SSL Field Unit Audit Final Report v3-e
Description
PARKS CANADA AGENCY AUDIT OF KEY FINANCIAL PROCESSES AT THE SAGUENAY ─ ST. LAWRENCE FIELD UNIT FINAL REPORT FEBRUARY 2005 Report tabled at and approved by A&E Committee Parks Canada Agency Audit of key financial processes Saguenay ─St. Lawrence Field Unit TABLE OF CONTENT EXECUTIVE SUMMARY.......................................................................................................3 1 OVERVIEW.......................................................................................................................6 1.1 Background ........................................................................................................................... 6 1.2 Objectives and Scope ............................................................................................................6 1.3 Methodology ......................................................................................................................... 7 1.4 Assurance Statement .............................................................................................................8 1.5 Conclusion............................................................................................................................. 8 2 OBSERVATIONS AND RECOMMENDATIONS ........................................................9 2.1 Management Control Framework ......................................................................................... 9 ...
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| Publié par | Voof |
| Nombre de lectures | 15 |
| Langue | English |
Extrait
PARKS CANADA AGENCY AUDIT OF KEY FINANCIAL PROCESSES AT THE SAGUENAY─ST. LAWRENCE FIELD UNIT FINAL REPORT FEBRUARY 2005 Report tabled at and approved by A&E Committee
Parks Canada Agency
Audit of key financial processes Saguenay─St. Lawrence Field Unit
TABLE OF CONTENT
EXECUTIVE SUMMARY.......................................................................................................3 1 OVERVIEW .......................................................................................................................6 1.1 Background ........................................................................................................................... 6 1.2 Objectives and Scope ............................................................................................................ 6 1.3 Methodology ......................................................................................................................... 7 1.4 Assurance Statement ............................................................................................................. 8 1.5 ......................................8................................................................................Cclonious..n..... 2 OBSERVATIONS AND RECOMMENDATIONS ........................................................9 2.1 Management Control Framework ......................................................................................... 9 2.2 ....................................................................................................eu..veneR.........................11 2.3 .12....................................................................................................tcartnoC.....gni................ 2.4 Acquisition Cards................................................................................................................ 15 2.5 Payments to Suppliers 17 ......................................................................................................... 2.6 Travel Expenditures ............................................................................................................ 18 2.7 Inventory ............................................................................................................................. 20 3 MANAGEMENT RESPONSE .......................................................................................22 Report tabled and approved by A&E Committee at June 27, 2005 meeting.
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E X E C U T I V E S U M M A R Y
Audit of key financial processes Saguenay─St. Lawrence Field Unit
BACKGROUND Parks Canada Agency (PCA) is conducting a series of cyclical audits of field units, service centres and the national office to review key financial, administrative and management practices. The audits focus on compliance with Treasury Board of Canada Secretariat (TBS) and PCA policies and practices. The audit of the Saguenay─St. Lawrence (SSL) Field Unit was conducted as part of this cyclical audit program.
OBJECTIVES AND SCOPE The objective of this audit was to confirm that due diligence is being exercised in key management processes at the SSL Field Unit and that the processes and controls in place are adequate to ensure compliance with TBS and PCA policies and practices. The scope of this engagement covered the following key financial process areas: Revenue, Contracting, Use of Acquisition Cards, Payments to Suppliers, Travel Expenditures and Inventory. The period from April 1, 2003 to March 31, 2004 as well as the current fiscal year were covered in this audit.
METHODOLOGY The audit methodology included a review of relevant background documentation, interviews with SSL Field Unit personnel, and transaction testing in the key financial process areas. The SSL Field Unit was visited during the period January 10 to 14, 2005, with an interview conducted by telephone on January 20, 2005 due to limited availability of SSL Field Unit personnel.
ASSURANCE STATEMENT In our opinion, sufficient audit work has been performed and the necessary evidence has been gathered to support the conclusions contained in this report.
CONCLUSION Overall, the SSL Field Unit has financial procedures in place that ensure accountability of financial transactions (revenue and payment to suppliers); however, due diligence could be strengthened with the definition and implementation of new procedures and controls related to Contracting, Acquisition Card Management, and Payment to Suppliers to ensure consistent compliance to Treasury Board Policies and PCA Policies.
