PPSC Financial Statements 2013–2014

Office of the Director of Public Prosecutions

Financial Statements

Statement of Management Responsibility Including Internal Control over Financial Reporting 2013-14

Reporting Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2014, 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. 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 effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2014 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 is 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 by the Deparmental 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
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)
  2014 2013
Liabilities
Accounts payable and accrued liabilities (note 4) 21,511 23,107
Vacation pay and compensatory leave 4,363 4,576
Employee future benefits (note 5) 6,100 16,814
Total liabilities 31,974 44,497
Financial assets
Due from the Consolidated Revenue Fund 12,821 11,685
Accounts receivable and advances (note 6) 8,971 11,783
Total gross financial assets 21,792 23,468
Financial assets held on behalf of Government
Accounts receivable and advances (note 6) (6,848) (6,091)
Total financial assets held on behalf of Government (6,848) (6,091)
Total net financial assets 14,944 17,377
Departmental net debt 17,030 27,120
Non-financial assets
Tangible capital assets (note 7) 12,894 8,960
Total non-financial assets 12,894 8,960
Deparmental net financial position (4,136) (18,160)

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
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)
  Planned Results 2014 2014 2013
Expenses
Drug, Criminal Code and terrorism prosecution program 127,201 139,148 127,594
Regulatory offences and economic crime prosecution program 34,691 37,949 35,747
Internal services 30,836 33,733 30,082
Total expenses 192,728 210,830 193,423
Revenues
Advisory and Prosecution Services 17,742 22,911 16,842
Fines, forfeitures and court costs 1,000 868 1,316
Rent from residential housing provided to employees 450 498 467
Other 75 15 102
Revenues earned on behalf of Government (1,525) (1,381) (1,885)
Total revenues 17,742 22,911 16,842
Net cost of operations before government funding and transfers 174,986 187,919 176,581
Government funding and transfers
Net cash provided by Government 166,640 180,810 158,445
Change in due from Consolidated Revenue Fund 451 1,136 (2,890)
Services provided without charge by other government departments (note 9) 19,200 19,994 18,620
Transfer of tangible capital assets from (to) other government departments - 3 8
Net cost of operations after government funding and transfers (11,305) (14,024) 2,398
Departmental net financial position - Beginning of year (16,277) (18,160) (15,762)
Departmental net financial position - End of year (4,972) (4,136) (18,160)

Segmented information (note 10)

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)
  Planned Results 2014 2014 2013
Net cost of operations after government funding and transfers (11,305) (14,024) 2,398
Change due to tangible capital assets
Acquisition of tangible capital assets (note 7) 1,200 6,156 4,120
Amortization of tangible capital assets (note 7) (1,975) (2,225) (2,005)
Transfer of tangible capital assets from other government departments (note 7) - 3 8
Total change due to tangible capital assets (775) 3,934 2,123
Net increase (decrease) in departmental net debt (12,080) (10,090) 4,521
Departmental net debt - Beginning of year 23,272 27,120 22,599
Departmental net debt - End of year 11,192 17,030 27,120

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)
  2014 2013
Operating activities
Net cost of operations before government funding and transfers 187,919 176,581
Non-cash items:
Amortization of tangible capital assets (note 7) (2,225) (2,005)
Services provided without charge by other government departments (note 9) (19,994) (18,620)
Variations in Statement of Financial Position:
Decrease in accounts receivable and accountable advances (3,569) (58)
Decrease in accounts payable and accrued liabilities 1,596 (2,483)
Decrease in vacation pay and compensatory leave 213 298
Decrease in employee future benefits 10,714 612
Cash used in operating activities 174,654 154,325
Capital investing activities
Acquisitions of tangible capital assets (note 7) 6,156 4,120
Cash used in capital investing activities 6,156 4,120
Net cash provided by Government of Canada 180,810 158,445

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) 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.

The ODPP has three (3) program activities :

1- Drug, Criminal Code and terrorism prosecution program

This program supports the protection of society against crime through the provision of legal advice and litigation support during police investigations, and the prosecution of: all drug offences under the Controlled Drugs and Substances Act and any related organized crime offences throughout Canada, except in Quebec and New Brunswick, where the Office of the Director of Public Prosecutions prosecutes such offences only where charges are laid by the Royal Canadian Mounted Police; proceeds of crime offences; pursuant to understandings with the provinces, Criminal Code offences where they are related to drug charges; all Criminal Code offences in the three territories; terrorism offences; and war crimes and crimes against humanity offences. This program activity also involves the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.

2- Regulatory offences and economic crime prosecution program

This program supports the protection of society against crime through the provision of legal advice and litigation support to federal investigative agencies, and the prosecution of: offences under federal statutes aimed at protecting the environment and natural resources as well as the country’s economic and social health (e.g., Fisheries Act, Income Tax Act, Copyright Act, Canada Elections Act, Canadian Environmental Protection Act 1999, Competition Act, Customs Act, Excise Act, and the Excise Tax Act); offences involving fraud against the government; capital market fraud offences; and any organized crime offences related to the foregoing offences. This program also includes the recovery of outstanding federal fines and the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.

