Canadian Government Executive - Volume 22 - Issue 10

22 / 32

22 / Canadian Government Executive // December 2016
Audit
Other tools and examples
Public sector managers and auditors who are confronting the challenge of
providing horizontal assurance for the first time can obtain guidance and examine
examples from several sources.
Since 2008 the Office of the Comptroller General of the Government of Canada
has conducted numerous horizontal internal audits. The examples below provide
an indication of the range of topics these audits cover:
• Horizontal Internal Audit of Information Technology Security in Large and Small
Departments
• Regional Development Agencies Internal Audit of Receivables Management for
Contribution Programs
• Horizontal Internal Audit of Integrated Business and Human Resources Planning
in Small Departments
• Horizontal Internal Audit of Electronic Recordkeeping in Large Departments and
Agencies.
These and other audits can be found online at
oversight-surveillance/ae-ve/hia-aih/index-eng.asp.
In addition, the internal audit groups in some federal departments have conducted
horizontal audits. For example:
• Industry Canada: Horizontal Audit of the Management of Funding
Agreements – Single Recipient Transfer Payments
• Agriculture and Agri-Food Canada: Horizontal Audit of Grants and
Contributions.
The Institute of Internal Auditors has published two documents that are relevant
to this topic:
• Auditing Outsourced Functions: Risk Management In An Outsourced World
(October 2012), by Mark Salamasick for The Institute of Internal Auditors
• Practice Guide: Reliance by Internal Audit On Other Assurance Providers
(December 2011) by The Institute of Internal Auditors.
scope and that may be able to self-assess,
consider potential relevance/impacts, and
take necessary actions. This approach also
allows for internal audit to consider any
better practices identified in the course of
horizontal audit work, so that these too can
be shared for the benefit and consideration
of other organizations not in scope.
Pay attention to the details
In complex situations, such horizontal
collaboration requires that all parties un-
derstand why the parties are collaborat-
ing, who is responsible for doing what,
and within what timeframes. Issues that
may need to be addressed include:
• A clear understanding of shared objec-
tives and expected results
• An articulation of roles and responsibili-
ties
• The tailoring of assurance activities to
meet the differing needs of the parties,
such as differing risk tolerances
• Coordination and integration of audit
planning and assurance activities
• An agreed decision-making process
• The provision of human and financial
resources
• Agreed upon audit and evaluation pro-
cedures
• Agreed upon audit criteria that are rele-
vant to shared definitions of a successful
initiative and a common understanding
of risks
• Agreed upon information sharing ar-
rangements during the audit process
• Provisions for problem-solving and dis-
pute resolution
• Shared approaches for consulting stake-
holders
• Timelines for the completion of differ-
ent phases of an audit
• Agreed upon mechanisms for reporting
audit results
• Shared public information strategies.
• Consideration for leveraging a corpo-
rate or enterprise-wide audit committee
that can oversee the approval of a hori-
zontal audit plan and reporting of hori-
zontal assurance activities.
• Agreed upon mechanism to assign own-
ership of taking action on recommenda-
tions.
Often a Memorandum of Understanding
(MOU) or Service Line Agreement (SLA)
may be the best tool for ensuring that all
parties are on the same page on these is-
sues.
Ideally, the MOU or SLA would be part
of a broader strategy covering all three
lines of defence: assurance relies not only
on auditing but also on effective manage-
ment and oversight. Each line of defence
plays a distinct role in a horizontal assur-
ance framework, and each may need to
apply different tools, practices or methods
to fulfill their distinct roles.
Sorting such issues out in advance can
greatly simplify and strengthen horizon-
tal assurance efforts. And if agreement
can be achieved at the beginning of an
initiative, human and financial resources
can be lined up in advance. As horizon-
tal delivery of programs and services be-
comes more prevalent, auditors will need
to learn how best to audit such arrange-
ments.
Deidre Green is the Assistant Comp-
troller – Audit and Consulting for
the Province of New Brunswick. She is
a member of the Government Internal
Auditors Council of Canada, which
brings together the heads of internal
audit of Canada’s federal, provincial
and territorial governments.