2013 FALL REPORT OF THE AUDITOR GENERAL OF CANADA

DEPARTMENTAL ACTION PLAN IN RESPONSE TO AUDIT FINDINGS AND RECOMMENDATIONS CONTAINED IN FOLLOW-UP AUDIT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING

ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT CANADA

AS OF MARCH 31, 2014

Recommendation	AANDC Response	Action Plan
1.24 Foreign Affairs, Trade and Development Canada; Human Resources and Skills Development Canada, Aboriginal Affairs and Northern Development Canada; and Transport Canada should complete their assessments of internal controls within the planned timelines, including addressing gaps and weaknesses. In addition, these four departments and Veterans Affairs Canada should fully implement a program of ongoing monitoring without delay. (1.15-1.23)	Agreed. Aboriginal Affairs and Northern Development Canada, Human Resources and Skills Development Canada, and Transport Canada recognize the importance of completing the testing of internal controls over financial reporting, addressing gaps and weaknesses, and implementing a program for ongoing monitoring of these controls, while working on other equally important priorities. Each department has put in place systems for internal controls over financial reporting, including requirements for internal reconciliations and analysis, and post-verification reviews. Work is under way to ensure that these and other internal controls are operating effectively to mitigate risk. Building on concrete steps taken to date, the departments will undertake to complete their first full risk-based assessments of internal controls over financial reporting, including identifying and addressing gaps and weaknesses in internal controls by 31 March 2015, 31 March 2016, and 31 March 2014 respectively. As the initial assessment for each key process is completed, Aboriginal Affairs and Northern Development Canada, Human Resources and Skills Development Canada, and Transport Canada will implement a program for continuous monitoring of their internal controls over financial reporting.	Update/Rationale: AANDC has completed the following processes for March 31, 2014: Environmental Liabilities, Revenue Management and Guarantee Deposits, Guaranteed Loans. For 2014-15, AANDC will finalize the assessment of Tangible Capital Assets. Also, a follow-up on previous significant recommendations will be done, and finally, the approved On-Going Monitoring plan will be initiated. To meet the expectations of the Treasury Board Policy on Internal Control for ongoing ICFR assessment, a risk-based approach will be used.  This approach will allow Internal Control Unit resources to be targeted to areas of highest risk and also allow the establishment of the external resources level required to meet deadlines.