Site Menu2021–22 Departmental Results Report
Annex to the
Statement of Management Responsibility
Including Internal Controls over Financial Reporting
Office of the Chief Electoral Officer (The Office)
For fiscal year ended March 31, 2022
1. Introduction
This document summarizes the measures taken by the Office to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.
Detailed information on the Office's authority, mandate and program activities can be found in the 2021-2022 Departmental Results Report and the 2021-2022 Departmental Plan.
2. The Office system of internal control over financial reporting
2.1 Internal control management
The Office has a well-established governance and accountability structure to support agency assessment efforts and oversight of its internal control system. The Financial Management Framework establishes the accountability of all managers and employees in charge of financial management within the Office and provides additional reasonable assurance that:
- Public resources are used prudently and economically;
- Roles and responsibilities of senior managers in their areas of responsibility for financial management are communicated;
- Ongoing communication and training activities regarding delegation of financial authority, legislative requirements, policies and procedures aimed at ensuring sound financial management and effective expenditure control;
- Informed decision making and effective risk management;
- Financial management processes are effective and efficient;
- Compliance with relevant laws, regulations and financial policy instruments;
- Increased oversight of the Office expenditure compliance.
- Regular monitoring and reporting as well as action plans are presented to the Deputy Chief Financial Officer or Chief Financial Officer as required;
- The values and ethics code is communicated and respected.
The Office ensures the objectivity and integrity of the data in its financial statements.
Office's Financial Management Framework helps ensure that:
- Records that support and represent all financial transactions are maintained;
- Financial transactions are recorded in a manner that allows for the preparation of internal and external financial information;
- Reports and statements are in compliance with financial management policy instruments;
- Expenditures made are in accordance with delegated authorities, and unauthorized transactions that could have a material impact on the financial statements are avoided or detected in a timely manner;
- Financial resources are protected against material loss due to waste, abuse, mismanagement, errors, fraud, omissions and other irregularities.
The effective implementation of this Financial Management Framework attests to the level of accountability demonstrated by all delegated managers and employees involved in financial management across the Office and is reflected in executive performance agreements, when applicable.
The Financial Management Framework includes the following:
- Organizational accountability structures related to the management of internal controls to support sound financial advice and stewardship management;
- The roles and responsibilities of senior executives in the management of internal controls, as well as those of delegated managers and delegated financial officers;
- An integrated management approach, providing access to high-quality information enabling informed decision-making;
- Added value through the provision of better overall results in financial management, planning and programs;
- Providing support to the group responsible for the programs in order to achieve results effectively;
- Improved financial reporting, demonstrated accountability and effective policy implementation;
- Monitoring and regularly updating the management of internal controls and reporting the results of assessments and related action plans to the Chief Financial Officer, the Chief Electoral Officer and managers reporting directly to the Chief Electoral Officer, and where applicable, to the Agency Audit Committee.
The Audit Committee is comprised of three external, independent members and is chaired by the Chief Electoral Officer (CEO). The Committee is mandated with the oversight of the Office's governance, risk management, control, audit and reporting practices. In carrying out its mandate, the Committee ensures that the CEO receives objective advice and guidance on the adequacy of its stewardship, management and accountability practices.
2.2 Service arrangements relevant to financial statements
The Office relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows:
Common Arrangements:
- Public Services and Procurement Canada (PSPC), centrally administers the payments of salaries and benefits of public servants, fees and allowances for electoral workers, the purchase of certain goods and services as well as the allowance of accommodations on behalf of the Office;
- Treasury Board Secretariat, including the Office of the Comptroller General, provides the Office with information to calculate the various allowances and accrued liabilities (e.g., severance pay, percentage of group insurance plans free of charge and employer contributions to employee benefit plans);
- The Office of the Auditor General of Canada conducts an independent audit of the Office that promotes accountability to the government for the collection and use of public funds. It also provides objective information, assurances and advice to Parliament on the results achieved in the Office's financial reports, which maintain and enhance public confidence through data collected in accordance with government policies and professional verification standards. The Office of the Auditor General of Canada is funded directly by Parliament and their costs are paid through an annual appropriation.
