Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting 2014-15 (unaudited)
This document provides summary information on the measures taken by the Office of the Commissioner of Official Languages (OCOL) to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.
2. Departmental system of internal control over financial reporting
2.1 Internal control management
OCOL has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An organizational internal control management framework, approved by the Commissioner, 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 in their areas of responsibility for control management;
- Values and ethics;
- Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
- Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and organizational senior management and, as applicable, the OCOL’s Audit and Evaluation Committee (AEC).
The AEC provides advice to the Commissioner on the adequacy and functioning of the OCOL's risk management, control and governance frameworks and processes.
2.2 Service arrangements relevant to financial statements
OCOL relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows.
- Public Works and Government Services Canada centrally administers the payments of salaries and the procurement of goods and services in accordance with OCOL’s Delegation of Authority, and provides accommodation services.
- Public Works and Government Services Canada provides OCOL with a financial system platform—the Common Departmental Financial System (CDFS)—to capture and report all financial transactions; and CDFS
- Public Works and Government Services Canada provides OCOL with an employee pay administration service to capture all pay transactions.
3. Organizational assessment results during fiscal year 2014-15
During 2014-15, the Office of the Commissioner of Official Languages completed design and operating effectiveness testing in various key control areas.
3.1 Design effectiveness testing of key controls
In 2014-2015, the Office successfully completed design effectiveness testing of the delegation of financial signing authorities and signature cards, capital assets and inventory management, and expenditures for travel, hospitality and events as a key business process. Corrective action for addressing key control deficiencies has increased in these control areas as indicated in Section 3.2. Design effectiveness testing was also conducted on the salaries process and pay administration.
3.2 Operating effectiveness testing of key controls
In 2014-2015, the Office successfully completed operating effectiveness testing of its general controls over the delegation of financial signing authorities and signature cards, capital assets and inventory management, and expenditures for travel, hospitality and events as a key business process. The corrective action required has been implemented. It should be noted that the Office has key controls that are independently assessed and are considered acceptable or more acceptable (strong).
As a result of the operating effectiveness testing, the Office determined the need for the following corrective action:
- Delegation of financial signing authorities and signature cards: minor changes to the temporary delegation process, particularly with respect to forms.
- Capital assets and inventory management: minor changes to the electronic registry of inventories.
- Expenditures for travel: ensure a more thorough follow-up on minor elements.
- Expenditures for hospitality and events: minor changes to the planning process.
4. Organizational action plan
4.1 Progress during fiscal year 2014-15
During 2014-15, OCOL continued to make significant progress in assessing and improving its key controls. The following table summarizes the organization’s progress based on the plans identified in the previous fiscal year’s annex.
|Element in previous year’s action plan||Status|
|Design and operating effectiveness testing||Design effectiveness completed, and remediation of design deficiencies advanced. However, certain tests deferred until 2015-16 because of other management priorities.|
|Operating effectiveness testing of key controls||Operating effectiveness testing and remediation advanced. However, certain tests deferred until 2015-16 because of other management priorities.|
|Ongoing monitoring plan||The current plan was created in 2013-2014 and describes various measures, including the establishment of cyclical assessments. The objective is to follow that plan. However, it has been decided to remove two processes, namely travel by non-public servants and accountable advances (petty cash) as they have been assessed as very low risk given the very low monetary values involved and the cost associated with their independent assessment. The Office plans to start ongoing monitoring in 2015-2016.|
4.2 Status and action plan for the next fiscal year and subsequent years
|Key control areas||Design effectiveness testing and remediation||Operational effectiveness testing and remediation||Ongoing monitoring rotation|
|Procurement and supplier payment||2013-14||2013-14||2015-16|
|Salaries / pay administration||2014-15||2015-16||2016-17|
|Delegation of financial signing authorities for disbursements (signature cards)||2014-15||2014-15||2016-17|
|Asset and inventory management||2014-15||2014-15||2016-17|
|Hospitality and events||2014-15||2014-15||2016-17|
|Business travel credit cards||2015-16||2015-16||2016-17|
|Manage acquisition cards||2015-16||2015-16||2016-17|
|IT general controls under organizational management||2015-16||2015-16||2016-17|
|Budgeting and financial resource management and monitoring||2015-16||2015-16||2017-18|
|Financial close and reporting||2015-16||2015-16||2017-18|