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Audit of Readiness for the Implementation of the Policy on Internal Control
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3. Findings, Recommendations and Management Response
3.4 People
Training and regular refreshers with respect to policies, processes and practices (including roles and responsibilities) for key stakeholders in the ICFR process will equip them with the necessary skills to support the Deputy Head and the CFO in making assertions on the state of internal controls within the department.
Finding 3.4.1: There is a need for more frequent and regular communication and awareness training regarding controls and ICFR responsibilities, including the development of specified learning plans for key stakeholders.
Training, tools and resources are needed to support various parties (CFO, Chief Audit Executive and other senior managers reporting to the Librarian and Archivist of Canada, responsibility centre managers, financial managers, financial officers and clerks) in the discharge of their responsibilities and accountabilities for internal control, including ICFR. This includes regular communication and reminders of the key policies, processes, and practices (including roles and responsibilities) to maintain and keep current the knowledge of key stakeholders about controls, including controls over financial reporting. In addition, training plans are a key step in acquiring essential skills, and it is important to ensure the implementation of those plans.
Training is available (formal training and informal knowledge transfer) for managers and non-managers to help them fulfill their duties. The review of training material delivered to Administrative Services staff and responsibility centre managers confirmed that training is available in FreeBalance Financial Systems modules and in FreeBalance Performance Budgeting for Human Capital, as well as other financial management processes such as financial planning, delegation of authority, contracting and the procurement process, as well as accounting operations.
In addition, there was consensus among Financial Officers and Administrative Services staff that opportunities for knowledge transfer exist (internal training, lunch-and-learn sessions, on-the-job training), however this group of employees also noted that there are often time constraints, budget constraints or other circumstances that prevent them from taking or receiving training.
In interviews, senior managers noted job-related training is available and encouraged. However, most of the senior managers interviewed agreed that there is a need for regular communication and awareness training regarding controls and ICFR responsibilities and accountabilities.
Learning plans in internal control areas to support these various parties in their roles and responsibilities for deploying the Policy on Internal Control have not been established.
Identifying necessary training and regular refreshers with respect to controls, including controls over financial reporting, for key stakeholders in the ICFR process will equip them with the necessary skills to support the Deputy Head and the CFO in making assertions on the state of internal controls within the department. In absence of this, senior departmental managers may establish, maintain, and monitor the system of internal control, including internal controls over financial reporting, in the programs for which they are responsible, inconsistently and ineffectively. There is also a risk that employees will not be appropriately trained in the principles, values, practices and behaviours considered appropriate to conduct LAC's business.12
Recommendation 3.4:
The CFO defines training plans and awareness requirements in internal control areas to support key stakeholders in their roles and responsibilities for deploying the Policy on Internal Control.
Management Response:
Management agrees with this recommendation. As part of the establishment of an appropriate control environment, specific and general training will have to be developed to help the various stakeholders understand and properly assume their roles and responsibilities as regards controls at the unit level.
12 The following internal control areas will be integral to the training: organizational values and principles, code of conduct, business ethics and compliance standards, legislative and regulatory requirements, basic accounting policies and procedures, central agency directives and guidelines, risk assessment, training on financial systems, understanding control frameworks and process controls, and training in planning and budgeting activities.