3- 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. These groups are: Communications Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Material Services; Acquisition Services; Internal Audit; Ministerial and External Relations; Strategic Planning and Performance Management, and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

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 Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-14 Report on Plans and Priorities.

(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 ODPP 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 the CRF

Amount due from/to the CRF is the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amount due from the CRF represents 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 future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically 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)
  2014 2013
Net cost of operations before government funding and transfers 187,919 176,581
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (19,994) (18,620)
Amortization of tangible capital assets (2,225) (2,005)
Decrease in employee future benefits 10,714 612
Decrease in vacation pay and compensatory leave 213 298
Employee benefits plan (EBP) 2,373 2,203
Refunds of previous year expenditures 138 178
  (8,781) (17,334)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 6,156 4,120
  6,156 4,120
Current year authorities used 185,294 163,367

(b) Authorities provided and used

(in thousands of dollars)
  2014 2013
Authorities provided:
Vote 35 - Program expenditures 172,337 167,751
Statutory amounts 17,672 15,199
Total authorities provided 190,009 182,950
Lapsed: Operating (4,715) (19,583)
Current year authorities used 185,294 163,367

4. Accounts payable and accrued liabilities

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

(in thousands of dollars)
  2014 2013
Accounts payable - Other government departments and agencies 1,007 1,441
Accounts payable - External parties 19,404 21,037
Total accounts payable 20,411 22,478
Accrued liabilities 1,100 629
Total accounts payable and accrued liabilities 21,511 23,107

5. Employee future benefits

(a) Pension benefits

The ODPP's employees participate in the Public Service Pension 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 EAP 2012, employee contributors have been divided into two 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 2013-14 expense amounts to $12,414 thousand ($10,852 thousand in 2012-13). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-13) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-13) 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 termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

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 were 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 benefit obligation.

(in thousands of dollars)
  2014 2013
Accrued benefit obligation, beginning of year 16,814 17,426
Expense for the year (1,162) 1,122
Benefits paid during the year (9,552) (1,734)
Accrued benefit obligation, end of year 6,100 16,814

6. Accounts receivable and advances

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

(in thousands of dollars)
  2014 2013
Receivables - Other government departments and agencies 8,701 11,418
Receivables - External parties 267 362
Employee advances 3 3
Gross accounts receivable 8,971 11,783
Accounts receivable held on behalf of Government (6,848) (6,091)
Net accounts receivable and advances 2,123 5,692

7. Tangible capital assets

Cost
(in thousands of dollars)
Capital asset class Opening Balance Acquisitions Adjustments * Disposals and Write-offs Closing Balance
Informatics hardware 2,556 227 - - 2,783
Informatics software 1,040 - - - 1,040
Furniture and furnishings 4,433 252 48 - 4,733
Motor vehicles 117 - - - 117
Leasehold improvements 6,087 5,677 - - 11,764
  14,233 6,156 48 - 20,437


Accumulated amortization
(in thousands of dollars)
Capital asset class Opening Balance Amortization Adjustments * Disposals and Write-offs Closing Balance
Informatics hardware 1,605 418 - - 2,023
Informatics software 889 47 - - 936
Furniture and furnishings 1,054 456 45 - 1,555
Motor vehicles 59 25 - - 84
Leasehold improvements 1,666 1,279 - - 2,945
  5,273 2,225 45 - 7,543


Net book value
(in thousands of dollars)
Capital asset class 2013 2014
Informatics hardware 951 760
Informatics software 151 104
Furniture and furnishings 3,379 3,178
Motor vehicles 58 33
Leasehold improvements 4,421 8,819
  8,960 12,894

* Adjustments include a transfer in of capital assets of $48 thousand as well as a corrpesponding transfer in of accumulated amortization of $45 thousand.

8. Contingent liabilities

Claims have been made against the ODPP in the normal course of operations. These claims include items with the amounts claimed in the pleadings 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 will record an allowance for claims and litigations where it is likely that there will 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 $11,270 thousand ($8,520 thousand at March 31, 2013) at March 31, 2014.

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 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)
  2014 2013
Accommodation 12,547 11,602
Employer's contribution to the health and dental insurance plans 7,447 6,983
Legal services - 35
  19,994 18,620

The Government has centralized some of its administrative activities for reasons of efficiency, cost-effectiveness and more 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 Works and Government Services 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 $10,097 thousand ($9,103 thousand in 2012-13).

(c) Other transactions with related parties

(in thousands of dollars)
  2014 2013
Expenses - Other Government departments and agencies 28,220 28,225
Revenues - Other Government departments and agencies 23,660 18,029

