PPSC Financial Statements 2015–2016

Office of the Director of Public Prosecutions

Financial Statements

Statement of Management Responsibility Including Internal Control over Financial Reporting 2015-16

Reporting responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2016, and all information contained in these statements rests with the management of the Office of the Director of Public Prosecutions (ODPP), also known as the Public Prosecution Service of Canada (PPSC). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the ODPP’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the PPSC’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the ODPP; and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess the effectiveness of associated controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2016, was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of the ODPP’s system of internal control are included as part of internal audit staff's risk-based approach to evaluate and improve the effectiveness of risk management, control and governance processes and supported by the Departmental Audit Committee, which oversees management responsibilities for maintaining control systems and the quality of financial reporting, and, which recommends the financial statements to the Director of Public Prosecution Services.

The financial statements of the ODPP have not been audited.

Original version was signed by Brian Saunders and Lucie Bourcier



___________________________
Brian Saunders, Q.C.
Director of Public Prosecutions



___________________________
Lucie Bourcier, CPA, CGA
Chief Financial Officer

Ottawa, Canada
Date: ______________________

Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)
  2016 2015
Liabilities
Accounts payable and accrued liabilities (note 4) 27,985 25,355
Employee future benefits (note 5) 7,485 8,250
Vacation pay and compensatory leave 4,632 4,499
Total liabilities 40,102 38,104
Financial assets
Due from the Consolidated Revenue Fund 23,026 21,627
Accounts receivable and advances (note 6) 4,025 4,157
Total gross financial assets 27,051 25,784
Financial assets held on behalf of Government
Accounts receivable and advances (note 6) (49) (378)
Total financial assets held on behalf of Government (49) (378)
Total net financial assets 27,002 25,406
Departmental net debt 13,100 12,698
Non-financial assets
Tangible capital assets (note 7) 10,822 13,098
Total non-financial assets 10,822 13,098
Departmental net financial position (2,278) 400

Contingent liabilities (note 8)

The accompanying notes form an integral part of the financial statements.

Original version was signed by Brian Saunders and Lucie Bourcier



___________________________
Brian Saunders, Q.C.
Director of Public Prosecutions



___________________________
Lucie Bourcier, CPA, CGA
Chief Financial Officer

Ottawa, Canada
Date: ______________________

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the year ended March 31
(in thousands of dollars)
  2016
Planned
Results
2016 2015
Expenses
Drug, Criminal Code and terrorism prosecution program 142,474 139,242 139,871
Regulatory offences and economic crime prosecution program 39,454 37,660 38,146
Compliance (Commissioner of Canada Elections) 2,630 3,201 1,306
Enforcement (Commissioner of Canada Elections) 1,754 927 489
Internal services 32,879 33,702 33,908
Total expenses 219,191 214,732 213,720
Revenues
Prosecution Services 22,742 20,323 21,431
Fines, forfeitures and court costsTable note * 450 825 902
Rent from residential housing provided to employeesTable note * 500 457 498
OtherTable note * 45 49 90
Revenues earned on behalf of Government (995) (1,331) (1,490)
Total revenues 22,742 20,323 21,431
Net cost of operations before government funding and transfers 196,449 194,409 192,289
Government funding and transfers
Net cash provided by Government - 168,552 164,164
Change in due from Consolidated Revenue Fund - 1,399 3,871
Services provided without charge by other government departments (note 9) - 21,824 21,050
Transfer of the transition payments for implementing salary payments in arrears (note 10) - (44) (3,869)
Net cost of operations after government funding and transfers - 2,678 7,073
Departmental net financial position - Beginning of year - 400 7,473
Departmental net financial position - End of year - (2,278) 400

Segmented information (note 11)

The accompanying notes form an integral part of the financial statements.

Statement of Change in Departmental Net Debt (Unaudited)

For the year ended March 31
(in thousands of dollars)
  2016
Planned
Results
2016 2015
Net cost of operations after government funding and transfers - 2,678 7,073
Change due to tangible capital assets
Acquisition of tangible capital assets (note 7) - 591 2,841
Amortization of tangible capital assets (note 7) - (2,867) (2,637)
Total change due to tangible capital assets - (2,276) 204
Net increase in departmental net debt - 402 7,277
Departmental net debt - Beginning of year - 12,698 5,421
Departmental net debt - End of year - 13,100 12,698

The accompanying notes form an integral part of the financial statements.

