Report of the Audit Committee to the Auditor General of Canada for the 2014–15 fiscal year


The Audit Committee provides the Auditor General of Canada with independent advice on the adequacy of the control and accountability processes of the Office of the Auditor General of Canada. Through this advisory role, the Committee forms an essential component of the Office’s governance framework.

In keeping with provision 9.1 of its charter, the Audit Committee has prepared this report for the fiscal year ended 31 March 2015.

Membership and meetings

The Audit Committee’s charter requires it to have three voting members, two of whom are independent of the Office of the Auditor General. Michael Ferguson (Auditor General) and Bruce Joyce (Chair and external independent voting member) were continuing members from the previous year. Brian Aiken joined the Committee in May 2014 as an external independent voting member. Bruce Sloan, who had been a non-voting member, left the Committee when he retired during the year. In addition, Sylvain Ricard, Assistant Auditor General—Corporate Services and Chief Financial Officer (CFO), and Anne Marie Smith, Senior General Counsel, joined the Committee during the year as ex officio, non-voting members.

Selected Practice Review and Internal Audit (PRIA) staff—along with Ron Bergin, who was the Chief Audit Executive (CAE) until December 2014, and Louise Bertrand, who has held the position since then—attended the Audit Committee’s meetings as observers and responded to questions from members.

The Audit Committee held four meetings during the fiscal year (8 May, 10 July, 3 October, and 9 January). At each meeting, the Committee allocated time for the voting members to have individual in camera sessions with the CAE, and similar in camera sessions with the CFO. The Committee also had an in camera session with the external auditor during the meetings the external auditor attended. In addition, the Chair had regular email exchanges, meetings, and phone conversations with the CAE, CFO, and external auditor.

Committee charter

On a regular basis, the Audit Committee reviews its terms of reference as it continues to develop operating routines to serve the Auditor General effectively. The Treasury Board Policy on Internal Audit states that its principles apply to the offices of agents of Parliament (including the Office of the Auditor General), but that departures from specific policy requirements are permitted under certain circumstances—for example, to allow the Office of the Auditor General to guard its independence. The Committee presents and discusses its work plan at each meeting, which helps ensure that it will meet its objectives.

The Audit Committee considers that its charter and work plan are suitably aligned with the Treasury Board’s guidance, and it has adopted the Treasury Board’s eight key areas of oversight responsibility.

Eight areas of oversight responsibility

1. Values and ethics

During its October 2014 meeting, the Audit Committee was briefed on how the Office of the Auditor General applies its Code of Values, Ethics and Professional Conduct. The Committee also received information regarding the Office’s handling of issues concerning respect in the workplace, conflicts of interest, harassment, and discrimination.

2. Risk management

Consistent with the proposed risk management approach discussed with the Audit Committee in the previous year, the Office of the Auditor General conducted an annual risk assessment and presented a summary of areas of high residual risk to the Committee. This project is ongoing, and a final report of the assessment will be available when the strategic planning exercise is complete.

As part of its assessment of the risk-based PRIA plan, the Committee also considers and reviews how the Office addresses risk management issues from an audit perspective.

3. Management control framework

The Audit Committee is updated annually on what the key management issues are, and on how procedures have been adopted to mitigate concerns and produce desired results. The Office of the Auditor General addresses issues concerning the delivery of professional services and products separately from issues concerning administrative and finance activities.

By receiving briefings on the results of the annual practice reviews, the Committee continues to be informed of progress and challenges in the area of management control.

With respect to administrative and finance activities, the CFO opened a discussion on the recommendation in the Treasury Board’s Policy on Internal Control for the Office to have an Internal Control Management Framework approved by the Auditor General. The Committee discussed the most useful and appropriate content of this Framework.

The Committee stays informed of ongoing activities by reviewing copies of the most recent summary management reports and selected other reports at each meeting. In particular, the Committee examines quarterly reports that summarize the Auditor General’s spending on travel, leave, and hospitality. The Committee also reviews quarterly reports outlining major contracts and contracting exceptions.

In July 2014, the Committee received an update and draft report on the Office’s annual monitoring of the System of Quality Control for audits for the year ended 31 December 2013, in accordance with the requirements of Canadian Standards on Quality Control. In January 2015, the Committee received the final approved report.