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

10. Segmented Information

Presentation by segment is based on the ODPP's program alignment 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 programs, by major object of expense and by major type 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 Internal services 2014 2013
Expenses
Salaries and employee benefits 84,313 22,994 20,440 127,747 118,245
Professional and special services- Counsel fees 29,806 8,129 7,226 45,161 36,544
Accommodation 9,003 2,455 2,183 13,641 12,754
Professional and special services- Other 5,233 1,427 1,269 7,929 8,174
Travel and relocation 3,995 1,089 968 6,052 7,566
Communication 2,471 674 599 3,744 3,590
Utilities, materials and supplies 1,543 421 374 2,338 2,347
Amortization of tangible capital assets 1,469 401 355 2,225 2,005
Information 552 151 134 837 1,153
Rental 349 95 84 528 406
Machinery and equipment 246 67 60 373 378
Repairs and Maintenance 185 51 45 281 284
Claims and ex-gratia payments - - - - 31
Other (17) (5) (4) (26) (54)
Total expenses 139,148 37,949 33,733 210,830 193,423
Revenues
Advisory and Prosecution Services - 22,594 317 22,911 16,842
Fines, forfeitures and court costs 3 - 865 868 1,316
Rent from residential housing provided to employees 498 - - 498 467
Other 15 - - 15 102
Revenues earned on behalf of Government (516) - (865) (1,381) (1,885)
Total revenues - 22,594 317 22,911 16,842
Net cost of operations 139,148 15,355 33,416 187,919 176,581

11. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

Annex – Assessment of Internal Control over Financial Reporting

1. Introduction

This document is an annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year 2013-14 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.

Detailed information on the ODPP’s authority, mandate and program activities can be found in the 2013-14 Department Performance Report and the 2013-14 Report on Plans and Priorities.

2. Departmental system of internal control over financial reporting

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. Departmental assessment results during fiscal year 2013-14

The ODPP completed the documentation and assessment related to the design effectiveness of key control areas listed in section 3.1 in 2011-12. Significant progress has been made in relation to the remediation since 85% has been completed. The remaining remediation actions will be implemented in 2014-15.

3.1 Design effectiveness remediation of key controls

In 2013-14, the ODPP took remediation actions on the “Entity Level and Process Level” control deficiencies. The following table provides a summary of the key controls that have been addressed:

Key Control Areas Completed Activities
Entity level controls
  • Control environment
  • Strengthened awareness of roles and responsibilities related to values and ethics for employees and managers.
  • Had discussions on succession planning.
  • Implemented evaluations of employees progress against their learning plans as part of the new Directive on Performance Management.
  • Implemented a formal process in maintaining proper organizational documentation to ensure a clear and effective structure.
Process level controls 
  • Roles and Responsibilities
  • Established an MOU with service provider for the provision of internal services.
  • Procurement, Payables and Payment
  • Established the post-payment account verification business process.
  • Documented and had discussions on vendor master record process.
  • Payroll and benefits
  • Implemented a verification process for all staffing files.
  • Implemented quarterly reconciliation of iCase.

3.2 Other control activities complementing key controls

During the course of FY 2013-14, the ODPP undertook and completed the following activities in preparation and support of the 2014-15 finalization of key controls remediation.

Control Areas Completed Activities
Entity level controls
  • Control Environment
  • Established an operational and organization review committee to approve organization structural changes.
  • Risk assessment
  • Updated corporate risk profiles and risk strategies.
Process level controls 
  • Roles and Responsibilities
  • Centralized financial management and procurement functions and improved management practices and controls.
  • Established a financial management policy framework.
  • Procurement, Payables and Payment
  • Established a central acquisitions office for NCR and improved purchasing process.
  • Strengthened the responsibilities and procedures for exercising payment authority under Section 33 of the Financial Administration Act (FAA) for legal agent transactions.
  • Improved practices and procedures as well as provided training for commitment control under Section 32 of the FAA.
  • Updated the Delegation of Authorities instrument.
  • Performed FAA Section 34 account verification review.

3.3 Operating effectiveness

During fiscal year 2013-14, the ODPP did not perform operating effectiveness testing. This phase will begin in 2014-15, after the design effectiveness weaknesses have been remediated.

3.4 On-going monitoring program

During fiscal year 2013-14, the ODPP did not conduct any monitoring of key controls, although other controls were monitored on an on-going basis. This phase will begin in 2015-16 once the operating effectiveness has been assessed.

4. Departmental action plan

The ODPP takes a risk-based approach for remediation of control deficiencies. Every effort is made to correct significant control deficiencies and priority is given to any remediation deemed high risk. 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 so that status can be reported to senior management and the Departmental Audit Committee.

4.1 Action plan & remediation for subsequent fiscal years

During 2013-14, the ODPP continued to make progress in implementing remedial actions to correct deficiencies as stated in Section 3.1. The ODPP plans to continue remediation of adjustments identified during its assessments, as well as to maintain an effective system of ICFR, by the following actions:

Key Control Areas Remediation action plan for 2014-15 Operational effectiveness testing and remediation On-going monitoring rotation
Entity level controls
  • Update Corporate Counsel’s Intranet, develop and provide mandatory training to strengthen values and ethics
  • Create an internal disclosure of wrongdoing protocol to manage the disclosure of wrongdoings
  • Advance/Implement succession planning

Begin
2014–15

 

 

 

 

 

 

Expected Completion
2015-16

Begin
2015-16 
Procurement, Payables and Payment
  • Strengthen the process of receipt of goods and FAA Section 34 accounting verification review
  • Implement material tracking system for moveable capital assets
  • Review validation of vendor information creation
  • Implement a risk-based approach to account verification
Payroll and benefits
Revenue and accounts receivables
Financial close and reporting
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