Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting

Fiscal Year 2016-17

1. Introduction

This document provides summary information on the measures taken by Parks Canada 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 Parks Canada’s authority, mandate and programs can be found in the attached Departmental Results Report and Departmental Plan

2. Parks Canada's System of internal Control Over Financial Reporting (ICFR)

Parks Canada recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective systems of ICFR and is well equipped to exercise these responsibilities effectively. Parks Canada’s focus is to ensure that risks are well managed through a responsive and risk-based control environment that enables continuous improvement and innovation.

2.1 Internal control management

Parks Canada has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. An internal control framework, approved by the Chief Executive Officer and Chief Financial Officer, is in place and includes:

  • Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities which span from senior managers across to PCA employees in their areas of responsibility for control management;
  • Internal control structure and management approach, which depicts the overall approach for internal control identification, documentation and evaluation;
  • Values and ethics; Parks Canada has a Values and Ethics Code, and an Ombudsman whose mission is to promote and intervene in favour of an organizational culture based on the fundamental values of the Agency. The Ombudsman is also the Senior Integrity Officer for internal disclosure and wrongdoing;
  • Ongoing communication and training on statutory requirements, policies and procedures for sound financial management and control; and
  • Monitoring and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Chief Executive Officer and the Audit Committee (AC).

The AC provides advice to the Chief Executive Officer on the adequacy and functioning of Parks Canada’s risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to the financial statements

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

Common Arrangements:
  • Public Services and Procurement Canada centrally administers the payments of salaries through its payroll system, the procurement of goods and services and the provision of accommodation.
  • The Treasury Board Secretariat provides the Agency with contributions covering the employer’s share of employees’ medical and dental insurance premiums.
  • The Treasury Board Secretariat provides the Agency with information used to calculate various accruals and allowances, such as the accrued severance liability.
  • The Department of Justice provides legal services to the Agency.
  • Shared Services Canada (SSC) provides IT infrastructure services to the Agency in the areas of acquisition and provision of hardware and software, data centre and network services. The scope and responsibilities are addressed in the interdepartmental arrangement between SSC and the Agency.
Specific Arrangement:
  • Parks Canada’s financial system related functional services are shared with Canadian Heritage. The services are administered through an MOU whereby Parks Canada shares equally the expenses (incl. maintenance, training, user support, etc.) as well as the responsibilities and risks in relation to the financial system. The financial system’s Information Technology (IT) related services are provided by Agriculture Canada to both Parks Canada and Canadian Heritage through a separate MOU.

3. Parks Canada's Assessment Results During Fiscal Year 2016-17

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

3.1 New or significantly amended key controls

The implementation of a new payroll system (Phoenix) resulted in important changes to the control activities associated with the payroll and benefits business process, resulting in the deferral of planned operating effectiveness testing in 2017-18. The Agency has put resources in place to begin the documentation of the key controls and processes associated with this new system.

There were no other new or significantly amended key controls in existing processes which required a reassessment in the current year.

3.2 On-going monitoring of key controls

As part of its ongoing monitoring plan, Parks Canada completed its assessment of Accounts Payable, Capital Assets, and Financial Reporting in 2016-17.

Key controls tested as part of Parks Canada’s ongoing risk-based monitoring plan in 2016-17 were found to be operating effectively with no significant deficiencies identified.

4. Parks Canada's Action Plan

4.1 Progress during fiscal year 2016-17

Parks Canada continued to conduct its ongoing monitoring according to the previous fiscal year’s rotational plan as shown in the following table:

Progress during fiscal year 2016-17
Element in previous year’s action plan
Accounts Payables
Status: Ongoing monitoring testing completed. Corrective measures identified and currently being addressed.
Capital Assets
Status: Ongoing monitoring testing completed. Corrective measures identified and currently being addressed.
Financial Reporting
Status: Ongoing monitoring testing completed. No remediation required.

4.2 Status and action plan for the next fiscal year and subsequent years

The Agency’s rotational ongoing monitoring plan over the next three years, based on the risk assessment of the Agency’s system of Internal Controls over Financial Management. The risk assessment is performed every three years, with an environmental scan in the intervening years to identify if changes to the Ongoing Monitoring Plan are needed. A full risk assessment was performed in 2016-2017 and the resulting Ongoing Monitoring Plan for ICFR , is shown in the following table:

Fiscal Year 2017-2018
Key Control Areas 2017-2018
IT General Controls under Departmental Management
  • IT General Controls
  • Parks Canada Reservation Service (PCRS)
  • Shared Travel Services (STS)
Business Processes Controls
  • Revenue Management
  • Financial Reporting
Fiscal Year 2018-2019
Key Control Areas 2018-2019
Entity Level Controls
  • Governance & Accountability
Business Processes Controls
  • Chart of Accounts
  • Revenue Management
  • Environmental Liabilities
  • Pay Administration
Fiscal Year 2019-2020
Key Control Areas 2019-2020
Business Processes Controls
  • Accounts Payable
  • Capital Assets
  • Pay Administration

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