every meeting to allow the committee the opportunity to review the QFR s.
Our august 9, meeting allowed for open discussions with ESDC management, whereas our August 19, meeting allowed for the responsible senior OAG officials to brief the DAC and present the results of their four 4 annual financial audits. We have observed that a significant amount of work has been completed with respect to the design effectiveness testing for the existing scheduled business processes including Employment Insurance EI and Canada Pension Plan CPP.
In addition, it is evident that significant progress has been made towards the operating effectiveness testing of key controls, where management responsibility action plans were produced, and fully remediated by process owners. ESDC is positioned to complete the first full risk-based assessment of its system of internal control over financial reporting ICFR by the end of We recommend and kindly request that briefings and presentations continue to be brought forward to the DAC with respect to ICFR and the results of the various design and operating effectiveness reviews of the business processes.
As the CPP is treated and accounted for as a social program, we feel that the same treatment should be applied to the OAS benefit. Noting that all audited financial statements receive an unmodified opinion from the Auditor General, we nonetheless encourage management to review and evolve the accounting disclosure of the CPP and OAS programs.
This independent review did not occur inand we were consulted and briefed accordingly regarding the decision to discontinue this practice. Again this year, unmodified audit opinions were received and no adjustments were required to the statements as a result of the OAG audits. ESDC management was fully cooperative and supported the OAG in the conduct of their work and as a result, no difficulties or disputes were encountered with management during the course of the audits.
Management promptly responded to the OAG management letters by implementing remedial actions to address the recommendations.
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The DAC was presented with and briefed on the management letters as well as the responses and planned actions. The OAG audit findings and recommendations, notwithstanding those identified via the CPP and Public Accounts Management Letters, concluded that no fraud involving senior management or employees with or without a significant role in internal control, or that would cause a material misstatement in the financial information, came to their attention as the result of their audit procedures.
This horizontal statement and observation further contributes to the issuance of unmodified audit opinions. Respect for people We are committed to providing a working environment in which all are treated with dignity and respect and encouraged to realize their full career potential.
We encourage open and honest communication to create a climate of trust and teamwork. Integrity and professionalism We sustain public confidence by conducting ourselves, in everything we do, with honesty and integrity and in a manner that meets the highest standards of professional conduct. Stewardship and serving the public interest We focus on significant issues to make a positive and measurable impact. In particular, we promote government accountability for the collection and use of public funds and for the results achieved.
We also promote continuous improvement of the environment and sustainable development. Commitment to Excellence We meet the highest standards of professionalism in our work with Parliament and those we audit. We are committed to continuously improving our processes and practices and delivering products and services of the highest quality.
We share our experience with others and contribute to the advancement of the legislative audit discipline in Canada and abroad. We strive to be a model organization for the federal government. We treat people fairly. Our audit plans are strategic and risk-based, our reports are focused on results, and our effectiveness is measured and reported annually to Parliament.
Our policies and practices are aligned with our vision and values, and our processes are economical, efficient, and responsive. Planning and Results The Office of the Auditor General of Canada OAG produces various reports that set forth its plans and prioritiesreview its performanceand demonstrate its commitment to employment equity.
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The Office also prepares a sustainable development strategy every three years.