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RECOMMENDATIONS
Audit of key financial processes Saguenay─St. Lawrence Field Unit
Contracting 1. The superintendent of the SSL Field Unit should ensure that a mechanism is in place to monitor contracting transactions against current policy, to ensure ongoing compliance to Treasury Board Policy on Contracting and to PCA contracting guidelines. 2. The superintendent of the SSL Field Unit should ensure that adequate training in procurement is provided to relevant personnel, and that key policies and procedures are maintained by the Field Unit to ensure ongoing compliance to TBS Policy. 3. The superintendent of the SSL Field Unit should ensure controls are in place to provide adequate clarity in the terms of reference and timelines for contracts to be in compliance with Treasury Policy on Contracting, specifically as it relates to terms of reference.
Acquisition Cards 4. The superintendent of the SSL Field Unit should ensure that adequate training be provided to the finance and administration staff as it relates to acquisition card management, monitoring, tracking (maintaining an active log of cards) and engaging the cardholder in active compliance with acquisition card policy through signing for receipt and acknowledgement of responsibilities for a-cards. 5. Following the training mentioned above, the superintendent of the SSL Field Unit should ensure that acquisition card monitoring procedures and controls be developed in line with TBS Policy and implemented to ensure ongoing compliance by cardholders.
Payments to Suppliers 6. The superintendent should ensure that, when the manager of finance and administration is acting in his stead, Section 33 Authority is transferred to a competent entity such as Quebec Region Office, and that corresponding SAP security be adjusted for that period, or provide an equivalent control to ensure compliance to Treasury Board Policy.
Travel Expenditures 7. The superintendent should ensure financial controls are in place to ensure that Section 34 is signed prior to releasing payment for travel expenses in compliance with Treasury Board Policy.
Inventory 8. The superintendent should consider implementing adequate controls to ensure the data integrity of the inventory database, and therefore control over the assets.
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9.
Audit of key financial processes Saguenay─St. Lawrence Field Unit
The superintendent should consider implementing a control to ensure that new acquisitions, when appropriate, be consistently inventoried whether the acquisition is made through procurement of goods by contract or through use of the acquisition card.
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1 O V E R V I E W
Audit of key financial processes Saguenay─St. Lawrence Field Unit
1.1 BACKGROUND Parks Canada Agency (PCA) is conducting a series of cyclical audits of key financial, administrative and management practices for all field units, services centres and the national office. There are 32 field units and four service centres in the PCA. Field units are groups of national parks, national historic sites and national marine conservation areas that are usually in proximity to one another. Their proximity allows them to share management and administrative resources. The service centres support the organization in a variety of professional and technical disciplines. Directors of the service centres and field units are responsible for ensuring that the policies, directives and guidelines issued by the Treasury Board of Canada Secretariat (TBS) and PCA are followed. Interis Consulting Inc. (Interis) conducted the audit of the Saguenay─ (SSL)St. Lawrence Field Unit as part of this cyclical audit program. The SSL Field Unit is responsible for the Saguenay─St. Lawrence Marine Park, located at the confluence of waters of the St. Lawrence Estuary and the Saguenay Fjord, with a surface area of 1,138 square kilometres. The park protects an exclusive marine environment, with sea bottom topography and the fjord; its main attraction is whale-watching. The Marine Park was established in 1998 and is managed jointly by the governments of Canada and Quebec. It has two co-superintendents (directeurs), one from PCA and one from its provincial counterpart. In practice, Quebec has a minimal presence on the working committee and has limited investment of resources in the park. The Marine Park operates largely through partnerships, and has a coordinating committee with representatives of the federal and provincial governments, regional municipalities, and the Montagnais Essipit aboriginal community, as well as representatives from the scientific community and groups concerned with conservation and protection of natural resources and education and interpretation of the natural environment.
1.2 OBJECTIVES AND SCOPE The objective of this audit was to confirm that due diligence is being exercised in key management processes at the SSL Field Unit and that the processes and controls in place are adequate to ensure compliance with TBS and PCA policies and practices. To achieve this, the audit reviewed the management control framework in place and covered the following key financial process areas: ♦Revenue; ♦Contracting; ♦Use of Acquisition Cards;
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Audit of key financial processes Saguenay─St. Lawrence Field Unit
♦Payments to Suppliers; ♦Travel Expenditures; and ♦Inventory. Transactions incurred during the period from April 1, 2003, to March 31, 2004 as well as the current fiscal year were covered in this audit.
