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Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting - Unaudited

Canadian Space Agency

Fiscal year 2015-2016

1. Introduction

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.

Detailed information on the Canadian Space Agency Act, its mandate, and program activities can be found in the 2015-2016 Departmental Performance Report and in the 2015-2016 Report on Plans and Priorities.

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 and three external members, one of whom chairs the Committee. In addition, the Vice-President, the Chief Financial Officer and the Chief Audit and Evaluation Executive attend all meetings.  The AC provides advice to the President on the adequacy and functioning of the Agency's risk management, control and governance frameworks and processes. 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 2015-2016, the AC had four meetings and participated in two 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:

Specific Arrangements:

3. Departmental assessment results during fiscal year 2015-2016

3.1 New or significantly amended key controls

During the current fiscal year, the travelling process has been modified to reflect the deployment of the new electronic travel system HRG. Design effectiveness tests were carried out on this new process. No changes were made to key control.

Following the implementation of the new payroll system Phoenix in April 21, 2016, the payroll process will be reviewed in 2016-17. The review aims to ensure that the process reflects the activities as they are carried out, in order to comply with the internal control policy.

3.2 On-going monitoring program

In 2015-2016, the CSA performed, in accordance with the plan, the on-going monitoring of key controls for payroll, performance appraisal for Senior Management, operating expenditures for travel and hospitality, transfer payments as well as specific related IT controls within the business processes.

The key financial controls evaluated for the above mentioned process, were found to be operating effectively, to prevent any material misstatement to the Financial Statements. There were no control weaknesses identified with a high risk impact. As for the low risk impact of the controls, findings were noted and corrective measures have been or will be rectified in 2016-17.

As a result of the on-going monitoring, the CSA identified the following improvements to strengthen its control environment.


Travel and hospitality

Transfer payments

4. Canadian Space Agency's Action Plan

4.1 Progress during fiscal year 2015-2016

The CSA has maintained the on-going monitoring for the ICFR system according to the previous fiscal year's plan. The progress achieved according to this plan is summarized as follows:

Elements in previous year's action plan identified for 2015-2016
Key Control Areas On-going monitoring Progress Status
Entity level controls
Performance Appraisal Yes On-going monitoring testing was conducted. No weaknesses were found.
General IT controls
General IT Controls Yes On-going monitoring testing was conducted. No weaknesses were found.
Process level controls
Payroll Yes On-going monitoring testing was conducted and weaknesses have been identified. Corrective measures are still being developped
Travel and Hospitality Yes Operating effectiveness testing is complete and weaknesses were found. Corrective measures have been implemented.
Transfer Payments Yes On-going monitoring testing was conducted and weaknesses have been identified. Corrective measures are still being developped.

In 2015-16, in addition of achieving relative progress in the on-going monitoring, the CSA has also carried out tests on the design effectiveness of the new electronic travel system HRG.

4.2 Action plan for the next fiscal year and subsequent years

The three year cycle plan for on-going monitoring focused on the CSA's risks is presented in the following table. It is established yearly following the validation of our processes and high risk controls.

Risk-based rotational ongoing monitoring planTable note 1
Key Control Areas 2016-2017 2017-2018 2018-2019
Entity level controls
Organizational Risk Management Yes    
Performance Appraisal and Mandatory Training     Yes
Delegation Instrument and Assignment of Delegated Authority Yes    
Budgeting and Forecast performance   Yes  
General IT controls
General IT Controls Yes Yes Yes
Process level controls
Payroll Table note 2 Yes Yes Yes
Operating Expenditures - Travel and Hospitality     Yes
Operating Expenditures - Procurement to payment   Yes  
Write-Off and Disposal   Yes  
Work in Progress - Capital Assets   Yes  
Transfer Payments Yes    
Month / Year-End procedures and Financial Reports Yes    

Other than the rotational on-going monitoring plan, the CSA will perform evaluations on the new or heavily modified key controls related to the payroll process following the transfer to the new payroll system Phoenix.

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