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Report of the Audit Committee for Fiscal Year 2013–2014

April 2014

Table of Contents

1. Introduction

The Audit Committee of the Chief Electoral Officer of Canada (Elections Canada) has been established in compliance with provisions of the Federal Accountability Act. It is composed of external members, and its purpose is to provide the Chief Electoral Officer (CEO) with independent advice on matters relating to management controls and reporting of plans and results. As required by its Terms of Reference the Committee has prepared this report to summarize its activities for the fiscal year ended March 31, 2014.

2. Membership and Meetings

The Committee was chaired by Mr. Marc Mayrand, Chief Electoral Officer of Canada, and has as its members: Messrs. W.E.R. Little, J-C. Bouchard and P.G. Boomgaardt. A representative of the Office of the Auditor General (OAG) is invited to attend all meetings. The Chief Audit Executive and Manager of Internal Audit attended all regular meetings as observers and to respond to questions from members. As needed, members of senior management and staff attended to make presentations and respond to matters raised by members.

The Committee convened five times during the fiscal year: May 2 (teleconference), August 21, January 22, February 5 and March 26. There was full attendance by external members. Meetings generally included an in-camera session involving only external members and the CEO.

3. Committee Terms of Reference

The Audit Committee reviewed and confirmed the Terms of Reference which guide its activities; these were modified last year to conform to the revised Treasury Board Policy on Internal Audit of 2012.

The Committee is mandated to provide advice on eight key areas of management.

4. Eight Areas of Oversight Responsibility

4.1. Values and Ethics (V&E)

Last year Elections Canada issued its updated code of conduct in line with the provisions of the newly issued Values and Ethics Code for the Public Service. In late 2013 it developed a training session on the Code, which will be offered to all staff in 2014. As part of a planned employee survey, the employees' perception of Values and Ethics will be assessed. The Committee is scheduled to receive the results of the survey.

4.2. Risk Management

Over the years the Committee has devoted considerable attention to the risks faced by Elections Canada and its approach to mitigating risks to ensure effective delivery on its mandates. The Committee received updates at each meeting on evolving issues and steps taken by Elections Canada to manage its affairs. In particular the Committee was apprised of the approach followed by senior management to identify corporate risks and that these assessments were used to select areas for audit.

During its March meeting the Committee received a briefing on a draft Corporate Risk Profile and accompanying Risk Identification and Management Approach; this working document will summarize key risk assessments and management's mitigation strategies. As in prior years, the Committee discussed plans to deal with spending restraints, the implications of a multi-year projection on salary expenditures and the unique challenges that arise from having certain expenditures funded by statutory appropriations while other expenditures are covered by annual appropriations.

4.3. Management Control Framework

Continuing the practice of prior years, the Committee has been apprised of the key management issues and how procedures have been adopted to mitigate concerns and produce desired results. Special attention has been directed to the issues implicit in Elections Canada's two parliamentary funding streams – annually voted appropriations as well as a statutory authority.

The Committee was periodically updated on the activities of the Contract Review Committee. In addition it was informed of the appointment of a new CIO and the progress of certain IT projects. At each meeting the Committee was informed about the plans and activities relating to the consolidation of facilities in new premises in Gatineau, culminating in the successful move completed in January 2014.

During its March meeting the Committee received a briefing on the Financial Management Framework Policy on Internal Controls; this included actions and findings to date and action plans for the next year.

The Committee also received periodic updates on the activities of Elections Canada in its support role for the federal electoral boundary commissions for the electoral boundaries readjustment. The redistribution was finalized during the year and significant work is underway to redo all 65,000 polling divisions, update maps and align the national register of voters.

As well, the Committee was regularly briefed on Corporate Strategy Office project management activities, including the 2013–16 Elections Canada Business Plan incorporating Vision 2015 and covering key issues, objectives and initiatives for the next general election. The Committee endorses the integrated planning and thorough project management approach implemented to ensure key projects individually and collectively are completed on time, on budget and deliver promised results.

