Core Control Audit of the Canada Industrial Relations Board and Management Action Plan
Core Control Audit of the Canada Industrial Relations Board
Office of the Comptroller General
Objective and scope
The objective of this audit was to ensure that core controls over financial management1 within the Canada Industrial Relations Board (CIRB) are effective and result in compliance with corresponding legislation, policies, and directives.
The scope of this audit included an examination of a sample of transactions from each of the policies and directives indicated in Appendix A of this report. The transactions were taken from April 1, 2009 to March 31, 2010.
The scope was limited due to memoranda of understanding with other Canadian Federal Institutions who are responsible on behalf of the Canada Industrial Relations Board for certain requirements in these policies and directives.
This audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing 2.
Why this is important
Canadians expect the federal government to be well managed and to be accountable for the prudent stewardship of public funds, the safeguarding of public assets, and the effective, efficient and economical use of public resources. They also expect reliable and transparent reporting on how the government spends public funds to achieve results for Canadians.3
The Financial Administration Act designates deputy heads as accounting officers for their department or agency. As accounting officers, deputy heads are accountable for ensuring resources are organized to deliver departmental objectives in compliance with government policy and procedures; ensuring that there are effective systems of internal control; signing departmental accounts; and performing other specific duties assigned by law or regulation to the administration of their department or agency.
Core controls over financial management within the Canada Industrial Relations Board are conducted in a manner compliant with the requirements contained in eleven of twelve policies, directives4 and corresponding legislation tested.
As part of this audit the Agency received detailed recommendations with respect to improvements that should be made. There is a need to ensure that delegation instruments are reviewed annually and submitted within 90 days of the arrival of a new minister. The Agency should also ensure that proper procedures are in place with respect to the distribution of acquisition cards. Furthermore, recommendations were made to ensure processes are in place regarding proper pre-authorization of employee overtime and vacation leave.
Management action plans
Management has accepted the audit findings and has developed an action plan to address the detailed recommendations5. The Canada Industrial Relations Board has provided the Office of the Comptroller General with the management action plan to address actions taken towards the findings. The management action plan is available on the Canada Industrial Relations Board website.
The results of the audit and the management action plan have been discussed with the Chairperson of the Canada Industrial Relations Board and the Small Departments and Agencies Audit Committee. The Office of the Comptroller General will follow-up on the management action plan until all findings are resolved.Brian M. Aiken, CIA, CFE
Assistant Comptroller General
Internal Audit Sector, Office of the Comptroller General
Appendix A: Policies and Directives Tested
|Policies and Directives Tested||Compliance|
|Directive on Delegation of Financial Authorities for Disbursements||Met with Exception|
|Directive on Expenditure Initiation and Commitment Control6||Met with Exception|
|Directive on Account Verification7||Met with Exception|
|Directive on Acquisition Cards||Partially Met|
|Directive on Accountable Advances||Met|
|Contracting Policy||Partially Met|
|National Joint Council Travel Directive and the Directive on Travel Cards and Travellers Cheques||Partially Met|
|Hospitality Policy||Met with Exception|
|Directive on Leave and Special Working Arrangements||Not Met|
|Directive on Financial Management of Pay Administration||Partially Met|
|Performance Pay Administration8||Met|
|Met||Greater than or equal to 99% compliance.|
|Met with exception||Greater than or equal to 90% and less than 99% compliance.|
|Partially met||Greater than or equal to 80% and less than 90% compliance.|
|Not met||Less than 80% compliance.|
1 See Appendix A for a complete list of policies and directives included in the scope of this audit. For the audit criteria please refer to http://www.tbs-sct.gc.ca/report/orp/2011/ccac-cvcb-eng.asp
2 The Office of the Comptroller General has not undergone an external assessment to support its conformance with this statement.
3 Policy Framework for Financial Management: Section 2. Context.
4 See Appendix A for the Agencies' overall compliance in the areas tested.
5 See Appendix B for a complete list of audit recommendations assigned by priority ranking.
6 Includes Financial Administration Act, Section 32.
7 Includes Financial Administration Act, Section 34.
8 Includes the Policy on the Management of Executives, the Directive on Terms and Conditions of Employment for Certain Excluded and Unrepresented Employees and the Directive on Executive Compensation
Management Action Plan
Canada Industrial Relations Board (CIRB)'s Opinion of the Audit Report:
The CIRB has reviewed the findings and recommendations contained in the Management Letter and accepts that the results accurately reflect the state of controls over financial management, contracting, travel and hospitality and human resources management. The CIRB will take concrete steps to address the issues identified and will continue to strive for excellence in its management practices.
