Treasury Board President Announces Next Steps To Strengthen Internal Audit Function Across Government

For immediate release
November 18, 2004

OTTAWA - Reg Alcock, President of the Treasury Board, today announced a multi-year initiative to strengthen the internal audit function across the federal government.

"The actions being announced today to strengthen internal audit deliver on our commitment in Budget 2004 to reorganize and bolster the internal audit function on a Government-wide basis, based on sound risk analyses of all departmental activities," said Minister Alcock. "Strengthening internal audit is an important part of our agenda to improve public sector management and ensure the rigorous stewardship of public funds."

The multi-year initiative, being developed by the new Comptroller General of Canada, will enhance the internal audit capacity in the public sector, and introduce standardized, proven audit processes.

"As a first step, the Comptroller General will provide internal audit services to 63 small departments and agencies.  This is an efficient and cost-effective way to strengthen internal control and performance measurement and improve the ability of these smaller organizations to meet policy and regulation requirements," said Minister Alcock.  "As part of our assessment of the audit capacity in Government, we have launched consultations with key stakeholders such as the Canadian Institute of Chartered Accountants, the Institute of Internal Auditors, and other professional organizations on changes to internal audit policy and practices."

The consultation process will focus on issues such as the revision of the current Internal Audit Policy, the organizational independence of internal audit groups, a clear definition of roles and responsibilities of senior managers and departmental comptrollers, guidance on best practices and training, the staffing of internal-auditor positions across the federal public service, and the creation of standardized internal methodologies and tools.

Details on further steps in the multi-year plan will be announced following the completion of consultations.

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For more information, contact:

Lise Jolicoeur
Press Secretary
Office of the President of the Treasury Board and Minister responsible for the Canadian
Wheat Board
(613) 957-2666

Robert Makichuk
Media Relations
Treasury Board of Canada Secretariat
(613) 957-2391

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Backgrounder

Internal Audit in Departments and Agencies

November 23, 2004

On November 18, 2004, the President of the Treasury Board announced a multi-year initiative to strengthen the internal audit function across the federal government. This initiative is an important part of the Government's agenda to strengthen public sector management and to ensure the rigorous stewardship of public funds.

The multi-year initiative will enhance the internal audit capacity across the public sector and introduce standardized, proven audit processes. Two key steps were announced on November 18^th:

• The Comptroller General's Office will provide internal audit services to 63 small departments and agencies who have limited or no internal audit resources. This is an efficient and cost-effective way to strengthen internal control and performance measurement.
• An assessment of the audit capacity in Government is being conducted as well as consultations with key stakeholders such as the Canadian Institute of Chartered Accountants, the Institute of Internal Auditors, and other professional organizations on changes to internal audit policy and practices.

Further steps of the multi-year initiative encompass revisions to the current Internal Audit Policy, including:

• Strengthening the internal audit capacity across government in terms of staffing and skills;
•  Enhancing the effectiveness of audit committees by adding an independent member with appropriate qualifications;
• Defining the role of departmental chief audit executives and providing for a clearer reporting relationship with the deputy head;
• Introducing certification requirements for chief audit executives;
• Requiring the joint approval of the deputy head and the Comptroller General for the nomination and/or removal of chief audit executives;
• More rigorous monitoring of departmental audit performance by introducing a departmental audit inspection protocol developed by the Comptroller General; and
• Introducing uniform, proven operating processes for departmental internal auditing, which would favour increased mobility of internal auditors across the Government of Canada.

Details on further steps in the multi-year initiative will be announced following the completion of consultations.

In addition two new positions have been created to support the internal audit function:

• The position of Assistant Comptroller General, Internal Audit Directorate, has been created to assist the Comptroller General in the implementation of the multi-year initiative. The incumbent will take office on December 1, 2004.

• The position of Executive Director, Field Audit of Small Departments and Agencies is currently being staffed.