ARCHIVED - Audit of the Treasury Board of Canada Secretariat's Management Control Framework of the Public Service Pension Plan

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2. Audit Details

2.1. Authority

The Audit of the Treasury Board of Canada Secretariat's Management Control Framework of the Public Service Pension Plan^[3] is part of the Secretariat's approved Three-Year Risk-Based Audit Plan 2010–13.

2.2. Objectives and Scope

The objective of the audit was to assess the adequacy and effectiveness of the Secretariat's management control framework of the Public Service Pension Plan.

The management control framework, for the purpose of this audit, is defined as the set of controls over roles and responsibilities, oversight, risk management and knowledge management. Adequacy refers to whether appropriate controls (i.e., processes and procedures) are in place; effectiveness refers to how well the controls work.

Specifically, from a Secretariat-wide perspective, the audit assessed whether:

• The Secretariat's roles and responsibilities related to the plan are clearly defined and communicated;^[4] and
• The Secretariat is providing adequate oversight and monitoring of the plan activities for which it has responsibility.

In addition, from a Pensions and Benefits Sector perspective, the audit assessed whether:

• The Sector is using a risk management approach in the delivery of key activities, and whether its strategic and operational plans are adequate to support its mandate with respect to the plan; and
• The Sector is managing its knowledge in a manner that adequately supports its plan-related roles and activities.

Most of the audit's scope consisted of activities in the Pensions and Benefits Sector, but other areas in the Secretariat were also included.

Activities in the Corporate Services Sector were included to the extent that they relate to the roles, responsibilities and authorities for recording contribution costs and subsequent recoveries. Plan-related oversight activities that may fall under the responsibility of the Assistant Secretary, Corporate Services Sector, in her role as the Chief Financial Officer of the Secretariat were also part of the audit.

The activities of the Office of the Comptroller General were included to the extent that they relate to the roles, responsibilities and authorities shared between the Office of the Comptroller General and other sectors that support the plan. For example, the audit examined the clarity of shared roles and responsibilities over the preparation of pension plan financial statements.

The roles and responsibilities, as they relate to the plan, of other organizations in the Secretariat (e.g., the Expenditure Management Sector, the Government Operations Sector and the Office of the Chief Human Resources Officer) were also considered.

The audit also assessed the interrelationships between the Secretariat and external organizations, including stakeholder committees.

The audit did not include the following:

• Supplementary benefits provided to employees under the Special Retirement Arrangement Act, Retirement Compensation Arrangements No. 1 and No. 2;^[5]
• The Supplementary Death Benefit Plan;
• Other pension plans or retirement arrangements under the purview of the Treasury Board—the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act;
• Activities of the Office of the Comptroller General related to accounting and recording of the plan in the Public Accounts of Canada;
• Plan risk management activities conducted by parties external to the Pensions and Benefits Sector (e.g., the Public Sector Pension Investment Board manages the investment risks of the plan); and 
• Plan knowledge management beyond the Pensions and Benefits Sector.

This was not an audit of the financial statements of the Public Service Pension Plan, which are audited by the Auditor General of Canada. However, the clarity of the shared roles and responsibilities and oversight over the financial statements, including the annual reporting process, were examined.

2.3. Lines of Enquiry

There were four lines of enquiry for the audit:

• Roles and responsibilities—Are the Secretariat's roles and responsibilities related to the Public Service Pension Plan clearly defined and communicated?
• Oversight, monitoring and reporting—Are there mechanisms in place to facilitate Secretariat oversight, monitoring and reporting of pension plan activities?
• Risk management and strategic and operational planning—Is there a formal and systematic approach used by the Pensions and Benefits Sector for identifying and assessing risks and mitigation strategies? Are risks taken into consideration in the development of strategic and operational plans?
• Knowledge management—Is knowledge managed adequately by the Pensions and Benefits Sector to support its plan-related roles and responsibilities?

The audit criteria are outlined in Appendix 2 of this report.

2.4. Approach and Methodology

The audit approach and methodology was risk-based and consistent with the Internal Auditing Standards for the Government of Canada and the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing. These standards require that the audit be planned and performed in such a way as to obtain reasonable assurance that audit objectives are achieved.

The audit involved interviews with key personnel, research and the review of key documents with Secretariat officials in the Pensions and Benefits Sector and with the following stakeholders:

• Corporate Services Sector
• Department of Finance Canada
• Expenditure Management Sector
• Government Operations Sector
• Office of the Chief Actuary
• Office of the Chief Human Resources Officer
• Office of the Comptroller General
• Public Sector Pension Investment Board
• Public Service Pension Advisory Committee
• Public Works and Government Services Canada

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