Statement of Cash Flows (Unaudited)

For the year ended March 31
(in thousands of dollars)
  2016 2015
Operating activities
Net cost of operations before government funding and transfers 194,409 192,289
Non-cash items:
Amortization of tangible capital assets (note 7) (2,867) (2,637)
Services provided without charge by other government departments (note 9) (21,824) (21,050)
Transition payments for implementing salary payments in arrears (note 10) 44 3,869
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and accountable advances 197 (5,019)
Decrease in accounts payable and accrued liabilities (2,630) (3,844)
Decrease in vacation pay and compensatory leave (133) (136)
Increase (decrease) in employee future benefits 765 (2,149)
Cash used in operating activities 167,961 161,323
Capital investing activities
Acquisitions of tangible capital assets (note 7) 591 2,841
Cash used in capital investing activities 591 2,841
Net cash provided by Government of Canada 168,552 164,164

The accompanying notes form an integral part of the financial statements.

Notes to the Financial Statements (Unaudited)

1. Authority and objectives

On December 12, 2006, the Office of the Director of Public Prosecution (ODPP), also known as the Public Prosecution Service of Canada, was created by the Director of Public Prosecutions Act, which is Part 3 of the Federal Accountability Act. The ODPP took over the duties of the former Federal Prosecution Service within the Department of Justice.

On October 1, 2014, by virtue of the coming into force of amendments to the Canada Elections Act, the Office of the Commissioner of the Canada Elections (OCCE) was transferred from Elections Canada to the ODPP. The Commissioner and the Director exercise their respective statutory duties independently from each other, even while operating within the same organization.

The ODPP has two strategic outcomes and four program activities in addition to internal services:

Strategic Outcome: Criminal and regulatory offences under federal law are prosecuted in an independent, impartial and fair manner.

Strategic Outcome: Compliance and enforcement activities under the Canada Elections Act and Referendum Act are conducted by the Commissioner of Canada Elections in an independent, impartial and fair manner.

Internal services: Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program. These groups of activities are: Management and Oversight Services; Communications Services; Legal Services, Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property; Material Services; and Acquisition Services.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

The ODPP is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the ODPP do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the "Expenses" and "Revenues" sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2015-16 Report on Plans and Priorities. The Planned results in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and the Statement of Change in Departmental Net Debt were prepared for internal management purposes and have not been previously published.

(b) Net cash provided by Government

The ODPP operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the ODPP are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

(c) Due from/to the CRF

Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the ODPP is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

(e) Expenses

Expenses are recorded on the accrual basis:

(f) Employee future benefits

(g) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Contingent liabilities

Contingent liabilities are potential liabilities, which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(i) Tangible capital assets

All tangible capital assets and leasehold improvements are recorded at their acquisition cost according to the table below. The ODPP does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset class Acquisition cost equal or greater than Amortization Period
Informatics hardware $1,000 3 to 5 years
Informatics software $10,000 3 to 5 years
Furniture and furnishings $1,000 10 years
Motor vehicles $10,000 5 years
Leasehold improvements $10,000 Lesser of the remaining term of lease or useful life of the improvement

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management estimates are periodically reviewed and as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

The ODPP receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the ODPP has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year authorities used

(in thousands of dollars)
  2016 2015
Net cost of operations before government funding and transfers 194,409 192,289
Adjustments for items affecting net cost of operations, but not affecting authorities:
Services provided without charge by other government departments (21,824) (21,050)
Amortization of tangible capital assets (2,867) (2,637)
Decrease (increase) in employee future benefits 765 (2,149)
Increase in vacation pay and compensatory leave (133) (136)
Employee benefits recovered 1,993 2,219
Refunds of previous year expenses 261 76
Increase in accrued liabilities not charged to authorities (1,156) -
Bad debt expense - (75)
Total items affecting net cost of operations, but not affecting authorities (22,961) (23,752)
Adjustments for items not affecting net cost of operations, but affecting authorities:
Acquisitions of tangible capital assets 591 2,841
Transition payments for implementing salary payments in arrears 44 3,869
Other 42 -
Total items not affecting net cost of operations, but affecting authorities 677 6,710
Current year authorities used 172,125 175,247

