Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting 2013-14 (unaudited)

2.1 Internal control management

OCOL has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An organizational internal control management framework, approved by the Commissioner, is in place and includes:

• Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
• Values and ethics;
• Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
• Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and organizational senior management and, as applicable, the OCOL’s Audit and Evaluation Committee (AEC).

The AEC provides advice to the Commissioner on the adequacy and functioning of the OCOL's risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

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

3.1 Design effectiveness testing of key controls

In 2013-14, OCOL completed design effectiveness testing of controls and administration of pay, procurement and supplier payments as a key business process. Remediation of key control deficiencies is substantially advanced in this control area.

As a result of design effectiveness testing, OCOL identified the following required remediation:

• Redefine the filing process by incorporating the new electronic filing system, which is better adapted to organizational needs; and
• Improve the account verification process prior to payment of pay transactions (section 33 of the Financial Administration Act), based on a sampling methodology.

3.2 Operating effectiveness testing of key controls

In 2013-14, OCOL completed operating effectiveness testing of its procurement and supplier payment general controls. Required remediation has been completed for contracts.

As a result of the operating effectiveness testing, OCOL identified the following required remediation:

• Improve certain contract forms and templates to make them more consistent and to make record-keeping more efficient.

4.1 Progress during fiscal year 2013-14

During 2013-14, OCOL continued to make significant progress in assessing and improving its key controls. The following table summarizes the organization’s progress based on the plans identified in the previous fiscal year’s annex.