Appendix G - Terms of Reference

The Director of Internal Audit, Western Economic Diversification requires an independent, objective statement of assurance that the Infrastructure Canada Program - Western Economic Diversification has met all of the Treasury Board and Infrastructure Canada requirements for audit to March 31, 2006. In this regard, the Director has requested that we develop an audit strategy (audit plan) that will address areas where audit work remains incomplete or insufficient in order to meet such requirements. Where those requirements have not been met, we have been asked to provide an estimate of the costs of our services that are needed to complete those requirements and to provide the required statement of assurance.

In conjunction with the development of this strategy, we have been requested to:

1. Develop a Risk Assessment Framework for each of the four western provinces (regions) based on the Risk Audit Framework Guide developed by the Treasury Board of Canada Secretariat; and
2. Identify aspects of the program and projects of significant risk where additional audit work is required.

Our approach in developing this strategy has included the following tasks

1. Identify and review the Treasury Board and Infrastructure Canada requirements;
2. Contacted the appropriate people in each region to obtain input as to the risk categories that should be considered in carrying out the audit requirements;
3. Develop a risk assessment framework for assessing both the recipient and program risks;
4. Complete a risk assessment of the recipient and program risks based on the input obtained from Task 2;
5. Recommend a risk based audit plan that meets the above requirements;
6. Determine what audit work has been completed to date;
7. Compare the audit work performed to our recommended audit plan;
8. Identify gaps between our audit plan and existing audit work; and
9. Determine the procedures necessary to eliminate gaps.