1.3 METHODOLOGY The methodology used in conducting this audit included a visit to the SSL Field Unit and the execution of the following activities: ♦Review of relevant documentation including: le Plan dexploitation viable 2003-2004 à 2007-2008, Organization Chart, PCA Financial Resource Management Principles, PCA Delegated Signing Authorities Chart, TBS and PCA policies dealing with the above key financial process areas, and financial reports prepared by the manager, finance and administration; ♦Interviews with the SSL Field Unit management and personnel responsible for the key financial processes; ♦Examination of a sample of transactions in each of the key financial process areas. Upon completion of the fieldwork, a debriefing of our preliminary observations was held with the superintendent of the SSL Field Unit. Our observations and recommendations have been made in accordance with the Audit Reporting Rating System described below: Audit Reporting Rating System Controls are not functioning and/or fraudulent activities have been Unsatisfactory detected which will or have a material impact on both the financial statements and operations of the Agency. The control environment is lacking and/or has degraded since the last Significant Improvements audit and is a contributing factor to non-achievement of Needed program/operational objectives. Immediate management actions need to be taken to address the control deficiencies noted. Some controls are in place and functioning; however, several major Moderate Improvements issues were noted that could jeopardize the accomplishment of Needed program/operational objectives. Minor Improvements Many of the controls are functioning as intended; however, some Needed minor changes are necessary to make the control environment more effective and efficient. Controlled Controls are functioning as intended and no additional actions are necessary at this time.
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Audit of key financial processes Saguenay─St. Lawrence Field Unit
1.4 ASSURANCE STATEMENT In our opinion, sufficient audit work has been performed and the necessary evidence has been gathered to support the conclusions contained in this report.
1.5 CONCLUSION Overall, the SSL Field Unit has financial procedures in place that ensure accountability of financial transactions (revenue and payment to suppliers); however, due diligence could be strengthened with the definition and implementation of new procedures and controls related to Contracting, Acquisition Card Management, and Payment to Suppliers to ensure consistent compliance to Treasury Board Policies and PCA Policies.
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Audit of key financial processes Saguenay─St. Lawrence Field Unit
2 O B S E R V A T I O N S A N D R E C O M M E N D A T I O N S
2.1 MANAGEMENT CONTROL FRAMEWORK Controlled Controls are functioning as intended and no additional actions are necessary at this time.
CU R R E N TPR A C T I C E S The Field Unit refers to PCA policies for financial management. The Parks Canada financial signing authority chart is implemented at the Field Unit. Managers interviewed confirmed that training has been occurring in the audit period for new employees. A new training program for procurement is being developed and will be implemented in the spring of 2005. The finance clerk has been in place for two years and had received two days training in Quebec City on SAP. A contact person in Quebec City provides ongoing support to finance. The procurement officer and the manager in the finance and administration section have been at the SSL Field Unit for 12 years. A binder of directives, policies, and emails regarding procedures is maintained by the section as a reference manual. Managers rely on the services and expertise of Finance and Administration. The management committee meets on a regular basis, approximately once a month, and is attended by the managers. The management committee discusses SSL Field Unit planning, performance against objectives, operational issues, updates, and activities. Minutes of the management committee are posted for all staff to read. There is no documented risk management framework in place at the SSL Field Unit; however, the business plan (plan dexploitation viable) does identify key issues, mitigating practices and strategies. The business planning process currently in use is a recent initiative in Parks, and has been described by management as an excellent mechanism to establish the current status, define issues, set priorities and develop strategies to move forward. The SSL Field Unit budget for O&M is about $2 million, of which $1.2 million is salaries and $0.8 million is goods and services. The SSL Field Unit has approximately $800K per year for investment. The investment budget is set over a 5-year period. The 5-year business plan is updated yearly to reflect the current fiscal years projects and budgets, as well as to set targets for subsequent years. The budget is developed with the business plan (plan dexploitation viable). At the beginning of the year, managers (chefs de section) identify their needs for the year for operations/maintenance and capital investment within a budget envelope. The superintendent challenges managers and makes the final decision on the amounts allocated to the various sections. The manager, Finance and Administration, has a coordinating role in the budget planning exercise but does not have a challenge function. Managers are held accountable for achieving planned results with their budgets; variances are challenged. Variance reports are issued in August (for SSL Field Unit use only), and in September, December, January,
