Home > Corporate > Finance and Informatics > Chapter 4 - Non-Public Property Audit (Revised 15 Dec. 10)
Chapter 4
General
Types of Audit and Compliance and Assurance Reviews
Internal Audits
External Audits
Compliance and Assurance Reviews
Audit Committee
Chief of Review Services Internal Audit Charter
General
Mission
Scope
Reports
DGPFSS Compliance and Assurance Review
CHAPTER 4
NON-PUBLIC PROPERTY AUDIT AND COMPLIANCE/ASSURANCE
1. The purpose of this chapter is to provide direction and guidance to organizations and entities in dealing with the audit of Non-Public Property (NPP). This includes internal audit, external audit and compliance and assurance. This chapter is to be read in conjunction with Chapter 3.
TYPES OF AUDIT AND COMPLIANCE AND ASSURANCE REVIEWS
INTERNAL AUDITS PERFORMED BY CHIEF REVIEW SERVICES
2. The responsibilities of the Chief Review Services (CRS) and the staff of the internal function are to establish and maintain appropriate policies and procedures to guide internal audit work and to prepare, communicate and implement a risk-based internal audit plan which will be updated on an annual basis.
3. Since NPP activities are subject to certain provincial and federal regulations (eg. PST, GST/HST) government authorities may visit bases to ensure compliance with applicable governmental regulations.
4. As mandated by the NPP Board a number of external audits are performed annually. For example, CANEX, CFCF, SISIP Financial Services (FS), CFPAF, the Non-Public Funds (NPF) employee Pension Plan, the NPF Employee Group Insurance Plan, and specific trust funds financial statements. The purpose of the audits is to provide reasonable assurance that the Financial Statements are fairly presented in accordance with generally accepted accounting principles. The CANEX audit process involves a visit to certain bases and the submission of specific information by the others.
5.Chief Review Services (CRS) will obtain and authorize/manage any contracted external auditing services obtained by the DND/CF.
COMPLIANCE AND ASSURANCE REVIEWS
6. Environmental Chiefs of Staff and Group Principals have the authority to establish their own internal review function which could include compliance of NPP activities. Commensurate with this authority, subordinate commanders and, where appropriate, their equivalents are responsible for coordinating compliance and assurance activities within their respective organizations, for evaluating the effectiveness of their groups, and for providing their compliance and assurance staff with functional assistance and professional development. At unit level, the unit commander is responsible for the compliance and assurance function, in accordance with policies and directives issued by the applicable senior authorities.
7. Within the Finance Division of DGPFSS there is a Compliance Review function. The purpose of the compliance review function is to advise senior management within DGPFSS and Base/Wing Commanders on inconsistencies of current practices with established NPP policies, or where practices fail to provide the necessary controls for the safeguarding of assets.
8. An NPP Audit Committee has also been established by the CDS to provide independent, objective assessment and assurance on the adequacy of risk management, control and accountability as they relate to NPP. The Chair of the Audit Committee is appointed by the CDS and reports directly to the CDS. Annually, the Chair of the NPP Audit Committee is to report the results of the Committee’s activities to the CDS. CRS and DGPFSS are ex-officio members of the NPP Audit Committee.
CHIEF REVIEW SERVICES INTERNAL AUDIT CHARTER
9. The Department of National Defence and Canadian Forces (DND/CF) place a high priority on sustaining a strong, independent and effective internal audit capability. The CRS Charter outlines the accountabilities, responsibilities and authorities of the Department of National Defence/Canadian Forces (DND/CF) internal audit function, which resides with the Chief Review Services (CRS) organization. The CRS is the DND/CF Chief Audit Executive. In an NPP capacity, the CRS is responsible for the audit and evaluation of NPP programs, activities and financial statements.
10. The mission of the internal audit function is to provide DND/CF senior management with independent and objective advice and guidance, as well as advisory and assurance services designed to add value and improve the effectiveness of:
• Risk management strategies and practices;
• Management control frameworks, systems and practices; and
• Governance processes.
11. Internal audit work can be conducted within all organizations, activities or operations under the purview of the Deputy Minister (DM) and the Chief of the Defence Staff (CDS). Work will be scoped to determine whether the DND/CF network of risk management, control, and governance processes, as designed and represented by management, is adequate and functioning in a manner that ensures the following:
• Risks are appropriately identified and managed;
• Interaction with the various governance groups occurs as needed:
• Financial, managerial and operating information is accurate, reliable, and timely;
• Activities and actions are in compliance with policies, standards, procedures, and applicable laws and regulations;
• Resources are acquired economically, used efficiently, and adequately protected;
• Internal controls are appropriate for prevention and detection of fraud;
• Programs, plans, and objectives are achieved;
• Quality and continuous improvement are fostered in the DND/CF control process; and
• Significant legislative or regulatory issues impacting the DND/CF are recognized and addressed properly.
12. When opportunities for improving management control, resource stewardship, and the DND/CF public image are identified during audits, they will be communicated to the appropriate level of management.
13. CRS is the functional authority responsible for advising the DM, the CDS and the applicable audit committee (the DND/CF Audit and Evaluation Committee or the Non-Public Property Audit Committee) on internal audit within the DND/CF.
DGPFSS COMPLIANCE AND ASSURANCE REVIEW
14. Functions within the compliance and assurance review are as follows:
• Provide DGPFSS senior management and Base/Wing Commanders with recommendations and solutions with respect to activities reviewed;
• Initiate, publish and distribute management reports based on the compliance reviews;
• Ensure programs and services delivered are relevant to enhancing operational performance;
• Ensure the consistency in application of internal controls of all NPP operations;
• Provide financial and management technical expertise to investigations;
• Review, evaluate and provide recommendations for improvements and maintenance of NPP policies and programs pertaining to the compliance section. The review of activities to assess if they are performed in accordance with specified policies, procedures , regulations and legislation; and
• The review of entities and organizations to assess whether these are operated and managed IAW the legislation and governance framework.
General
Types of Audit and Compliance and Assurance Reviews
Internal Audits
External Audits
Compliance and Assurance Reviews
Audit Committee
Chief of Review Services Internal Audit Charter
General
Mission
Scope
Reports
DGPFSS Compliance and Assurance Review