Archived - Audit of the Casual Refund Program

October 2014

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Foreword

The Canada Border Services Agency (the CBSA or the Agency) is responsible for facilitating trade and travel across the Canadian border, while collecting revenue and protecting Canada’s population from border-related risks. Revenue and trade programs are a key element of the Agency’s role in supporting Canada’s economy. There are approximately 200,000 businesses importing goods into Canada, and imports average over $400 billion of goods each year. Individuals also import goods for personal use. The Agency collects approximately $100 million in duties and taxes related to these non-commercial (casual) imports.

The Customs Act allows for a person who paid duties and taxes on imported goods to apply for a refund of all, or part, of the duties and taxes collected on non-commercial (casual) importation under specific circumstancesFootnote 1 such as when goods are returned or duties and taxes are overpaid.

Casual refunds claims are processed by the Agency in two different manners:

  • Manually, using a paper B2G Form: An individual may request a refund of duties and taxes for non-commercial importations using Form B2G, CBSA Informal Adjustment Request, which is printed on the back of the Form E14, CBSA Postal Import Form, and attached to parcels upon import. The B2G is also available on the CBSA website and at CBSA offices. The individual completes the B2G, attaches the required supporting documentation, and mails package to one of five Casual Refund Centres (CRCs)Footnote 2 where it is processed manually with the aid of the Casual Refund System (CRS).
  • Electronically, using the Casual Refund Electronic Data Interchange Transactions System (CREDITS): CREDITS is an automated process for authorized Canadian customs brokers to submit casual refund claims on behalf of casual importers who have returned goods to the original foreign vendor. Refunds through CREDITS apply only to casual e-commerce goods that have been accounted for by Canadian customs brokers and consolidated in Canada by the brokers for export to the foreign company. CREDITS allows the transmission of minimal data on the basis that original import and export records are maintained by brokers and submitted on the Agency’s request to support the claim.

The Trade and Anti-dumping Programs Directorate manages the Casual Refund Program that administers the refund and adjustment processes for casual importations brought into Canada by mail, by courier or carried by travellers. The Program is small, but has been growing rapidly and is expected to grow substantially with increases in cross-border e-commerce.

The Program operates within a decentralized model. The Trade Policy Division, located within the Programs Branch’s Trade and Anti-dumping Programs Directorate in Ottawa, is accountable for oversight of the Casual Refund Program. The Division supports the Agency’s Casual Refund Centres (CRCs), which are managed by the Operations Branch in the regions, as well as supporting external clients (i.e., brokers and importers) with their enquiries on commercial and casual refund processes and policies.

The five CRCs that administer the Casual Refund Program are located in: Vancouver, British Columbia; Winnipeg, Manitoba; Yarmouth, Nova Scotia; Scarborough, Ontario; and Ville St-Laurent, Quebec. Scarborough is the only CRC with CREDITS capability and processes more than 85% of all casual refund requests.

In fiscal year 2012–2013, the Agency issued 293,913 refunds totalling $9.6 million. The following table details the refunds issued by the CRCs.

CRC Number of transactions Dollar value of transactions
Manual Process CREDITS Total Manual Process CREDITS Total
Scarborough 9,954 264,396 274,350 $2,888,596 $5,538,893 $8,427,489
Ville St-Laurent 6,592 NilFootnote 3 6,592 $386,706 Nil $386,706
Vancouver 5,423 5,423 $390,355 $390,355
Winnipeg 5,165 5,165 $315,351 $315,351
Yarmouth 2,381 2,381 $116,589 $116,589
Total 29,517 264,396 293,913 $4,097,596 $5,538,893 $9,636,489

2.0 Significance of the Audit

A preliminary survey of the Revenue and Trade Programs conducted by the Internal Audit and Program Evaluation Directorate in 2013 assessed the key risk areas for each program. The Casual Refund Program was identified as having high inherent risk of non-compliance with legislation, inconsistent/ineffective practices, and loss of revenue.

