Fiscal year 2022-2023 - Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting - Unaudited
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Fiscal year -
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 department's authority, mandate and core responsibilities can be found in the Departmental Plan for the - fiscal year and the Departmental Results Report for the - fiscal year.
2. Departmental system of internal control over financial reporting
In this section
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.
A departmental internal control management framework, is in place and comprises:
- Organizational accountability structures as they relate to internal control management to support sound financial management, including the roles and responsibilities of senior departmental managers for control management in their areas of responsibility;
- Values and ethics;
- Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control;
- Risk-based monitoring and regular updates on internal controls, with an approved annual evaluation plan, results communicated to senior departmental management and an action plan required to address highlighted weaknesses. The Departmental Audit Committee receives a summary of findings and action plans twice a year.
The Departmental Audit Committee provides advice to the deputy head on the adequacy and functioning of the department's risk management, control and governance frameworks and processes.
2.2 Service arrangements relevant to financial statements
The CSA relies on other organizations to process and capture certain transactions recorded in its financial statements, as follow:
2.2.1 Common service arrangements
- Public Services and Procurement Canada (PSPC) administers the payment of salaries and the procurement of some goods and services, and provides accommodation services
- Shared Services Canada provides CSA with Information Technology infrastructure services (data centers, network services, etc.)
- The Department of Justice, which provides legal services.
- The Treasury Board of Canada Secretariat, which provides information on public service insurance and centrally administers payment of the employer's share of contributions toward statutory employee benefit plans.
Readers of this document may refer to the annexes to the Statement of Management Responsibility including Internal Control over Financial Reporting of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.
2.2.2 Specific arrangements
- The Department of Agriculture and Agri-Food provides the CSA with a financial system platform to capture and report all financial transactions.
- The Department of Transport Canada provides support services for the human resources management system at the CSA.
3. Departmental assessment results for the to fiscal year
The Agency is at ongoing monitoring for all its financial reporting and financial management processes. The table below summarizes the ongoing monitoring activities according to previous fiscal year's rotational plan:
| Key Control Areas | Ongoing Monitoring | Progress Status |
|---|---|---|
| CONTROLS OVER FINANCIAL REPORTING | ||
| GENERAL IT CONTROLS | ||
| IT controls specific to business process | Yes | Control tests at the financial system level are integrated into the business process at the time of monitoring. |
| PROCESS LEVEL CONTROLS | ||
| Payroll | Yes | Ongoing monitoring tests were conducted and weaknesses were identified. Corrective measures have been implemented for certain weaknesses and others are still being developed. |
| Transfer Payments | Yes | Ongoing monitoring tests were conducted and weaknesses were identified. Corrective measures are still being developed. |
| CONTROLS OVER FINANCIAL MANAGEMENT | ||
| Forecasting | Yes | Ongoing monitoring testing was conducted. No weaknesses were found. |
The key findings and remediation actions from the current fiscal year's assessment activities are summarized in subsections 3.1 and 3.2. No material control weaknesses were identified that will affect the validity, accuracy, and completeness of the financial statements.
3.1 New or significantly amended key controls
In the current fiscal year, there were no significant changes in existing business processes requiring a reassessment of key controls. The future of work at CSA will be hybrid, working from home and the office. We continue to encourage electronic documentation of controls to facilitate access and review when possible.
3.2 Ongoing monitoring program
As part of its rotational ongoing monitoring plan, the CSA completed its reassessment of internal control over financial reporting and internal control over financial management, within the following business processes:
- Transfer Payments
- Payroll
- IT controls specific to business process
- Forecasting
For the most part, the key controls that were tested, performed as intended to prevent material misstatement of financial statements and to ensure prudent use of public resources. The weaknesses observed are minor and infrequent, and are mainly due to:
- Incomplete documentation of the executed control.
- Missing approval by a delegated authority.
- Immaterial salary underpayments stemming from a manual entry process.
- Untimely request for a salary advance repayment due to delays in the transfer of the Phoenix pay file between departments.
- Inconsistencies regarding salary advance transfers between departments.
- Lack of evidence regarding reviews of some final grants and contributions payments.
Management action plans have been developed by the business process owner to address recommendations
4. Departmental Action Plan for the next fiscal year and subsequent fiscal years
CSA's rotational ongoing monitoring plan over the next fiscal years is shown in the following table. The ongoing monitoring plan is based on:
- An annual review of high-risk processes and controls
- Significant changes in business processes or deployment of new technology
- Related adjustments to the ongoing monitoring plan as required.
| Key Control Areas | - | - | - | and Subsequent |
|---|---|---|---|---|
| CONTROLS OVER FINANCIAL REPORTING | ||||
| ENTITY LEVEL CONTROLS | ||||
| Organizational Risk Management | - | Yes | - | - |
| Mandatory Training | - | Yes | - | - |
| Performance Appraisal | - | - | Yes | - |
| Delegation Instrument and Assignment of Delegated Authority | - | - | Yes | - |
| GENERAL IT CONTROLS | ||||
| SAP - Access Control | - | - | Yes | - |
| IT controls specific to business process Footnote 2 | Yes | Yes | Yes | Yes |
| PROCESS LEVEL CONTROLS | ||||
| Payroll Footnote 3 | Yes | Yes | Yes | Yes |
| Operating Expenditures - Travel and Hospitality | Yes | - | - | - |
| Operating Expenditures - Procurement to Payment | - | Yes | - | - |
| Write-Off and Disposal | Yes | - | - | - |
| Transfer Payments | - | - | - | Yes |
| Month / Year-End Procedures and Financial Reports | - | - | Yes | - |
| CONTROLS OVER FINANCIAL MANAGEMENT | ||||
| Chief Financial Officer Attestation | - | Yes | - | - |
| Budgeting | - | - | - | Yes |
| Forecasting | - | - | - | Yes |
| Costing | Yes | - | - | - |
| Investment Planning | Yes | - | - | - |
| Project Management | - | Yes | - | - |
In addition to the rotational ongoing monitoring plan included in the internal control system, the CSA will follow up on pending corrective actions based on the findings listed in section 3.2 ongoing monitoring program.