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| Duties of
investment
committee
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31. The investment committee shall
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(a) perform the duties that are assigned to it
by the board of directors;
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(b) approve the engagement of investment
managers empowered with discretionary
authority to invest the assets of the Board;
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(c) meet with the officers and employees of
the Board to discuss the effectiveness of the
Board's investment policies and the
achievement of the Board's objects;
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(d) require management to implement and
maintain appropriate procedures to
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(i) monitor the application of the Board's
investment policies, standards and
procedures, and
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(ii) ensure that the Board's agents and
mandataries comply with this Act and the
Board's investment policies, standards
and procedures; and
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(e) review, evaluate and approve
management's procedures referred to in
paragraph (d).
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| Investment
policies,
standards and
procedures
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32. Subject to the regulations, the board of
directors shall establish, and the Board and its
subsidiaries shall adhere to, investment
policies, standards and procedures that a
person of ordinary prudence would exercise in
dealing with the property of others.
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| Duty of
investment
managers
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33. Every investment manager who invests
the assets of the Board shall do so in
accordance with this Act and the Board's
investment policies, standards and
procedures.
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| Financial year
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34. The financial year of the Board is the
period beginning on April 1 in one calendar
year and ending on March 31 in the next
calendar year.
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| Books and
systems
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35. (1) The Board shall, in respect of itself
and each of its subsidiaries, cause
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(a) books of account and records to be kept
for each fund;
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(b) financial and management control and
information systems and management
practices to be maintained; and
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(c) a record of the investments held by each
fund during the financial year to be kept,
showing
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(i) the book value of each investment,
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(ii) the market value of each investment
and the information that would permit
the verification of that value, and
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(iii) the information that would permit
the determination of whether the
requirements of this Act and the
investment policies, standards and
procedures have been met.
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| Manner in
which books,
etc., to be kept
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(2) The books, records, systems and
practices required by subsection (1) shall be
kept and maintained in a manner that will
provide reasonable assurance that
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(a) the Board's assets and those of its
subsidiaries are safeguarded and
controlled;
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(b) the Board's transactions and those of its
subsidiaries are in accordance with this Act
and the by-laws, or the by-laws of its
subsidiaries; and
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(c) the Board's financial, human and
physical resources and those of its
subsidiaries are managed economically and
efficiently and that the Board's operations
and those of its subsidiaries are carried out
effectively.
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| Internal audit
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(3) The Board shall cause internal audits to
be conducted, in respect of itself and each of
its subsidiaries, to assess compliance with
subsections (1) and (2).
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| Annual
financial
statements
|
(4) The Board shall cause annual financial
statements, in respect of itself and each of its
subsidiaries, to be prepared in accordance
with generally accepted accounting
principles.
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| Contents of
statements
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(5) The annual financial statements shall
show the information and particulars that in
the opinion of the directors are necessary to
present fairly, in accordance with generally
accepted accounting principles, the primary
source of which is the Handbook of the
Canadian Institute of Chartered Accountants,
the financial position for each fund as at the
end of the financial year to which it relates and
the results of the operations of the Board for
that financial year.
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| Quarterly
financial
statements
|
(6) During each financial year, the Board
shall cause quarterly financial statements to
be prepared for each three-month period of the
year. The quarterly statements shall
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(a) show the same information for the most
recent three-month period as is required to
be set out in the Board's annual financial
statements; and
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(b) show the same information in respect of
the part of the year up to the date of the
statements in relation to the corresponding
period in the preceding financial year.
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| Approval by
board of
directors
|
(7) The board of directors shall approve the
annual financial statements and that approval
shall be evidenced by the signature of at least
one director of the Board.
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| Annual
auditor's
report
|
36. (1) The Board shall cause an annual
auditor's report to be prepared, in respect of
itself and each of its subsidiaries, on
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(a) the annual financial statements referred
to in section 35;
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(b) any revised financial statement referred
to in subsection 37(3); and
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(c) the record of investments referred to in
paragraph 35(1)(c).
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| Contents
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(2) A report under subsection (1) shall be
addressed to the Board and shall
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(a) include separate statements indicating
whether, in the auditor's opinion,
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(i) the financial statements are presented
fairly in accordance with generally
accepted accounting principles,
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(ii) the Board's transactions and those of
its subsidiaries that have come to the
auditor's notice in the course of the
auditor's examination for the report were
in accordance with this Act and the
by-laws, and the by-laws of the
subsidiaries, and
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(iii) the record of investments kept in
accordance with paragraph 35(1)(c)
fairly presents the information required
by that paragraph; and
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(b) call attention to any other matter falling
within the scope of the auditor's
examination for the report that, in the
auditor's opinion, should be brought to the
attention of the Board.
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| Examination
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(3) An auditor preparing a report under
subsection (1) shall make the examination that
the auditor considers necessary for the
purpose.
