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2008
Overall summary We completed our audit in a manner consistent with the engagement letter dated 13 February 2008. This document, Report to Senior Management – Annual Audit Results, has been prepared solely to assist senior management in its review of the financial statements before their approval. This report provides disclosures required by professional standards and other information we believe will be useful to senior management in its work. The information is not intended to be and should not be used by anyone other than this specific party. Any communication by us of matters identified during the financial statement audit is a by-product of that audit. The audit would not necessarily identify all matters that may be of interest to senior management in fulfilling its responsibilities. No restrictions were placed on the scope of our audit, and we obtained all of the information and explanations we considered necessary to provide our opinion on the financial statements. Audit objectives As noted in the engagement letter, the objectives of our audit were to provide an independent opinion on whether:
Our auditor’s report addresses each of our audit objectives. Auditor’s report Following approval of the financial statements of the Office of the Information Commissioner of Canada (the Office) by the Commissioner, we intend to issue an unqualified opinion on the financial statements of the Office. A draft of the auditor’s report is included as Appendix A. Financial statement highlights Management has informed us that it will review the financial statements with senior management and outline the important differences from the approved operating budget and the results of the previous year. We will be available to answer any questions senior management may have. Significant audit areas Business risks, audit implications and related audit results Our audit was risk-based. We reviewed the key business risks that could impact the achievement of the Office’s objectives and obtained an understanding of those risks that had implications for the financial statements. We focused on areas with a higher risk of a material error or non-compliance with a significant authority instrument, based on our understanding of the Office and its business. For the 2008 audit, we did not identify any business risks that had significant audit implications. Other audit risk areas and related audit results Not all significant audit areas are derived from business risks. We also identified the following area of audit risk and addressed it in our audit.
New and emerging developments No new accounting and auditing standards have to be reported to you in this report. Important information on the results of our audit Auditor’s responsibilities We provide independent, objective assurance that the financial statements prepared by management are fairly presented, in all material respects, in accordance with Canadian generally accepted accounting principles. In addition, as legislative auditors, for the transactions coming to our notice, we determine if the Office has complied with key legislative authorities. We also have an obligation to bring to the attention of Parliament any “other matter” that we believe is significant. Our audit was conducted in accordance with Canadian generally accepted auditing standards, our own quality management system, and the ethical standards of our profession. Accordingly, our auditor’s report provides a high, though not absolute, level of assurance that the conclusions expressed in our opinion are appropriate. However, owing to the inherent limitations of an audit, there is an unavoidable risk that some misstatements in the financial statements were not detected, even though the audit was properly planned and performed. Materiality Materiality represents our judgment of the degree of significance of misstatement(s) that could influence the decision of a knowledgeable user relying on the financial statements. In determining materiality both quantitative and qualitative factors are considered. As indicated in the engagement letter, quantitative materiality when planning the audit was set at $185,000. During the audit, no significant developments or new information came to our attention to indicate that a change in quantitative materiality was warranted. Use of the work of specialists When we were informed that the Office had lost financial data as a result of maintenance work conducted by the OPC on their joint server, we engaged one of our IT specialists to perform additional work on OPC’s back-up and restore strategies and procedures. At the end of our review, we concluded that OPC had taken the appropriate initiatives to ensure that its back-up and restore strategies would provide adequate protection for both entities. The exceptions and issues noted are a reflection of OPC’s need to fine tune its back-up configurations and OPC continues to do so. It was noted that successful data back-ups are taking place as well as database exports, which have been tested to be valid. Testing needs to be re-performed at a later date after initial setup issues have been resolved, especially given that there are planned changes to infrastructure affecting the back-up process. This will be followed up later in 2008. Also, since OPC manages Free Balance and the data back-up process for itself and the Office, we recommend that a formal agreement be created between the Office and OPC to describe in adequate detail the joint understanding and responsibilities for management of the Free Balance system including access control, change management and back-up/recovery procedures. During the audit, we also engaged one of our Human Resource specialists to follow-up on the human resource findings communicated in our last Report to Senior Management. Our conclusions are summarized below in the section called “Related matters”. Management letter As mentioned in our engagement letter, it is possible that we would identify opportunities for changes in
procedures that would improve systems of internal control, streamline operations, and/or enhance
the Office’s financial reporting practices. Communication of other matters to senior management Professional standards require the auditor to communicate certain matters arising from the audit to assist senior management in overseeing the financial reporting process and compliance with reporting and disclosure requirements. We summarize that information below.
Related matters Follow up on issues reported in our Report to Senior Management for 2007 During this year’s audit, we followed-up on the measures the Office has put in place in response to the
matters raised in our last Report to Senior Management.
- The executive performance pay practices didn’t fully comply with the requirements of the Canada Public Service Agency (CPSA): The performance pay for 2007-08 complied with CPSA requirements. - The leave balances in the Human Resources Information System were not accurate: We discussed with management the controls implemented for leave balances and tested on a sample basis these balances and we concluded they were accurate for 2007-08. - Unconventional language training provided to one employee: No similar cases found for 2007-08. Based on our discussions with management and our review of a sample of employee files, language training is now provided in accordance with conventional public service practice. - Lack of compliance with a number of recruitment guidelines (use of non-advertised processes, irregularities in staffing processes and inadequate documentation in staffing files): These items were assessed by the Public Service Commission (PSC) in May-June 2008 to determine if an audit was necessary. The Office is waiting for the PSC’s decision. - Inadequate documentation of classification files: There was no reclassification during the period of June 2007 to May 2008. - Applicable regulations on contracts were not followed and there was a lack of knowledge of the Treasury Board policy on acquisition cards: Corrective measures were under implementation during 2007-08. We reviewed these measures and they appeared to be appropriate to resolve the issues we raised in the 2006-07 audit. We plan to test these new processes and controls during the 2008-09 audit to ensure they are reliable. - Gift certificates given to employees to celebrate the Public Service Week: This practice has been discontinued. Audit hours and costs There will be no costs to the Office of the Information Commissioner of Canada for professional services for the audit.
The costs are paid from moneys appropriated by Parliament to the Office of the Auditor General of Canada. Information on
our budgeted and actual audit hours and the related audit costs is presented below for information.
We estimate that the fully loaded cost of this audit was $133,000.
Appendix A – Draft Auditor’s Report We intend to issue the following auditor’s report after the financial statements are approved by senior management: AUDITOR’S REPORT To the Speaker of the House of Commons and the Speaker of the Senate I have audited the statement of financial position of the Office of the Information Commissioner of Canada as at March 31, 2008 and the statements of operations, equity of Canada and cash flow for the year then ended. These financial statements are the responsibility of the Office’s management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In my opinion, these financial statements present fairly, in all material respects, the financial position of the Office as at March 31, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Further, in my opinion, the transactions of the Office that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Access to Information Act. John Wiersema, FCA |
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