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

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.

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.

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.

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.

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

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: