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Audit and Evaluation Committee — Terms of reference (revised September 19, 2017)

Table of contents


Introduction

The Treasury Board Policy on Internal Audit came into effect on . Its objective is to support strong and accountable public sector management by ensuring effective internal auditing within departments and across government.

The Commissioner of Lobbying is an agent of Parliament and, as such, the Office of the Commissioner of Lobbying (the Office) is not directly within the purview of Treasury Board oversight. The Policy states that the principles of the policy will apply to the offices of agents of Parliament. In this respect, the Commissioner may authorize any departures from specific policy requirements as she may deem appropriate in light of the governance arrangements, statutory mandate and risk profile of the organization.

The Agents of Parliament have considered the Policy on Internal Audit, and in order to preserve their independence from government, intend to comply with its principles with the following adaptations:

  • The appointment of the external members of the Audit Committee will be the sole responsibility of the Agent of Parliament.
  • Agents of Parliament are not accountable to a minister. Internal audit plans and results are published on the Office’s website.
  • Internal audit reports of non-investigative functions would be made public.
  • Chief Audit Executive (CAE): Given the size, risk profile and resources of officer of Parliament organizations, it is not practicable or feasible to appoint a full-time chief audit executive. However, responsibility for internal audit, together with other responsibilities, if feasible, will be assigned to a senior executive who has a CIA and/or CPA designation where possible, and who reports directly to the officer of Parliament.
  • Agents of Parliament are not part of the executive branch of government. However, consideration will be given to incorporating the horizontal risks identified by the Office of the Comptroller General into annual audit plans of the officers of Parliament.

The Treasury Board Policy on Evaluation also came into effect on and replaced the Policy on Evaluation that was in place since April, 2009. The policy objective is to improve the achievement of results across government; and enhance the understanding of the results government seeks to achieve, does achieve, and the resources used to achieve them. Given the size of the Office, the Commissioner has taken the decision that the Committee would also serve as an advisory body to her related to the evaluation plan, resourcing, final evaluation reports and other evaluation and evaluation-related activities of the Office.

These Terms of Reference document the role, responsibilities and operation of the Audit and Evaluation Committee for the Office of the Commissioner of Lobbying.

Purpose

The Committee is an independent advisory body to the Commissioner of Lobbying. It provides objective advice and recommendations to the Commissioner regarding the sufficiency, quality and results of assurance on the adequacy and functioning of the organization's risk management, control and governance frameworks and processes (including accountability and auditing systems). In order to give this support to the Commissioner, the Audit and Evaluation Committee should exercise oversight of core areas of management, control and accountability, including reporting. This should be done in an integrated, risk-focused and systematic way.

The Audit and Evaluation Committee as a strategic resource to the Commissioner, also provides such advice and recommendations as may be requested by the Commissioner on specific emerging priorities, concerns, risks, opportunities and/or accountability reporting.

Committee membership

Composition

The Audit and Evaluation Committee is comprised of three external members and the Commissioner (an ex-officio member). An external member will chair the Audit and Evaluation Committee. At least one member must be a financial expert with a recognized professional accounting designation (CIA or CPA). The Commissioner, as an ex-officio member, is the only member internal to the Office. If at some point in time members internal to the federal public service, in addition to the Commissioner, are named to the Audit and Evaluation Committee, these members are to be limited to deputy ministers and associate deputy ministers from within the organization or otherwise.

All members to the Audit and Evaluation Committee are appointed by the Commissioner. Members are selected in a manner whereby their collective abilities, knowledge and experience allow the Committee to carry out its duties competently and effectively.

Chair

An external member will chair the Audit and Evaluation Committee.

The Chair of the Audit and Evaluation Committee has the following responsibilities:

  • Prepare a plan to ensure that its annual and ongoing responsibilities are addressed and that meetings are scheduled based on requirements. The plan will be presented to the committee for its endorsement and recommendation to the Commissioner.
  • Set the agenda of the Committee in consultation with the Commissioner, taking into account items proposed by other committee members and senior management, and lead committee proceedings.
  • Ensure that proper advice and guidance is provided to the Commissioner, oversee that the Committee's decisions are implemented, and ensure that proper action is taken on all matters relevant to Committee's Terms of Reference.
  • Ensure that the representatives from the Office of the Auditor General are kept informed of Audit and Evaluation Committee proceedings, and solicit comments and advice from the Office of the Auditor General relating to matters relevant to the Committee and the internal Audit function.
  • Ensure that Audit and Evaluation Committee Terms of Reference are relevant, and propose modifications to the Committee for updating the terms of reference where considered useful.
  • Ensure the preparation of an Annual Report of the Audit and Evaluation Committee to the Commissioner, as described at section 8 of these Terms of Reference.

In order to carry out these responsibilities effectively, the Chair of the Audit and Evaluation Committee has direct access for meeting with the Commissioner, the Chief Financial Officer, the Chief Audit Executive, and the Office of the Auditor General on an as required basis, outside of the Committee meetings.

Tenure and terms of office

An external member shall serve at pleasure of the Commissioner but generally not more than eight years. In general, taking into account the training provided and the knowledge of the operations of the office and policies gained over time, external members would be expected to make a personal commitment to remain on the Committee for at least four consecutive years.

Committee responsibilities and duties

The key areas of responsibility that fall within the scope of concern of the audit and evaluation committee are presented below. However, the particular emphasis and priorities for the committee will be set by the Commissioner in consultation with the committee and in consideration of the particular mandate, objectives and priorities, as well as the corresponding risks affecting the organization and the government. Accordingly, the Commissioner is responsible for ensuring that each of the following areas is reviewed with an appropriate risk-guided focus and cycle:

Values and ethics

The arrangements established by management to exemplify and promote public service values and to ensure compliance with laws, regulations, policies and standards of ethical conduct.

Risk management

The corporate risk profile and related risk management arrangements.

Management control framework

The internal control arrangements, including audits that may be initiated by managers.

Internal audit function

Recommend, and periodically review, the Internal Audit Charter or Internal Audit policy requiring the approval of the deputy head.

Monitor the adequacy of resources of the Internal Audit function.

Review and recommend for approval by the Commissioner the annual risk assessment and Multi-Year Internal Audit Plan prepared by the Chief Audit Executive.

Monitor and assess the performance of the internal Audit function.

Receive and recommend for approval to the Commissioner Internal Audit reports and management action plans to address the audit recommendations prepared by the Chief Audit Executive.

Receive and review regular reports on progress against the Internal Audit plan, including an annual status report from the Chief Audit Executive on such progress.

Receive and review regular reports on the status of management action relative to prior Internal Audit recommendations prepared by the Chief Audit Executive.

Receive and recommend for approval an annual assurance overview report prepared by the Chief Audit Executive.

Be briefed on Internal Audit activities that do not result in a report, and be informed by the Chief Audit Executive of all matters of significance arising from such work.

Evaluation function

Review the adequacy of evaluation coverage, as expressed in an evaluation plan developed by the head of evaluation, as well as the risk-based approach used for determining the evaluation approach and level of effort to be applied to the individual evaluations comprised in the plan, and recommends the plan for approval by the deputy head.

If requested by the head of evaluation:

  • review and recommend approval of key elements of an evaluation, such as the terms of reference; and
  • consider and respond to key evaluation-related issues.

Review final evaluation reports, including management responses and action plans, and recommend approval to the deputy head.

Ensure follow-up to action plans approved by the deputy head.

Review the adequacy of resources allocated to the evaluation function and recommend to the deputy head an adequate level of resources consistent with the organization evaluation plan.

Review the adequacy of resources allocated to performance measurement activities as they relate to evaluation, and recommends to the deputy head an adequate level of resources for these activities.

Review the performance of the evaluation function, and recommend action to address any weaknesses.