Specific Arrangements:
- Agriculture and Agri-Food Canada (AAFC) provides the Office with integrated financial and material management system (SAP) services to record and report on all financial transactions, and material management transactions as of April 1st, 2021. As part of this arrangement, the Office relies on controls established by AAFC to manage certain information technology (IT) controls and procedures (e.g., security, segregation of duties and business continuity). AAFC also administers various master data functions in SAP on behalf of the Office. AAFC has reported the results of the design effectiveness and operational effectiveness testing of key controls and these were rated as strong by an external consulting firm. The Office relies on the automated SAP controls established by AAFC for all 7 departments served.
Readers of this appendix may consult the appendices of the above organizations to better understand the internal control systems over financial reporting relating to these specific services.
3. The Office assessment results during fiscal year 2021-2022
In 2021-2022 the Office extended the end date of a contract with a professional firm specialized in the assessment of internal financial controls to support the work of the Internal Controls team. A new contract has been awarded in 2022-2023 to ensure that the Office continued to carry out its monitoring activities.
Significant changes
There were no significant changes to key controls within the existing processes requiring a reassessment.
3.1 Design Effectiveness testing of key controls
During the 2021-2022 fiscal year, the Office did not perform design effectiveness tests of its key controls.
3.2 Operating effectiveness testing of key controls
In 2021-2022, the Office continued work on the operating effectiveness testing related to headquarters salaries and benefits as expected, which concluded that the financial processes and key controls related to the administration of Headquarters Pay Administration are designed to adequately ensure control objectives are met and provide reasonable assurance that the risk of non-compliance to the FAA and TBS's policies and directives be substantially limited.
3.3 Ongoing monitoring of key controls
In 2021-2022, as part of the implementation of SAP, the Office continued to review its financial business processes and has adapted SAP related controls. All SAP business processes have been configured, communicated and are on the Office's intranet.
3.4 Adaptation and update of New or significantly changed key controls
In 2021-2022, no key controls were significantly changed under existing processes requiring reassessment.
4. The Office action plan
4.1 Progress made during the 2021-2022 fiscal year
In 2021-2022, the Office continued to make progress in assessing and improving its key controls. The table below provides a summary of its progress based on the plans described in the previous fiscal year's annex.
The office plan takes into consideration the transition to SAP
| Element in previous year's action plan | Status |
|---|---|
| Salaries and Benefit – Headquarters |
|
4.2 Status and action plan for the next fiscal year and subsequent years
As part of the SAP implementation, the Office handled several changes, notably the data system and the adjustment of existing business processes. The design and operational effectiveness testing of all business processes will be reviewed over the next few years with new SAP business processes.
Delays in design and operational effectiveness testing assessment are possible in the event of a general election in a minority government context.
| Key control areas | Design effectiveness testing and remediation | Operating effectiveness testing and remediation | Ongoing monitoring rotation |
|---|---|---|---|
| Budgeting and Forecasting | 2022-2023 | Future years | Future years |
| Accounts Receivable | 2022-2023 | Future years | Future years |
| Accounts Payable and Operating Expenses | 2023-2024(1) | Future years | Future years |
| Financial Statement Close | 2023-2024(1) | Future years | Future years |
| Entity Level Controls | 2023-2024(1) | Future years | Future years |
| IT General Controls | 2023-2024(1) | Future years | Future years |
| Transfer Payments | 2023-2024(1) | Future years | Future years |
| Tangible Capital Assets | 2023-2024(1) | Future years | Future years |
| Inventory | 2023-2024(1) | Future years | Future years |
| Salaries and benefits – Headquarters | 2024-2025(1) | Completed | Future years |
| Salaries- Electoral Administrators and Workers | 2025-2026(1) | Future years | Future years |
Note:
*: Planning for the next steps in internal control management assessment activities includes a risk-based approach given the implementation of the Office's Departmental Financial Management System as of April 1, 2021. It is possible that this could cause delays in future assessments.
(1): New sequence in the Office's evaluation cycle.