Office of the Commissioner of Lobbying of Canada

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Audit and Evaluation Committee Annual Report 2021-22

Table of contents

Introduction

The Office of the Commissioner of Lobbying (OCL) is an independent Agent of Parliament. The Commissioner of Lobbying (Commissioner) is the deputy head of the organization.

The Financial Administration Act requires that deputy heads establish an audit committee for their departments. The Treasury Board (TB) Policy on Internal Audit and Directive on Internal Audit expand on the legislation, requiring the establishment of a Departmental Audit Committee (DAC) that includes a majority of members from outside the federal public service (external members).

Audit and evaluation are the subjects of separate policies in the federal government. However, the management of these functions is closely linked, particularly in small agencies. In the interest of efficiency, the Commissioner has established an Audit and Evaluation Committee (AEC) that in addition to responsibilities mandated for a DAC, has responsibilities related to evaluations that are carried out under the TB Policy on Results.

The Terms of Reference (TOR) for the AEC requires that the Committee prepare a report on its activities annually and submit it to the Commissioner. This document fulfils that requirement.

Relevant legislation and related policies

The AEC TOR supports the application of the Financial Administration Act as well as related Treasury Board policies and Directives. Details, including application to OCL as an Agent of Parliament, are set out in the TOR.

Accountability of the AEC

The sole accountability of the AEC is to the Commissioner. In this regard, members are accountable for the objectivity, quality and timeliness of their advice and for the performance of their contractual responsibilities.

Responsibilities of the AEC

The AEC is responsible for the following:

  • Providing objective advice and recommendations to the Commissioner regarding the sufficiency, quality and results of internal audit engagements that are related to the adequacy and functioning of the Office's frameworks and processes for risk management, control and governance.
  • Using a risk-based approach, reviewing all areas of management set out in the AEC TOR for committee review. These areas are listed in the next section of this document.
  • Providing advice and recommendations on matters for which the Commissioner, as accounting officer, is responsible, and on other related matters as needed or requested by the Commissioner.
  • To provide advice and recommendations to the Commissioner on the selection of areas for evaluation and on the scope, conduct and results of those evaluations.

Areas of management for AEC review

The areas of management that fall within the scope of the AEC are:

  • Audits and Evaluations
  • Values and Ethics
  • Risk Management
  • Management Control Framework
  • Internal Audit Function
  • Follow-up on Management Action Plans, including those made in response to audits by the Office of the Auditor General or the Public Service Commission
  • Financial Statements and Public Accounts Reporting
  • Accountability Reporting

Membership

The Chair and other external members are selected by the Commissioner. The FY 2021-22 AEC consisted of:

Chair:

Michael McLaughlin, External member and Chair (April 2021-February 2022)

Michael Nelson, External member (April 2021-February 2022), Chair (March 2022)

Members:

Nancy Bélanger, Commissioner, Ex-Officio member

Basia Ruta, External member (October 2021-March 2022)

Regular Non-member attendees

Charles Dutrisac, Chief Audit Executive, Director of Finance and Chief Financial Officer (CAE/CFO)

Meetings

During FY 2021-22 regular meetings of the Committee took place on:

April 29, 2021

July 15, 2021

October 14, 2021

January 10, 2021

February 15, 2022

Ad hoc meetings and discussions between the Commissioner and AEC members were held throughout the FY as required.

External members held in-camera meetings with the Commissioner and the CAE/CFO at or close to each regular meeting. In-camera meetings with other OCL Directors were also held during the FY.

Summary of FY 2021-22 aec meeting items

Agendas for AEC meetings were planned by the Chair and the CAE. Items were included for either a decision, advice to the Commissioner or for the information of external members. Items included at regular and ad hoc meetings of the AEC in FY 2021-22 included the following:

OAG Audit of Financial Statements

OCL Financial Statements are audited each year by the OAG. The AEC reviewed the Financial Statements as well as the ICFR prior to meeting with the OAG. Nathalie Chartrand, Audit Principal and Julie Tremblay, Director, presented the results of the audit of FY 2020-21 to the Committee on July 15, 2021. Ms. Tremblay advised that the results of the audit resulted in an unmodified opinion on the financial statements. Ms. Chartrand confirmed that the audit had gone well and thanked officials of OCL and the financial services provider, the Canadian Human Rights Commission (CHRC), for their full cooperation. On the recommendation of the AEC, the Commissioner and the CFO signed the audited financial statements.

OCL Budget

The AEC reviewed and provided comments on each Quarterly Financial statement. At every meeting, members were presented with a report and analysis by the CFO on expenditures and forecasts. Budget 2021 had allocated funding for OCL IM/IT requirements. AEC members were informed of progress on obtaining this funding though a TB Submission as well as measures taken by OCL to staff IM/IT positions and to obtain consulting services for a study of moving some OCL IT services to a cloud-based solution.