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| Auditing
standards
|
(4) An auditor's examination shall be
conducted in accordance with generally
accepted auditing standards, the primary
source of which is the Handbook of the
Canadian Institute of Chartered Accountants.
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| Reliance on
internal audit
|
(5) In conducting an audit under this Act, an
auditor shall rely on any internal audit
conducted under subsection 35(3), to the
extent that the auditor considers that reliance
to be feasible.
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| Copy to
Ministers
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(6) Without delay on the completion of a
report under this section, the auditor shall send
a copy of it to the Minister, the Minister of
National Defence and the Solicitor General of
Canada.
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| Notice of
errors and
omissions
|
37. (1) A director or officer of the Board
shall without delay notify the Board's auditor
and the audit committee of any error or
omission of which the director or officer
becomes aware in a financial statement that
the auditor or a former auditor has reported on
or in a report prepared by the auditor or a
former auditor under section 36.
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| Duty of
auditor
|
(2) When the Board's auditor, or a former
auditor of the Board, is notified or becomes
aware of an error or omission in a financial
statement that the auditor or former auditor
has reported on or in a report prepared by the
auditor or former auditor under section 36, the
auditor or former auditor shall without delay
notify each director of the Board of the error
or omission if the auditor or former auditor is
of the opinion that the error or omission is
material.
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| Correction
|
(3) When the directors receive a
notification under subsection (2) of an error or
omission in a financial statement or a report,
the Board shall prepare a revised financial
statement or the auditor or former auditor shall
issue a correction to the report, and a copy of
it shall be given to the Minister, the Minister
of National Defence and the Solicitor General
of Canada.
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| Appointment
of auditor
|
38. (1) The auditor of the Board shall be
appointed annually by the board of directors
and may be removed at any time by it.
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| Re-appointme
nt
|
(2) On the expiry of the appointment of the
auditor of the Board, the auditor is eligible for
re-appointment.
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| Continuation
in office
|
(3) Notwithstanding subsection (1), if an
auditor of the Board is not appointed to take
office on the expiry of the appointment of an
incumbent auditor, the incumbent auditor
continues in office until a successor is
appointed.
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| Definition of
``firm of
accountants''
|
39. (1) In this section, ``firm of
accountants'' means a partnership, the
members of which are accountants engaged in
the practice of accounting, or a body corporate
that is incorporated by or under an Act of the
legislature of a province and engaged in the
practice of accounting.
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| Qualification
of auditor
|
(2) A natural person or firm of accountants
is qualified to be the auditor of the Board if
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(a) in the case of a natural person, the person
is an accountant who
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(i) is a member in good standing of an
institute or association of accountants
incorporated by or under an Act of the
legislature of a province,
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(ii) has at least five years experience at a
senior level in performing audits of a
financial institution,
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(iii) is ordinarily resident in Canada, and
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(iv) is independent of the Board, each of
its subsidiaries, and the directors and
officers of the Board and those of each of
its subsidiaries; and
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(b) in the case of a firm of accountants, the
member or officer of the firm jointly
designated by the firm and the Board to
conduct the audit of the Board on behalf of
the firm meets the qualifications described
in paragraph (a).
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| Independence
|
(3) For the purposes of this section,
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(a) independence is a question of fact; and
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(b) a person is deemed not to be
independent if that person or any of that
person's business partners
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(i) is a business partner, director, officer
or employee of the Board or of any of its
subsidiaries, or a business partner of any
director, officer or employee of the Board
or of any of its subsidiaries, or
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(ii) has been a liquidator, trustee in
bankruptcy, receiver or receiver and
manager of any of the Board's
subsidiaries within the two years before
the natural person's or the firm of
accountants' proposed appointment as
the Board's auditor.
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| Joint
designation
|
(4) Within 15 days after appointing a firm of
accountants as its auditor, the Board and the
firm shall jointly designate a member or
officer of the firm who has the qualifications
described in paragraph (2)(a) to conduct the
audit of the Board on behalf of the firm.
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| Resignation
|
(5) An auditor of the Board who becomes
disqualified under this section shall resign
without delay after becoming aware of the
disqualification.
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| When
resignation
becomes
effective
|
(6) A resignation of an auditor of the Board
becomes effective at the time the Board
receives a written resignation from the auditor
or at the time specified in the resignation,
whichever is later.
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| Statement of
auditor
|
(7) If the Board's auditor resigns or receives
a notice or otherwise learns of a meeting of the
board of directors at which another auditor is
to be appointed in place of the auditor and the
auditor objects to being replaced, the auditor
shall submit to the Board a written statement
giving the reasons for the resignation or the
reasons why the auditor objects to being
replaced.
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| Statement to
be sent to
Ministers
|
(8) When the Board receives a written
statement referred to in subsection (7) that
relates to a resignation of its auditor as a result
of a disagreement with the directors or officers
of the Board or that relates to a replacement or
proposed replacement of the auditor, the
Board shall without delay send a copy of the
statement to the Minister, the Minister of
National Defence and the Solicitor General of
Canada.
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