Financial Statements

Annex - Assessment of Internal Control Over Financial Reporting

For the year ended March 31, 2014

1. Introduction

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

Detailed information on the Department’s authority, mandate, and program activities can be found in the 2013-14 Departmental Performance Report and the 2013-14 Report on Plans and Priorities.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

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

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

2.2 Service arrangements relevant to financial statements

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

Common Arrangements within the Government of Canada

Public Works and Government Services Canada centrally administers the payments of salaries and the procurement of goods and services in accordance with the Department’s delegation of authority, and provides accommodation services.

Specific Arrangement for the Department of Justice

Other organizations also rely on the Department of Justice as follows:

3. Departmental assessment results during fiscal year 2013-14

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

New or significantly amended key controls

The prior year (2012-13) assessment of key controls in the re-engineered end-to-end processes for legal services revenues continued. Opportunities to further strengthen specific key controls were identified. Significant adjustments were not required for the new key controls that were assessed.

New key controls were implemented for leave.

On-going monitoring program

As part of its rotational on-going monitoring plan, the Department completed its 2013-14 planned assessment of entity level controls, IT general controls, and of the key financial controls for the Family Law liability, salaries and employee benefits expense, professional and special services expense, legal services revenue, transfer payments, travel and relocation expense, tangible capital assets, and accounts payable and accrued liabilities financial statement accounts. For the most part, the key controls that were tested performed as intended, with remediation required as follows:

Management action plans addressing the recommendations have been developed by the process owners.

4. Departmental action plan

4.1 Progress during fiscal year 2013-14

The Department continued to conduct its on-going monitoring according to the previous fiscal year’s rotational plan as shown in the following table.

Rotational on-going monitoring plan for current year Status
  • Entity level controls,
  • IT General controls, and
  • Key process level controls for the following financial statement accounts: Family Law liability, Salaries and employee benefits expense, Legal services revenue, and Tangible capital assets.
Completed as planned; no remedial actions required.
  • Key process level controls for the following financial statement accounts: Professional and special services expense, Transfer payments payable, Travel and relocation expense, and Accounts payable and accrued liabilities.
Completed as planned; remedial actions started.

In 2013-14, the Department conducted the following work in addition to the progress made in on-going monitoring:

4.2 Action plan for the next fiscal year and subsequent years

The Department’s rotational on-going monitoring plan over the next three years, based on an annual validation of the high risk processes and controls and related adjustments to the on-going monitoring plan as required, is shown in the following table.

Rotational On-Going Monitoring Plan for Internal Control over Financial Reporting
Key control area Operating effectiveness testing rotation
2014-15 2015-16 2016-17
Entity level controls Table note X Table note X Table note X
IT General controls under departmental management Table note X Table note X Table note X
Process level controls
The on-going monitoring schedule for specific financial statement accounts is outlined below.
Family Law account (Liability) Table note X Table note X Table note X
Salaries and employee benefits (Expense) Table note X Table note X Table note X
Professional and special services (Expense) Table note X Table note X Table note X
Legal services revenue Table note X Table note X Table note X
Transfer payments Table note X Table note X Table note X
Travel and relocation (Expense)   Table note X  
Tangible capital assets   Table note X  
Accounts payable and accrued liabilities   Table note X  
Receivables and advances Table note X   Table note X
Family Law fees (Revenue) Table note X   Table note X
Table note X

An X signifies that the level of control, or the key controls for a financial statement account, will be monitored in the specified fiscal year.

Return to table note X referrer