Office of the Auditor General and other agents of Parliament
(for example Official Languages Commissioner, Information Commissioner, Privacy Commissioner, Ethics Commissioner)

Advise the Commissioner on the adequacy of arrangements that are in place for supporting the Office of the Auditor General and other agents of Parliament in doing audit work at the Office.

Be briefed on all audit work relating to the Office, review the draft audit reports, as may be referred by the Commissioner, and as may be requested by the Commissioner, and recommend for approval management responses and action plans where applicable.

Periodically meet with the Office of the Auditor General and seek its comments and advice on matters of organizational risk, control and governance.

Central agencies

Be briefed on audit-related issues and priorities raised by central agencies and, as may be requested by the Commissioner, make recommendations on required action.

Be briefed, and advise the Commissioner on, the impact of government-wide initiatives to improve management practices.

Follow-up on management action plans

Advise the Commissioner on the effectiveness of the arrangements in place to monitor and follow up on management action plans responding to audit recommendations from internal audits, evaluation reports, the Office of the Auditor General, other agents of Parliament, or other sources.

Receive a report periodically from the Chief Audit Executive on whether management action plans have been implemented and, based on risk-targeted follow-up work, whether the actions taken are effective, and whether the Chief Audit Executive believes that management has accepted excessive levels of risk.

With regard to internal disclosure of wrongdoing in the workplace, the Audit and Evaluation Committee will review, when requested by the Commissioner, any report concerning a complaint and provide advice to the Commissioner based on the matters presented in the report.

Financial statements and public accounts reporting

Review the financial statements and public accounts of the Office with management, including all significant accounting estimates and judgments therein, and advise the Commissioner on any apparent material concerns. When the financial statements are audited, such advice will include a recommendation to the Commissioner as to whether they should be accepted.

Review, when applicable, the audited financial statements with the Office of the Auditor General and management, and discuss any significant adjustment to the statements required as a result of the audit, and any difficulties or disagreements with management encountered in the course of the audit.

Review the management letters arising from the audits, and the findings and recommendations relating to internal controls in place for financial reporting, as well as management responses.

Risk and accountability reports

Review the Office's Corporate Risk Profile and provide any related advice to the Commissioner. Also, review the Annual Report to Parliament, the Report on Plans and Priorities, the Departmental Performance Report, the Public Accounts, and any other significant accountability report to ensure that, to the best of Audit and Evaluation Committee members' knowledge, there are no material misstatements or omissions.

Committee meetings

Meetings

Meetings are at the call of the Chair, normally expected to be four times annually. The Chair may convene additional meetings as circumstances require. The Chair must call a meeting if requested to do so by the Commissioner or another Audit and Evaluation Committee member.

On an annual basis, the Chair of the Audit and Evaluation Committee will propose a plan to ensure that the annual and ongoing responsibilities of the Committee are fully addressed. The plan will be presented to the Committee for approval, and will determine the number, timing and duration of the regular Committee meetings. The Audit and Evaluation Committee's meeting schedule will thereby be set out one year in advance so that management and Internal Auditors can prepare the information and reports required to support the Committee's work. Rescheduling of Committee meetings will be by exception only.

Quorum

The Audit and Evaluation Committee has quorum if the Chair or acting Chair plus one of the members are in attendance.

An external member of the Audit and Evaluation Committee may act as replacement to the Chair in the Chair's absence during meetings. Only the Chair or the Commissioner may empower another external member of the Committee to temporarily act as the Chair's replacement for the conduct of meetings.

No alternates to members shall be permitted to attend, with the exception of persons in a formal acting capacity for the Commissioner (ex-officio member) who may be on leave.

Preparation and attendance by members

To enhance the effectiveness of the committee meeting, each member will:

  • devote the time needed to prepare for and participate in each meeting by reading the reports and background materials provided in advance of the meeting; and,
  • maintain an excellent meeting attendance record.

Attendance by non-members

The Deputy Commissioner, the Chief Financial Officer, the Chief Audit Executive, and the Head of Evaluation, shall attend all meetings of the Committee.

