Canadian Grain Commission Revolving Fund, Financial statements, March 31, 2023

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2023, and all information contained in these statements rests with the management of the Canadian Grain Commission. These financial statements have been prepared by management in accordance with the reporting requirements of the Receiver General for Canada for revolving funds.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the Commission’s Departmental Results Report is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff, through organizational arrangements that provide appropriate divisions of responsibility, through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the department, and through conducting an annual assessment of the effectiveness of the system of internal control over financial reporting.

In accordance with the Policy on Financial Management, internal control activities for the year ended March 31, 2023 are summarized in the annex along with future action plans.

The system of internal control over financial reporting is designed to mitigate risks to a reasonable level based on an ongoing process to assess key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The effectiveness and adequacy of the Canadian Grain Commission’s system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the department’s operations. It is also reviewed by the Departmental Audit Committee, which oversees management’s responsibilities for maintaining adequate control systems and the quality of financial reporting. The Departmental Audit Committee reviews the results of the annual audit and recommends approval of the financial statements to the Deputy Head of the Canadian Grain Commission.

An independent external auditing firm has expressed an opinion on the fair presentation of the financial statements of the Canadian Grain Commission, which does not include an audit opinion on the annual assessment of the effectiveness of the department’s internal controls over financial reporting.

Doug Chorney
Chief Commissioner and Deputy Head
Winnipeg, Canada
Cheryl Blahey
Chief Financial Officer
Winnipeg, Canada

Independent Auditor’s Report

To the Chief Commissioner, Commissioners and the Departmental Audit Committee of Canadian Grain Commission Revolving Fund

Report on the audit of the financial statements

Our opinion

In our opinion, the accompanying financial statements of the Canadian Grain Commission Revolving Fund (the Fund) as at March 31, 2023 and for the year then ended are prepared, in all material respects, in accordance with Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada.

What we have audited

The CGC Revolving Fund's financial statements comprise:

  • the statement of financial position as at March 31, 2023;
  • the statement of operations and net assets for the year then ended;
  • the statement of cash flows for the year then ended; and
  • the notes to the financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Fund in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Emphasis of matter - basis of accounting and restriction on use

We draw attention to note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Fund to meet the requirements of Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the management of the Fund and should not be used by parties other than the Fund, the Treasury Board of Canada and the Receiver General for Canada. Our opinion is not modified in respect to this matter.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation of the financial statements in accordance with Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Fund’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
  • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Chartered Professional Accountants, Licensed Public Accountants

Ottawa, Ontario
June 2, 2023

Statement of Financial Position

As of March 31, 2023
(in thousands of dollars)
Assets 2023 $ 2022 $
Financial Assets
Accounts receivable (note 3) 7,552 3,728
Accountable advances 1 9
  7,553 3,737
Non-financial assets
Prepaid expenses 645 707
Tangible capital assets (note 4) 11,049 11,667
  11,694 12,374
  19,247 16,111
As of March 31, 2023
(in thousands of dollars)
Liabilities and net assets 2023 $ 2022 $
Liabilities
Accounts payable and accrued liabilities (note 5) 2,635 2,841
Salaries payable 6,208 3,579
Vacation, overtime and compensatory leave payable 2,739 2,825
Deferred revenue 933 955
Employee severance benefits liability (note 6) 973 1,109
  13,488 11,309
Net assets (note 8) 5,759 4,802
  19,247 16,111
Contractual obligations (note 9)
Contingent liabilities (note 10)
Producer payment security (note 11)

