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Report on 2008 Internal Audit Forum
Sunday, 07 December 2008 20:00

Internal Audit Leaders to Share Information, Offer Mutual Support

Members of the Government Internal Auditors Council of Canada (GIACC) identified a number of topics on which they plan to exchange information and areas in which they could provide mutual support at their annual National Forum in Ottawa, October 20-22, 2008.

2008-iaf-group-dec-2008
Back Row – Left to right: Paul Wallis, Ted Doane, Stuart Newton, Ken Gabora, Steve Thompson, David Hill,
Jane Holatko, Bob Shahi, Michael Eastman

Front Row – Left to right: Nicole Wieczorek, David Moynagh, Grace Wilk, Heather Zomar, Brian Aiken,
Greg Gertz, Mishèle Bérubé, Richard Kennedy, John Gunter

Missing from photo: Luc Lavoie

Meeting for the sixth time since they first got together in 2003, the senior internal audit representatives from Canada's federal, provincial and territorial governments agreed to look for opportunities to share information on such subjects as:

  • Human resources management (e.g. job descriptions, office structures, salary levels)
  • Training (e.g. course schedules, training plans, areas of strength or specialization)
  • Tools (e.g. handbooks, guides)
  • Lessons learned on topical issues (e.g. Whistleblowers Acts).

Members also saw opportunities to support each other:

  • aiken-iaf-dec-2008For example, Brian Aiken, Assistant Comptroller General of Canada, said he would seek advice from his provincial and territorial counterparts as the Office of the Comptroller General proceeds with the purchase of auditing software. He also offered to make available to GIACC members an expert in ACL software and data mining who is on his staff.
     
  • Some smaller audit offices offered to provide temporary developmental opportunities for staff from larger offices - an arrangement that would help the smaller offices address staffing shortages.
     
  • The members will examine the possibility of developing joint position statements on issues of concern, such as the implications for independence of the reporting relationship of the IA function


Canadian Audit Community Leaders in Attendance

The Forum was co-chaired by Richard Kennedy, Chief Internal Auditor and Assistant Deputy Minister, Ontario Ministry of Finance; Brian Aiken of the Office of the Comptroller General of Canada, which hosted the meeting; and Nicole Wieczorek, CCAF's Chief Financial Officer and Secretary of the Council.

co-chairs-iaf-dec-2008

The Government Internal Auditors Council of Canada comprises member representatives from Canada's federal, provincial and territorial governments, in most cases, that Governments' Chief Internal Auditor, as well as Luc Lavoie, the Executive Director of the Institute of Internal Auditors - Canada, and Michael Eastman, Executive Director of CCAF.

In addition to member-led sessions, presenters at this years Forum included:

  • Elizabeth MacRae, a former CCAF Research Associate who is working on an internal audit Capability Maturity Model for the Institute of Internal Auditors
     
  • Paul Wallis, Executive Lead and Strategic Advisor, Audit Centre for Excellence, Ontario Internal Audit
     
  • David Moynagh, Acting Executive Director, Professional Practices, Internal Audit Sector, Office of the Comptroller General of Canada
     
  • Lee McCormack, Director of Research, CCAF
     
  • Fred Jaakson, Executive Director, Systems, Forensic and Horizontal Audits, Internal Audit Sector, Office of the Comptroller General of Canada.


eastman-dec-2008kennedy-dec-2008At the conference dinner on October 21, Michael Eastman and Richard Kennedy welcomed many special guests. Among them were Comptroller General of Canada monette-dec-2008Rod Monette, who took a few moments to recognize his CCAF Board colleagues present as well as Chief Audit Executives Frank Brunetta, Assistant Deputy Minister, Departmental Oversight Branch, Public Works and Government Services Canada, Greg Jarvis, Chief Review Services, National Defence and Elizabeth Murphy-Walsh, Chief Audit Executive, Human Resources and Social Development Canada. He also welcomed some of his colleagues at Treasury Board Secretariat, namely Frank Des Rosiers, Assistant Secretary, Priorities and Planning Sector, Tim Flaherty, Senior Analyst, Policy, Methodologies Platforms, Guides and Tools and Ann-Marie Sahagian, Assistant Comptroller General, Transformation Management, Capacity Building and Community Development.

CCAF was also pleased to welcome Auditor General of Canada Sheila Fraser, Auditor General of the City of Ottawa Alain Lalonde, Amipal Manchanda, Director General, Internal Audit and Accountability, Citizenship and Immigration Canada & Past President, IIA Ottawa Chapter, Board of Governors and Errol Price, Deputy Auditor General of British Columbia.

