Report of the Audit Committee to the Chief Electoral Officer of Canada for Fiscal Year 2016–17
Table of Contents
- Membership and Meetings
- Committee's Terms of Reference
- Eight Areas of Oversight Responsibility
The Audit Committee of the Office of the Chief Electoral Officer of Canada (Elections Canada) was established in compliance with the Federal Accountability Act. It is composed of external members and the Chief Electoral Officer (CEO), and its purpose is to provide the CEO with independent advice on management controls and on the reporting of plans and results. As required by its Terms of Reference, the Committee has prepared this report to summarize its activities for the fiscal year ended March 31, 2017.
Membership and Meetings
The year was marked by major changes in membership, as the CEO retired and the three original external members came to the end of their appointment terms. To facilitate the transition, new external members were added during the year.
Until his retirement in December 2016, Mr. Marc Mayrand, then CEO, chaired the Committee; in 2017, meetings were chaired by Stéphane Perrault, Acting Chief Electoral Officer.
Throughout the year, the Committee's external members consisted of Messrs. W.E.R. Little, J-C. Bouchard and P.G. Boomgaardt, who served from the time the Committee was formed in 2008 to March 31, 2017. In August 2016, Mr. K. Lindsey joined the Committee and Mr. A. Grondines started in November 2016.
A representative of the Office of the Auditor General (OAG) is invited to attend regular meetings. The Chief Audit Executive and the Manager, Internal Audit, attended all regular meetings as observers and to respond to questions from members. As needed, members of senior management and staff attended to make presentations and respond to matters raised by members.
The Committee convened six times during the fiscal year: on April 27, August 10, August 31, November 2, January 18 and March 29, for both regular and special meetings. There was full attendance by external members, except for the absence of one member for one meeting. Meetings generally included an in-camera session involving only external members and the CEO.
Committee Terms of Reference
The Audit Committee has written Terms of Reference, which guide its activities and conform to the revised Treasury Board Policy on Internal Audit of 2012.
The Committee is mandated to provide advice on eight key areas of management.
Eight Areas of Oversight Responsibility
1. Values and Ethics
The Committee was presented with an update on initiatives to integrate values and ethics into all aspects of the workplace. During its January meeting, the Committee addressed ways to promote discussion among staff and to increase sensitivity to values and ethics. Management will continue to stress the importance of this matter and to monitor the impact of its initiatives.
2. Risk Management
One of the key points of attention for the Committee is to understand the risks faced by Elections Canada; this enables the Committee to assess Elections Canada's approach to mitigating risks to ensure effective delivery on its mandate. During the November meeting, the Committee discussed key questions regarding the enhancement of corporate risk management; this provided input for developing a corporate risk register and the new risk-based action plan.
At various meetings throughout the year, management provided updates on how staff compensation was being handled in light of the widely publicized problems with the government-wide Phoenix pay system.
The Committee received periodic updates on evolving issues and steps taken by Elections Canada to manage its affairs. In particular, the Committee was provided with an outline of metrics related to the conduct and wrap-up of the 42nd general election. Special emphasis was directed to a summary of feedback received during post-event regional meetings with returning officers and other field staff. Similarly, the Committee was briefed on the conduct of the general election from an IT perspective, especially as related to cybersecurity, together with lessons learned.
Building on the experience of the most recent general election, the Committee was updated in April, November and January on Voting Services Modernization initiatives.
The Committee was provided with an overview of procedures for and controls over special ballots received by Elections Canada and was updated during the year on plans to enhance the controls. At its January meeting, the Committee was briefed on the plan to deal with a potential case of fraud.
During its March meeting, the Committee was presented with a document called "Discussion on Risk," outlining the key risks along with the risk response strategy.
3. Management Control Framework
Continuing the practice of prior years, the Committee was apprised of key management issues and how procedures have been adopted to mitigate concerns and produce desired results. Special attention was directed to the issues inherent in Elections Canada's two parliamentary funding streams—the annually voted appropriations and the statutory authority.
During its August meeting, the Committee received an overview of the three-year financial cycle, during which the financial policy framework and key financial controls are assessed. Particular attention was focused on completion of the current cycle and activities planned for the years ahead.
Elections Canada highlighted for the Committee the key documents used in its strategic planning; of note was the need to modernize electoral services and to support electoral reform. During each meeting, the Committee received presentations and updates on key projects such as improving voting and electoral services, online services to voters, voter outreach and information services, and front-line service delivery provided by field staff. Special focus was placed on information technology, with several projects making up the Voting Services Modernization initiative: polling place process enhancements, special ballot voting enhancements and future voting technologies.
The Committee was also introduced to plans for a revised governance model and delegations of financial authorities, intended to facilitate executing future plans and projects as well as ensure longer-term progress.
4. Internal Audit Function
In January 2017, a new Chief Audit Executive (CAE)—the Senior Director, Electoral Integrity and Internal Audit—was appointed. The CAE reports regularly on general Internal Audit matters to the Deputy Chief Electoral Officer, Regulatory Affairs, as well as directly to the CEO and the Committee as needed. The Manager, Internal Audit, is generally devoted full time to the audit function, although on occasion he/she may be assigned special projects. The Committee is governed by a Charter, which was reviewed and updated during the Committee's March meeting.