Statement of Operations and Net Assets

As of March 31, 2023
(in thousands of dollars)
  Grain Regulation Internal Services 2023 Total 2022 Total
  Planned Results
$
Actual
$
Planned Results
$
Actual
$
Planned Results
$
Actual
$
Actual
$
Revenue
Fees and services 57,369 43,617 - - 57,369 43,617 41,771
Parliamentary appropriations (note 7) 6,238 6,377 295 535 6,533 6,912 6,440
Licensing and producer cars 4,008 1,972 - - 4,008 1,972 1,896
Optional services 3,179 1,884 50 26 3,229 1,910 1,742
Other revenues - - - 65 - 65 31
  70,794 53,850 345 626 71,139 54,476 51,880
Operating expenses
Personnel 33,869 34,415 16,552 16,084 50,421 50,499 48,110
Rentals 4,193 3,978 2,143 2,077 6,336 6,055 6,149
Amortization of tangible capital assets - 3,057 - 818 - 3,875 3,729
Professional services 651 498 3,107 2,673 3,758 3,171 3,527
Transport and communication 1,425 1,793 1,216 716 2,641 2,509 1,595
Materials and supplies 1,731 1,055 331 97 2,062 1,152 1,306
Repairs and maintenance 1,729 983 710 96 2,439 1,079 697
Machinery and equipment 439 805 422 148 861 953 1,116
Loss on disposal of tangible capital assets - (20) - - - (20) 299
Information 57 104 284 408 341 512 182
Other - 2 1,075 33 1,075 35 28
  44,094 46,670 25,840 23,150 69,934 69,820 66,738
Net results 26,700 7,180 (25,495) (22,524) 1,205 (15,344) (14,858)
Net assets, beginning of year 4,802 9,116
Net financial resources used and change in the accumulated net charge against the Fund’s authority during the year 16,301 10,544
Net assets, end of year 5,759 4,802

Statement of Cash Flows

For the year ended March 31, 2023
(in thousands of dollars)
Operating activities 2023
$
2022
$
Net results for the year (15,344) (14,858)
Items not affecting use of funds
Amortization of tangible capital assets 3,875 3,729
Provision for employee severance benefits 37 22
Loss on disposal of tangible capital assets (20) 299
  (11,452) (10,808)
Payment of employee severance benefits (173) (350)
Variations in statement of financial position
Accounts receivable (3,824) 5,359
Accountable advances 8 (2)
Prepaid expenses 62 (143)
Accounts payable and accrued liabilities (206) (877)
Salaries payable 2,629 32
Vacation, overtime and compensatory leave payable (86) (283)
Deferred revenue (22) 14
Net financial resources provided by operating activities (13,064) (7,058)
Capital investing activities
Acquisition of tangible capital assets (3,263) (3,524)
Proceeds from disposal of tangible capital assets 26 38
Net financial resources used by capital investing activities (3,237) (3,486)
Net financial resources used and change in the accumulated net charge against the Fund's authority, during the year (16,301) (10,544)
Accumulated net charge against the Fund's authority, beginning of year 143,759 154,303
Accumulated net charge against the Fund's authority, end of year 127,458 143,759

Notes to Financial Statements

1. Authority and purpose

The Canadian Grain Commission Revolving Fund (CGC or the Fund) derives its authority from the Canada Grain Act. The CGC’s mandate as set out in the Canada Grain Act is to, in the interest of grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, in order to ensure a dependable commodity for domestic and export markets.

The CGC’s core responsibility is Grain Regulation: to regulate grain handling in Canada and establish and maintain science-based standards for Canadian grain. Internal Services supports this core responsibility.

The CGC was established under Appropriation Act No. 6, 1994–1995. The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, tangible capital acquisitions and temporary financing of accumulated operating deficits, with a drawdown authority of $2,000,000. The CGC also receives annual appropriation funding through the Appropriation Acts approved by Parliament.

CGC fee revenue is largely based on grain volumes, which fluctuate from year to year. In years with higher than average grain volumes, revenues may exceed expenses and the CGC could accumulate surplus. In years with lower-than-average grain volumes, revenues could be less than expenses and the CGC would be required to draw on its surplus. Excessively hot and dry growing conditions across most of western Canada in 2021 resulted in decreased yields, causing a shortfall in revenue earned in 2022–2023.

In accordance with the Government’s policy on self-insurance, the CGC does not carry its own insurance. The CGC is not subject to income taxes.

2. Significant accounting policies

The financial statements have been prepared in accordance with the reporting requirements of the Receiver General for Canada for revolving funds. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because:

  • the net debt indicator and the statement of change in net debt are not presented in the financial statements;
  • the liabilities for employee severance liability are based on management’s best estimate rather than actuarial valuations;
  • the services received without charge from other government departments and agencies are not reported as expenses; and
  • no liability is recorded for sick leave.