(b) Authorities provided and used

(in thousands of dollars)
  2016 2015
Authorities provided:
Vote 1 - Program expenditures 169,976 157,419
Statutory amounts 19,082 19,259
Total authorities provided 189,058 176,678
Lapsed: Operating (16,933) (1,431)
Current year authorities used 172,125 175,247

4. Accounts payable and accrued liabilities

The following table presents details of the ODPP’s accounts payable and accrued liabilities:

(in thousands of dollars)
  2016 2015
Accounts payable - Other government departments and agencies 406 571
Accounts payable - External parties 20,022 19,300
Total accounts payable 20,428 19,871
Accrued liabilities 7,557 5,484
Total accounts payable and accrued liabilities 27,985 25,355

5. Employee future benefits

(a) Pension benefits

The ODPP's employees participate in the Public Service Pension Plan (the "Plan"), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the ODPP contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into groups - Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members joining the plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2015-16 expense amounts to $11,359,225 ($11,528,894 in 2014-15). For Group 1 members, the expense represents approximately 1.25 times (1.41 times for 2014-15) the employee contributions and, for Group 2 members, approximately 1.24 times (1.39 times for 2014-15) the employee contributions.

The ODPP's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Financial Statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

The ODPP provides severance benefits to its employees based on eligibility, years of service and salary at the termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefits obligation.

Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars)
  2016 2015
Accrued benefit obligation, beginning of year 8,250 6,100
Expense for the year (171) 2,834
Benefits paid during the year (594) (684)
Accrued benefit obligation, end of year 7,485 8,250

6. Accounts receivable and advances

The following table presents details of the ODPP's accounts receivable and advances balances:

(in thousands of dollars)
  2016 2015
Receivables - Other government departments and agencies 3,807 4,000
Receivables - External parties 244 229
Employee advances 16 3
Sub-total 4,067 4,232
Less: Allowances for doubtful accounts on external receivables (42) (75)
Gross accounts receivable and advances 4,025 4,157
Accounts receivable held on behalf of Government (49) (378)
Total net accounts receivable and advances 3,976 3,779

7. Tangible capital assets

Cost
(in thousands of dollars)
Capital asset class Opening Balance Acquisitions Disposals and transfers Closing Balance
Informatics hardware 3,303 62 - 3,365
Informatics software 1,283 36 - 1,319
Furniture and furnishings 5,008 98 - 5,106
Motor vehicles 163 - - 163
Leasehold improvements 13,521 395 - 13,916
Total Cost 23,278 591 - 23,869


Accumulated amortization
(in thousands of dollars)
Capital asset class Opening Balance Amortization Disposals and transfers Closing Balance
Informatics hardware 2,289 143 - 2,432
Informatics software 953 20 - 973
Furniture and furnishings 2,024 473 - 2,497
Motor vehicles 112 10 - 122
Leasehold improvements 4,802 2,221 - 7,023
Total accumulated amortization 10,180 2,867 - 13,047


Net book value
(in thousands of dollars)
Capital asset class 2015 2016
Informatics hardware 1,014 933
Informatics software 330 346
Furniture and furnishings 2,984 2,609
Motor vehicles 51 41
Leasehold improvements 8,719 6,893
Total net book value 13,098 10,822

8. Contingent liabilities

Claims have been made against the Office in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. The ODPP has recorded an allowance for claims and litigations where it is likely that there would be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $11,200,000 ($11,650,000 at March 31, 2015) at March 31, 2016.

9. Related party transactions

The ODPP is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The ODPP enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the ODPP received and provided common services, which were obtained without charge from other Government departments as disclosed below.

a) Common services provided without charge by other government departments

During the year, the ODPP received services without charge from certain common service organizations, related to accommodation, legal services and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the ODPP's Statement of Operations as follows:

(in thousands of dollars)
  2016 2015
Accommodation 13,752 13,432
Employer's contribution to the health and dental insurance plans 8,072 7,618
Total services provided without charge 21,824 21,050

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada are not included in the Statement of Operations.

