Special examinations are a form of performance audit of federal Crown corporations. Under the Financial Administration Act, federal Crown corporations are subject to a special examination at least once every 10 years.
In special examinations, examiners provides an opinion on the management of the Crown corporation as a whole. More specifically, they examine whether a Crown corporation's systems and practices provide reasonable assurance that assets are safeguarded, resources are managed economically and efficiently, and operations are carried out effectively.
PSP Investments' Special Examination led to the best possible outcome. The joint examiners, the Auditor General of Canada and Deloitte & Touche LLP, concluded: "The Corporation has maintained systems and practices to provide it with reasonable assurance that its assets are safeguarded and controlled, its resources are managed economically and efficiently, and its operations are carried out effectively."
PSP Investments is pleased with the outcome of its special examination and with the examiners' comments. Their observations included the following:
- The Corporation has the key elements of a strong governance framework, and its governance practices are consistent with industry practices for stewardship and oversight by boards of directors.
- The Corporation's risk management practices, particularly in the area of investment risk, provide for identification, monitoring, management, and reporting of risks to protect its assets from undue risk of loss.
- The Corporation's compensation framework and practices are comparable with those of the industry. The Board plays an active oversight role in the design and operation of compensation practices, and reviews and monitors them independently of management.
- The Corporation regularly benchmarks its practices against those of comparable organizations in the industry.
The report also provides recommendations for ongoing improvements regarding the public reporting of responsible investment activities, Board appointments, the corporation's strategic planning process and new investment activities. PSP Investments agrees with these recommendations and will be taking steps to implement them.