As necessary, the chair shall ask a senior representative of the Office of the Auditor General, to attend an Audit and Evaluation Committee meeting. Other participants may be invited at the discretion of the chair of the Committee.

The chair may request that certain agenda items be treated without the presence of some or all of the non-members attending the meeting.

Minutes of meetings

Minutes of each meeting shall be kept and shall contain a record of the persons present. The minutes provide a record of decisions taken and a high-level summary of the discussion, providing insight on the topics and sub-topics discussed.

In-camera meetings

At least annually, the Audit and Evaluation Committee shall meet individually, in camera, with each of:

  • the Chief Financial Officer
  • the Chief Audit Executive
  • the representative of the Office of the Auditor General when in attendance
  • any other officials the Audit and Evaluation Committee may determine.

At the discretion of the Commissioner, in-camera sessions with officials from the Office of the Auditor General, the OCL, or other organizations, may take place only with the external members.

Operations

Access by / to the committee

The Audit and Evaluation Committee has unfettered access to the, Deputy Commissioner and Chief Financial Officer, Director of Investigations, Director, Registration and Client Services and to other employees of the Office and documentation (subject to applicable legislation) as may be required to fulfill its responsibilities.

The Deputy Commissioner and Chief Financial Officer has unfettered access to the Audit and Evaluation Committee and to the Committee's Chair.

Committee orientation, training and continuing education

The role of the Audit and Evaluation Committee can only be fulfilled if its members are well informed. The annual meeting with the OCG and other members of Departmental Audit Committees (usually held each November) has been a valuable event. A process of continuing education — for example, briefings and information on emerging issues and risks — shall also be put in place.

Support to the committee

The Audit and Evaluation Committee will be provided with the resources necessary to carry out its role, responsibilities and duties. To the extent it deems necessary to meet its responsibilities, and in keeping with its Terms of Reference, the Committee has the authority to retain independent advice and assistance.

Secretariat support to the operation of the Committee shall be provided by officials from the Office. This includes:

  • the timely preparation of all notices and agendas of meetings;
  • coordination of presentations and distribution of reports and/or related documents that are prepared for the committee's information or consideration;
  • the timely preparation and distribution of minutes of meeting proceedings; and,
  • performance of other duties as may be assigned.

The Chief Financial Officer of the Office will act as Secretary to the Audit and Evaluation Committee, and will involve a staff person to attend meetings for drafting minutes. Administrative support for the Committee and individual members will be provided by the staff of the Office, as arranged by the Chief Financial Officer.

Assessment of committee performance

Committee self-assessment

The Audit and Evaluation Committee will self-assess its performance on an annual basis and provide a confidential report to the Commissioner.

As a micro-organization that contracts with external experts for its audits and evaluations, and that has no Internal Audit personnel, there is no external “practice inspection” for Internal Audit planned. Audits at OCL are conducted by external audit firms that meet the federal procurement requirements.

Accountability reporting by committee

The committee is accountable to the Commissioner.

The committee shall prepare an annual report to the Commissioner. This report shall:

  • summarize the committee's activities undertaken and the results of its review;
  • provide the committee's assessment of the Office's system of internal controls;
  • highlight significant concerns the committee may have in relation to the risk management, controls and governance framework and processes of the Office;
  • provide the committee's assessment of the capacity and performance of the Internal Audit function;
  • provide, as needed, recommendations for the improvement of risk management, controls and governance framework and processes, including recommendations for the improvement of the Internal Audit function of the Office;
  • provide such other information or documentation that the committee deems important to best convey a fair and complete picture of its activity and results — and the context within which this ought to be viewed (e.g., it is good practice for the Committee to include its Terms of Reference in its annual report); and,
  • fully brief the Commissioner in advance of the finalization of the annual report of the Committee.

Review of committee terms of reference

The committee shall review annually the appropriateness of its terms of reference, for reaffirmation by the Commissioner.

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