(b) Common services provided without charge to other government departments

During the year, the ODPP provided services without charge to other government departments, related to the provision of legal services, in the amount of $10,404,882 ($10,084,340 in 2014-15).

(c) Other transactions with related parties

(in thousands of dollars)
  2016 2015
Expenses - Other Government departments and agencies 24,245 23,640
Revenues - Other Government departments and agencies 20,765 22,193

Expenses and revenues disclosed in (c) exclude common services provided without charge, which are already disclosed in (a).

10. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay process. This charge to the pay system had no impact on the expenses of the ODPP. However, it did result in the use of additional spending authorities by the ODPP. Prior to year-end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Services and Procurement Canada, who is responsible for the administration of the Government pay system.

11. Segmented Information

Presentation by segment is based on the Office's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expense and by major types of revenue. The segment results for the period are as follows:

(in thousands of dollars)
  Drug, Criminal Code and terrorism prosecution program Regulatory offences and economic crime prosecution program Compliance Enforcement Internal services 2016 2015
Expenses
Salaries and employee benefits 85,073 23,202 1,332 876 20,624 131,107 134,747
Professional and special services - Counsel fees 28,107 7,665 - - 6,814 42,586 42,810
Accommodation 10,005 2,729 - - 2,426 15,160 14,706
Professional and special services - Other 4,528 1,235 1,396 21 1,098 8,278 6,531
Travel and relocation 4,881 1,331 42 2 1,183 7,439 6,570
Amortization of tangible capital assets 1,892 516 - - 459 2,867 2,637
Communication 1,179 321 42 1 285 1,828 1,821
Utilities, materials and supplies 1,125 307 36 18 273 1,759 2,089
Allowance for contingent liabilities 1,156 - - - - 1,156 -
Rental 357 97 313 - 87 854 373
Information 428 117 13 9 104 671 714
Machinery and equipment 345 94 24 - 83 546 274
Repairs and maintenance 182 49 3 - 44 278 198
Claims and ex-gratia payments - - - - 226 226 185
Bad debts - - - - - - 75
Other (16) (3) - - (4) (23) (10)
Total expenses 139,242 37,660 3,201 927 33,702 214,732 213,720
Revenues
Prosecution Services - 20,133 - - 190 20,323 21,431
Fines, forfeitures and court costs 136 8 - - 681 825 902
Rent from residential housing provided to employees 457 - - - - 457 498
Other 49 - - - - 49 90
Revenues earned on behalf of Government (642) (8) - - (681) (1,331) (1,490)
Total revenues - 20,133 - - 190 20,323 21,431
Net cost of operations 139,242 17,527 3,201 927 33,512 194,409 192,289

Annex – Assessment of Internal Control over Financial Reporting

Note to the reader

In accordance with the Treasury Board Policy on Internal Control, departments are required to demonstrate the measures they are taking to maintain an effective system of internal control over financial reporting (ICFR).

Under this policy, departments are expected to conduct annual assessments of their system of ICFR, establish action plan(s) to address any necessary adjustments, and to attach to their Statements of Management Responsibility a summary of their assessment results and action plan.

Effective systems of ICFR aim to achieve reliable financial statements and to provide assurances that:

The system of ICFR is not designed to eliminate all risks, but rather to mitigate risk to a reasonable level with controls that are balanced with and proportionate to the risks they aim to mitigate.

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess the effectiveness of associated controls and to adjust, as required, as well as to monitor the system in support of continuous improvement. As a result, the scope, pace and status of those departmental assessments of the effectiveness of their system of ICFR will vary from one organization to another based on risks and taking into account their unique circumstances.

1. Introduction

This document is an annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting (ICFR) for the Fiscal Year 2015-16 of the Office of the Director of Public Prosecutions (ODPP), also known as the Public Prosecution Service of Canada (PPSC). This document provides summary information on the measures taken by the ODPP to maintain an effective system of ICFR, including information on internal control management, assessment results and related action plans.

1.1 Authority, Mandate and Program Activities

Detailed information on the authority, mandate and program activities can be found in the 2015-16 Department Performance Report and the 2015-16 Report on Plans and Priorities for the Public Prosecution Service of Canada.