Forum covers wide range of topics

The three-day meeting began with a roundtable review of developments in each jurisdiction. Issues frequently raised in the roundtable included internal audit work with audit committees, the use of audit software, the role of internal audit in risk assessment, professional designations for auditors, and HR issues facing the community.
The participants then compared activity in each jurisdiction regarding three issues:

  • Whistleblowing (new legislation in Manitoba, New Brunswick, Ontario and at the federal level; the Government of Newfoundland and Labrador has committed to develop legislation)
     
  • Audit of Broader Public Sector Organizations (some jurisdictions have, to varying degrees, authority to conduct audits of public sector organizations beyond government ministries, including Alberta, British Columbia, New Brunswick, Northwest Territories, Yukon)
     
  • Hiring and classification of IT auditors (most jurisdictions that have sought people with both audit and IT skills have had difficulty finding them).


Performance Indicators

shahi-dec-2008Bob Shahi, Director of the Northwest Territories Audit Bureau, reported on the results of a pilot survey of GIACC members regarding performance indicators for internal audit offices, conducted by the Performance Indicators Committee he chairs.

The survey tracked 9 of 33 performance indicators in 4 categories that members had earlier identified. Seven jurisdictions participated in the survey. Among the findings were the following:

  • 64% of audit staff positions require an audit designation;
  • most jurisdictions use Audit Risk Methodology to prepare the annual audit work plan
  • in most jurisdictions the Audit Committee approves the annual work plan at the beginning of the fiscal year
  • 85% of hours were allocated to direct project hours 
  • client satisfaction is, overall, above average.

zomar-dec-2008The committee will rework the questions based on the knowledge gained from the survey and from the discussion, submit them to members for response, report on the results and then conclude the project.

The usefulness of the survey findings prompted the group to create a new permanent Performance Indicators Panel. Heather Zomar, Chief Internal Auditor, Government of Alberta, agreed to lead the new Panel, which will take the work of the committee chaired by Bob Shahi to the next level.


Overview of IIA Capability Maturity Model

macrae-dec-2008Elizabeth (Libby) MacRae sought the group's input on a draft public sector Internal Audit Capability Maturity Model she has been developing for the Institute of Internal Auditors Research Foundation, with funding from the World Bank.

The five-level model describes key elements for effective internal audit. It provides a tool for self-assessment and a roadmap for improving capabilities in an orderly manner.

Following a lively discussion based on her presentation, Libby thanked the group for its input.


Enterprise Risk Management

newton-dec-2008Stuart Newton, Executive Director of Audit and Technical Services for the Government of British Columbia, made a presentation on Enterprise Risk Management in the BC Government.

His group is responsible for validating the risk assessments prepared by ministries, agencies and Crown corporations, identifying corporate risks, and suggesting audits based on risk and mitigation issues. It stresses that ministries and agencies are responsible for risk assessment, mitigation and management.

In the discussion that followed, members noted the difficulty many governments have in addressing risk effectively.


Quality Assurance / Practice Inspections

moynagh-dec-2008David Moynagh, Acting Executive Director, Professional Practices, Internal Audit Sector, Office of the Comptroller General of Canada and Paul Wallis, Executive Lead and Strategic Advisor, Audit Centre for Excellence, Ontario Internal Audit made separate presentations on Quality Assurance and Practice Inspections in the federal and Ontario governments respectively.

David reviewed The IIA and Government of Canada requirements for quality assurance and improvement programs for the internal audit function. He noted that the government's Internal Audit Policy and Guidelines require the Comptroller General to conduct practice inspections of the entire spectrum of departmental internal audit activities at least every four years.

David also reported that the Office of the Comptroller General (OCG) is developing a self-assessment tool that will allow departments to assess their conformance with all mandatory requirements for the function. Departments will be able to use the tool to prepare for practice inspections carried out by the OCG. Pilot inspections will begin in late 2008-2009; OCG will eventually conduct 14-15 inspections a year.

wallis-dec-2008Paul described a multi-phase quality assurance program that is being implemented in Ontario, where audit service teams report to the Office of the Chief Internal Auditor but reside in the ministries they serve. The program will include independent validation by The IIA (March 2009) and final reports to ministry audit committees, with an overall report to the corporate audit committee. It will be sustained through an ongoing annual internal maintenance process followed by a five-year external assessment.

lavoie-dec-2008GIACC members discussed the challenge of finding trained quality assurance assessors. The IIA offers Quality Assurance Assessor Courses; Luc Lavoie said he would consider the feasibility of offering the course in Canada, perhaps once in western Canada and once in the east.


Governance of State-owned Enterprises

Mishèle Bérubé, Executive Director of Québec's Forum des responsables de la vérification interne, presented an update on the impact of Québec's Act Respecting the Governance of State-Owned Enterprises.

berube-dec-2008The Act, adopted in 2006, initially covered seven key state-owned enterprises, with more added since. The boards of these enterprises are required, among other things, to establish an audit committee composed solely of independent directors. The audit committees' responsibilities involve the audit plan, internal controls, and the risk management process.

