Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting for the Royal Canadian Mounted Police, Fiscal year 2019-2020

1. Introduction

This document provides summary information on the measures taken by the Royal Canadian Mounted Police (RCMP) to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.

Detailed information on the RCMP's authority, mandate and core responsibilities can be found in the 2019- 2020 Departmental Plan and the 2019-2020 Departmental Results Report.

2. RCMP's system of internal control over financial reporting

2.1 Internal control management

The RCMP recognizes the importance of setting the tone from the top and helps ensure that staff at all levels understand their role in maintaining an effective system of internal control over financial reporting (ICFR) and are well equipped to exercise these responsibilities effectively. The RCMP's focus is to ensure risks are managed through a responsive and risk-based control environment that enables continuous improvement and innovation.

The RCMP has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. The RCMP's internal control management framework, approved by the Commissioner, is in place and includes:

  • Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
  • Values and ethics;
  • Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control;
  • Centralized team with support from regional internal control units within the Corporate Management portfolio dedicated to the documentation, design and operating effectiveness of ICFR under the Chief Financial Officer authority;
  • Periodic monitoring of, and regular updates to, internal control management, as well as the provision of related assessment results and action plans to the Commissioner, the Chief Financial Officer, senior management and, as applicable, the Departmental Audit Committee.

The Departmental Audit Committee provides advice to the Commissioner on the adequacy and functioning of the RCMP's risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The RCMP relies on other organizations for the processing of certain transactions that are recorded in its financial statements, as follows.

Common service arrangements:

  • Public Services and Procurement Canada (PSPC) administers the following:
    • The payments of salaries and benefits under two different pay systems: Phoenix for public service employees and Member Pay System (MPS) for regular and civilian members of the RCMP
    • The procurement of goods and services in accordance with the RCMP's Delegation of Authority, and the provision of accommodation services
    • The issuance of Receiver General payments and the processing of Interdepartmental Settlements on behalf of the RCMP via the Standard Payment System (SPS);
  • The Treasury Board of Canada Secretariat provides services related to public sector insurance for public service employees of the RCMP and centrally administers payment of the employer's share of contributions toward statutory employee benefit plans (i.e. the Public Service Pension Plan, Employment Insurance Plan, Canada Pension Plan, Quebec Pension Plan and Public Service Supplementary Death Benefit Plan) on behalf of the RCMP;
  • The Department of Justice Canada provides legal services to the RCMP; and
  • Shared Services Canada (SSC) provides information technology (IT) infrastructure services to the RCMP in the areas of data centre and network services. The scope and responsibilities are addressed in the interdepartmental arrangement between SSC and the RCMP.

Readers of this annex may refer to the annexes of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.

The RCMP relies on other departments for the processing of certain transactions or information that are recorded in its financial statements, as follows:

Specific Arrangements:

  • PSPC administers the member pension administration on behalf of the RCMP. PSPC has the authority and responsibility to ensure that transactions and payments are made in accordance with the terms and conditions set out by the RCMP.
  • Veterans Affairs Canada (VAC) administers some of the programs and services that the RCMP is responsible to provide to its members, including the disability pension and health benefit programs for a service-related injury, illness or death, pursuant to Part II of the Royal Canadian Mounted Police Superannuation Act and the Pension Act. VAC also provides transition support, case management, and access to the network of Operational Stress Injury (OSI) Clinics and VAC Assistance Service to eligible members.

3. Departmental assessment results during the 2019-2020 fiscal year

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year's rotational plan.

Progress during the 2019-2020 fiscal year
Previous fiscal year's rotational ongoing
monitoring plan for the current fiscal year		 Status
Key business process controls over significant risks In progress; to be completed in 2020-2021 and remedial actions to start in 2020-2021.
IT general controls under departmental management In progress; to be completed in 2020-2021 and remedial actions to start in 2020-2021.
Tangible capital assets In progress; to be completed in 2021-2022.
Pension plan liabilities In progress; to be completed in 2020-2021.
Operating expenditures and accounts payable In progress; to be completed in 2020-2021 and remedial actions to start in 2020-2021.
Revenues and accounts receivable In progress; to be completed in 2020-2021.
Payroll and benefits – public service employees In progress; to be completed once PSPC's payroll processing reaches a steady state.
Financial reporting In progress; to be completed in 2020-2021 and remedial actions to start in 2020-2021.
Financial management In progress; to be completed in 2022-2023.

