The author completed a COSO certification course, appreciating its quality despite previous frustrations with online learning. However, the course fell short in addressing the practical deployment of COSO, leaving gaps in internal-control specifics. Nonetheless, COSO promotes adaptability for organizations, suggesting they can customize the framework to better suit their needs.
Continue readingThe article discusses the challenge of measuring internal control effectiveness within organizations, specifically within the COSO framework. It emphasizes the need for reasonable assurance rather than absolute control, encouraging periodic checks on high-risk processes. It suggests organizations regularly review and update controls for relevance and effectiveness to ensure organizational objectives are met.
Continue readingCOSOPS is a modified version of the COSO framework applied to public sector organizations. COSOPS highlights internal controls aimed at efficiency, reliability of reporting, and compliance with laws. Key changes include emphasizing public accountability, the role of civil service, fiscal matters, and external oversight, aiming for improvement in public policy functions.
Continue readingThis is the third in a series of the internal control. The first blog, Internal Control and COSO, introduced this framework including highlighting some of its short comings. The second blog, A List of Internal Controls, attempted to create the most comprehensive list of controls ever constructed (or that at least I could find). This blog asks the question, “does COSO have competitors or is there a better control framework out there?“.
Continue readingThe network file structure is now about 50+ years old but is still the backbone for a lot of corporate and personal data management [1]. At the same time, how often have you heard stories of people losing all of the family pictures because they failed to back up or backed up the wrong directory.
Continue readingThis is a second in a series of blogs on Internal Control and this one specifically asks, is there a list of internal controls and why would you want such a list?
Continue readingAccountants are trained to think about and implement controls. The classic examples are segregation of duties, reconciliations or budgets. Generally though, these controls are to manage at the transactional level where an error or a small fraud might occur. The big frauds of course are in the C-Suites and include such classics as off-balance sheet liabilities, rogue traders or manipulation of inventories.
Continue readingCPA Canada invited me to review their proposed changes to their student/qualification competency map. I am happy to contribute because the current map is pretty good and CPA Canada did a pretty darn good job out of the gate.
Continue readingMost people never have to consider the challenges (and enormous benefits) of choosing to be an international public servant. That is an employee of an international organization.
For the duration of your employment you don’t typically pay taxes, nor do you pay into a national social security network such as the Canada Pension Plan or a health insurance program. When you are younger this seems like a great deal but what happens when you leave the service or when you retire? Do you have a pension, health insurance or other social benefits when you are no longer an international public servant?
The answer is… it depends and this is a look into the most well-known of the international organizations, the United Nations, and their post-employment employer benefits programs.
The United Nations offers a pension plan but some organizations (and nations) have taken a different direction, Provident Funds. Effectively a provident fund is a savings account
When I was contracting for NATO, for example, I recall staff being able to withdrawal from their provident fund to buy homes or pay for the children’s education. Obviously the details of each fund is very different but that is a potential advantage to an employee of a provident fund is the ability to make use of the resources earlier rather than waiting for retirement.
Unfortunately provident funds are seldom portable between organizations. Another challenge is that risk is not distributed. Thus for a person and family who remain healthy, they may retire and leave a nice inheritance to their children. Conversely if you/family become ill earlier in your life your provident fund may be quickly depleted.
A benefit to the employer is controlling the liability associated with the provident fund. They truly are a define contribution scheme meaning that the long-term liability ends after each monthly fund payment. On the other hand, a friend of mine moved to Malaysia and knows stories of older people having to go back to work after gambling away their lump sum provident fund payment. But back to the United Nations!
The United Nations offers two types of after-service benefits to its employees, a pension and health insurance. As a career organization, this makes sense and the portability of both of these programs is excellent. The pension fund is a defined benefit plan with a five year vesting periods. With ~$54B USD fund, the pension is generally considered to be fully funded although has been under criticism for its investments, governance and performance (e.g. see: The UN General Assembly Urges The 54 billion pension fund to shape up).
ASHI is another matter and represents a significant cost and liability to the United Nations. The following graphic provides a visual image of why this is a critical issue given that this one benefit represents nearly 90% of the total employee benefit liabilities. ASHI and the other long-service employee benefits have grown to the largest liability for the UN primarily because of ‘pay-as-you-go’ philosophy. All sources from the 2016 UN Financial Statements.
Analysis of UN long service employee benefits (2016 financial statements)
The UN’s ASHI’s deliberation has a direct parallel to the current challenges of an aging population and funding medical needs. One of the primary challenges is moving from a pay-as-you-go to a fund-as-you-go model. Given the accumulation of public debt and the inclination in the western democratic tradition to focus on shorter time horizons, this solution may be a challenge. Nevertheless, the UN experience can be an excellent analog to inform public policy in Alberta (and Canada and elsewhere) on managing citizen (and public servant) costs.
This is the second in a series of blogs on a Practical Risk Management Method or PRMM. At the bottom of this blog is a refresher of the other steps. This step’s premise is don’t separate your planning activities from your risk management activities. In other words:
Planning = Risk Management. Planning is ultimately about managing uncertainty which is a fancy name for Risk. At this point you may be saying:
I am afraid I can’t help you if you fall into the last category but hopefully these blogs can help you if you with the first two.
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Organizational Biology 