ARCHIVED - Internal Audit for the Treasury Board of Canada
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For the Year Ending March 31, 1998
Prepared by Consulting and Audit Canada - November 1999
The audit of the Pension Plan For Employees of the Government of Canada
Locally Engaged in the USA - Registered Pension Plan(RPP) was
conducted in October 1998 at the Canadian Embassy in Washington, D.C., for the
fiscal year ending March 31, 1998. The Treasury Board of Canada is the plan
sponsor for the pension plan and has designated the Embassy's Head of Personnel
as the Plan Administrator. The Embassy's Benefits Group is responsible for
As a result of our review, we conclude that the pension plan has been
administered in compliance with the RPP Document and the financial transactions
into and out of the RPP Fund were found to be timely and accurate. The market
value of RPP assets at March 31, 1998 was $85.5 million (Canadian).
While effective control has been provided over the systems and procedures in
place to administer the RPP, we have recommended a number of corrective actions
intended to maintain or strengthen the administration of the RPP with regard to
financial integrity, service level to clients and data processing capability, as
- Minor differences were found to exist between financial balances shown on
the RPP trustee's monthly statements for the RPP and those of the RPP
investment manager. The differences are apparently the result of timing
differences in the respective preparation of monthly statements. Therefore,
we have recommended that the RPP trustee provide the Plan Administrator, in
writing, with an explanation of any such discrepancies if they occur from
month to month.
- A review of the trustee's monthly portfolio statements revealed that the
statements were difficult to read and interpret. Consequently, at the time
of the audit, the Benefits Group was not able to reconcile the financial
data provided by the trustee to its own internal records. As a result, we
have recommended that the trustee be requested to provide the Plan
Administrator with better training, including adequately detailed written
instructions and explanations concerning the use of the monthly portfolio
- There has been a marked increase in the overall workload of the Benefits
Group, due to the development and implementation of the RPP (the revised
former Plan) and the newly established Qualified Pension Plan, and the
resulting need to design, develop and implement new computer systems.
Further, the decision to use three insurance carriers for the welfare
programs, in place of the one previously used, has also added to the overall
workload. As a consequence, we have recommended that temporary and/or
contracted support be provided in the short-term until the new pension and
welfare plans become fully operational and the resulting resource needs are
- While all Benefits Group systems have been replaced or upgraded to be Year
2000 compliant, the Embassy's pension application ALPH (Automated Life,
Pension and Health System) remains the one notable exception. ALPH is not
considered an acceptable Year 2000 product, as its dBase-III/Clipper
database technology is about 15 years old. As a result, we have recommended
three corrective actions, namely: (1) Verify ALPH processing
capabilities/limitations regarding year 2000. (2) Prepare a comprehensive
ALPH replacement plan, including the support required from key stakeholders,
key development phases and an estimate of the cost to replace the system.
(3) Prepare a contingency plan/business continuity plan to support data
processing into the new millennium.