Follow-up to the 2006 Audit of Departmental Financial Controls

1.0 Background

The Audit and Evaluation Branch conducted a follow-up of the Departmental Financial Controls Audit which was tabled and approved at the Audit and Evaluation Committee in September 2006. The purpose of the follow-up was to assess the extent of the implementation of the completed management actions identified in the Management Action Plan.

The initial audit could not provide assurance that financial processes were being carried out in a consistent manner and that all required financial controls were in place and operating as intended. Further, the Deputy Minister and the Chief Financial Officer were at risk of not being able to assess the design, implementation & maintenance of internal controls at a departmental level.

The initial audit concluded the following as it related to each of the activities/elements examined:

Subject	Observation
Existence of Policies, Procedures and Guidelines	Most financial policies, procedures and guidelines have been developed and communicated; however, auto-post and the complementary post-audit processes have not been documented.
Exercise of Departmental Functional Authority	There was a need for financial processes to be carried out consistently across the department.
Organization of Financial Management in Regions and Discrete/Autonomous Organizations	Officers in regions exercise payment authority without having clear assurance that they can rely on audit verification activities taking place in satellites offices.
Access Controls and Related Security Issues	For the most part, IFMS access controls and related security measures were in place and operating as intended, however some controls could be strengthened.
Verification of the Authority to Approve Assistance	Absence of documentation in the financial files to demonstrate that departmental grants and contribution payments had been approved by officials with delegated authority.
Claim Verification Process for G&C Payments	Financial Officers have not established a process to assess the effectiveness of the claim verification process at the program level.
Account Verification Process for O&M Transactions	A number of weaknesses in both account verification (Section 34 of the FAA) and payment approval (Section 33 of the FAA).
Financial Controls Over Collaborative Agreements	Some weaknesses existed in the management of Specified Purpose Accounts.
Organization of Financial Files	Weaknesses existed in the organization of HQ's financial files.
Training Programs	Financial training courses did not address all key risk areas
Oversight of Expenditure Management Accountability	Opportunities existed to strengthen aspects of the Corporate Comptroller's oversight role.
Oversight of Acquisition Cards Process	Opportunities existed to strengthen the monitoring of acquisition card transactions.

The audit findings, conclusions and recommendations of the audit were accepted by the responsible management.