Annually, almost 10% of duties and taxes are refunded through the Casual Refund Program. This amount is expected to rise as demand for imported goods remains strongFootnote 4, with resulting increases in cross-border e-commerce and the amount of non-commercial (casual) goods brought into Canada by mail, courier or carried by travellers. The Casual Refund Program is one of the public faces of the Agency for many Canadians. As a result, it is important that an adequate control framework be in place to ensure that eligible and accurate refunds are paid.

The objective of this audit was to assess the adequacy and effectiveness of controls for the processing, verification and payment of casual refund requests. The audit scope and criteria can be found in Appendix A.

3.0 Statement of Conformance

The audit conforms to the Internal Auditing Standards for the Government of Canada, as supported by the results of the quality assurance and improvement program. The audit approach and methodology followed the International Standards for the Professional Practice of Internal Auditing as defined by the Institute of Internal Auditors and the Internal Auditing Standards for the Government of Canada, as required by the Treasury Board’s Policy on Internal Audit.

4.0 Audit Opinion

Employees in the CRCs diligently process manual claims from individuals, and all such claims were administered in compliance with the requirements of the Customs Act. However, there are gaps in the Agency’s control framework that supports the processing, verification and payment of casual refund claims. Opportunities exist to enhance roles and responsibilities, procedures, controls, and reporting and monitoring practices for the Casual Refund Program.

As a result, this translates to a medium-high risk exposure for the Program and requires management’s attention.

5.0 Key Findings

The audit found that claims from individuals were paid only when they were eligible and in the correct amounts. There are, nevertheless, opportunities to strengthen the Casual Refund Program’s control framework.

The standard operating procedures for casual refunds were developed and distributed in 2000. The procedures are obsolete and do not establish Agency-wide, roles, responsibilities, accountabilities, and controls for employees who process casual refunds. The reporting mechanism that is currently in place for casual refunds is focussed on service standards. A risk-based monitoring process for casual refund payments has not been implemented.

The processing of casual refund claims submitted by brokers requires attention. Discrepancies were found between the amount of duties and taxes paid to the CBSA by brokers on import, and the amounts automatically refunded to brokers through the Agency’s CREDITS process.

6.0 Summary of Recommendations

The audit makes the following three recommendations:

  • Develop and implement a management control framework for the Casual Refund Program.
  • Design and implement procedures to process manual claims from brokers for large numbers of low-dollar value casual imports that have been accounted for in error.
  • Design and implement a monitoring framework to assess the eligibility and accuracy of claims that are automatically processed through the CREDITS.

7.0 Management Response

Programs Branch is in agreement with the audit report and accepts its three recommendations.

The CBSA established the Casual Refund Program (CRP) in 1992 as a mechanism to refund import duties and taxes to individuals in situations where the imported goods were subsequently exported from Canada. In 1997 the CRP was expanded to incorporate the Casual Refund Electronic Data Interchange Transaction System (CREDITS) in order to facilitate the effective refund of import duties and taxes paid to individuals where brokers had imported the goods on their behalf and the goods were subsequently exported from Canada.

The rapid increase in e-commence imports and exports over recent years has resulted in the CBSA receiving significantly more casual refund requests. Changing consumer/business practices and pressures, due to the influx of refund requests, resulted in the inconsistent administration of the program in order to facilitate service delivery to clients. In December 2012, as part of the Preliminary Survey of Trade Programs conducted by the Internal Audit and Program Evaluation, the Trade and Anti-dumping Programs Directorate identified the CRP as an area of concern that would benefit from an arms-length verification.

In order to respond to the recommendations in this audit, the Programs Branch will, in collaboration with the Operations Branch, the Comptrollership Branch, and the Information, Science and Technology Branch, undertake the following work:

  • Further develop and implement a more robust management control framework for the CRP. This management control framework will address findings in the audit report and serve to protect the overall integrity of the program by ensuring that it operates as intended, provides for effective and consistent service delivery, ensures that data is reliable and provides for risk identification and effective controls, and that the organization is compliant with all applicable laws, regulations and policies.
  • Design and formally implement Standard Operating Procedures for the processing of large volumes of casual refund claims from brokers relating to import declaration errors.
  • Design and implement a monitoring framework that effectively assesses the eligibility and accuracy of CREDITS claims and provides for risk identification and effective controls.

