Horizontal Internal Audit of the Grants and Contributions Management Control Framework in Small Departments and Agencies (SDAs) - Observations and Recommendations

The objective of this audit was to provide assurance that the governance, risk management, and control processes over grant and contribution programs are being executed in compliance with the Policy on Transfer Payments.

Observations Recommendations Departmental Action Plan
and Response
  • Standard checklists or tools used for assessment were not provided for review.
  • Some electronic checklists to track reporting requirements and payments were found inconsistently in files.
 3. SDAs should develop checklists and other tools to support standardized processes. Agreed. CanNor's DG Operations is in the process of developing a checklist and tools to ensure that we are demonstrating consistency in the approach to our project assessment. This will become a standardized practice.

To implement the DG Operations will host a national workshop by videoconference with key Economic Development Officers and the checklist and tools will be finalized by December 2011.
  • There is no documented evidence of program performance monitoring.
 4. SDAs should periodically report to management on program performance based on established performance indicators. Agreed. n the months following the audit, CanNor completed a comprehensive Performance Measurement Framework (PMF) in close consultation with Treasury Board Secretariat and which was approved by CanNor's President September 2010.

CanNor now has a full year of program delivery to form the baseline of performance indicators. The PMF will be considered in the review of our program delivery process currently taking place and the DG Operations, will ensure it is operational by November 2011.

The Vice President Policy will ensure that management engages in an annual review of PMF generated performance results as part of the Agency's annual planning process.
  • Criteria for business plan assessment for the Aboriginal Business Development Program (ABDP), are not publicly available.
  • Detailed ABDP and Community Economic Development Program (CEDP) program information is not available on the CanNor website; visitors are redirected to Aboriginal Affairs and Northern Development Canada's (AANDC) website for information. Program names are not consistently used across different pages.
 5. SDAs should ensure that descriptions of the program assessment criteria are publicly available in order to provide greater clarity for those applying to a grant or contribution program to be able to demonstrate how they meet these criteria. Agreed. CanNor's DG Operations makes available to all potential and actual program applicants the business plan and assessment criteria for ABDP.

CanNor's Vice-President Policy will ensure the detailed ABDP and CEDP program information will be available on the CanNor website no later than December 31, 2011.
  • While standard templates were used for project applications and operational plans, the amount of information required and provided for approval was inconsistent. In many files, total project costs did not include breakdowns or explanations of estimated expenses, and project summaries were brief or missing.
 6. SDAs should assess applications from potential recipients based on pre-established assessment criteria. Agreed. CanNor's DG Operations will confirm program criteria with all officers and apply those criteria consistently with the use of checklists and tools.

This will become a standardized practice and will be integrated to the review process. To implement the DG Operations will host a national workshop by videoconference with key Economic Development Officers and the checklist and tools will be finalized by December 2011.
  • Although project approvals were generally documented for CEDP, multiple files did not have supporting documentation to justify the awarding of the contribution.
 7. SDAs should document their assessment of recipient applications and formal recipient approvals to provide greater transparency in the approval process. Agreed. To improve the situation CanNor's DG Operations has ensured that a file checklist is used so that relevant documentation is kept in the associated recipient files. All application assessments and approvals are available on the recipient files starting April 1, 2011.
  • No criteria and tools for risk assessment and ranking were provided for review.
  • There is no documented evidence of risk thresholds or criteria used for monitoring.
  • There is no evidence of recipient risk assessments being performed in the files reviewed.
  • Documented evidence of monitoring of recipients was inconsistent.
 8. SDAs should develop and implement recipient risk assessment strategies to enable more efficient use of resources in monitoring and reporting on recipients. SDAs should collaborate with other departments and agencies to share tools and guidance for risk assessment. Agreed. CanNor has a risk assessment strategy that aligns with the new Treasury Board Policy on Transfer Payments. Effective April 1, 2011 all recipients have risk assessments completed before entering into Contribution Funding Arrangements. CanNor's DG Operations has established guidelines, tools and an ongoing training plan for recipient risk assessment for Senior Management, project officers and financial officers.

Prepared: February 2011

Updated: October 11, 2011

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