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February and March. The variance reporting has been described as the cornerstone of accountability at the Field Unit. Managers have indicated that they request expense reports more frequently than required to ensure they are on top of expenditures in anticipation of variance reviews. Performance appraisals provide a further control point for accountability and include a contract (between managers and the superintendent) for performance and achievements. Although performance appraisals are normally conducted on an annual basis, there have been a number of events that have given rise to delays in appraisals, such as the strike, which has resulted in a decision to have two eighteen-month performance appraisal periods and then resume annual performance appraisals. In addition to the business plan, variance reporting, management committee minutes, and performance appraisals, the following reports are also prepared: Year-end Achievements Report (Réalisation de la fin de lannée) and Year-end Evaluation Report (Rapport dévaluation de la fin de lannée). The SSL Field Unit has contingency plans in place for critical systems. The server is backed up once a week, SAP is backed up every day off site, and a paper file trail is in place. For security purposes, they have a safe for cheques, petty cash, and other items. Three individuals have access to the safe. One person manages all keys. All employees have a key to the building and locking times are understood. The SSL Field Units marine equipment is stored at a commercial storage location in winter and at a supervised commercial marina in summer. There is no alarm system at the Field Unit Office. Agency vehicles are parked in a public parking lot, not a closed compound.
OB S E R V A T I O N S The management control framework in place at the Field Unit is generally adequate to ensure stewardship of resources (financial, human resources, facilities, information technology systems). The audit has found some weaknesses with respect to acquisition card management, contracting, payment to suppliers, and inventory management. The details of those weaknesses are discussed in the relevant sections below, with corresponding recommendations. With respect to security, the following observation was made: •local school board in a building that is annexedThe Field Unit leases space from the to the local elementary school. It is located in the centre of the town of Tadoussac. The premises are secured with locks and there is an understanding among staff to lock the doors, which appeared to be implemented as part of the normal routine while the audit was being conducted. When the SSL Field Unit offices were being established in this facility, management at the Field Unit sought advice from the Quebec Region PWGSC facilities management representative on whether they should be installing an alarm system on the leased property. PWGSC indicated that it was not an obligation to install an alarm system, and that they should assess the risk and act accordingly. There had not been an incident of vandalism, break-in or theft and given the remote community and the value of the assets they are managing, they assessed the risk as low (an event is not likely and if it did occur, the impact would not be significant) and
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opted not to install an alarm system. It therefore appears that management at the SSL Field Unit acted with due diligence to manage SSL Field Unit resources and the security of facilities.
RE C O M M E N D A T I O N: None
2.2 REVENUE Controlled Controls are functioning as intended and no additional actions are necessary at this time.
CU R R E N TPR A C T I C E S The SSL Field Unit operates largely through partnerships with the rural county organizations (MRC) through the use of collaboration agreements. The partners deliver programs on behalf of the SSL Field Unit, collect visitor fees, and keep the fees under the terms of the agreement. The SSL Field Unit has revenues of approximately $80,000 per year. No revenues are taken directly from visitors, as the partners in the collaboration agreements collect and keep the revenue generated from the entrance fees. A target for visitor fees is set for the partner organizations; if the partner organization collects the target amount of visitor fees, it keeps the revenue. If it receives fewer visitor fees, the SSL Field Unit pays it the difference between the target and the actual revenue; if it receives more visitor fees, it pays the additional revenue to the SSL Field Unit. Audited financial statements are used as the control mechanism in assessing revenues collected through visitor fees. There is new source of revenue this year from the National Passes (cartes dentrée national); the partner organizations sold several on the SSL Field Units behalf. Revenue from invoiced sources includes: •Docking fees for commercial boat cruise companies; •of park buildings (e.g., Directors house);Rental •Commercial boating permits for the park; •Rental of space for a souvenir boutique; and, •Sales by partners. Two employees share the file and mailroom responsibilities on a part-time basis. When mail is received, the finance clerk and one of the file room clerks open the mail together. If the envelope contains a cheque, a photocopy of the cheque is made and the photocopy is placed in the payments in waiting file (paiements en attente). Cheque information is recorded in the
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