Annex to the statement of management responsibility including internal control over financial reporting RCMP fiscal year 2023-2024

1. Introduction

This document provides summary information on the measures taken by the Royal Canadian Mounted Police (RCMP) to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.

Detailed information on the RCMP’s authority, mandate and core responsibilities can be found in the 2023-2024 Departmental Plan and the 2023-2024 Departmental Results Report.

2. RCMP’s system of internal control over financial reporting

2.1 Internal control management

The RCMP recognizes the importance of setting the tone from the top and helps ensure that staff at all levels understand their role in maintaining an effective system of internal control over financial reporting and are well equipped to exercise these responsibilities effectively. The focus of the RCMP’s internal control management framework is to ensure risks are managed through a responsive and risk-based control environment that enables continuous improvement and innovation.

The RCMP has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. The RCMP’s internal control management framework includes:

Organizational accountability structures to support sound financial management, including roles and responsibilities of senior managers for key areas of responsibility, as related to internal control management
Values and ethics (RCMP renewed its Core Values through consultation in 2023-2024)
Ongoing communication, including training on statutory requirements, policies and procedures, for sound financial management and control
A centralized internal control team, supported by regional units within the Corporate Management portfolio dedicated to the documentation, design and operating effectiveness of internal control over financial reporting under the Chief Financial Officer
Periodic monitoring of, and regular updates to, internal control management, as well as the provision of related assessment results and action plans to the Commissioner and senior management through committees and, as applicable, the Departmental Audit Committee

The Departmental Audit Committee provides advice to the Commissioner on the adequacy and functioning of the RCMP’s risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The RCMP relies on other organizations for the processing of certain transactions that are recorded in its financial statements, as follows:

Common service arrangements

Public Services and Procurement Canada administers the following:
- The payments of salaries and benefits under two different pay systems: Phoenix for public service employees and Member Pay System for regular and civilian members of the RCMP
- The procurement of goods and services in accordance with the RCMP’s Delegation of Authority, and the provision of accommodation services
- The issuance of Receiver General payments and the processing of Interdepartmental Settlements on behalf of the RCMP via the Standard Payment System
The Treasury Board of Canada Secretariat provides services related to public sector insurance for public service employees of the RCMP and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans (the Public Service Pension Plan, Employment Insurance Plan, Canada Pension Plan, Quebec Pension Plan and Public Service Supplementary Death Benefit Plan) on behalf of the RCMP;
The Department of Justice Canada provides legal services to the RCMP; and
Shared Services Canada provides information technology (IT) infrastructure services to the RCMP in the areas of data centre, network and telecommunication services.

The annexes of the above-noted departments could be reviewed to obtain a greater understanding of the systems of internal control over financial reporting related to these specific services.

Specific arrangements

Public Services and Procurement Canada, under a service level agreement, provides day-to-day pension administration services for members, including determining the eligibility and the calculation of pension benefits, providing call centre support, and providing information to Plan members and providing pension payroll services
Veterans Affairs Canada, under a Memorandum of Understanding, administers some of the programs and services that the RCMP is responsible to provide to its members, including the disability pension and health benefit programs for a service-related injury, illness or death, pursuant to Part II of the RCMP Superannuation Act and the Pension Act. Veterans Affairs Canada also provides transition support, case management, and access to the network of Operational Stress Injury Clinics and Veterans Affairs Canada Assistance Service to eligible members.

3. Departmental assessment results during the 2023-2024 fiscal year

The following tables summarize the assessment areas where key controls were tested in 2023-2024:

Table 1: Internal control over financial reporting processes
Previous fiscal year’s rotational ongoing monitoring plan for the current fiscal year	Status
Payroll and benefits – Members	Testing ongoing; assessment to be finalized in 2024-2025
Tangible capital assets ^{table 1 note 1}	Process narrative being updated; testing to start in 2024-2025
IT general controls under departmental management ^{table 1 note 2}	Testing strategy reviewed
Pension plan liabilities	Key controls testing completed; no control deficiencies observed; final results report completed
Table 1 notes Table 1 note 1 The key controls over tangible capital assets have not been tested for many years, hence this is a risk area. Tangible capital assets represent decentralized and complex processes which will be tested in 2024-25 and finalized in 2025-2026. Return to table 1 note 1 referrer Table 1 note 2 In 2023-2024, the assessment of the design and operating effectiveness of IT general controls was not performed as the IT general controls assessment process was revamped to obtain more clarity on the landscape and better align testing to risks. The key controls assessment identified in the first year of the new plan will begin in 2024-2025. Return to table 1 note 2 referrer

