NRCan 2020-25 Integrated Audit and Evaluation Plan Summary

Acronyms

Acronym

Details

ADM

Assistant Deputy Minister

AEB

Audit and Evaluation Branch

CAEE

Chief Audit and Evaluation Executive

CERRC

Clean Energy for Rural and Remote Communities

CFS

Canadian Forest Service

CMSS

Corporate Management & Services Sector

CPS

Communications Portfolio Sector

DAC

Departmental Audit Committee

DM

Deputy Minister

DRF

Departmental Results Framework

ECCC

Environment and Climate Change Canada

ETS

Energy Technology Sector

FAA

Financial Administration Act

FRA

Fraud Risk Assessment

FY

Fiscal Year

GBA+

Gender-Based Analysis

GI

Green Infrastructure

IA

Internal Audit

IAA

Impact Assessment Agency

IAEP

Integrated Audit and Evaluation Plan

IARS

Indigenous Affairs and Reconciliation Sector

IIA

Institute of Internal Auditors

IM

Information Management

IT

Information Technology

LCES

Low Carbon Energy Sector

LMS

Land and Minerals Sector

M

Million

MPMO

Major Projects Management Office

N/A

Non Available

OCG

Office of the Comptroller General

OCS

Office of the Chief Scientist

OPI

Office of Primary Interest

SPI

Strategic Policy and Innovation Sector

SPPIO

Strategic Petroleum and Policy Investment Office

TB

Treasury Board of Canada

TBC

To be Confirmed

TBD

To Be Determined

TBS

Treasury Board Secretariat

TC

Transport Canada

Introduction

The Integrated Audit and Evaluation Plan (IAEP), also referred to as the “Plan”, is prepared by the Audit and Evaluation Branch (AEB) of Natural Resources Canada (NRCan). It contains details on the roles of internal audit, evaluation, the AEB’s planning methodology, and the planned projects for fiscal years (FY) 2020-21 to 2024-25.

The Plan provides a roadmap outlining AEB’s future activity. However, consistent with emerging innovations in the respective disciplines, we strive to remain agile in monitoring and adapting to the changing context and environment of our work. Risk assessment and engagement with clients and partners is a continual activity. As new risks are identified, AEB may find it necessary to modify the Plan in consultation with senior management.

The IAEP is developed in accordance with the requirements of the Treasury Board of Canada (TB) Policy on Internal Audit, related directives and guidelines, the Institute of Internal Auditors’ (IIA) International Standards for the Professional Practice of Internal Auditing, Section 42.1 of the Financial Administration Act (FAA), and the TB Policy on Results.

Planning Results: Audit, Evaluation, and Joint Projects for 2020-25

Tables 1 through 3 summarize the internal audit projects, joint audit and evaluation projects, and evaluations planned for the FYs 2020-21 to 2024-25. In total, 71 AEB projects of high priority are planned for the next five years.

Table 3 – AEB Projects for Fiscal Years 2020-25

Projects are listed in the fiscal year of their initiation.

In response to the COVID-19 pandemic, AEB has dedicated additional resources for advisory projects in 2020-21, in order to maintain agility and provide rapid response to the evolving situation.

Planning Results: Continuous Auditing of Core Controls

The AEB will continue to undertake assurance-based continuous auditing to proactively identify potential systemic control issues and report annually on various processes. This work will be performed in accordance with the IIA Standards to provide reasonable assurance and will address key risks associated with significant departmental expenses. These have been identified, in part, based on the results of the Management Action Plans developed in response to the most recent Departmental Fraud Risk Assessment.

The three areas selected for continuous audit in 2020-21 are:

• Pay and Benefits;
• Offshore Revenues and Payments; and
• Procurement Processes and Professional Services.

NRCan’s annual report on continuous audit will be completed for the DAC’s fall 2020 meeting, covering continuous audit work conducted in 2019-20.

Follow-up on Audit and Evaluation Recommendations

AEB conducts follow-up on all audit and evaluation recommendations, from both internal and external providers. The follow-up process at NRCan consists of two main activities: self-assessment and validation.

First, management self-assesses the implementation progress for each recommendation and associated action plan. Second, when the self-assessment is that a recommendation and action plan have been fully implemented, AEB validates it by:

• conducting interviews;
• reviewing supporting documentation; and
• performing analysis and testing based on risk.

These two activities are undertaken on a semi-annual basis, in summer and winter. The annual reporting cycle concludes when the DM approves the annual Follow-Up Report. Once approved, the report is sent to the OCG.

In FY 2019-20, NRCan senior management implemented an additional quarterly monitoring process, supplementary to the established follow-up procedures, for selected audit and evaluations of significant interest. This process requires office of primary interest (OPI) to complete quarterly dashboards to track and report progress on implementing recommendations and action plans from the selected audit and evaluation reports.

Resources and Capacity

The AEB’s forecasted budget for FY 2020-21 is $5.1 million, of which $3.0 million is allocated to the audit function and the remaining $2.1 million to the evaluation function. An estimate of total resource capacity available was developed and allocated to AEB activities using metrics based on past experience. Approximately 7,350 person days of direct assurance engagements, evaluations, and advisory services, equating to 42 professional positions, are required for projects and activities in 2020-21. These resources provide AEB with the capacity to deliver the Plan to engage in other activities such as strategic and risk-based planning, follow-up on the implementation of recommendations, special studies, performance reporting, professional practices, and external audit liaison work. It should be noted that during the pandemic all AEB staff have been working remotely. As a result, AEB capacity to perform its work is being impacted by the pandemic and it will continue to assess the timelines for projects included in the IAEP.

Appendix 1: Five Year Evaluation Schedule (FYs 2020-25)