Executive Summary

Background

At its May 1, 2007 meeting, the Treasury Board of Canada Secretariat Audit and Evaluation Committee approved the "Preliminary Survey Report – Audit of Accounts Payable" and the deferral of the detailed examination phase of the audit. The Committee requested that Internal Audit and Evaluation undertake selected testing of accounts payable during fiscal year 2007-08. The Assurance Engagement of Accounts Payable – Large Payments to External Vendors was therefore included as part of the Treasury Board of Canada Secretariat Three Year Risk Based Audit Plan (Fiscal Year 2007-2008 to 2009-2010). The engagement period was from September 2007 to April 2008. 

Accounts payable are liabilities that occur when amounts are owing to creditors for goods received or services rendered. An accounts payable arises because of the time lag between the receipt of goods and services and the time in which the invoice is paid. Accounts payable are recognized for payment upon receipt of an invoice that has been approved under section 34 of the Financial Administration Act. Furthermore, the Treasury Board policy on Account Verification states that as part of the section 34 account verification process, transactions should be reviewed for accuracy such as ensuring that the payment is not a duplicate.

The definition of large payments for the purposes of this engagement is individual payments greater than $100,000 made to external vendors.

During the period of under review, there was a centralized accounts payable function for Treasury Board of Canada Secretariat and Finance Canada under the Financial Policies and Procedures Division within the Corporate Services Branch.

Objective and Scope

The engagement objective was to conduct selected tests and analysis, based on a risk assessment, to provide additional assurance on issues and findings identified in the "Preliminary Survey Report – Audit of Accounts Payable." In particular, the engagement sought to provide reasonable assurance that there were no duplicate large payments made to external vendors during fiscal year 2006-07 and 2007-08 (periods 1 to 8),

The engagement covered all transactions greater than $100,000 processed for external vendors during fiscal year 2006-07 and 2007-08 (periods 1 to 8.) The examination phase was conducted between September 2007 and February 2008.

Conclusion

In conclusion, the results provide reasonable assurance that there were no duplicate payments made for all 530 large payments processed for the 32 external vendors during fiscal year 2006-07 and 2007-08 (periods 1 to 8).

Assurance Statement

We concluded with a reasonable level of assurance that there were no duplicate payments for all 530 large payments processed for the 32 external vendors during fiscal year 2006-07 and 2007-08 (periods 1 to 8).

In the professional judgment of the Chief Audit Executive, sufficient and appropriate procedures have been conducted and evidence has been gathered to support the accuracy of the opinion provided in this report. The opinion is based on a comparison of the conditions, as they existed at the time of the engagement, against pre-established criteria. The approach and methodology followed the required assurance engagement standards as defined by the Internal Auditors Professional Practices Framework and the Internal Auditing Standards for the Government of Canada.

The opinion is only applicable for the entities and transactions examined and for the time period specified.

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