Departmental Plan (DP) and Departmental Results Report (DRR)

The AEC was provided copies of the DP and DRR for review well in advance of their publication. Comments were made and where required, discussions with the CFO took place. During the course of the review of the DP, including the Future-oriented Statement of Operations, members requested that they meet with the CFO and CHRC to be briefed on the process of developing financial tables for the various documents that the AEC reviews throughout the year.

Corporate Risk Profile (CRP) and Risk-Based Audit and Evaluation Plan (RBAEP)

OCL undertook a comprehensive review of the CRP and RBAEP during the reporting period. The AEC was fully involved. AEC sessions were held with the consultants and with the Commissioner and CAE. The final result was excellent. While each document will be reviewed annually, the work done this year will form the basis of planning going forward.

Human Resources

At each meeting the Commissioner and where appropriate the Director of Corporate Services, briefed the AEC on OCL staff issues. These included:

  • Staff Well-Being: The AEC was kept informed of the impact of the shift to working at home caused by the pandemic and on measures taken by OCL management to promote mental health wellness and productivity of staff. Information was provided at each regular meeting on issues such as government vaccination requirements and return to workplace guidelines and policies.
  • Staffing: Budget 2021 provided funding for new IM/IT positions at OCL. The AEC was briefed at every meeting on progress to fill these positions. As well, a director position was vacant for part of the FY and the AEC was provided with the status of the ongoing work to fill that position.
  • Organization: The AEC was consulted on changes to the allocation of responsibilities among OCL Directors

Parliamentary Affairs and Outreach

The AEC was informed at regular meetings and on an ad hoc basis regarding Parliamentary and outreach activities. These included:

  • Discussion of an appearance by the Commissioner before a Parliamentary Committee: The AEC was informed in advance of the event, was able to watch the meeting by webcast and was able to discuss it at a later meeting with the Commissioner.
  • Consultation on the Lobbyists’ Code of Conduct (Code): During the reporting period, the Commissioner held a public consultation on revising the Code, The AEC was briefed at each regular meeting on the progress of this consultation.

Legal Issues

The Commissioner kept the AEC informed of the status of cases that were before the Courts. During the reporting period, there were no cases that posed a potential financial risk to OCL.

Ongoing Operational Matters

At regular meetings and when appropriate at ad hoc meetings, the AEC was informed of the status of operational matters that arose during the reporting period. Members appreciated this information, as it provided context for their advice to the Commissioner. Items included the following:

  • Conversion of some OCL staff from the CS group to the IT group
  • Staff training, including writing and lean processes
  • IT security and physical security
  • Statistics on investigations
  • Sampling reports on FAA Section 33 and Section 34 transaction errors
  • Procurement initiatives, including Indigenous Business contract requirements
  • Reporting burden to Central Agencies
  • Progress on the OCL Business Continuity Plan

Orientation and learning activities

  • The Chair provided verbal briefings and key AEC documents to new external member Basia Ruta prior to her joining the AEC in October, 2021.
  • Members of the Committee attended the virtual DAC symposium that was hosted by the Office of the Comptroller General in December 2021.

Assessment of OCL’s system of internal controls, risk management and governance processes

As described earlier in this report, the AEC met as a full committee with the Commissioner and OCL staff several times during the year, including ad-hoc meetings and discussions as required. At these meetings, the functioning of internal controls, risk management and governance processes were discussed. In addition, to increase the reliability of the advice provided by the AEC to the Commissioner, the following steps were taken:

  • At each regular AEC meeting the Commissioner and CAE/CFO were asked whether there were any irregularities, including fraud or management override, that they wished to disclose. There were none.
  • At or near each regular AEC meeting, the external members held in-camera sessions with the CAE/CFO and the Commissioner, proving a further opportunity to raise any issues of concern
  • During the reporting period, the Chair was in regular contact with the Commissioner and the CAE/CFO
  • OCL’s Quarterly Financial Statements were reviewed by external members before they were published. Questions were asked of the CFO – and satisfactory answers were provided – at each of these reviews.
  • External members met in-camera with the OAG Principal responsible for the audit of OCL’s FY 2020-21 financial statements. It was noted that the audit did not identify any material misstatements or concerns that needed to be brought to the attention of the AEC.
  • During the reporting period, a comprehensive review of OCL’s Corporate Risk Profile and Risk-Based Audit and Evaluation Plan was carried out and discussed in detail with the AEC.

