Annex to the Statement of Management Responsibility including internal control over Financial Reporting for the Royal Canadian Mounted Police, fiscal year 2021-2022
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List of acronyms and abbreviations
- RCMP
- Royal Canadian Mounted Police
Introduction
This document provides summary information on the measures taken by the Royal Canadian Mounted Police 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 2021-2022 Departmental Plan and the 2021-2022 Departmental Results Report.
RCMP's system of internal control over financial reporting
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 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 includes:
- Organizational accountability structures to support sound financial management, including roles and responsibilities of senior managers for key areas of responsibility, as related to internal control management;
- Values and ethics;
- Ongoing communication, including training on statutory requirements, policies and procedures, for sound financial management and control;
- A centralized internal control team, supported by regional units, within the Corporate Management portfolio dedicated to the documentation, design and operating effectiveness of internal control over financial reporting under the Chief Financial Officer authority; and
- 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.
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 administers the following:
- The payments of salaries and benefits under two different pay systems: Phoenix for public service employees and Member Pay System 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; and
- The issuance of Receiver General payments and the processing of Interdepartmental Settlements on behalf of the RCMP via the Standard Payment System;
- 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 (that is 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 provides information technology 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 Shared Services Canada 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:
- Public Services and Procurement Canada, under a service level agreement, provides the day-to-day pension administration services for members including determining the eligibility and the calculation of pension benefits, providing call centre support, providing information to Plan members and providing pension payroll services.
- Veterans Affairs Canada, under a Memorandum of Understanding, 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 RCMP Superannuation Act and the Pension Act. Veterans Affairs Canada also provides transition support, case management, and access to the network of Operational Stress Injury Clinics and Veterans Affairs Canada Assistance Service to eligible members.
Departmental assessment results during the 2021-2022 fiscal year
The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year's rotational plan.
| Previous fiscal year's rotational ongoing monitoring plan for the current fiscal year | Status |
|---|---|
| Key business process controls over significant risk table 1 note 1 | Completed as planned; remedial actions started. |
| Information technology general controls under departmental management | Completed except for some access controls to be tested in 2022-2023; remedial actions to start in 2022-2023. |
| Operating expenditures and accounts payable | Completed as planned; remedial actions started. |
| Payroll and benefits - public service employees | Completed as planned; remedial actions started. |
| Financial reporting | Completed as planned; remedial actions to start in 2022-2023. |
| Transfer payments | Completed as planned; no remedial actions required. |
| Financial management | In progress; to be completed by end of 2023-2024. |
Table 1 notes
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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.
Ongoing monitoring program:
As part of its rotational ongoing monitoring plan, the RCMP completed its reassessment of key business process controls over significant risks; Information technology general controls under departmental management; and, financial controls within the business processes of:
- Operating expenditures and accounts payable
- Payroll and benefits - public service employees
- Financial reporting
- Transfer Payments
For the most part, the key controls that were tested performed as intended and no significant deficiencies were found; however, some of the findings remain to be validated with management. Management action plans addressing the recommendations have been or will be developed by the process owners.
Departmental action plan for the next fiscal year and subsequent fiscal years
The RCMP's rotational ongoing monitoring plan over the next five fiscal years is shown in the following table. The ongoing monitoring plan is based on:
- an annual validation of high-risk processes and controls;
- resource availability and budget; and
- related adjustments to the ongoing monitoring plan, as required.
Some key control areas are assessed over two fiscal years due to their size (number of sub-processes) and complexity.
| Key control areas | 2022-2023 fiscal year | 2023-2024 fiscal year | 2024-2025 fiscal year | 2025-2026 fiscal year | 2026-2027 fiscal year |
|---|---|---|---|---|---|
| Entity-level controls | Yes | No | No | No | No |
| Information technology general controls under departmental management | Yes table 2 note 1 | Yes table 2 note 1 | Yes table 2 note 1 | Yes table 2 note 1 | Yes table 2 note 1 |
| Operating expenditures and accounts payable | No table 2 note 2 | No table 2 note 2 | Yes table 2 note 2 | Yes table 2 note 2 | No table 2 note 2 |
| Revenues and accounts receivable | No | No | No | Yes | Yes |
| Payroll and benefits - members | No table 2 note 2 | Yes table 2 note 2 | Yes table 2 note 2 | No table 2 note 2 | No table 2 note 2 |
| Payroll and benefits - public service employees | No table 2 note 2 | No table 2 note 2 | No table 2 note 2 | Yes table 2 note 2 | Yes table 2 note 2 |
| Financial reporting | No table 2 note 2 | No table 2 note 2 | No table 2 note 2 | No table 2 note 2 | Yes table 2 note 2 |
| Tangible capital assets | Yes | Yes | No | No | No |
| Transfer payments | No | No | No | No | Yes |
| Inventory | Yes | No | No | No | Yes |
| Pension plan liabilities | Yes | No | No | No | No |
| Departmental financial signing authorities | No table 2 note 2 | No table 2 note 2 | Yes table 2 note 2 | No table 2 note 2 | No table 2 note 2 |
Table 2 notes
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In addition to the ongoing monitoring plan, the RCMP is continuing to conduct a full assessment of its financial management process, which is planned for completion by the end of the 2023-2024 fiscal year. Upon completion of the full assessment, the financial management process will be added to the ongoing monitoring plan to reassess control performance on a rotational basis based on risk.
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