8.0 Audit Findings

8.1 Control Framework

Audit Criteria:

  • Specific roles, responsibilities and accountabilities for casual refunds are defined, documented and communicated.
  • Policies and procedures are in place and sufficient to define and sustain consistency in the application of required controls.
  • Segregation of duties for the processing and approval of refund payments is in place.
  • System controls are implemented to allow only authorized users to access the CRS and CREDITS to register and process claims.
  • Reporting and feedback mechanisms are in place to address irregularities and facilitate appropriate and timely corrective action.
  • There is a national, risk-based monitoring process in place that includes casual refund payments.

An effective control framework for the Casual Refund Program should include clearly defined roles, responsibilities, accountabilities, control activities and processes to monitor and report on casual refunds. In addition, procedures, tools and guidance should be in place to support those with delegated authorities to appropriately perform their duties.

8.1.1 Roles and responsibilities

Documenting and communicating roles, responsibilities and accountabilities support the coordination of efforts to achieve program objectives, comply with applicable authorities, and to increase efficiency and productivity. It is especially important due to the decentralized nature of the program to ensure consistency of delivery.

The Trade Policy Division, located within the Programs Branch’s Trade and Anti-dumping Programs Directorate, is accountable for oversight of the Casual Refund Program and ensuring that an effective control framework is in place to support the Casual Refund Centres (CRCs) in administering the program. However, Agency-wide roles, responsibilities and accountabilities have not been documented and communicated to support all involved in this process.

At the two CRCs visited, the comprehensiveness and formality of roles and responsibilities, and extent to which they were communicated, varied:

  • At Ville St-Laurent, roles and responsibilities for each employee involved in processing manual claims were established and documented.
  • At Scarborough, roles and responsibilities were not documented but communicated verbally and through peer-to-peer training for both manual and CREDITS processing.

Specific roles, responsibilities and accountabilities for employees of the Casual Refund Program have not been sufficiently established, documented or communicated. Without defined roles and responsibilities, claims may not be consistently processed in accordance with applicable policies, acts, and authorities.

8.1.2 Policies and procedures

The audit assessed the extent to which policies and procedures were in place and sufficient to clearly define and sustain consistency in the application of required controls. The Agency’s Comptrollership Manual – Finance Volume states that payments made by the CBSA are governed by the requirements of the Financial Administration Act and the Directive on Account Verification. The Agency has also published D Memoranda and a Casual Refund Electronic Data Interchange Transaction System (CREDITS) Participant’s Requirements Document outlining the requirements of the Customs Act and explaining procedures for individuals to apply for a refund of duties and taxes on casual importations, and for brokers to electronically submit refund claims through the CREDITS process.

The Trade and Anti-dumping Programs Directorate monitors a generic mailbox to which casual refund questions can be submitted and interviewees indicated that responses were timely, a contact name and phone number for follow-up purposes would be helpful. The audit also found that while the Casual Refund System (CRS) and CREDITS have field controlsFootnote 5 for data that are input into the systems, the standard operating procedures that were developed and distributed in 2000 are obsolete, predate the creation of the Agency, and do not reflect the current requirements and operating practices for the Program. In addition, there was no evidence of regular communication with the CRCs to provide direction or guidance.

Management at visited CRCs have developed local procedures. Ville St-Laurent has documented and maintains detailed procedures for the entire manual process; Scarborough communicates local procedures verbally and with on-the-job training.

The policies and procedures currently in place are not sufficient to sustain consistency in the application of required controls and processing of casual refund claims across the Agency. In the absence of up-to-date standard operating procedures, required controls may not be consistently applied as evidenced by the file review results reported in section 8.2.