4. Practice Review and Internal Audit function

The hallmark of the Office of the Auditor General is the reliability and integrity of the reports produced by its various audits and other examinations. Accordingly, emphasis and attention are directed to ensuring that the System of Quality Control for all product lines is operative and effective. This is done by periodically assessing the design of the quality management systems and by annually conducting systematic and rigorous practice reviews on a basis that covers all senior practitioners over a multi-year cycle.

In October 2014, the Audit Committee received the Report on a Review of the Annual Audit Practice and recommended it for approval by the Auditor General. In January 2015, the Committee received the Report on a Review of the Performance Audit and Special Examination (Direct Report) Audit Practice and recommended it for approval by the Auditor General.

The Committee received the report on findings and recommendations arising from the internal audit of PROxI implementation and monitoring of PROxI use. The Committee was pleased with the report and with management’s response to recommendations, and it recommended the report for approval by the Auditor General.

The Committee also received the draft report on findings and recommendations arising from the internal audit of integrated human resource planning. It plans to review the final report after additional work has been performed by the PRIA team.

At each meeting, the Committee is updated by the Chief Audit Executive on audits in progress, staffing issues, and other matters affecting PRIA.

The Committee considers that the internal audit function

The Committee is satisfied that the PRIA team continues to operate in line with relevant guidance, has a reasonable capacity to address its mandate, and is performing its role in a satisfactory manner.

5. Central agencies

The Audit Committee was periodically briefed on the funding and operations of the Office of the Auditor General.

The Committee was briefed on the Access to Information policy as it applies to the Office and on how requests are handled.

6. Follow-up on management action plans

The Audit Committee attaches a high priority to assessing the responsiveness and timeliness of management action plans and to monitoring their implementation. Accordingly, a systematic and thorough approach has been adopted to ensure the receipt of progress reports until each action point is resolved.

As a matter of practice, the Committee receives periodic updates on plans to address findings from internal audits until all points are cleared. The Committee is also briefed on the findings of any examination by external oversight bodies, and of any annual report on the status of management action plans.

7. Financial statements and public accounts reporting

Management briefed the Audit Committee on the preparation of the financial statements, including the preparation of estimates and the choices of accounting policies.

The Committee met in May 2014 and July 2014 with the external auditor (Collins Barrow Ottawa LLP) to be briefed on the respective plans for, and results of, the audit of the 31 March 2014 financial statements of the Office of the Auditor General. The Audit Committee recommended the approval of the financial statements for the year ended 31 March 2014 to the Auditor General. Management also briefed the Committee on the information submitted to the Receiver General for Canada for inclusion in the Public Accounts of Canada.

8. Accountability reporting

In July 2014, the Audit Committee was briefed on the Performance Report of the Office of the Auditor General for the 2013–14 fiscal year, including the related audited financial statements. The Committee reviewed the draft document, provided some comments, and recommended the amended report for approval by the Auditor General.

At the May 2014, October 2014, and January 2015 meetings, the Committee received the most recent versions of the quarterly financial statements. As noted last year, these reports must be prepared on an expenditure basis of accounting, rather than on the accrual basis of accounting that is used for year-end reporting.

In addition, in January 2015, Committee members reviewed the draft of the Report on Plans and Priorities for the 2015–16 fiscal year. The Committee recommended its approval by the Auditor General, subject to suggested changes.


The briefings and reports presented to the Audit Committee during the 2014–15 fiscal year, together with the experience of prior years, have provided the Committee with a sound understanding of the key issues facing the Office of the Auditor General. The Committee found management and staff to be candid and clear on the challenges they face and to be receptive to the Committee members’ comments and suggestions.

The Committee notes that the Office of the Auditor General sets very high standards for the quality of its audit products and that it has a satisfactory methodology to conduct reliable audits and studies. In addition, the Committee believes that the system of management control is satisfactory for the Office’s needs.

Overall, the Committee concludes that the Office of the Auditor General has a rational and systematic approach to addressing its mandate, to monitoring results, and to reporting to Parliament and the public.

April 2015