Bill 198: Canada Legislates Corporate and IT Governance

Simplify IT Governance with integrated applications for projects, purchasing, time and expense.

Bill 198, "Keeping the Promise for a Strong Economy Act (Budget Measures), 2002”, was introduced in December 2002 by the Provincial Government of Ontario, Canada. This legislation covers different aspects of the government’s operations, as well as provisions on taxes, auto insurance and corporate disclosure. The IT and Information Security conditions it requires for corporate disclosure and financial reporting are almost identical to the Sarbanes Oxley Act passed in the United States, so much so that Canada’s Bill 198 is also known by a nickname, “CSOX”, even though the legislation on corporate disclosure is only one aspect of it. Two instruments have been created to help implement Bill 198, MI-52-109 (“Certification of Disclosure in Issuers’ Annual and Interim Filings”) and MI-52-111 (“Reporting on Internal Controls Over Financial Reporting”).

For IT and IS areas of the organization, Bill 198 and its instruments require:

• Like SOX, Bill 198 calls for the establishment of internal controls for financial reporting. However, it also requires controls and procedures for financial disclosure as well.
• On an ongoing basis, the effectiveness of the internal controls must be reviewed and reported on, with “trustworthy and reliable evidence” provided in annual reports to securities regulators.
• Under Bill 198, organizations are required to officially disclose the effectiveness of their internal controls, both on an interim and an annual basis.

What Bill 198 Means to Management

Bill 198 and its instruments place the ultimate responsibility of compliance on the shoulders of the executives. Under Bill 198, CEOs and CFOs are required to regularly provide signed certifications that address the establishment and maintenance of internal controls, the design of the controls and their own evaluations of the effectiveness of those controls. These documents are filed with Canada’s securities regulators. Any misrepresentation or falsehood in these documents can result in serious penalties under Canada’s securities laws, including fines up to $5,000,000 Canadian.

How Tracker Products Facilitate Bill 198

Tracker products offer an integrated suite of business applications which automate workflow and streamline processes. They can facilitate the internal controls aspect of Bill 198 by rapidly establishing a comprehensive, structured environment for financial reporting, an environment with clear transparency and powerful reporting capabilities.

Tracker applications for purchasing, check requests, time and expense reporting (Purchase Tracker, Payment Tracker, Time Tracker and Expense Tracker, respectively), establish and enforce legitimate approval processes, as well as generate audit trails for all financials. These applications integrate with Project Tracker, allowing purchases, time and expenses to be tied directly to projects, tasks, account codes and cost centers, improving the accuracy of reporting as well.

End to End Control

1. Electronic Forms - Tracker eliminates one of the largest inefficiencies in financial reporting – paper based processes. Paper based systems are inherently unsecure, vulnerable to document loss, delays, misprocessing, and document error. Tracker provides forms for purchase orders, timesheets and expense reports that simplify and secure reporting.
2. Form Validation - Tracker applications offer key advantages, including form validation, improving reporting accuracy by linking Project and Cost Center codes to time, expenses and purchases, as well as simplifying the reporting process by allowing users to submit these forms from any location via the Web or their email client.
3. Configurable Approval Routing - Using Tracker, organizations can establish approval workflows for timesheets, purchase orders and expense reports. These workflows can be controlled by spending limits and includes support for proxy approvers.
4. Electronic signatures and Activity logs – Every step of a financial item’s life is recorded in the document, from its creation, through approvals and final processing.
5. Comprehensive Reporting – Simply by moving purchasing, time and expense reporting to the electronic workflow provided by Tracker, organizations greatly accelerate the timeliness (as well as accuracy and security) of reporting, compared to paper based systems or basic spreadsheet routines. The Tracker Data Warehouse, a Web based reporting engine, receives data from all the Tracker modules as well as legacy Accounting and HR databases, to generate up-to-date, comprehensive reports on the financial condition of the company, including balance sheets, income statements and capital expenditures. The Tracker Data Warehouse provides a single point of access to all financial reports for the organization.