Audit Entity Sign Off on the Management Action PlanElizabeth MacPherson
Canada Industrial Relations Board
|Recommendations||Priority||Response and Planned Actions||Responsibilities (position title responsible for the action)||Timelines (actual planned dates of implementation)|
|1. The CIRB should ensure that delegation instruments are reviewed annually and submitted within 90 days of the arrival of a new minister.||High||Response and Planned Action:
The CIRB will review the delegation instruments on an annual basis, at the beginning of each fiscal year, and will ensure the instruments are updated and submitted to the minister's office within 90 days of the appointment of a new minister.
|Executive Director and CFO||Ongoing, yearly at the beginning of each fiscal year and/or as required.
Next review is April 2012.
|2. The CIRB should obtain written acknowledgement of responsibilities and obligations from acquisition cardholders prior to issuing an acquisition card and keep documentation on file.||Low||Response and Planned Actions:
This is already partly implemented as every cardholder signs an acknowledgement of responsibilities when requesting the card. The CIRB will amend the acquisition cardholder agreement to include the date of activation and ensure the cardholder acknowledges his/her obligations prior to card activation.
|Departmental Acquisition Card Coordinator||Form amendment: September 2011.|
|3. The CIRB should develop business processes and keep documentation to ensure that accommodations respect the appropriate government limits or justification is documented on file for the use of above-the-limit suppliers.||High||Response and Planned Actions:
The CIRB already adheres to the directive related to accommodations. However there were some instances where use of above-the-limit accommodation suppliers was not properly documented. A reminder of the policy will be communicated to personnel and new employees to ensure all are aware of the policy: The selection of accommodations should respect the thresholds established in the government directory of approved suppliers and that exceptions are to be properly documented on file and approved by the manager.
|A random sampling will be conducted in 2012-13 to verify compliance with this policy. Further action will be taken to realign management practices with the policy if necessary.||Random sampling in the fall 2012.|
|4. The CIRB should ensure that Executives are reimbursed for meals and incidental expenses in a manner consistent with the allowance rates within the National Joint Council (NJC) Travel Directive.||High||Response and Planned Actions:
The CIRB is aware that its current travel directives provide higher per diem rates for meals than those provided by the NJC Directive for its Governor-in-Council appointees and Executives. A separate schedule of per diem rates was established in the 1990s to address a significant problem with a high number of travel claims based on receipts, as permitted by the TBS Special Travel Authorities.
Although the CIRB has statutory authority to designate rates for the GIC appointees, it does not have sufficient authority to establish its own per diems for Executives. The Chairperson, upon her arrival at the Board in January 2008, froze all these rates to eventually bring them in line with TBS and NJC rates. As of April 2011, there is a differential of less than 4% between the CIRB and NJC daily allowance.
Once the per diem rates for meals are in line with NJC and TBS rates, the CIRB will adopt and follow the NJC Directive for all of its personnel.
|Executive Director and CFO||It is expected that the CIRB meal allowance rates will be in line with NJC rates by 2012-13.|
|5. The CIRB should ensure procedures are in place to ensure that hospitality is approved by the appropriate level of authority, and that all costs relating to a single event are disclosed on a single hospitality request form.||High||Response and Planned Actions:
The CIRB accepts the audit's findings related to the one particular event and will ensure that all expenses relating to a single hospitality event are reported on a single hospitality request form and approved at the appropriate level of authority. The CIRB will also ensure personnel clearly understand all applicable requirements of the hospitality policy, and will strengthen its challenge and verification process for hospitality requests.
|Executive Director and CFO||Immediate|
|6. The CIRB should take the necessary steps to ensure that all leave requests are pre-authorized in writing.||Low||Response and Planned Actions:
The CIRB still operates with a paper based monthly leave report system. This has caused inconsistencies in the application of the policy as regional staff commonly request leave authorization through email or telephone and send their monthly reports for final approval at the end of the month. To ensure properly documented files, the CIRB has requested that for the personnel who cannot practically get a leave form signed when they seek pre-approval, that leave be requested via email and that the approval email be attached with the monthly reports. This practice is consistent and in compliance with the policy.
A reminder of this requirement was communicated on July 5, 2011 during the Monthly Management Meeting. Periodic sampling will be conducted to ensure internal controls are properly applied.
|Director, Client and Corporate Services||Immediate|
|7. The CIRB should ensure that overtime pre-approval is properly documented.||Medium||Response and Planned Actions:
The CIRB acknowledges that pre-approval of overtime must be properly documented. Staff will be reminded of appropriate procedures to follow to request overtime. In the instances where pre-approval of overtime cannot be pre-planned, but that overtime is a direct result of a hearing or mediation session running past regular working hours, the CIRB will develop a directive and appropriate processes that address overtime requests in these circumstances.
Periodic sampling of overtime documentation in HR files will also be conducted.
|Director, Client and Corporate Services||Immediate
Directive developed and implemented by December 2011.
Sampling will be conducted in the fall 2012
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