8.1.3 Segregation of duties

Segregation of duties is an internal control intended to reduce the risk of erroneous and inappropriate action by having more than one employee involved in the completion of a task. When duties cannot be separated, compensating controls should be implemented.

Although the Agency’s Comptrollership Manual and the Treasury Board Secretariat’s Guideline on Common Financial Management Business Processes 3.3 – Manage Other Payments identify the required segregation of duties for processing payments, the Trade and Anti-dumping Programs Directorate has not provided guidance to the CRCs to ensure that more than one employee is required to process each casual refund claim. As a result, segregation of duties was inconsistently applied at the CRCs visited.

At the Scarborough CRC, one refund clerk processes an entire claim through the CRS performing all required functions. At the Ville St-Laurent CRC, two employees and a manager processed each claim, performed separate functions, and described that they verified each other’s work.

The absence of adequate segregation of duties increases the risk of errors, and fictitious or ineligible refund payments. Ensuring that employees are tasked with the appropriate duties and properly segregating them will help manage and minimize risks of potential fraud.

8.1.4 System controls

Robust user access controls help prevent the unauthorized processing of refund payments.

The audit found variations and gaps in the controls for authorizing access, assigning the appropriate level of access for a specific user’s needs and managing inactive user IDs.

At the Scarborough CRC, management has been provided with the ability to create and delete user IDs for the CRS and CREDITS, and can also give itself access to process claims. At Ville St-Laurent, Regional Information Science and Technology creates and deletes user IDs for the CRS as requested by CRC management.

At both refunds centres visited, the CRS system design enables the employee releasing the refund for payment from the system to alter payment amounts and details. As a result, even with properly authorized access, there is a risk that users could fraudulently create or modify claims.

There were no formal procedures for deleting the user IDs for employees that no longer require access to the two systems. While the Scarborough CRC employees were not aware if inactive user IDs had been deleted, at Ville St-Laurent, the superintendent periodically deletes inactive user IDs; but with some delay after the person has left the CRC or no longer requires access to the CRS. At both CRCs visited, the audit found inactive user IDs for employees who no longer require access to the systems.

Without proper system controls and management of user IDs, unauthorized users may have access to the CRS and CREDITS to create fictitious claims.

8.1.5 Monitoring and reporting

With the exception of monitoring performance against a 30-day service standard, the Casual Refund Program is not subject to national, risk-based monitoring of payments. Opportunities exist for the program to develop a framework which could ensure that:

  • Refunds are eligible and accurate;
  • Claims are processed in accordance with appropriate policies and acts; and
  • Corrective measures are implemented in a timely manner.

On a monthly basis, each CRC prepares reports that summarize the volume of transactions processed and value of duties and taxes refunded which are submitted to the Commercial and Trade Operations Division within the Operations Branch. Although the Operations Branch reviews the reports to determine whether the CRCs are processing claims within a 30-day service standard, the CRCs do not know how the reports are used or receive feedback. [*]

National risk-based monitoring and reporting could provide the Program with assurance that claims are processed in accordance with the appropriate policies and acts.

In conclusion, significant gaps were found in the control framework for the Casual Refund Program, which, if not addressed, place the Program at risk of not processing, verifying and paying casual refund requests in accordance with applicable acts and regulations.

Recommendation 1:

The Vice-President of the Programs Branch should develop and implement a management control framework for the Casual Refund Program.

Management Response Completion Date

The Programs Branch agrees with this recommendation. The Programs Branch, in collaboration with Operations Branch, has already taken measures to better manage system user identifications by updating user identification databases to ensure that system access is limited to current program employees; and to segregate duties for the processing and approval of refund payments by ensuring that all employees processing requests were advised of their respective roles and responsibilities. The Programs Branch commits to further develop and implement a more robust management control framework for the Casual Refund Program (CRP). In collaboration with the Operations Branch, the Comptrollership Branch and the Information, Science and Technology Branch, the Programs Branch will conduct a comprehensive review of the existing management control framework and ensure that it includes: the identification and segregation of roles, responsibilities and accountabilities under the Customs Act, the Refund of Duties Regulations, and the Financial Administration Act (FAA); clear CRP policies, Standard Operating Procedures and systems direction; a risk mitigation strategy; and staff training and stakeholder awareness products.