Having taken these steps, the view of the external members of the AEC is that OCL’s system of internal controls, risk management and governance processes are from our perspective and to the best of our knowledge, sound.

Assessment of the capacity and performance of the OCL’s internal audit and evaluation function

Given its staff size and budget, the OCL does not have an in-house audit or evaluation team. Audits, evaluations, and related reviews are carried out by external consultants under the direction of the CAE.

The AEC noted that to support this arrangement of carrying out the OCL’s audit and evaluation responsibilities:

  • The AEC meets on a regular and ad hoc basis, has an external Chair, and membership is reviewed and renewed on a timely basis.
  • OAG audits take place each year. OAG staff conducting the FY 2020-21 audit commended the cooperation of OCL staff with whom they worked in carrying out the audit, as well as the cooperation of CHRC officials.
  • A multi-year risk-based audit and evaluation plan has been prepared and has been reviewed by the AEC.
  • Sufficient funds are available to carry out this plan.

In view of these observations and its ongoing work with the Commissioner and the CAE/CFO, the AEC’s advice to the Commission is that the capacity and performance of the OCL’s internal audit and evaluation are sound.

Support to the committee

The AEC received information and support from management to enable it to carry out its duties. In particular:

  • Meeting agendas were discussed with the Chair in advance of each regular meeting
  • Minutes were taken at regular meetings and were provided to AEC members for review in a timely manner
  • Arrangements for virtual meetings worked extremely well, allowing for efficient and effective discussions despite the inability to meet in person
  • Contract support for external members was carried out effectively, including new contracts, renewals and amendments

Aec forward agenda

Certain AEC activities take place each year, including the following:

  • Providing advice and recommendations to the Commissioner on issues related to delivery of services, including performance measurement and communication with stakeholders
  • Reviewing audit and evaluation reports
  • Follow up of Management Action Plans
  • As a committee, developing a better understanding of both the administration and the business of OCL through briefings by appropriate OCL staff. These briefings help Committee members to provide advice regarding risks.
  • Review of Quarterly Financial Statements and provision of comments where appropriate on the Departmental Plan and the Departmental Results Report
  • Participating where appropriate in DAC community learning events to exchange views with audit committee members in other departments and agencies

In addition to these regular activities, the external members of the AEC will have a special interest in the following issues during 2022-23:

  • Implementation of the RBAEP – Central to the work of the AEC is provision of advice on audits, evaluations, and reviews such as Advisory Projects. The Committee looks forward to advancing this work in the coming FY.
  • OCL Financials – During the course of the year, the AEC considers several reports containing financial details. These range from OCL monthly budgets to Parliamentary reports such as the DP, the DRR, and Quarterly Financial Reports. The CFO has committed to providing to the AEC, in coordination with CHRC, a briefing that will explain the linkages among the financial data and tables in these reports and the processes for developing them
  • Renewal of AEC meeting operations – Early in FY 2022-23, external members met with the Commissioner and with the CAE to exchange views on how best to organize AEC meetings so as provide the Commissioner with quality advice. Decisions made subsequent to these meetings included: providing more time for discussion and less for presentations at meetings; ensuring adequate time for in-camera meetings; planning for briefings by members of the OCL Executive team on current and planned operational matters; and ensuring time with the Commissioner to discuss strategic or other issues.
  • Integration of new IM/IT Staff – Budget 2021 provided OCL with funding for five new IM/IT positions. The AEC will look forward to hearing about progress on integration of these new staff and the work they will carry out in support of OCL IM/IT systems and more generally, on information management at OCL.
  • Transformation of OCL work practices as we emerge from the pandemic – OCL has been extremely successful in mitigating the risks and challenges associated with working remotely during the pandemic. Going forward, as practices for remote work vary across government, OCL will need to continue adapting to the expectations of stakeholders and OCL staff and management.
  • AEC Learning – External members look forward to learning opportunities of three kinds in 2022-23:
    • OCL Operations – The work of the AEC will be enhanced by knowledge of current and expected opportunities, challenges and risks in OCL’s work. The AEC Annual Plan for 2022-23 includes planned opportunities for briefings to the AEC by the Commissioner on a regular basis and by OCL Directors at least once during the FY and at other times as required.
    • DAC Community Events - The OCG organizes learning events for the DAC community each year. OCL AEC members look forward to participating in these events where appropriate.
    • Learning as a Committee – The current OCL AEC of the Commissioner, Basia Ruta and Michael Nelson is the first completely new OCL AEC in over ten years. The external members looking forward to working with OCL to learn how best to use our individual experience, knowledge and abilities to provide the best possible advice to the Commissioner on all matters brought to our attention during the coming year.
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