Core Control Audit of the Patented Medicine Prices Review Board - October 2011
Office of the Comptroller General
Objective and scope
The objective of this audit was to ensure that core controls over financial management1 within the Patented Medicine Prices Review Board (PMPRB) are effective and result in compliance with corresponding legislation, policies, and directives.
The scope of this audit included an examination of a sample of transactions from each of the policies and directives indicated in Appendix A of this report. The transactions were taken from April 1, 2010 to March 31, 2011.
Conformance with Professional Standards
This audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing.2
Brian M. Aiken, CIA, CFE
Assistant Comptroller General
Internal Audit Sector, Office of the Comptroller General
Why this is important
Canadians expect the federal government to be well managed and to be accountable for the prudent stewardship of public funds, the safeguarding of public assets, and the effective, efficient and economical use of public resources. They also expect reliable and transparent reporting on how the government spends public funds to achieve results for Canadians.3
The Financial Administration Act designates deputy heads as accounting officers for their department or agency. As accounting officers, deputy heads are accountable for ensuring resources are organized to deliver departmental objectives in compliance with government policy and procedures; ensuring that there are effective systems of internal control; signing departmental accounts; and performing other specific duties assigned by law or regulation to the administration of their department or agency.
Audit findings and conclusion
Core controls over financial management within the Patented Medicine Prices Review Board are conducted in a manner compliant with the requirements contained in eleven of twelve policies, directives4 and corresponding legislation tested.
As part of this audit the Agency received detailed recommendations with respect to improvements that should be made. Recommendations were made to ensure that expenses are pre-approved and that account verification is done on a timely basis by an appropriate delegated authority, particularly in the area of hospitality.
Management action plans
Management has accepted the audit findings and has developed an action plan to address the detailed recommendations. The Patented Medicine Prices Review Board has provided the Office of the Comptroller General with the management action plan to address actions taken towards the findings. The management action plan is available on the Patented Medicine Prices Review Board website.
The results of the audit and the management action plan have been discussed with the Chairperson of the Patented Medicine Prices Review Board and the Small Departments and Agencies Audit Committee. The Office of the Comptroller General will follow-up on the management action plan until all findings are resolved.
Appendix A: Policies and Directives Tested
|Policies and Directives Tested
|Directive on Delegation of Financial Authorities for Disbursements
|Directive on Expenditure Initiation and Commitment Control5
|Directive on Account Verification6
|Directive on Acquisition Cards
||Met with Exception
|Directive on Accountable Advances
|National Joint Council Travel Directive and the Directive on Travel Cards and Travellers Cheques
|Hospitality Policy and the Directive on the Management of Expenditures on Travel, Hospitality and Conferences
|Directive on Leave and Special Working Arrangements
|Directive on Financial Management of Pay Administration
|Performance Pay Administration7
||Greater than or equal to 99% compliance.
|Met with exception
||Greater than or equal to 90% and less than 99% compliance.
||Greater than or equal to 80% and less than 90% compliance.
||Less than 80% compliance.
1 See Appendix A for a complete list of policies and directives included in the scope of this audit. For the audit criteria please refer to http://www.tbs-sct.gc.ca/report/orp/2011/ccac-cvcb-eng.asp.
2 The Office of the Comptroller General has not undergone an external assessment to support its conformance with this statement.
3 Policy Framework for Financial Management: Section 2. Context.
4 See Appendix A for the PMPRB´s overall compliance in the areas tested.
5 Includes Financial Administration Act, Section 32.
6 Includes Financial Administration Act, Section 34.
7 Includes the Policy on the Management of Executives, the Directive on Terms and Conditions of Employment for Certain Excluded and Unrepresented Employees and the Directive on Executive Compensation