During its February and March meetings the Committee was provided an overview of Bill C-23 (An Act to amend the Canada Elections Act and other Acts). The Committee will monitor developments with great interest, recognizing certain provisions of the proposed legislation may impact Elections Canada in very significant ways.

4.4. Internal Audit Function

As noted in last year's report, the Internal Audit function became part of the corporate secretariat on April 1, 2013, with the Chief of Staff devoted part time to the role of Chief Audit Executive. During the year Elections Canada filled a vacancy and welcomed a new Manager, Internal Audit.

The Committee reviewed and approved the updated Risk-based Audit Plan for 2013–14 to 2015–16, which had been developed following a comprehensive exercise by senior management to assess organizational risks and assurance needs. Given the reduction in Internal Audit resources the plan adopts a very basic approach. Two assurance audits are scheduled: the first, already underway, will assess whether controls over security of election-period lists of electors and election workers are satisfactory; the second, planned for 2014–15, will assess whether Elections Canada's Professional Development Program and related training courses meet the competency development needs of the organization.

At each meeting the Committee was updated on the status of audits and plans. It noted with interest that Internal Audit compiled an inventory of internal and external assurance tools used by Elections Canada, which will facilitate evaluating organizational risks in future. The Committee was pleased to receive Internal Audit's thorough annual report.

The Internal Audit Charter was reviewed and confirmed by the Committee in line with requirements of the Treasury Board Policy Suite on Internal Audit.

4.5. Office of the Auditor General and Central Agencies

By virtue of attendance at Committee meetings by a representative of the OAG, the Committee has been kept informed of matters raised by the OAG and of its audit plans. At its August 21 meeting the Committee received the results of the audit of the 2012–13 financial statements. For its February 5, 2014 meeting the Committee received a report from the OAG outlining its annual audit plans for the year ending March 31, 2014.

The Chief Audit Executive and Manager of Internal Audit periodically updated the Committee on audit-related matters coming from central agencies. All three external Committee members attended the November 7, 2013 Symposium for Departmental Audit Committees sponsored by the Office of the Comptroller General.

4.6. Follow-up on Management Action Plans

The Committee follows a systematic approach to monitoring action plans presented by management to execute its mandate, as well as those that respond to external and internal audits. In August 2013 and February 2014, the Committee received updates on implementation plans responsive to audit findings.

The Committee continues to be satisfied with the effective follow-up reporting as well as with the progress in implementing action plans.

4.7. Financial Statements

The Committee reviewed and endorsed the disclosure contained in the 2012–13 Elections Canada financial statements. These statements were audited by the Auditor General of Canada, who issued an un-modified audit report without reservations and noted good collaboration from Elections Canada staff. The Committee commended all for the good work and recommended the statements for approval by the CEO.

In connection with each meeting the Committee is presented with the most recent Quarterly Financial Report that Elections Canada is required to publish. Similarly the Committee is provided with key management reports and financial statements periodically throughout the year.

4.8. Accountability Reporting

During its August 2013 meeting the Committee reviewed a draft of the Departmental Performance Report (DPR) for the 2012–13 fiscal year. In January 2014 the Committee reviewed the draft 2014–15 Report on Plans and Priorities (RPP). The Committee offered some suggestions to strengthen clarity and completeness but in both cases was satisfied with the tone and content of the Elections Canada reports.

5. Conclusion

The Committee considers that its activities for the year constitute a satisfactory basis for fulfilling its role. The Committee was provided with relevant and transparent information responsive to its mandate. The Committee is pleased with the candour concerning the challenges facing Elections Canada and the genuine interest that the CEO shows in the views of Committee members. The Committee notes the professionalism and dedication demonstrated by staff, as well as their openness and willingness to accept and implement suggestions.

The Committee considers that it has a reasonable understanding of Elections Canada's considerable challenges: its elaborate legislative/regulated environment, extraordinary operating demands and needs to innovate. Based on its observations over the current and past years the Committee considers that Elections Canada has adopted a systematic and rational approach to addressing its mandate, to monitoring results and to reporting publicly.