March 2015

8.2 Compliance

Audit Criteria:

  • Operating practices ensure consistent compliance of claim processing and payment with applicable acts and regulations.
  • Only eligible claims for refunds are approved and paid.

8.2.1 Operating practices

The Customs Act requires that claimants submit specific documentation in support of each refund claim within prescribed time limits. The Financial Administration Act (FAA) and the Directive on Account Verification govern the conditions under which all payments can be made.

Effective operating practices should specify the extent of the verification required by employees responsible for assessing the eligibility of claims, certifying payments under section 34 and 33 of the FAA, and performing account verification.

While national functional guidance has not been provided to the CRCs to ensure consistent compliance of claim processing and payment with applicable acts and regulations, local practices have evolved based on operational needs.

At the Scarborough CRC, the following practices were in place to process manual and CREDITS claims:

Manual Process:

  • A refund clerk assesses manual claims for compliance with the Customs Act;
  • Management indicated that it reviews some claims eligible for payment and all denied claims. The audit confirmed that of the 103 low-dollar claims tested, management reviewed 36 of the 75 claims eligible for a refund. There was no evidence that any of the 28 denied claims were reviewed;
  • The Scarborough CRC did not have a well-defined escalation process for management review of high-value payments: employees processing refunds expressed an inconsistent understanding of the limits for paying individual refunds without additional management review.

Credits:

  • Hundreds of thousands of claims, many of which are less than a dollar, are processed through the CREDITS. The application has programmed rules [*]Footnote 7. As a result, more than [*] of all CREDITS claims are being processed automatically. Claims [*] can be inspected based on the judgement of the reviewing officer and by requesting supporting documentation from the broker.

None of the claims refunded manually or through the CREDITS were formally certified pursuant to section 34 of the FAA despite Treasury Board direction that FAA sections 33 and 34 apply to refundsFootnote 8.

The Ville St-Laurent CRC only processes manual claims. The employees have developed the following practices:

  • Each refund is processed for compliance with the Customs Act by two different individuals and a superintendent who indicated that they reviewed each other’s work prior to payment;
  • Review of high-value claims: While no high-value claims tested as part of the audit were processed at the CRC, a well-defined escalation matrix for reviewing high-value payments was in place. The Chief who oversees the local operation at the CRC must sign-off on all claims between [*]. Claims between [*] must be signed off by the Director, and any claim over [*] requires approval of the Regional Director General;
  • Review of manually processed claims: The Superintendent reviews, date stamps and initials the casual adjustment worksheet of each refunded claim. The superintendent also described that she performed a more detailed review of supporting documents for claims above [*] dollars or related to certain types of transactions such as refunds of duties on personal effects brought into Canada during immigration or cars. Testing confirmed that of the 54 low-dollar claims sampled, all 38 claims assessed as eligible were reviewed by management;
  • Although the Superintendent date-stamped and initialled each refunded claim, the review was not an official section 34: it lacked the “certified pursuant to section 34 of the FAA” statement, as well as the printed and signed name of the authorizing individual. CRC management took action to correct this deficiency as soon as it was identified by the audit team.

While the Comptrollership Branch does certify both manual and CREDITS payments under section 33 of the FAA, in doing so it has no assurance that there is auditable evidence demonstrating that account verification has taken place, or that the payment has been certified by an individual with delegated financial signing authority pursuant to section 34 of the FAA.

The current operating practices do not ensure consistent application of the requirements of the FAA and the Directive on Account Verification.

Management should ensure that improvements to the control framework address these compliance issues.

8.2.2 Eligibility requirements

To be eligible for a refund, a manual claim must meet specific Customs Act requirements for supporting documents and timeliness. Claims submitted electronically through CREDITS must include the information specified in the CREDITS Participant’s Requirement Document. In addition, brokers must be prepared to provide supporting documentation to the Agency on request.

