Laser Audit of the Reimbursement of Work from Home Expenses

March 2022

Table of contents



The COVID-19 pandemic gave way to a predominantly remote work environment at Public Safety (PS) where most employees have been working virtually since March 16, 2020. To accommodate its workforce, PS provided reimbursement for expenses incurred by employees to set-up a home office and conduct government business.

The Financial Operations, Policy and Systems Unit within the Comptroller’s office of the Corporate Management Branch (CMB) designed and implemented the process for work from home (WFH) expense reimbursements, communicated through the Departmental Policy on Employee Claims for Working from Home Expenses. According to the Policy:

“Employees may claim a reimbursement of up to $500 (including applicable taxes and delivery charges) for purchases they have incurred starting on March 16, 2020 up to March 31, 2022. The limitation of up to $500 applies to the total of both fiscal years.”

The WFH expense reimbursement process requires cooperation across the PS manager community to ensure discretion is exercised in the application of the Policy and that expenses are approved in accordance with departmental policy and the Financial Administration Act (FAA), mainly:

Audit Objective and Scope

The objective of this laser audit was to provide assurance that the Department’s WFH expense reimbursement process and related controls supports compliance with relevant acts, policies, directives and procedures.

The scope of the audit included the WFH expense reimbursement process for employees’ claims, including related transactions, records, policies and procedures maintained by the Comptroller’s Directorate of the CMB in collaboration with other areas within the Branch and stakeholders across PS. The audit covered the time period between March 16, 2020 and January 14, 2022 (i.e., the start date of the eligibility period for reimbursements and the effective end date of the audit, respectively).

The scope of the audit did not include employee expense claims made under the Duty to Accommodate Policy and purchases made on behalf of employees using departmental acquisition cards.

Methodology and Audit Approach

For each criteria established (see Annex), an audit methodology was developed to sufficiently and appropriately examine the area in support of the laser audit objective. To complete the engagement, the following methods were leveraged.


Multiple interviews were conducted with the Financial Operations, Policy and Systems Unit within the Comptroller’s Directorate. Communication with this team was maintained throughout each phase of the audit which helped to facilitate the auditors’ understanding of the WFH expense reimbursement process and provided ease of access to related claims transactions that were tested.

Document Review

Relevant documents were reviewed, including:

Data Analysis and Testing

Data from the total population of WFH expense claims were collected as at August 10, 2021. From the total population of 730 claims, a sample of 10% or 73Footnote1 were then selected via a combination of random and judgmental sampling. The claims were tested against established audit criteria including compliance with departmental policy and FAA requirements.

Conformance with professional standards

This audit conforms to the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing and the Government of Canada’s Policy on Internal Audit, as supported by the results of the Quality Assurance and Improvement Program.


Observation #1: The WFH expense reimbursement process is generally in compliance with policy and legislative requirements.

From August 13, 2020 to August 10, 2021, a total of 730 general WFH expense claims covering 1,132 transactions were processed by the Department. This represented $223,271.78 of reimbursements to employees.

Through our sample testing of 71 claims, we found reimbursed expenses were:

The level of controls attested to related to section 33 of the FAA (i.e., authority to release payment) were deemed sufficient, and as such, detailed testing was not conducted in this area; however, we did verify whether or not there were any reimbursements made in excess of the $500 limit (results discussed later in this report).

Observation #2: Expenditure initiation and commitment authorization (i.e., section 32 of the FAA) was exercised after purchase in many cases.

Departmental Policy requires employees provide a description of the items they wish to purchase, and if eligible, their manager is to pre-approve the purchase by certifying sufficient funds are available for reimbursement as per section 32 of the FAA. 

Between the start of WFH arrangements on March 16, 2020 and the implementation of the Policy on August 13, 2020, it was acceptable for section 32 to be authorized after an employee had already made a purchase to accommodate their WFH needs; however, once the Policy came into effect, it was expected that employees would seek section 32 authorization from their manager prior to making their purchase.

We found the majority of section 32 authorizations in our sample occurred after the purchase was made by the employee, including 40 instances (56%) during the time in which the Policy was in effect and prescribed that section 32 authorization occur prior to purchase. 

Although the financial impact of authorizing section 32 after a purchase is low given managers may still reject a reimbursement request for a purchase already made by their employees, it remains a prudent practice for managers to sign-off on section 32 prior to their employees making a purchase. Doing so may also avoid a potential strain in the relationship between a manager and his or her employee(s) if a questionable item is purchased with the expectation it will be approved for reimbursement, only for it to be declined.

Observation #3: Management discretion could be strengthened with respect to the eligibility of items approved for reimbursement and proof of payment accepted.

Eligibility of items

The Departmental Policy provides general direction on the type of goods eligible and ineligible for reimbursement without being overly prescriptive. It encourages managers to be flexible and reasonable when it comes to their employees’ WFH expense requests while also emphasizing the importance of discretion and sound judgment. Although an item may be in accordance with policy, the selection of the item should be cost effective and address business requirements.

