Internal Audit Charter

1. Introduction

1. This document describes the RCMP internal audit function including mandate, how independence and objectivity is maintained, authority under which it operates, and the responsibilities and duties of those involved in supporting the function.
2. The Federal Accountability Act and the Financial Administration Act require departments to have an adequate internal audit capacity and an independent departmental audit committee.
3. The Treasury Board Directive on Departmental Audit Committees which came into effect on July 1, 2009 instructs the departmental audit committee to recommend, and periodically review, a departmental internal audit charter for the approval of the Commissioner.

2. Mandate

1. Internal audit is a professional, independent appraisal function that provides objective, substantiated conclusions as to how well the organization's risk management, control and governance processes are designed and working.
2. The focus of internal audit is on all management systems, processes and practices, including the integrity of financial and non-financial information.
3. Internal audit adds value by assessing and making recommendations on the effectiveness of mechanisms in place to ensure that the organization achieves its objectives and in a way that demonstrates informed, accountable decision-making with regard to ethics, compliance, risk, economy and efficiency.
4. For the internal audit profession, the above-described role is referred to as providing assurance. It is intended to contribute to the basis by which decision-makers achieve oversight and control of their organizations, apply sound risk management, target their attention to areas in need of improvement and demonstrate accountability. Accordingly, internal audit takes a disciplined, evidence-based approach to determining whether or not assurance can be provided that key systems and processes are appropriately designed and are functioning as intended.
5. Principally as an adjunct to the assurance role, and within their sphere of expertise, internal auditors may also provide advisory services. In this respect, internal auditors are also expected to offer solution-oriented recommendations.

3. Independence and Objectivity

1. The independence, real and perceived, of internal audit from line management is derived principally through an independent departmental audit committee that includes competent and experienced members drawn from outside the federal public administration, and the organizational independence of the Chief Audit Executive (CAE) who leads the audit function.
2. Internal auditors are required to exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors are required to make a balanced assessment of all the relevant circumstances and are not to be unduly influenced by their own interests or by others in forming judgments. Internal auditors are not to participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organization. They should not accept anything that may impair or be presumed to impair their professional judgment. They are to disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.

4. Authority

1. The Commissioner is responsible for establishing an internal audit capacity appropriate to the needs of the RCMP. Authority in this regard is derived from the:
   1. Federal Accountability Act (December 12, 2006);
   2. Financial Administration Act (Part I.1)
   3. Treasury Board Policy on Internal Audit and Directive on Chief Audit Executives, Internal Plans, and Support to the Comptroller General (July 1, 2009).
2. The Directive on Chief Audit Executives, Internal Plans, and Support to the Comptroller General specifies that the Office of the CAE will have:
   1. unfettered access to the departmental audit committee and to the committee chair;
   2. access to all departmental records, databases, workplaces and employees, and has the authority within the context of internal audit planning or approved engagements, to obtain information and explanations from departmental employees and contractors, subject to applicable legislation; and
   3. unimpaired ability to carry out his or her responsibilities, including reporting findings to the Commissioner, to the departmental audit committee and, as appropriate, to the Comptroller General.
3. The CAE has the sole authority to undertake internal audit activities at the Divisional, Regional and National levels of the RCMP.

5. Responsibilities and Duties

1. The Commissioner:
   1. Ensures an internal audit capacity appropriate to the needs of the RCMP and that operates in accordance with this policy and professional internal auditing standards.
   2. Establishes an independent departmental audit committee that includes a majority of external members who have been recruited from outside the federal public administration.
   3. Appoints a qualified CAE at a senior executive level, reporting directly to the Commissioner, to lead and direct the internal audit function.
   4. Approves a departmental internal audit plan that appropriately addresses areas of higher risk and significance. This internal audit plan will also address risks and incorporate audits that may be identified by the Comptroller General as part of government-wide or sectoral coverage. The plan will include individual internal audit engagements as well as being designed to support separate annual assurance overview reporting by the chief audit executive on departmental risk management, control and governance processes.
   5. Puts in place effective procedures to ensure systematic monitoring and assurance regarding the soundness of risk management, control and accountability processes within their departments. The Treasury Board Policy on Internal Control defines additional requirements with respect to the pertinent responsibilities of deputy heads.
   6. Takes into account the results of internal audits directed, led and/or performed by the Office of the Comptroller General (OCG). This includes a requirement to ensure that departmental internal audit plans appropriately address horizontal risks identified by the OCG.
   7. Ensures that the audit committee receives all of the information and documentation necessary to fulfill its responsibilities, subject to applicable legislation.
   8. Ensures that management action plans are prepared that adequately address the recommendations and findings arising from audits and that the action plans have been effectively implemented.
   9. Ensures that completed internal audit reports are:
      1. Issued in a timely manner and made accessible to the public with minimal formality; and
      2. Posted on departmental web sites in a timely manner, in both official languages. Reports posted on the departmental web site must respect the Access to Information Act and the Privacy Act.
   10. Ensures that the Minister of Public Safety is briefed periodically on significant matters arising from the work of internal audit and the Departmental Audit Committee (DAC). It is expected that the DAC will routinely provide the Commissioner with advice and recommendations on the sufficiency, quality and results of assurances respecting departmental risk management, control and governance (including accountability and auditing systems) frameworks and processes. Further, it is expected that the Minister of Public Safety will be offered the opportunity to meet with the DAC, along with the Commissioner, at least annually, to discuss the annual report of the DAC and any significant concerns that may be raised therein or that may otherwise arise.
   11. Ensures that the OCG and its agents, for the purpose of carrying out assigned responsibilities, are given:
       1. Full access to departmental records, databases, workplaces and employees, and have the right to obtain information and explanations from departmental employees and contractors; and
       2. Management representations pertinent to supporting the planning, conduct and reporting of audits by the Comptroller General.