The key findings and significant adjustments required from the current year's assessment activities are summarized below.

New or significantly amended key controls:

In the current year, there were no significantly amended key controls in existing processes that required a reassessment.

In mid-March 2020, the Coronavirus disease (COVID-19) pandemic resulted in emergency measures being taken to combat the spread of the virus. These measures impacted the way in which the RCMP operates as work had to be done remotely. The RCMP surveyed policy centres in high-risk areas to assess the impact of COVID-19 on key controls and no significant changes were identified. Mitigating controls were put in place where necessary to reduce risk to an acceptable level, and the use of technology was utilized to maintain controls such as the implementation of electronic signatures. Some control activities were postponed with minimal impact and are now slowly resuming.

Ongoing monitoring program:

Ongoing monitoring activities extend beyond the end of the fiscal year (March 31st), as such the reassessment of key business processes was widely interrupted by the impact of COVID-19 due to shifting priorities, reduction in workforce capacity and workplace restrictions. The reassessments are still in progress and are expected to be completed as per the timelines shown in the table above. The design and operating effectiveness testing on departmental key controls for the Phoenix pay system for public service employees is still ongoing until PSPC's payroll processing reaches a steady state. The full assessment of the Financial management process started in 2019-2020 and is expected to be completed in 2022-2023.

No significant control deficiencies have been identified in the testing performed in 2019-2020.

4. Departmental action plan for the next fiscal year and subsequent fiscal years

The RCMP's rotational ongoing monitoring plan over the next 4 fiscal years is shown in the following table. The ongoing monitoring plan is based on:

  • an annual validation of high-risk processes and controls; and
  • related adjustments to the ongoing monitoring plan, as required.
Rotational ongoing monitoring plan
Key control areas 2020-2021
fiscal year		 2021-2022
fiscal year		 2022-2023
fiscal year		 2023-2024
fiscal year
Entity-level controls No YesFootnote 1 No No
IT general controls under departmental managementFootnote 2 YesFootnote 3 Yes Yes Yes
Operating expenditures and accounts payableFootnote 4 YesFootnote 5 No YesFootnote 1,Footnote 5 No
Revenues and accounts receivableFootnote 4 YesFootnote 3 No No No
Payroll and benefits – membersFootnote 4 No No YesFootnote 6 No
Payroll and benefits – public service employeesFootnote 4 YesFootnote 3 No No No
Financial reporting YesFootnote 3 No No No
Tangible capital assets YesFootnote 3 No No No
Transfer payments No Yes No No
Inventory No YesFootnote 1 No No
Pension plan liabilities YesFootnote 3 No No No
Departmental financial signing authoritiesFootnote 4 No No YesFootnote 1 No
Table 1 Notes
Table 1 Note 1

The reassessment was deferred to the next fiscal year due to the impact of COVID-19 and to focus on the completion of work carried over from 2019-2020.

Return to table 1 note 1 referrer

Table 1 Note 2

The assessment of IT general controls under departmental management is based on a comprehensive risk- based four-year plan where high risk areas are assessed on an annual basis and controls over medium- and low-risk elements are tested on a rotational basis.

Return to table 1 note 2 referrer

Table 1 Note 3

Carry-over from the previous year; to be completed in 2020-2021 with the exception of Payroll and benefits for public service employees and Tangible capital assets. For more information, refer to the table under Section 3.

Return to table 1 note 3 referrer

Table 1 Note 4

Key business process controls over significant risk are tested annually; all other key controls are tested at least once over a four-year period.

Return to table 1 note 4 referrer

Table 1 Note 5

The reassessment of some sub-processes within Operating expenditures and accounts payable have carried over from the previous year. A full reassessment will be performed on the remaining sub-processes in the 2022-2023 fiscal year.

Return to table 1 note 5 referrer

Table 1 Note 6

The reassessment of Payroll and benefits for members was part of the 2020-2021 ongoing monitoring plan; however, the reassessment has been deferred as remedial actions are still being implemented and due to the impact of COVID-19.

Return to table 1 note 6 referrer

In addition to the ongoing monitoring plan, the RCMP is continuing to conduct a full assessment of the Financial management process that is expected to be completed in the 2022-2023 fiscal year. At that time, the process will be added to the ongoing monitoring plan to reassess control performance on a rotational basis.

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