2. ODPP’s system of internal control over financial reporting

The ODPP recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective systems of ICFR and are well equipped to exercise these responsibilities effectively. The ODPP's focus is to ensure risks are well managed through a responsive and risk-based control environment that enables continuous improvement and innovation.

2.1 Internal control management

The Deputy Head has approved a governance and accountability structure to support the assessment efforts and oversight of its system of internal control. It includes:

2.2 Service arrangements relevant to financial statements

The ODPP relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows:

Common Arrangements
Specific Arrangements
Service Arrangements where the ODPP is the common or specific service provider

3. ODPP’s assessment results during fiscal year 2015-16

During 2015-16, the ODPP progressed substantially with the implementation of the Policy on Internal Control. The design effectiveness of major business processes have been reassessed. Operating effectiveness testing was performed and remediation plans have been developed for various major business processes.

3.1 Design effectiveness activities re-evaluated

During the course of the fiscal year 2015-16, the ODPP undertook to re-evaluate the design effectiveness of the following processes. No significant deficiencies have been identified.

Control Areas Completed Activities
  • Entity Level Controls
  • Reviewed questionnaires completed by the Human Resources Directorate, Internal Audit, Corporate Counsel as well as the Finance and Acquisitions Directorate;
  • Reviewed the self-assessment of the governance processes against an established and agreed upon framework chaired by the Internal Audit Division; and
  • Reviewed and analyzed other relevant documents.
  • Internal Control over General Technology (ITGC)
  • Interviewed IT Management and the Chief Information Officer (CIO);
  • Sought expertise of consultants to review and analyze relevant IT documents; and
  • Sought assurance of controls from third party providers.

3.2 Operating effectiveness testing of key controls

During the fiscal year 2015-16, the ODPP performed operating effectiveness testing on the following processes. Thus far, no significant deficiencies have been identified.

Key Control Areas Completed Activities
  • Procurement, Payables and Payment

Focused on travel and major payable expenses:

  • Developed a test plan and identified key milestones;
  • Analyzed, verified and re-performed sampled transactions; and
  • Developed a remediation plan.
  • Financial Close and Reporting
  • Developed a test plan and identified key milestones;
  • Analyzed, verified and re-performed sampled transactions; and
  • Developed a remediation plan.

3.3 On-going monitoring of key controls

During the fiscal year 2015-16, the ODPP did not conduct any monitoring of key controls. This phase will be carried as per the action plan.

4. ODPP’s action plan

The ODPP takes a risk-based approach to correct significant control deficiencies. It should be noted the ODPP accepts that certain corrective actions may require a reasonable amount of time to complete due to the level of complexity and/or effort. For low risk items, management may choose to accept the stated risk, with no further corrective action being undertaken. All remediation actions are tracked through management action plans (MAPs) which are regularly monitored and reported to senior management and the Departmental Audit Committee.

4.1 Action plan for subsequent fiscal years

During 2016-17, the ODPP will continue to make progress in assessing key internal controls and implementing remedial actions of all significant gaps identified to maintain an effective system of ICFR. The following actions will be taken:

Key Control Areas Design effectiveness testing and remediation Operational effectiveness testing and remediation On-going monitoring rotation
Entity Level Controls Complete Operating effectiveness
testing in progress

Remediation: 2016-17
2017-18
IT General Controls under Departmental Management Complete Operating effectiveness
testing in progress

Remediation: 2016-17
2017-18
Payroll and Benefits Complete for old process
(old pay system)

New process: 2016-17
(new pay system)
Complete for old process
(old pay system)

2017-18
2018-19
Procurement, Payables and Payment
  1. Counsel Fees (professional and special services – legal services)
Complete Operating effectiveness testing 2016-17

Remediation: 2016-17
2018-19
  1. Travel
Complete Operating effectiveness testing completed

Remediation: 2016-17
  1. Other Major Expenses
Complete Operating effectiveness testing completed

Remediation: 2016-17
Revenue and Accounts Receivables Complete 2016-17 2017-18
Financial Close and Reporting Complete Operating effectiveness testing in progress

Remediation: 2016-17
2016-17
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