Follow-up Audit of the Atlantic Innovation Fund – Program Management Report – Fiscal Year 2003

Acoa

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Follow-up Audit of the Atlantic Innovation Fund – Program Management Report – Fiscal Year 2003/04 Audit Directorate Final Report March 2006 TABLE OF CONTENTS OBJECTIVES .................................................................................. 1 SCOPE............................................................................................ 1 METHODOLOGIES......................................................................... 1 AUDIT RESULTS ............................................................................ 1 Post-Payment Audits (PPAs) – MAP recommendation 2.......... 1 Resources – MAP recommendation 3....................................... 2 Management of the Program (Client Service Standards) – MAP recommendation 4............................................................ 3 Delegation of Authority – MAP recommendation 5 ................... 4 OVERALL CONCLUSION............................................................... 6 Audit Directorate Follow-up Audit of the Atlantic Innovation Fund – Program Management Report – Fiscal Year 2003/04 Management Letter OBJECTIVES The objectives of this follow-up engagement were to: • Identify the recommendations from the AIF Audit of Program Management and determine the risk associated with each; • Review and document the actions taken by management in response to ...

Sujets

• management
• managers

Informations

• Publié par: Veam
• Nombre de lectures: 84
• Langue: English

Extrait

Follow-up Audit of the

Atlantic Innovation Fund –

Program Management Report –

Fiscal Year 2003/04

Audit Directorate

Final Report

March 2006

TABLE OF CONTENTS

OBJECTIVES.................................................................................. 1

SCOPE............................................................................................ 1

METHODOLOGIES......................................................................... 1

AUDIT RESULTS............................................................................ 1

Post-Payment Audits (PPAs) – MAP recommendation 2.......... 1

Resources – MAP recommendation 3....................................... 2

Management of the Program (Client Service Standards) –

MAP recommendation 4............................................................ 3

Delegation of Authority – MAP recommendation 5 ................... 4

OVERALL CONCLUSION............................................................... 6

Audit Directorate

Page 1

Follow-up Audit of the

Atlantic Innovation Fund –

Program Management Report –

Fiscal Year 2003/04

Management Letter

OBJECTIVES

The objectives of this follow-up engagement were to:

•

Identify the recommendations from the AIF Audit of Program

Management and determine the risk associated with each;

•

Review and document the actions taken by management in response

to the AIF Audit of Program Management; and,

•

Provide management with results from the follow-up audit by way of a

Management Letter.

The examination was conducted during December 2005 and January 2006 and

covered activities that have occurred since the issuance of the report in April

2003.

SCOPE

The scope of the follow-up audit included four of the five audit findings. These

findings were considered to be of moderate to high risk and included:

•

Post payment audits (MAP recommendation 2);

•

Human resources (MAP recommendation 3);

•

Client service standards (MAP recommendation 4); and,

•

Delegation of authority (MAP recommendation 5).

METHODOLOGIES

•

Interviews with AIF Program Officer, Account Managers; and,

•

Document Review relating to actions taken by AIF.

AUDIT RESULTS

Post-Payment Audits (PPAs) – MAP recommendation 2

In the 2003-2004 Audit of Program Management, payment procedures were

examined. Payment procedures as outlined in the AIF Policy and Procedures

Manual and posted on the ACOA website were found to be adequate for effective

Audit Directorate

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and efficient control of payment for the AIF program.

However, it was

recommended that post-payment audit procedures for AIF be finalized.

During the 2005-2006 follow-up audit, we found the post payment procedures

were adopted from the BDP and are outlined in the AIF Risk-Based Audit

Framework (RBAF).

However, there is no reference to the post-payment

procedures in the AIF Policy and Procedures Manual.

Post-payment Audits were found to be current as at the end of 2004 and a report

reflecting the results is being drafted.

Further, the post-payment audits are

continuing for 2005 with a sample being identified in January 2006.

Conclusion

AIF Management has ensured that post-payment procedures are in place and

that the audits are being performed on a continuous basis.

However, we

recommend that reference be made to the post-payment procedures in the AIF

Policy and Procedures Manual. A brief description with a reference to the BDP

would be appropriate.

Human Resources – MAP recommendation 3

A review of the Treasury Board Policy on Transfer payments indicated that the

policy states, in section 7.1.1, that ACOA must ensure that

departmental capacity

exists to effectively deliver and administer the transfer program, including

monitoring, learning and training.

Since the beginning of AIF, resources for the delivery of the program have been

an issue. The Audit of Program Management identified that for Round I of the

AIF, the level of resources provided to the regional offices was not adequate and

regional offices were required to compensate for the necessary resources by

borrowing staff from BDP to ensure the necessary level of due diligence. In the

long term, with the added complexity of monitoring AIF projects, which will be

complex due both to the size of the projects and the fact that R & D projects will

require changes as the projects proceed, this effort cannot be sustained.

The Audit of Program Management concluded that the level of resources

provided for the delivery of the AIF program was lacking in the regional offices of

the Agency in order to provide due diligence for project evaluation, payments and

monitoring. It will be difficult to sustain Round I efforts if resource levels are not

addressed. This could result in non-compliance with the Treasury Board Policy

on Transfer Payments, specifically section 7.1.1 of the policy.

Audit Directorate

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Management responded to this conclusion by stating that action was taken in

Round II to secure adequate resources and continues to monitor the resource

requirement to deliver the AIF Program and is committed to undertake further

actions if required.

During the follow-up audit, we found evidence of advance resource planning for

Round III which resulted in staff being assigned to dedicated AIF teams. This

has had a positive effect on AIF Managers who can now ensure due diligence in

project evaluation, payments and monitoring. However, the future possibility of

overlapping Rounds may require a re-evaluation of resources as the Program

progresses into Rounds IV and V.

