Robust Checks and Balances and Internal Audit
Checks and balances and internal audit mechanisms are essential elements of sound management. They ensure that senior management has the information it needs to make decisions, track performance and results, identify problems and take remedial action as soon as possible.
To assist in better decision-making, we have segregated key positions from program delivery. These positions report directly to the Deputy Minister. This ensures that senior management receives independent advice – which is to say, advice that is not influenced by program or operational considerations – in three key areas:
- Finance: The Chief Financial Officer (CFO) is specifically accountable for ensuring that departmental finances are managed with prudence and probity, for providing professional financial management advice and guidance, and for providing operational accounting and reporting services to senior management.
- Risk Management: We are strengthening our risk management function with the appointment of a Chief Risk Officer. The Office of the Chief Risk Officer (OCRO) provides the Deputy Minister with expert advice in the areas of risk management, ethics and quality assurance. OCRO is responsible for identifying any risks that could negatively affect the operations, the financial health or the reputation of the department. OCRO is also expected to develop a way to determine how widespread problems are upon assessing initial errors and irregularities.
- Audit and Evaluation: The Audit and Evaluation Branch is headed by a new Director General reporting directly to the Deputy Minister. This office will increase our focus on the audit and evaluation functions.
Internal Audit
The internal audit function at PWGSC is governed and guided by Treasury Board policies, professional standards, as well as a departmental policy on internal audit. One of its key features is the Audit, Assurance and Ethics Committee (AAEC) chaired by the Deputy Minister.
The AAEC approves the management action plans developed to address the recommendations of internal audits and the Auditor General, and monitors the adequacy and timeliness of their implementation. We are strengthening the AAEC by:
- expanding its role to encompass oversight for ethics, thus making it the Audit, Assurance and Ethics Committee (AAEC);
- appointing to the AAEC two members from other departments and an independent private sector committee member who is an expert in business ethics;
- adopting a formal, written AAEC Charter; and,
- appointing the Chief Financial Officer and the Chief Risk Officer as members of the AAEC.
In addition, we are meeting with external auditors for the annual attest audits of PWGSC Revolving Fund Financial Statements to discuss matters such as risk and reliance on internal controls.