Manual Refunds to Individuals

The audit reviewed a sample of 162 manualFootnote 9 claims submitted by individuals and found that all claims were processed in accordance with the requirements of the Customs Act and that resulting payments were made in the correct amounts.

At Scarborough, the audit confirmed that of the 108 claims processed, the CRC correctly assessed that the 80 paid claims met the requirements for a refund. The other 28 were correctly assessed as ineligible and were not paid.

At Ville St-Laurent, the audit confirmed that of the 54 claims processed, the CRC correctly assessed that the 38 claims paid by the CRC met the requirements for a refund and the remaining 16 were correctly assessed as ineligible were not paid.

Manual Refunds to Brokers

The audit tested the 12 high-value claims submitted by brokers and processed at the Scarborough CRC. Testing verified that 11 of these claims met the requirements for a refund under the Customs Act.

[*]

[*]

Going forward, a well-designed process with appropriate controls would improve the management of these claims.

Credits – Electronic Refunds to Brokers

The audit tested a random sample of 158 CREDITS claims that were processed at the Scarborough CRC. All 158 claims were assessed as eligible by the CREDITS and paid automatically according to the [*]Footnote 10. While the audit confirmed that CREDITS correctly assessed the eligibility of claims, discrepancies were found in [*].

[*]

[*]

Recommendation 2:

The Vice-President of the Programs Branch should design and implement procedures to process manual claims from brokers for large numbers of low-dollar value casual imports that have been accounted for in error.

Management Response Completion Date

The Programs Branch agrees with this recommendation and, in consultation with the Operations Branch, the Comptrollership Branch, and the Information, Science and Technology Branch, will establish and implement procedures to process large volumes of casual refund claims received from brokers relating to all types of import declaration errors. Implementation of these Standard Operating Procedures will include a training component for staff, as well as a robust Headquarters program support mechanism to enhance CRP performance.

February 2015

Recommendation 3:

The Vice-President of the Programs Branch should design and implement a monitoring framework to assess the eligibility and accuracy of claims that are automatically processed through the CREDITS.

Management Response Completion Date

The Programs Branch agrees with this recommendation and commits to the review of existing monitoring elements and practices in order to design and implement an enhanced monitoring framework to effectively assess the eligibility and accuracy of claims that are automatically processed through CREDITS. Specifically, a valid sampling formula to determine risk will be established and incorporated into program policies and procedures.

February 2015

Appendix A – About the Audit

Audit Objectives And Scope

Internal Audit conducted the Preliminary Survey of the Agency’s Revenue and Trade Programs in 2012-13. Based on the results of the risk assessment, the Survey identified six (6) proposed audits, one of which was the Audit of the Casual Refund Program. The Audit of the Casual Refund Program was approved as part of the Agency’s 2013-14 to 2015-16 Risk-Based Audit Plan.

The objective of this audit was to assess the adequacy and effectiveness of controls for the processing, verification and payment of casual refund requests. The audit scope included both manual and CREDITS refund processes and claims processed between April 1, 2012 and March 31, 2013. Headquarters functions and two regional offices that administer the Casual Refund Program (Scarborough and Ville St-Laurent) were included.

Approach And Methodology

The following techniques were used during the examination phase of the audit:

  • Reviewed of applicable policies, directives and procedures governing the Program.
  • Conducted interviews with clerks, officers and managers in regional offices that administer the Casual Refund Program, and with officials in the Comptrollership, Operations and Programs branches.
  • Prepared walkthroughs of the manual refunds process in: Ville St-Laurent, Quebec and Scarborough, Ontario.
  • Reviewed a random sample of manual and automatic claims processes (157 manual and 158 CREDITS) in 2012-13 to assess the effectiveness of key controls and compliance with key authorities.
  • Reviewed all high-valueFootnote 11 refunds issued in 2012-13.