Conclusion

The response from the AIF Secretariat to secure sufficient resources for Round

III has provided assurance that ACOA is in compliance with Treasury Board

Policy on Transfer Payments (Section 7.1.1.) and that the AIF staff can provide

due diligence when evaluating and monitoring projects and making payments.

However, continuous monitoring of resources is recommended to ensure the

Agency is prepared for future Rounds and any overlapping of Rounds.

Management of the Program (Client Service Standards) –

MAP recommendation 4

The Treasury Board Policy on Transfer payments states that the AIF program

must be managed with due regard to economy, efficiency and effectiveness. In

addition to this, the AIF Program was developed within the timeframe of the

application of “Results for Canadians” – a Management Framework for the

Government of Canada. As stated in Results for Canadians, first and foremost,

the Government of Canada must sharpen its

citizen focus

in designing,

delivering, evaluating and reporting on its activities. It must improve service and

expand partnerships with other governments, the private sector and voluntary

organizations.

With the AIF Program being developed and launched in this environment, client

service objectives, perhaps with standards established and published, would be

expected.

The Audit of Program Management identified that there were no pre-

defined client service objectives and that this impacted on the effectiveness of

the delivery of the program.

It is understood that AIF projects are complex and thus the evaluation processes

in place to arrive at decisions on project approvals will be onerous.

Clients

should also be aware that project evaluation will require a reasonable length of

time

From observing the turnaround time for other Industry Canada granting

programs such as Canada Foundation for Innovation (CFI), which take

Audit Directorate

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approximately a year, it is clear that ACOA has done well by making

announcements within

13 months of the request for proposals especially considering the complications

of starting a new program. The Audit of Program Management stated that client

service would be improved by indicating at the outset the estimated length of

time necessary thus allowing clients to plan accordingly.

With a complicated decision making mechanism as is in place for the AIF

program, without client service objectives in place, there exists a potential of

somewhat loosing sight of the client. Service objectives encourage organizations

to maintain a client focus. The Audit of Program Management encouraged the

Agency to define and communicate service objectives for future Rounds to

improve the effectiveness and efficiency of the decision-making processes.

The AIF Secretariat, including AIF Regional Coordinators and AIF Regional

Program Directors acknowledged that after the first two Rounds there was a

better understanding of the timelines involved and they committed to

communicating to proponents’ realistic timeframes for review, approval and

announcement of approved projects for future Rounds. Further, they committed

to continue to explore ways to improve client service.

During the follow-up audit, we found that dates have been established for future

rounds (III, IV and V) so that clients are aware, in advance, of future rounds.

Further, there was evidence that client service standards have been documented

and are published in the AIF Policy and Procedures Manual (Section 2316).

Conclusion

No recommendations.

Delegation of Authority – MAP recommendation 5

The Audit of Program Management examined Results for Canadians which

reveals that the Government’s Management Framework states that departments

and agencies must strive to achieve a balance. On one hand, they must be

flexible enough on the decision-making authority and administrative rules to

support initiative and common sense, while on the other hand be sufficiently

rigorous on standards and control systems to ensure clear accountability.

For the AIF program, following the Ministers’ initial approval of the projects to

receive support of AIF funding from Round I, the Ministers have authorized

ACOA officials to work with the proponents of the projects and conclude

contribution agreements for the projects. The Audit encouraged this delegation

in the post-approval stage to allow the Agency to be more responsive to clients.

Audit Directorate

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In addition, the Agency and the Ministers were encouraged to reach an

agreement on delegation of authority to address substantive amendments to the

contracts for the supported projects. In the Audit Directorate’s view, following the

Ministers’ approval of projects, Agency officials possess the necessary expertise

to work with clients and address substantive amendments within the Agency

without the need to return to the Ministers to obtain approval on amendments.

The Audit recommended that the Agency and Ministers reach an agreement to

provide a delegation of authority structure to address amendments to projects

subsequent to approval by the Ministers. This will allow the Agency to make

amendments to contracts thus providing timelier client service. We feel this is

particularly important for AIF projects since the projects are large and complex

and quick turnaround on project amendments may be critical to project success.

Management responded to the recommendations and reported that authority to

approve projects or project amendments that involve a substantive change in

project scope or funding rests with the Minister of ACOA. However, ACOA has

implemented an internal process to deal with amendments that do not

significantly affect the overall nature of a previously-approved project.

This

process will allow ACOA to address such amendments in a timely manner.

While not necessary, a degree of delegation to approve substantive amendments

would provide greater flexibility to manage the program with a greater level of

responsiveness and efficiency. Further, Management committed to continue to

monitor amendment activity and the impact of current delegation of authority on

efficiency of program delivery. Actions will be taken, if deemed necessary.

During the follow-up audit, we determined that authority remains with the Minister

of ACOA for project approval and amendments that involve a substantive change

in project scope or funding. ACOA has implemented an internal process to deal

with amendments that do not significantly affect the overall nature of a

previously-approved project.

This process allows ACOA to address such

amendments in a timely manner.

Further, administrative steps were taken to define substantive, significant and

administrative amendments. These definitions are identified in the AIF Operating

Guidelines (Section 2313) and, therefore, readily available to staff delivering the

AIF Program.

Conclusion

With Management’s commitment to continue monitoring amendment activity and

the impact of current delegation of authority on efficiency of program delivery,

there are no further actions required.

Audit Directorate

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OVERALL CONCLUSION

Following an examination of the activities performed by AIF Management since

the Audit of Program Management, we conclude that, ACOA has responded

satisfactorily to the recommendations made in the 2002-2003 Audit of Program

Management.

Further, there is evidence that AIF Management has taken advantage of the

lessons learned from the first two rounds and made improvements to their

Operating Guidelines in preparation of Round III.