Internal Audit Charter
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1. Purpose and Application
1.1 The purpose of this document is to establish the mandate of Indian and Northern Affairs Canada (INAC) internal audit function and to assign the responsibilities and identify the standards according to which it will be implemented.
1.2 This Charter is effective as of the date of signature.
2.1 In accordance with the Treasury Board Policy on Internal Audit, the role of the Departmental internal audit function, in conjunction with the Audit and Evaluation Committee, is to ensure that the Deputy Minister of Indian and Northern Affairs, and the Comptroller General, are provided with added assurance, independent from line management, on the department's risk management, control and accountability processes.
2.2 The internal audit function fulfills this role by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of the department's risk management, control, and governance processes.
3. Scope of Work
3.1 The scope of work of the internal audit function is to determine whether INAC's network of risk management, control, and governance processes, as designed and represented by management, is adequate and functioning in a manner to ensure:
- Risks are appropriately identified and managed
- Significant financial, managerial, and operating information is accurate, reliable, and timely
- Activities and actions are in compliance with policies, standards, procedures, and applicable laws and regulations
- Resources are acquired economically, used efficiently, and adequately protected
- Programs, plans, and objectives are achieved
- Quality and continuous improvement are fostered in the department.s control processes and
- Significant legislative or regulatory issues impacting the department are recognized and addressed properly.
When opportunities for improving management control, governance, or resource stewardship are identified during audits, they will be communicated to the appropriate level of management.
4.1 The Deputy Minister is responsible for:
- establishing an internal audit function that is appropriately resourced and that operates in accordance with the Treasury Board Policy on Internal Audit and its related directives
- establishing an independent audit committee and ensuring that it receives all the information needed to fulfill its responsibilities
- appointing a qualified Chief Audit and Evaluation Executive, reporting to the Deputy Minister, to lead and direct the internal audit function, independent from departmental management and operations
- approving a departmental internal audit plan that addresses all areas of higher risk and significance
- putting in place effective procedures to ensure systematic review of control and accountability processes
- taking into account the results of internal audits conducted by the Comptroller General
- ensuring that management action plans are prepared that adequately address the recommendations and findings arising from internal audits, and that action plans have been effectively implemented
- ensuring that completed audit reports are issued in a timely manner and made accessible to the public with minimal formality and posted on the INAC website in a timely manner, in both official languages and
- ensuring that the Minister of Indian Affairs is briefed periodically on significant items arising from the work of internal audit and the Audit and Evaluation Committee.
4.2 The INAC Audit and Evaluation Committee is responsible for:
- ensuring, in accordance with the INAC Audit and Evaluation Committee Terms of Reference, that the Deputy Minister has independent, objective advice, guidance and assurance on the adequacy of INAC's risk management, control and accountability processes and
- preparing an annual report to the Deputy Minister on their activities, including an assessment of the internal audit function.
4.3 The Chief Audit and Evaluation Executive is responsible for:
- establishing appropriate policies and procedures to guide the internal audit function
- establishing risk-based audit plans to set out the priorities of the internal audit function
- coordinating internal audit plans and activities with other internal and external providers of assurance activities
- communicating the internal audit plan of engagements and the related resource requirements (including the impact of resource limitations) to the Deputy Minister and the Audit and Evaluation Committee
- ensuring that internal audit resources are appropriate (i.e. professional qualifications and skills), sufficient and effectively deployed to achieve the approved plan
- ensuring the timely completion of and reporting on individual internal audit engagements in accordance with professional standards
- supporting and conducting horizontal and sectoral audits requested by the Office of the Comptroller General and any internal audits requested by other central agencies, Cabinet or Parliament
- being the point of contact with the Office of the Comptroller General, the Office of the Auditor General, the Commissioner for the Environment and Sustainable Development, the Public Service Commission, and other agencies involved in conducting audits that include INAC
- reporting periodically to the Audit and Evaluation Committee on whether management-s action plans have been implemented and whether the actions taken have been effective
- maintaining a quality assurance and improvement program that covers all aspects of the internal audit function
- reporting annually to the Audit and Evaluation Committee on the internal audit function-s conformance with professional internal auditing standards
- providing annually a holistic opinion to the Deputy Minister and the Audit and Evaluation Committee on the effectiveness and adequacy of INAC-s risk management, control, and governance processes
- maintaining unfettered access to the Audit and Evaluation Committee and to the Committee Vice-Chair and
- informing the Comptroller General without delay, but after discussion with the Deputy Minister, of any issue of risk, control or management practice that may be of significance to the government or require Treasury Board Secretariat-s involvement.
4.4 INAC Management (including Associate and Assistant Deputy Ministers, Regional and Headquarters Directors General, Directors, and Managers) is responsible for:
- ensuring the adequacy and effectiveness of risk management, control and governance processes
- providing full and timely support and cooperation to the staff of the internal audit function in carrying out their approved engagements and
- preparing and implementing corrective action plans with respect to approved audit recommendations.
4.5 The Comptroller General of Canada is responsible for directing horizontal audits and for focused, sustained functional leadership of internal audit across government in order to build and develop capacity, ensure adequate levels of professionally qualified resources, and ensure adherence to professional standards and rigorous methodology in the delivery of internal audits.
5.1 The internal audit function, as led by the Chief Audit and Evaluation Executive and implemented by the Audit and Assurance Services Branch, has access to all departmental records, databases, workplaces and employees and has the right to obtain information and explanations from departmental employees and contractors, subject to applicable legislation. Access to certain confidential personnel records is to be limited exclusively to such information as may be required in the conduct of a particular audit.
5.2 The staff performing the internal audit function must be independent of and objective towards the activities that they review. They do not have any direct authority over the activities of INAC managers or staff.
5.3 The internal audit staff will perform audits with the proficiency and due care expected of reasonably prudent and competent audit professionals.
6.1 The internal audit function will be conducted in accordance with the Internal Auditing Standards for the Government of Canada, the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Audit, and the INAC Internal Audit Manual. In the event of conflict with the International Standards for the Professional Practice of Internal Audit, the Internal Auditing Standards for the Government of Canada will prevail.
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