Mishèle indicated that the Act has added substantially to the work of the heads of internal audit in the state-owned enterprises. Internal audit heads have responded by strengthening their links to other managers, networking to exchange best practices with other audit offices, ensuring they have adequate trained staff, and promoting the role of the function internally.


Innovation, Risk and Control

mccormack-dec-2008Lee McCormack, Director of Research at CCAF, described the research the Foundation is undertaking in the areas of innovation, risk and control, and asked GIACC members for their input into the work done to date. He noted that the discussion was the first opportunity he had had to engage a federal/provincial/territorial group in the initiative.

Following Lee's presentation, GIACC members made a number of observations and suggestions regarding the program. At the conclusion of the session, Lee said he would involve the members in a series of regional consultation sessions he is planning for 2009.


Internal Controls over Financial Reporting

For this session, three Forum participants made presentations on initiatives taking place in their jurisdictions regarding internal control over financial reporting:

  • Heather Zomar, Alberta
  • Fred Jaakson, Government of Canada
  • Richard Kennedy, Ontario.

Each of the jurisdictions has been engaged in major projects to help strengthen internal control over financial reporting, suggesting that this is a subject of growing importance.

  • Alberta has produced a high level guide to help departments assess their internal controls and to support the annual Management Responsibility Statement signed by each Deputy Minister in their Ministry annual report and financial statements.
     
  • The Office of the Comptroller General of Canada, in developing a requirement for a deputy head and CFO to sign a Statement of Management Responsibility that includes internal control over financial reporting, is providing federal departments with guidance and tools.
     
  • Ontario is conducting a pilot program in the Ministry of Health as a first step in an effort to support ministries in assessing their controls.
     
  • CCAF will be preparing a further Update on this important topic.


Looking Ahead

As the Forum approached its conclusion, GIACC members reviewed the Terms of Reference for the Council, and proposed a number of changes. CCAF will draft revised Terms of Reference for the approval of GIACC members.

CCAF Executive Director Michael Eastman summarized the results of the Forum. He noted the potential for the GIACC website to serve as a means for GIACC members to share information, and said CCAF would upgrade the site to enhance its usefulness. He also encouraged members to provide information for the website, and to use it.

The 2009 GIACC Forum will take place in Toronto, hosted by the Ontario Internal Audit Division of the Government of Ontario.

 

Government Internal Auditors Council of Canada
(GIACC)

The following list comprises GIACC council members (as at October 2008) and their
representatives at the 2008 Forum

Brian Aiken
Assistant Comptroller General, Internal Audit
Office of the Comptroller General of Canada, Treasury Board of Canada, Secretariat

Mishèle Bérubé
Directrice exécutive, Forum des responsables de la vérification interne, Québec

Ted Doane
Executive Director, Internal Audit Department, Nova Scotia Department of Finance


Michael Eastman
Executive Director, CCAF-FCVI

Ken Gabora
Director, Internal Audit, Ministry of Finance, Saskatchewan

Pierre Gagné
Président, Forum des responsables de la vérification interne, Québec

John Gunter
Director, Government Audit Service, Government of the Yukon Territories

David Hill
Director, Professional Services & Internal Audit Division
Office of the Comptroller General, Newfoundland & Labrador

Jane Holatko
Director, Internal Audit & Consulting Services, Manitoba Finance

Richard Kennedy
Chief Internal Auditor & Assistant Deputy Minister
Ministry of Finance, Government of Ontario

Luc Lavoie
Executive Director, Institute of Internal Auditors – Canada

David Moynagh
A/Executive Director, Professional Practices, Internal Audit Sector
Office of the Comptroller General of Canada, Treasury Board of Canada, Secretariat

Stuart Newton
Executive Director, Audit and Technical Services, Internal Audit and Advisory Services
Ministry of Finance, British Columbia

Bob Shahi
Director, Audit Bureau, Financial Management Board Secretariat
Government of the Northwest Territories

Stephen Thompson
Director, Audit and Consulting Services
Office of the Comptroller of New Brunswick

Paul Wallis
Executive Lead & Strategic Advisor, Audit Centre for Excellence
Treasury Board Office, Ontario Internal Audit Division

Grace Wilk
Audit Manager and Acting Chief Internal Auditor, Internal Audit Services Branch
Department of Finance, Nunavut

Heather Zomar
Chief Internal Auditor, Government of Alberta

Council Secretary:

Nicole Wieczorek
Director of Training and Chief Financial Officer, CCAF-FCVI