The following table identifies the type and number of claims tested at each of the visited CRCs:

Refund Type Scarborough CRC Ville St-Laurent CRC Total
High-value 17 0 17
Manual 103 54 157
CREDITS 158 NilFootnote 12 158
Total 357 54 411

Risk Assessment

The planning phase of the audit identified potential control weaknesses in a number of areas:

Control Framework

There is a risk that:

  • Specific roles, responsibilities and accountabilities for casual refunds are not defined, documented and communicated to employees of the Casual Refund Program.
  • Policies and procedures are not in place and sufficient to clearly define and sustain consistency in the application of required controls.
  • Segregation of duties for the processing and approval of refund payments is not in place to manage and minimize risk of potential fraud.
  • System controls are in place to allow only authorized users to access the CRS and CREDITS to register and process claims.
  • Reporting and feedback mechanisms are not in place to address irregularities and facilitate appropriate and timely corrective action.
  • A national, risk-based monitoring process for casual refund payments is not in place to provide assurance that expected results are achieved, claims are processed in accordance with the appropriate policies and acts, and corrective measures are implemented in a timely manner.

Compliance

There is a risk that operating practices do not ensure the eligibility of claims, certification of payments under section 34 and 33 of the FAA, and performance of account verification.

Audit Criteria

The audit criteria were derived from the Office of the Comptroller General’s Audit Criteria Related to the Management Accountability Framework: A Tool for Internal Auditors, the Assertions from the CICA Handbook and the CICA Criteria of Control Framework (CoCo).

Lines of Enquiry Audit Criteria
Control Framework
  • 1.1 Specific roles, responsibilities and accountabilities for casual refunds are defined, documented and communicated.
  • 1.2 Policies and procedures are in place and sufficient to define and sustain consistency in the application of required controls.
  • 1.3 Segregation of duties for the processing and approval of refund payments is in place.
  • 1.4 System controls are implemented to allow only authorized users to access the CRS and CREDITS to register and process claims.
  • 1.5 Reporting and feedback mechanisms are in place to address irregularities and facilitate appropriate and timely corrective action.
  • 1.6 There is a national, risk-based monitoring process in place that includes casual refund payments.
Compliance
  • 2.1 Operating practices ensure consistent compliance of claim processing and payment with applicable acts and regulations.
  • 2.2 Only claims eligible for refund are approved and paid.

Appendix B – List of Acronyms

CBSA
Canadian Border Services Agency
CRC
Casual Refund Centre
CREDITS
Casual Refund Electronic Data Interchange Transfer System
CRP
Casual Refund Program
CRS
Casual Refund System
FAA
Financial Administration Act

Footnotes

Footnote 1

As identified in the Canada Border Services Agency’s Memorandum D6-2-6

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Footnote 2

As determined by the first letter of the postal code of their home address.

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Footnote 3

All CREDITS refunds are processed at the Scarborough CRC.

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Footnote 4

As identified on the Foreign Affairs, Trade and Development Canada Report: “Canada’s State of Trade: Trade and Investment Update – 2013”.

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Footnote 5

Rules programmed into the systems that help check the integrity of the data input. These include: incorrect field format or blank fields, duty paid date prior to present date, duty paid date not greater than two years from present date or four years for GST/HST, export date prior to present date, export date less than duty paid date, duplicate adjustment number, etc.

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Footnote 6

High-value was defined as refunds with a value greater than [*], which is equivalent to three standard deviations above the average refund paid [*].

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Footnote 7

[*]

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Footnote 8

Directive on Payment Requisitioning and Cheque Control, section 6.5.2.

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Footnote 9

These comprise 103 and 54 randomly selected low-dollar value refunds from the Scarborough and Ville St-Laurent CRC respectively, and the five high-value refunds from the Scarborough CRC that were paid to individuals.

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Footnote 10

Due to the design of CREDITS, documentation in support of the automatically paid claims has not been requested prior to this audit.

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Footnote 11

High-value was defined as refunds with a value greater than [*], which is equivalent to three standard deviations above the average refund paid [*].

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Footnote 12

All CREDITS refunds are processed at the Scarborough CRC.

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