The significant accounting policies are as follows.

a. Use of estimates
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the periods covered by the financial statements. The principal financial statement components subject to measurement uncertainty include salaries payable related to unsettled labour contracts, the estimated useful life of tangible capital assets, allowance for doubtful accounts, and the liabilities for employee severance benefits. Actual results could differ from those estimates. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
b. Planned results
Planned results for the fiscal year ended March 31, 2023 disclosed in the statement of operations were based on revenues and expenses as per CGC’s 2022–2023 Departmental Plan and include adjustments subsequent to its preparation.
c. Revenue recognition
Revenue is recognized in the accounting period in which it is earned through the provision of goods or services, or when an event giving rise to a claim has taken place. The majority of service fees such as inspection and weighing activities are dependent on grain volumes handled. Revenues that have been received but not yet earned are presented as deferred revenue. Deferred revenue is primarily received for licensing fees, which usually cover a 12-month period.
d. Expense recognition
Unless otherwise disclosed, expenses are recorded in the period they are incurred.
e. Parliamentary appropriation
Operations are funded primarily from a permanent authority from Parliament (revolving fund) where the CGC is allowed to spend fees collected. Some of the operations of the Grain Research Program and Internal Audit are funded by ongoing Parliamentary appropriations through their annual votes. These appropriations have been recorded as revenue of the Fund.
f. Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized. Allowances are established for all accounts for which interest or principal payments are 180 days past due and deemed uncollectable.
g. Tangible capital assets
Certain assets previously under the custody of the Department of Agriculture and Agri-Food Canada were assumed by the Fund on April 1, 1995. The assumed assets were considered to be contributed capital and recorded at the Crown’s estimated net book value. Assets acquired subsequent to April 1, 1995 were recorded at cost. Proceeds from the disposal of capital assets are retained by the Fund.
All capital assets and leasehold improvements with a cost equal to or greater than $10,000 are capitalized at their acquisition cost.
Assets are amortized on a straight-line basis over their estimated useful lives, commencing in the month after they are put into service, as follows:
Scientific equipment 5 years
Office equipment and furniture 5 years
Operational equipment 10 years
Motor vehicles 5 years
Computer equipment and software 3 years
Leasehold improvements 5 years

The costs for assets under construction are capitalized as incurred with amortization commencing in the month after they are put into service.

h. Vacation, overtime and compensatory leave
Vacation, overtime and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
i. Employee severance benefits
Severance benefits accrue to employees over their years of service with the Government of Canada as stipulated in their collective agreements. The CGC provides for the severance entitlements earned by employees. The obligation relating to the benefits earned by employees is calculated using information derived from management’s estimate of the liability.
j. Pension plan
Employees of the CGC are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefit charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. Current legislation does not require the CGC to make contributions for any actuarial deficiencies of the Public Service Superannuation Account.
k. Sick leave
Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. Unused sick leave on employee termination is not payable to the employee. No amount has been accrued in these financial statements, and payments of sick leave benefits are included in current operations as incurred.

3. Accounts receivable

(in thousands of dollars)
  2023 $ 2022 $
Other government departments and agencies 169 651
Outside parties 7,388 3,079
  7,557 3,730
Less: Allowance for doubtful accounts from outside parties (5) (2)
  7,552 3,728

4. Tangible capital assets

(in thousands of dollars)
  Cost Accumulated amortization 2023 2022
  Opening balance $ Acquisitions $ Adjustment $ Disposals and transfers $ Closing balance $ Opening balance $ Amortization $ Disposals and transfers $ Closing balance $ Net book value $ Net book value $
Scientific equipment 22,313 1,212 - (889) 22,636 16,636 1,911 (889) 17,658 4,978 5,677
Office equipment and furniture 243 24 - - 267 233 5 - 238 29 10
Operational equipment 3,086 185 - (83) 3,188 2,314 222 (77) 2,459 729 772
Motor vehicles 457 - - - 457 343 37 - 380 77 114
Computer equipment and software 9,248 461 - (17) 9,692 8,364 556 (17) 8,903 789 884
Leasehold improvements 10,207 105 132 - 10,444 7,443 1,144 - 8,587 1,857 2,764
Assets under construction 1,446 1,276 (132) - 2,590 - - - - 2,590 1,446
  47,000 3,263 - (989) 49,274 35,333 3,875 (983) 38,225 11,049 11,667

Assets under construction consist of leasehold improvements and in-house software development.

5. Accounts payable and accrued liabilities

(in thousands of dollars)
  2023 $ 2022 $
Other government departments and agencies 778 362
Outside parties 1,857 2,479
Total accounts payable 2,635 2,841

6. Employee severance benefits liability

The CGC provides severance benefits to its employees based on eligibility, years of service and final salary. These benefits are currently calculated based on the actual severance owed to each employee.