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2. The CAE:
   1. Establishes appropriate policies and procedures to guide the internal audit function.
   2. Establishes risk-based audit plans to set out the priorities of the internal audit function, consistent with the organizational objectives.
   3. Ensures that the internal plan of engagements is based on a risk assessment, done at least annually, and:
      1. Considers the input of senior departmental management, the DAC and Treasury Board Secretariat;
      2. Includes internal audits identified by the Comptroller General as part of government-wide coverage, including:
         1. Annual audits that address financial statement reporting and other fundamental controls; and
         2. Selected government-wide sectoral, thematic or horizontal audits.
      3. Is designed to support the provision of assurance services on all significant aspects of risk management, control ad governance processes; and
      4. Is designed to provide an annual assurance report on the effectiveness and adequacy of risk management, control, and governance processes.
   4. Coordinates internal auditing activities and plans with other internal and external providers of assurance and consulting activities to ensure proper coverage and minimize duplication of effort.
   5. Communicates plan of engagements and resource requirements for the internal audit function, including significant interim changes and the impact of resource limitations to the Commissioner and the DAC. This communication is to include the impact of resource limitations.
   6. Ensures that internal audit resources are appropriate, sufficient and effectively deployed to achieve the approved plan.
   7. Ensures the timely completion of internal auditing engagements.
   8. Ensures that reports on internal auditing engagements are provided to the DAC with a minimum of delay.
   9. Ensures that internal auditors have appropriate professional qualifications and skills, and opportunities for sufficient training and development to maintain and develops their internal auditing competence and to obtain Certified Internal Auditor certification.
   10. Develops and maintains a quality assurance and improvement program that covers all aspects of the internal audit function, and continuously monitors its effectiveness.
   11. In collaboration with the DAC and the Comptroller General, ensures that a practice inspection or other external review of the internal audit function is conducted at least every four years, by the OCG or a qualified, independent reviewer, or external review team, and that the results of this external assessment are communicated to the Commissioner, the DAC and the Comptroller General.
   12. Ensures that professional internal auditing standards are followed.
   13. Reports at least annually to the DAC on the internal audit function's conformance with professional internal auditing standards
   14. After discussion with the Commissioner, informs the Comptroller General without delay of any issue of risk, control or management practice that may be of significance to the government and/or require Treasury Board Secretariat's involvement.
   15. Provides Secretariat support to the DAC. This includes:
       1. Drafting and, with the approval of the Chair, circulating all notices and agendas of meetings;
       2. Coordinating the distribution of reports and/or related documents that are prepared for the DAC’s information or consideration;
       3. Drafting and distributing the minutes in a timely fashion;
       4. Serving as the link between the DAC and management and responding to any requests for information or research that the DAC may require;
       5. Maintaining records of the DAC’s official documents, including minutes, records of decisions, reports prepared by or on behalf of the DAC; and
       6. Assisting the DAC in the preparation of reports and correspondence as required.

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3. Managers and employees of the program being audited are expected to:
   1. Be forthright and proactive in providing information relevant to an audit or an investigation;
   2. Take into account the results of internal and external audits;
   3. Ensure that the RCMP Internal Audit, OCG and external auditors, for the purpose of carrying out assigned responsibilities, are given:
      1. full access to departmental records, databases, workplaces and employees, and have the right to obtain information and explanations from departmental employees; and
      2. management representations needed to support the planning, conduct, and reporting of internal and external audits.
   4. Support the development of risk-based audit framework and engagement plans when required;
   5. Review and discuss draft reports and provide feedback and comments on facts, observations and conclusions in a timely manner; and
   6. Prepare and implement management action plans, in a timely manner, in response to audit recommendations.
4. Departmental Audit Committee
   
   For the responsibilities and duties of the DAC, refer to the DAC Charter.