Table 2: Internal control over financial management processes
Financial management business process	Risk assessment and documentation	Design effectiveness testing and recommendations provided to process owner for remediation	Operational effectiveness testing and recommendations provided to process owner for remediation
Project management (real property)	Complete	Complete	Complete
Costing	Complete	Complete	Complete
Budgeting and forecasting	Complete	Complete	Complete
Treasury Board submissions including Chief Financial Officer attestation	Complete	Complete	Complete
Investment planning	Complete	Complete	In progress
Project management (IM/IT)	Complete	In progress	In progress

Four out of the six internal control over financial management assessments are at the ongoing monitoring phase; the remaining two will be completed during 2024-2025.

Ongoing monitoring program

The key controls that were tested (see previous two tables - Departmental Assessment Results) performed as intended and no significant deficiencies were found. In addition, the RCMP followed-up on previous years' Management Action Plans to ensure that risks identified were mitigated with the implemented actions.

4. Departmental action plan for the next fiscal year and subsequent fiscal years

The RCMP’s rotational ongoing monitoring plan over the next five fiscal years is shown below in the table. The ongoing monitoring plan is based on:

an annual validation of high-risk processes and controls
resource availability
related adjustments to the ongoing monitoring plan, as required

Some key control areas are assessed over two fiscal years due to their size (number of sub-processes) and complexity.

In addition to the ongoing monitoring plan, the RCMP will conduct a full risk assessment of its internal controls over financial management processes, which will be completed in 2024-2025. Upon completion of this assessment, the financial management processes will be added to the ongoing monitoring plan to reassess control performance on a rotational basis based on risk.

Table 3: Rotational ongoing internal control over financial reporting monitoring plan
Key control area	2024-2025	2025-2026	2026-2027	2027-2028	2028-2029
Entity-level controls	No	Yes ^{table 3 note 3}	Yes ^{table 3 note 3}	Yes ^{table 3 note 3}	Yes ^{table 3 note 3}
IT general controls under departmental management	Yes ^{table 3 note 1}	Yes ^{table 3 note 1}	Yes ^{table 3 note 1}	Yes ^{table 3 note 1}	Yes ^{table 3 note 1}
Operating expenditures and accounts payable ^{table 3 note 4}	Yes	Yes	No	No	Yes
Revenues and accounts receivable	No	Yes	Yes	No	No
Payroll and benefits – members	Yes	No	No	No	Yes
Payroll and benefits – public service employees	No	Yes	Yes	No	No
Financial reporting	No	No	Yes	No	No
Tangible capital assets	Yes	Yes	No	No	No
Transfer payments	No	No	Yes	No	No
Inventory	No	No	Yes	No	No
Pension plan liabilities	No	No	No	Yes	No
Departmental financial signing authorities	Yes	No	No	No	Yes
Rotational ongoing internal control over financial management monitoring plan
Financial management	No	To be determined ^{table 3 note 2}	To be determined ^{table 3 note 2}	To be determined ^{table 3 note 2}	To be determined ^{table 3 note 2}
Table 3 notes Table 3 note 1 The assessment of IT general controls under departmental management is based on a comprehensive risk-based four-year plan where high-risk areas are assessed on an annual basis and controls over medium- and low-risk elements are tested on a rotational basis. Return to table 3 note 1 referrer Table 3 note 2 Financial Management processes will be added to the rotational internal control over financial management plan starting in 2025-2026. Return to table 3 note 2 referrer Table 3 note 3 Starting in 2025-2026, the reassessment of entity-level controls will span over multiple years where each of the five control components under the Committee of Sponsoring Organizations of the Treadway Commission framework will be tested by the end of the period. Return to table 3 note 3 referrer Table 3 note 4 Procure to Pay will be examined as part of sub-processes. Return to table 3 note 4 referrer

Date modified:: 2024-10-21

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