With Budget 2011, the Government of Canada announced its intention to eliminate the ongoing accumulation of severance benefits. All collective agreements for the CGC have been negotiated and severance benefits have ceased to accumulate. The amounts reported are for employees who did not liquidate their severance and will be paid on their departure from the public service.

(in thousands of dollars)
  2023 $ 2022 $
Employee severance benefits liability – Beginning of year 1,109 1,437
Expense for the year 37 22
Benefits paid during the year (173) (350)
Employee severance benefits liability – End of year 973 1,109

7. Parliamentary appropriations

The CGC is financed by the Government of Canada through a combination of an ongoing Parliamentary appropriation, authority to re-spend fees collected, accumulated surpluses from prior years and a revolving line of credit of $2,000,000.

The government funding basis is used to recognize transactions affecting Parliamentary appropriations. The statement of operations and net assets is based on accrual accounting. Consequently, items presented in the statement of operations and net assets are not necessarily the same as those provided through appropriations from Parliament. Items recognized in the statement of operations and net assets in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the CGC has appropriation authorities for the year on a government-funding basis and some on an accrual accounting basis. Details on appropriation authorities provided and used are shown in the following tables.

(in thousands of dollars)
  2023 $ 2022 $
Total appropriation funds provided 7,071 6,506
Lapsed (159) (66)
Current year appropriation funds provided and used 6,912 6,440

8. Net assets

Contributed capital represents the value of capital assets financed from capital contributions at the inception of the Fund.

The accumulated surplus is the accumulation of each fiscal year’s surplus net of deficits since the inception of the Fund.

The accumulated net charge against the Fund’s authority represents the cumulative receipts and disbursements over the life of the Fund.

(in thousands of dollars)
  2023 $ 2022 $
Contributed capital 4,941 4,941
Accumulated surplus
Opening balance 143,620 158,478
Net results (15,344) (14,858)
Closing balance 128,276 143,620
Accumulated net charge against the Fund’s authority
Opening balance (143,759) (154,303)
Change in net resources provided 16,301 10,544
Closing balance (127,458) (143,759)
Total net assets 5,759 4,802

9. Contractual obligations

The CGC leases its premises primarily under Lease Out Contracts. A Lease Out Contract is a formal agreement between the CGC and Public Services and Procurement Canada, recording the terms and conditions that govern the provision and occupancy of the accommodation. The CGC has a total of 15 separate Lease Out Contracts (2022 – 15) with various term lengths up to 10 years. In addition, the CGC has a direct lease agreement with the University of Manitoba for the rental of laboratory and office space.

For the year ended March 31, 2023, the CGC incurred $4,898,557 in costs associated with its occupancy and lease obligations (2022 – $5,104,847). Expected future payouts by fiscal year are as follows:

(in thousands of dollars)
  $
2024 4,516
2025 4,445
2026 4,225
2027 1,177
2028 and thereafter 2,042

10. Contingent liabilities

In the normal course of its operations, the CGC may become involved in various legal actions and grievances with financial implications. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the financial statements.

As at March 31, 2023, there were no accruals for contingent liabilities around various legal actions and grievances with financial implications in the financial statements (2022 – Nil).

11. Producer payment security

Through the CGC’s Safeguards for Grain Farmers Program, licensed grain companies must provide payment security to the CGC to cover money owed to producers for grain deliveries in the event of a licensing default. When a CGC-licensed company fails to pay producers for grain deliveries, the CGC uses the security to pay producers for eligible claims. As at March 31, 2023, no pending claim transactions were remaining (2022 – nil).

12. Related party transactions

The CGC is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The CGC enters into transactions with these entities at arm’s length in the normal course of business and on normal trade terms.

Services provided by other government departments

During the year ended March 31, 2023, the CGC paid occupancy costs and certain professional services to other government departments or agencies. Employer’s health insurance plan contributions and employee benefit plans were also provided by and paid to other government departments. Significant services have been recognized in the CGC statement of operations and net assets as follows:

(in thousands of dollars)
  2023 $ 2022 $
Revenues (483) (533)
Expenses
Employer's contribution to employee benefit plans 9,072 8,979
Occupancy costs 4,763 4,978
Leasehold improvements 442 94
Professional and special services 2,290 2,111
Transportation and communication 296 320
Other 366 334
Total 16,746 16,283

Included in accounts receivable, accounts payable and salaries payable at year-end are the following amounts with related parties.

