Service arrangements relevant to financial statements:

The CFIA relies on other organizations and their internal controls for the processing of certain transactions that are recorded in its financial statements, as well as, systems development and maintenance services:

• Public Works and Government Services Canada (PWGSC) centrally administers the payments of salaries.
• Treasury Board Secretariat (TBS) provides information used to caluclate various accruals and allowances, such as the accrued severance liability.
• Agriculture and Agri-Food Canada (AAFC) provides acquisition, system development and maintenance services for the information systems used in financial reporting.

Material changes in fiscal year 2010-11:

No significant changes that are relevant to the financial statements occurred in 2010-11.

2. Control environment of the Agency relative to ICFR:

The CFIA recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining an effective system of ICFR and are well equipped to exercise these responsibilities effectively. CFIA'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 Key positions, roles and responsibilities relative to ICFR

Below are the CFIA's key positions and committees with responsibilities for maintaining and reviewing the effectiveness of its system of ICFR.

President - CFIA's President, as Accounting Officer, assumes overall responsibility and leadership for the measures taken to maintain an effective system of internal control. In this role, the President chairs the Senior Management Committee and is supported by the Executive Vice-President.

Chief Financial Officer (CFO) - CFIA's CFO reports directly to the President and provides leadership for the coordination, coherence and focus on the design and maintenance of an effective and integrated system of ICFR, including its annual assessment.

Vice-Presidents - CFIA's Vice-Presidents in charge of program delivery are responsible for maintaining and reviewing effectiveness of their system of the ICFR falling within their mandate.

Chief Audit Executive (CAE) - CFIA's CAE reports directly to the President and provides assurance through periodic risk-based internal audits which can be instrumental to the maintenance of an effective system of ICFR.

Department and Agency Audit Committee (DAAC) - The DAAC is an advisory committee that provides objective views on the CFIA's risk management, control and governance frameworks. It is comprised of three external members and was established in 2007.