NON - PUBLIC PROPERTY AUDIT

GENERAL

1. The purpose of this chapter is to provide direction and guidance to organizations and entities in dealing with the audit of Non-Public Funds (NPF). This includes internal audit and external audit. This chapter is to be read in conjunction with Chapter 3 and Treasury Board Directives.

INTERNAL AUDIT

DEFINITION

2. Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

RESPONSIBILITY FOR INTERNAL AUDIT

3. Environmental Chiefs of Staff and Group Principals have the authority to establish their own internal audit function. Commensurate with this authority, subordinate commanders and, where appropriate, their equivalents are responsible for coordinating audit activity within their respective organizations, for evaluating the effectiveness of their internal audit groups, and for providing their audit staff with functional assistance and professional development. At unit level, the unit commander is responsible for the internal audit function, in accordance with policies and directives issued by the applicable senior authorities.

INTERNAL AUDIT OF NPF

4. NPF activities are entitled to the same level of internal audit services provided to other activities at the unit. This includes the NPF activities of lodger units.

EXTERNAL AUDITS

5. Since NPF activities are subject to certain provincial and federal regulations (eg. PST, GST) government authorities may visit bases to ensure compliance with applicable governmental regulations.

6. As directed by the VCDS, CANEX financial statements are subject to annual external audits. The purpose of the audits is to provide reasonable assurance that the CANEX Consolidated Financial Statements are fairly presented in accordance with generally accepted accounting principles. The audit process involves a visit to certain bases and the submission of specific information by the others.

INTERNAL AUDIT AND REVIEW DIVISION CHARTER

GENERAL

6. The Non Public Property Board of Directors (NPP BOD), under the auspices of its governance framework, provides Internal Audit and Review functionality to the Canadian Forces Personnel Support Agency (CFPSA), the Environmental Chiefs of Staff (ECS), and to subordinate commanders having responsibility for Canadian Forces Personnel Support Program (PSP) activities. This functionality includes, but is not specifically limited to, the review and internal audit of PSP policies, procedures, activities and operations. The CFPSA Internal Audit and Review organization is mandated by the NPP BOD. Its responsibilities are defined by that Board's Audit & Accountability Committee and by the President & Chief Executive Officer. With respect to the operations of the CFPSA, the President & Chief Executive Officer has, through the judicious use of the review and internal audit functions available, a means for determining the efficiency, effectiveness and economy with which PSP and associated activities are conducted.

MISSION

7. Provide independent appraisal and client focused advice to management on financial and operational issues

SCOPE

8. The scope of PSP internal auditing and review encompasses, in part, the PSP policies, procedures, activities, operations and the associated internal controls established by management in carrying out assigned responsibilities. In addition, scope includes the provision of assessments and the expression of opinions upon:

   • the PSP, its components and related activities and operations to ascertain whether functions and/or results are consistent with approved PSP goals and objectives;

   • the reliability and the integrity of financial and operating information and the means used to identify, measure, classify and report such information;

   • the economy, efficiency and effectiveness with which resources are employed;

   • the systems established to ensure compliance with relevant policies, plans, procedures, regulations and laws in the fulfillment of the overall PSP plan;

   • the verification and safeguarding of assets; and

   • the adequacy of internal controls for prevention and detection of fraud.

REPORTS

9. CFPSA Internal Audit and Review reports are prepared on the authority of the CFPSA Vice President Internal Audit and Review.

10. The Senior Manager(s) responsible for issues covered in a report should respond to the Vice President Internal Audit and Review within the timelines indicated in the report and forward a copy to addressees included in the report's distribution list. The response should indicate the action to be taken with regard to the issues and the recommendations contained in the report. If appropriate, a timetable for the anticipated completion of the action ought to be included.

11. The Vice President Internal Audit and Review issues an Annual Report of Internal Audit and Review Activities to the President & Chief Executive Officer, CFPSA and to the Chair of the Audit & Accountability Committee.

    Original signed by:

    M.Jeffery	Terry P. Payan
    Lieutenant-General	Vice Presdient IA&R
    Chair, Audit & Accountability Committee

1 October 2001
Canadian Forces Personnel Support Agency