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Elections Canada Audit Committee Terms of Reference

1. Introduction

This document sets out the terms of reference for the Audit Committee (the Committee) of the Office of the Chief Electoral Officer (Elections Canada, or the agency). A revised Treasury Board (TB) Policy Suite on Internal Audit, which includes the Directive on Internal Auditing in the Government of Canada, took effect on April 1, 2012. This new Directive replaces three directives and two guidelines in the Policy Suite on Internal Audit of July 2009. The policy requires Elections Canada, as an agent of Parliament, to set up an audit committee that includes a majority of members who are external to the federal public service. The Committee is an essential component of the governance and audit regimes of Elections Canada.

2. Effective Date

These Terms of Reference take effect on July 5, 2012. They replace the previous terms, which were approved on June 25, 2010.

3. Purpose

These Terms of Reference define the Audit Committee's mandate, operations, membership, duties and responsibilities, and accountabilities.

The Audit Committee is an independent advisory committee that provides the Chief Electoral Officer (CEO) with objective guidance on risk management, control framework and reporting practices. Its mandate is to provide independent advice and assurance on the effectiveness of Elections Canada's governance, risk management, control, audit and reporting practices. In carrying out its mandate, the Committee ensures that the CEO receives independent and objective advice, guidance and assurance on the adequacy of Elections Canada stewardship, management and accountability practices.

The Committee also provides advice and guidance to the CEO in relation to his or her duties as Accounting Officer of Elections Canada, in accordance with requirements of the Federal Accountability Act and other similar legislation applicable to Elections Canada.

4. Legislative and Policy Requirements

These Terms of Reference take into account the requirements of sections 16.1 and 16.2 of the Financial Administration Act, requiring the CEO to ensure that the agency has internal audit capacity appropriate to its needs and to establish an audit committee in accordance with directives issued by TB. The Terms of Reference also ensure compliance with the TB Policy Suite on Internal Audit, which includes the Directive on Internal Auditing in the Government of Canada.

Section 2.4 of the TB Policy on Internal Audit provides that deputy heads of the agents of Parliament may authorize any departures from specific policy requirements that they deem appropriate in light of the governance arrangements, statutory mandate and risk profile of the organization. The Office of the CEO complies with the principles of the TB Policy Suite on Internal Audit. However, the CEO has authorized the following departures to preserve Elections Canada's independence as an agent of Parliament:

5. Committee Membership

Composition

The Audit Committee is composed of the CEO and three other members, with a majority of members external to the federal public service. The CEO will chair the Committee, and at least one member must be a financial expert with a recognized professional accounting designation (CA, CMA or CGA). The CEO, as an ex-officio member, is the only member internal to Elections Canada. Members internal to the federal public service are limited to deputy ministers, associate deputy ministers and assistant deputy ministers.

All members of the Audit Committee are appointed by the CEO. Members are selected in a manner whereby their collective abilities, knowledge and experience allow the Committee to carry out its duties competently and effectively.

Chair

The CEO will chair the Committee.

The chair of the Audit Committee has the following responsibilities:

The chair of the Audit Committee may meet as required with the Chief Audit Executive (CAE) and the OAG outside of Committee meetings.

Tenure and Terms of Office

External members serve at the discretion of the CEO, but generally for not more than eight years.

6. Committee Responsibilities and Duties

The Audit Committee has the following responsibilities:

Values and Ethics

Risk Management

Review and provide advice on the agency's risk management arrangements.

Management Control Framework

Review and provide advice on Elections Canada's internal control arrangements, and be aware of all significant matters arising from the work of others who provide assurances to senior management and the CEO.

Internal Audit Function

External Assurance Providers

Follow-up on Management Action Plans

Financial Statements and Public Accounts Reporting

Accountability Reports

Other Management Priorities

7. Committee Meetings

Meetings Schedule

Audit Committee meetings are arranged at the call of the chair, are normally held in person, and are scheduled at least twice each year.

The Committee chair will propose an annual plan to ensure that the Committee addresses its annual and ongoing responsibilities. The plan will be presented to the Committee for approval and will determine the number, timing and duration of the regular Committee meetings.

Quorum

The Audit Committee has quorum if the chair and a majority of the members are in attendance.

The Committee may designate an external member as vice-chair, who may replace the chair in his or her absence during meetings. Only the chair may empower the vice-chair to temporarily act as his or her replacement for the conduct of meetings.

No alternates to members shall be permitted to attend, with the exception of persons acting in a formal capacity for ex-officio members who are on leave.

Members' Preparation and Attendance

To enhance the effectiveness of the Committee meetings, each member will

Attendance by Non-members

The Chief Financial Officer (CFO) and CAE are expected to attend all meetings of the Committee. As necessary, the chair shall ask a senior representative of the OAG to attend. Other participants may be invited at the discretion of the chair.

The chair may request that certain agenda items be treated in camera (without the presence of some or all of the non-members who are attending the meeting).

Minutes of Meetings

Minutes of each meeting shall be kept and shall list the persons present. The minutes provide a record of decisions taken and a high-level summary of the discussion, providing insight into the topics and sub-topics discussed.

In-camera Meetings

At each of its meetings, members of the Audit Committee will normally meet in camera with the CFO (as a group or individually, according to the topic they wish to discuss), as well as with the CAE, any representatives of external assurance providers in attendance, and any other officials the Committee may determine.

8. Operations

Access by and to the Committee

The Committee has unfettered access to the CAE and CFO, as well as to other employees of Elections Canada and to documentation (subject to applicable legislation) it requires to fulfill its responsibilities.

The CAE and CFO have unfettered access to the Committee and to its chair and vice-chair.

Committee Orientation, Training and Continuing Education

The Audit Committee can fulfill its role only if its members are well informed. Members shall receive formal orientation and training on the Committee's purpose, responsibilities and objectives, as well as on Elections Canada's business. A process of continuing education such as briefings and information on emerging issues and risks shall also be put in place.

Support to the Audit Committee

The Committee will be provided with the resources necessary to carry out its role, responsibilities and duties. To the extent it deems necessary to meet its responsibilities, and in keeping with its Terms of Reference, the Committee has the authority to retain independent advice and assistance.

Secretariat support to the operation of the Committee includes

The CAE of Elections Canada will act as Secretary to the Audit Committee and may provide a staff person to take minutes at meetings. Administrative support for the Committee and individual members will be provided by the Office of the CAE.

9. Assessment of Committee Performance

Committee Self-Assessment

The Committee will self-assess its performance annually.

External Practice Inspection

As part of the internal audit function's practice inspection, the Committee's performance will be subject to periodic external assessment, led by a professional certified by the Institute of Internal Auditors.

10. Accountability Reporting by Committee

The Audit Committee is accountable to the CEO.

The Committee shall prepare an annual report to the CEO that

11. Review of Committee Terms of Reference

The Committee shall annually review the appropriateness of its Terms of Reference, for reaffirmation by the CEO.



1 Treasury Board of Canada, Policy on Internal Audit, April 2012, 6.4.7

2 Ibid., 6.2.3

3 Ibid., 6.1.6

4 Ibid., 6.1.8

5 Ibid., 6.1.8

6 Ibid., 6.1.8

7 Ibid., 6.1.7