(in thousands of dollars)
  2023 $ 2022 $
Accounts receivable 169 651
Accounts payable 778 362
Employer’s contribution to employee benefit plans payable 1,386 778

13. Risk disclosures

Financial instruments that potentially subject the Fund to concentrations of credit risk consist primarily of accounts receivable. For the year ended March 31, 2023, six large integrated organizations accounted for $5,766,447 or 78% of the CGC’s outside parties receivable balances (2022 – six organizations, $2,150,238 or 70%).

Unaudited Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting
Fiscal year 2022-2023

1. Introduction

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

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

2. Departmental system of internal control over financial reporting

2.1 Internal control management

The Canadian Grain Commission has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. A departmental internal control management framework, approved by the Deputy Head, is in place and is comprised of:

  • organizational accountability structures as they relate to internal control management to support sound financial management, including the roles and responsibilities of senior departmental managers for control management in their areas of responsibility
  • values and ethics
  • ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control
  • at least semi-annual monitoring of, and updates to, internal control management, as well as the provision of related assessment results and action plans to the Deputy Head and the Departmental Audit Committee, and senior departmental managers as required.

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

2.2 Service arrangements wrelevant to financial statements

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

2.2.1 Common service arrangements:

  • Public Services and Procurement Canada, which administers the payment of salaries and the procurement of goods and services, and provides accommodation services
  • Department of Justice Canada, which provides legal services
  • Treasury Board of Canada Secretariat, which provides information on public service insurance and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans
  • Shared Services Canada, which provides IT infrastructure services to the Canadian Grain Commission in the areas of data centre and network services

Readers of this annex may refer to the annexes of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.

The Canadian Grain Commission relies on other departments for the processing of certain information or transactions that are recorded in its financial statements, as follows:

2.2.2 Specific arrangements

  • Agriculture and Agri-Food Canada provides the Canadian Grain Commission with a SAP financial platform to report on historical financial transactions, with a PeopleSoft platform to capture and report leave and pay related transactions, and with IT security services in the area of Enterprise Secure Access Service.
  • Treasury Board of Canada Secretariat provides the Canadian Grain Commission with a SAP financial platform and related reporting tools, including the associated system support and technical infrastructure, to capture and report all financial transactions.

3. Departmental assessment results for the 2022 to 2023 fiscal year

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan.

Previous fiscal year’s rotational ongoing monitoring plan for current fiscal year Status
Financial Reporting Reassessment in progress; to be completed in 2023-2024

In fiscal year 2022 to 2023, the department began work to re-evaluate its ongoing monitoring frequency and approach to determine a more appropriate strategy given available resources and the size of the organization. The department also followed up on the status of remedial plans from previous years.

3.1 New or significantly amended key controls

In the current fiscal year, there were no new or significantly amended key controls in the existing processes that required reassessment.

3.2 Ongoing monitoring program

The department began its reassessment of the Financial Reporting process as planned. This assessment will be completed and key findings reported in fiscal year 2023 to 2024.

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

The Canadian Grain Commission’s rotational ongoing monitoring plan over the next three fiscal years is shown in the following table. The ongoing monitoring plan is based on:

  • an annual validation of high-risk processes and controls
  • related adjustments to the ongoing monitoring plan as required
Key control areas 2023 to 2024 fiscal year 2024 to 2025 fiscal year 2025 to 2026 fiscal year
Entity Level Controls No No Yes
IT General Controls under departmental management No No No
Purchase to Pay No No No
Capital Assets No No No
Pay Administration No Yes No
Financial Reporting Yes No No
Revenues No No Yes

In fiscal year 2023 to 2024, the CGC will continue work to re-evaluate the department’s ongoing monitoring frequency and approach to determine a more appropriate strategy given available resources and the size of the organization. Factors such as organizational priorities and emerging events, resourcing options, and the costs and benefits of assessments compared with the associated risks will be considered.

Planned ongoing monitoring work has been kept to a minimum until the re-evaluation is complete and a more informed plan can be developed.

A reduced ongoing monitoring plan will also allow the department to allocate resources to implementing new technologies in an effort to create efficiencies, strengthen controls and innovate its processes.

In addition to planned ongoing monitoring work, regular follow-up on past remediation plans will be performed.