Of the claims reviewed, items purchased by employees were generally found to be eligible per policy. However, there were a few instances where more cost effective and business appropriate options were likely available. As such, additional scrutiny on the part of the delegated signing authorities would have been appropriate.

For example, we found the following purchases reimbursed with minimal to no evidence on file of follow-up or rationale prior to their approval:

Proof of payment

Departmental Policy requires that employees provide supporting documentation of their purchase (i.e., copy of receipt) as part of their claim package.

While all claims reviewed had some form of document on file that served as evidence the employee made a purchase, 44 of 71 (62%) claims reviewed only included order confirmations or similar documents in lieu of a receipt. Further, in a few cases, there was no description of the items purchased on the document.

A receipt or similar document (e.g., paid invoice) is a stronger control than an order confirmation as it indicates payment has been accepted by the seller.

Controls related to FAA section 34 – authority to certify the employee is eligible for the reimbursement of the WFH expense – would be improved if receipts were enforced as the standard document accepted as proof of payment. Further, delivery notifications may be considered as an additional control for online purchases.

Observation #4: Claim files contain a consistent set of documents; the compilation of these documents into a final claim package for storage in the corporate repository is underway but delayed.

The claim files reviewed included a consistent set of documents throughout, including evidence of section 32 and 34 authorization, general claim form, and proof of payment. While records of reimbursement issued to employees were not included in the files, reference numbers linked to the financial system were included, thus allowing for an audit trail to be observed.

With respect to overall information management (IM) practices, not all final claim packages have been stored and archived in the corporate repository (RDIMS) as of the conclusion of this audit. The IM Business team, who is responsible for archiving, has experienced backlogs due to an increase in the overall scope of their work during the pandemic. According to the team, 62% of archiving has been completed with the remainder expected to be completed by March 31, 2022.

With the launch of the new corporate repository (GCDocs) expected in 2022, final records are expected to be transferred and stored there moving forward.

Observation #5: Information captured in the financial system was generally complete and accurate; functionality of the internal controls within the financial system could be enhanced.

When comparing proof of payment documentation on file with information entered into SAP, we found the information was consistent between the two. There was one exception for a claim in which the expenses and related taxes entered into SAP did not directly match the proof of payment on file; however, this error had a net zero effect on the reimbursement to the employee.

In terms of system functionality, we were informed manual intervention is required in SAP to prevent reimbursements in excess of the $500 limit. From the sample of SAP payment screenshots we reviewed, we found only one claim in excess of the limit, in the amount of $14.75.

We also found manual intervention is necessary to ensure a delegated official authorizes section 32 and 34 prior to the release of payment. While all claims in our sample included authorization by a delegated official, we observed three instances across two claims (3%) in which the delegated official was not responsible for the cost centre in which they exercised their authority (two instances for section 32 and one instance for section 34).

Conclusion and Recommendation


Overall, the WFH expense reimbursement process is functioning as intended; employees have had the opportunity to purchase and be reimbursed for home office goods that support the performance of their duties from home.

There are some areas for improvement to consider with respect to:


In light of the development of the Hybrid Workforce Framework and migration to a hybrid work environment at PS, the Assistant Deputy Minister, CMB, should ensure:

Management Action Plan

Management Action Plan


Management Action Plan-Deliverables

Planned Completion Date

In light of the development of the Hybrid Workforce Framework and migration to a hybrid work environment at PS, the Assistant Deputy Minister, CMB, should ensure:

  • The results of this engagement are taken into account when developing and/or updating policies, procedures, and guidance related to the reimbursement of WFH expenses; and,
  • That these developments and/or updates be communicated department-wide.

Updated Delegation of Financial Signing Authority training material is published on InfoCentral and used in future training offerings.

April 29, 2022

Present options for extending or updating the Policy on Employee Claims for Working from Home Expenses to the Workplace Planning Committee.

April 29, 2022

In the event that the Policy is rescinded, extended or amendments are made, we will communicate these changes to the department in alignment with a strategy to be developed with the Communications team.

April 29, 2022


The Internal Audit and Evaluation Directorate would like to thank all those who provided advice and assistance during the audit.

Annex – Audit Criteria

Annex – Audit Criteria
Criterion Audit Criteria

Criterion 1

  • Relevant policy and legislative requirements (e.g., FAA) are consistently applied.

Criterion 2

  • Sufficient and appropriate supporting documentation associated with reimbursement transactions, including necessary approvals and justifications, are maintained on file.

Criterion 3

  • Relevant, reliable, timely and complete data is captured in the financial system.


  1. 1

    Upon verification of claims and corresponding documentation, the audit team identified 2 claims of the 73 selected that were transactions related to the Duty to Accommodate Policy and thus fell out of the scope of this audit. As such, we removed these 2 claims from our sample testing results.

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