Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting - Unaudited
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Canadian Space Agency
Fiscal year 2013-2014
This document provides summary information on the measures taken by the Canadian Space Agency (CSA) to maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management, assessment results and related action plans.
2. Departmental system of internal control over financial reporting
2.1 Internal control management
The CSA has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control which promotes continuous improvement. The CSA Framework for the internal control management, which indicates the objective, the expected results, the principle and approach as well as the roles and responsibilities in regards to internal controls, was approved by the President on June 19, 2013.
The CSA internal control management framework includes the following :
The CSA established an Audit Committee (AC) in 2010. The AC is composed of the CSA President, three external members, one of whom chairs the Committee and two ex-officio members whom are the Chief Financial Officer and the Chief Audit and Evaluation Executive. The CA provides advice and oversees management, control and accountability procedures. It reviews amongst others, the internal control system, by the update on results on the monitoring and the action plans related to the system of ICFR as well as the financial reports. In 2013-2014, the AC had three meetings and participated in five teleconferences.
2.2 Service Arrangements Relevant to Financial Statements
The CSA relies on other organizations for the processing of certain transactions that are recorded in its financial statements :
Common Arrangements :
Shared Services Canada (SSC) provides IT infrastructure services to the CSA in the areas of emails, data centers and telecommunications. The scope and responsibilities are addressed in the interdepartmental agreement between SSC and the CSA.
Specific Arrangements :
3. Assessment results for fiscal year 2013-2014
During 2013-2014, the CSA completed the design effectiveness testing and significantly progressed in the operating effectiveness testing in all key control areas. The ongoing monitoring was implemented according to the plan.
3.1 Design effectiveness testing of key controls
In 2013-2014, the CSA completed, in accordance with the plan, the design effectiveness testing of the following control elements: organizational risk management, budgeting, forecast performance and work in progress (capital assets). Also, the CSA added design effectiveness testing for the following control elements : holdbacks and payables at year end.
As a result of design effectiveness testing, no improvements were required.
3.2 Operating effectiveness testing of key controls
In 2013-2014, the CSA completed, in accordance with the plan, the operating effectiveness testing for organizational risk management, the delegation instrument and the assignment of delegated authority, the general IT controls and the write-off and disposal. Also, the CSA added operating effectiveness testing for operating expenditures (procurement to payment), holdbacks and payables at year end.
As a result of the operating effectiveness testing, the CSA identified the following required improvements :
Assignment of delegated authority
Procurement to payment
3.3 On-going monitoring of key controls
In 2013-2014, the CSA performed, in accordance with the plan, the on-going monitoring of key controls for payroll and transfer payments.
As a result of the on-going monitoring, the CSA identified the following required improvements:
4. Canadian Space Agency's Action Plan
4.1 Progress during fiscal year 2013-2014
During 2013-2014, the CSA continued to make significant progress in assessing and improving its key controls and the progress status is in line with the Treasury Board Secretariat's expectations. The progress made by the CSA based on the plans identified in the previous fiscal year's annex are summarized as follows :
|Key Control Areas||Documentation||Testing||On-going
|Entity level controls|
|Organizational Risk Management||Yes||Yes||Design and operating effectiveness testing is complete. No weaknesses were found.|
|Delegation Instrument and Assignment of Delegated Authority||Yes||Operating effectiveness testing is complete and weaknesses have been identified. Improvements have been implemented.|
|Budgeting and Forecast performance||Yes||Design effectiveness testing is complete. No weaknesses were found|
|General IT controls|
|General IT Controls||Yes||Operating effectiveness testing is complete. No weaknesses were found.|
|Process level controls|
|Payroll||Yes||On-going monitoring was conducted and weaknesses have been identified. Improvements have been implemented.|
|Write-Off and Disposal||Yes||Operating effectiveness testing is complete. No weaknesses were found.|
|Work in Progress - Capital Assets||Yes||Design effectiveness testing is complete. No weaknesses were found.|
|Transfer Payments||Yes||On-going monitoring was conducted and weaknesses have been identified. Improvements have been implemented.|
|Additional assessments not foreseen in the previous year's plan|
|Operating Expenditures - Procurement to Payment||Yes||Testing for operating effectiveness was added for 2013-14 and weaknesses have been identifies. Improvements have been implemented.|
|Payables at Year End||Yes||Yes||Yes||These control areas were added during the year. The documentation, the design and operating effectiveness testing are complete and weaknesses were identified. The improvements were implemented.|
4.2 Status and action plan for the next fiscal year and subsequent years
Due to progress to date, the CSA will complete the full assessment of its system of ICFR in 2014-2015. At that time, the CSA will be applying its rotational on-going monitoring plan to reassess control performance on a risk basis across all control areas. The status and action plan for the completion of the assessment of the identified control areas and the continued on-going monitoring for fiscal 2014-2015 for the next fiscal years are as follows:
|Key Control Areas||Assessment Elements|
|Design effectiveness testing and improvement measures||Operating effectiveness testing and improvement measures||On-Going Monitoring Rotation Footnote 1|
|Entity level controls|
|Organizational Risk Management||Completed||Completed||2015-2016|
|Performance Appraisal and Mandatory Training||Completed||2014-2015||2015-2016|
|Delegation Instrument and Assignment of Delegated Authority||Completed||Completed||Future years|
|Budgeting and Forecast performance||Completed||2014-2015||Future years|
|General IT controls|
|General IT Controls||Completed||Completed||2014-2015|
|Process level controls|
|Payroll Footnote 2||Completed||Completed||2014-2015|
|Travel and Hospitality||Completed||Completed||2015-2016|
|Operating Expenditures - Procurement to payment||Completed||Completed||2014-2015|
|Write-Off and Disposal||Completed||Completed||2014-2015|
|Work in Progress - Capital Assets||Completed||2014-2015||Future years|
|Month / Year-End procedures and Financial Reports||Completed||Completed||Future years|
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