In compliance with the Treasury Board Secretariat's Policy on Internal Audit, Elections Canada completed a self-audit practice inspection in 2014–15, which indicated that the Internal Audit function generally conforms to relevant policies, standards and directives. During its March meeting, the Committee received an update on the implementation of the management action plan to remedy the few areas that had been found to only "partially conform"; the Committee will continue to monitor the execution of plans.
In the context of very limited Internal Audit resources, one assurance audit had been scheduled for 2016–17: the audit of the Professional Development Program. However, in light of changing organizational priorities, this audit was replaced by three assurance audits proposed in the draft "Risk-based Audit Plan for 2017–18 to 2019–20": reviews of political financing, IT security and financial controls. At the March meeting, the Committee reviewed the audit plan and provided additional advice on the selection of audits in the coming years based on identified risks and the results of previous audits.
5. Office of the Auditor General and Central Agencies
By virtue of attendance at Committee meetings by a representative of the OAG, the Committee has been kept informed of matters raised by the OAG and of its audit plans.
In its August 31 meeting, the Committee received the results of the audit of the 2015–16 financial statements. All involved in the preparation of the statements and the related audit were commended for handling the challenges inherent in accounting for the 42nd general election.
During its January meeting, the Committee received a report from the OAG that outlined the Annual Audit Plan for the year ending March 31, 2017.
Several Committee members attended the DAC Symposium sponsored by the Treasury Board Secretariat on November 8, 2016. This served to acquaint them with trends and priorities for management and audit in the federal government.
The Chief Audit Executive and the Manager, Internal Audit, periodically updated the Committee on audit-related matters coming from central agencies, including the audit plans of the Office of the Comptroller General.
6. Follow-up on Management Action Plans
The Committee follows a systematic approach to monitoring action plans presented by management to execute its mandate as well as those that respond to external and internal audits. At the time audit findings are presented, the Committee stresses the importance of explicit management plans that are responsive to remedying deficiencies and take advantage of opportunities to improve.
At its November meeting, the Committee was provided with an overview of the progress made in executing plans to address the issues raised in the Independent Audit Report on the Performance of the Duties and Functions of Election Officials – 42nd General Election (PwC report).
At its January meeting, an update was provided on the audit results of the by-election held in Medicine Hat–Cardston–Warner on October 24, 2016. Discussions covered possible procurement strategies for new technologies, the impact of new technology on polling station workflow, risk management and a communication strategy to introduce changes to the public.
In November, the Committee was provided with an update on the plans developed in response to the August 2015 report of the Office of the Commissioner of Official Languages.
At its March meeting, the Committee was presented with an update on the remaining management action plans stemming from external and internal audits.
The Committee continues to be satisfied with the agency's effective follow-up reporting as well as with its progress in implementing action plans.
7. Financial Statements
The Committee reviewed and endorsed the disclosure contained in Elections Canada's 2015–2016 financial statements. These statements were audited by the Auditor General of Canada, who issued an unmodified audit report and noted good collaboration from Elections Canada staff. The Committee commended all for the good work and recommended the statements for approval by the CEO.
8. Accountability Reporting
During its meeting on August 10, 2016, the Committee reviewed a draft of Elections Canada's Departmental Performance Report for 2015–16; some changes in format were noted, and given that it covered the general election, it had more extensive performance data. In January 2017, the Committee reviewed the draft 2017–18 Departmental Plan (which replaced the Report on Plans and Priorities of prior years). The Committee offered minor suggestions to strengthen clarity and completeness, but in both cases it endorsed the tone and content of the reports.
The Committee was provided with an overview of the Retrospective Report on the
General Election and a preview of the CEO' s Recommendations Report. The Committee emphasized that the reports should convey that incredible efforts were made to deliver the election and that changes must be made to ensure that Elections Canada does not need to continue to rely so heavily on such extraordinary efforts in light of a temporary and aging workforce. The Committee encouraged organizing the large number of recommendations thematically to enhance the report's usefulness to parliamentarians.
The Committee notes that the 2016–17 reporting period was one of transition, both in Elections Canada leadership and in Committee membership. The Committee considers that its activities for the year constitute a satisfactory basis for fulfilling its role. The Committee was provided with relevant and transparent information responsive to its mandate.
The Committee is pleased with the candid analysis of the challenges facing Elections Canada and the sensible approaches taken to deliver on its mandate. Led by the recently retired CEO, the entire executive team has consistently shown genuine interest in the views of Committee members. The Committee notes the professionalism and dedication demonstrated by staff, as well as their openness and willingness to accept and implement suggestions.
Although some experience and context will be lost as long-serving members depart, new members have already attended some meetings; they bring a fresh perspective and have access to the record of the past eight years of Committee work. The Committee considers that it has a reasonable understanding of Elections Canada's considerable challenges: its elaborate legislative and regulatory environment, extraordinary operating demands and need to innovate. Based on its observations over the current year and past years, the Committee considers that Elections Canada has adopted a systematic and rational approach to addressing its mandate, monitoring results and reporting publicly.