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The objective of the audit was to give assurance on the adequacy and effectiveness of the control framework in place and used within the Secretariat for the administration of pay and related benefits to ensure the accuracy and compliance of the processed pay transactions with relevant authorities.
The scope of the audit consisted of an assessment of the existing control framework for the administration of most types of pay such as regular pay, acting pay, and performance pay and related benefits, which result in a payment issued to an employee such as for maternity or parental allowance, bilingual bonus, and severance pay. In addition, detailed audit tests on the most material types (where annual expenses exceed $100,000) of pay transactions and expenses as described in Table I were conducted to verify the accuracy of the amount paid in compliance with legislation, regulations, terms and conditions of employment, collective agreements, and Treasury Board policies and directives.
G/L Account No. | Description of Type of Pay Transaction/Expenses | Account Balance for Fiscal Year ending March 31, 2008($) |
---|---|---|
1010 | Indeterminate-Basic pay | 89,393,694 |
1646 | Executive interchange | 3,280,660 |
1210 | Term-Casual-Part time basic pay | 3,225,162 |
1011 | Indeterminate-Performance award | 2,031,005 |
1048 | Severance pay | 1,771,144 |
1642 | Maternity-Parental allowance | 1,508,810 |
1024 | Indeterminate-Bilingual bonus | 565,635 |
1810 | Student-Basic pay | 368,648 |
1660 | Other allowances | 149,155 |
1034 | Indeterminate-Retroactive basic current year | 142,569 |
1016 | Terminable allowance | 113,994 |
Total | 102,550,476 |
The audit covered the administration of pay activities and transactions, including related data and expenses for the fiscal year ending March 31, 2008. The examination phase was conducted between June and November 2008.
The audit did not examine the controls nor test the pay transactions relating to leave (with pay) and overtime, as these had been the subject of a separate audit conducted by IAEB. The report for this audit was finalized in December 2008.
As previously mentioned, only employee benefits which manifest themselves in a pay transaction and result in a payment issued to an employee such as maternity or parental allowance, bilingual bonus, and severance pay were under the scope of the audit. The audit did not cover the administration of employee benefits and related transactions, expenses related to the employer's contribution to employee pension plans, or the premiums paid for employee health care and other insurance. These transactions were not included in the scope as they are managed centrally for the overall federal public service by the Pension and Benefits Sector of the Secretariat.
In addition, the audit did not include a validation of internal controls within the related business applications in People Soft or in the SFS (replaced as of April 1, 2008 by the SFT). Only the internal controls of RPS under the direct responsibilities of HRD and FMD were subject to the audit as PWGSC is responsible for the overall administration of RPS.
The audit criteria used to assess the adequacy and effectiveness of the Secretariat's control framework were developed based on the authorities governing pay and related benefits in the federal public service. In addition, these were complemented by criteria developed based on the Core Management Controls document issued by the Office of the Comptroller General, which focus on the federal government's Management Accountability Framework (MAF) in the Stewardship and People categories (Refer to Appendix 1 for details.). Appendix 2 contains the list of the relevant authorities.
The audit approach and methodology is risk-based and is consistent with the International Standards for the Professional Practice of Internal Auditing and the Internal Auditing Standards for the Government of Canada as required under Treasury Board's Policy on Internal Audit. These standards require that the audit be planned and performed in such a way as to obtain reasonable assurance that the audit objective is achieved. The audit was conducted in accordance with an audit program that defined audit tasks to assess each criterion after a preliminary survey was conducted to identify key risk elements.
The approach used in carrying out the audit included the following:
Of the 67 files, 57 were employees (non-executives), 8 were EX (executives) and two were students. Any of the files could exhibit one or more of the characteristics, as outlined in the following Table.
Characteristics | Number of files |
---|---|
Regular pay | 58 |
Bilingual bonus | 33 |
Hired and deployment appointments | 21 |
Promotions (three to executive level) | 8 |
Acting pay | 9 |
Performance pay | 7 |
Maternity and parental benefit, Illness disability, Leave with income averaging, and leave without pay | 7 |
Pay recoveries from another department or reimbursements of pay to another department performed with an Interdepartmental Settlement (IS) | 28 |