Management Letter for the Audit of the Canadian Northern Economic Development Agency 2011

May 2011
Office of the Comptroller General

Table of contents

Management Letter

This management letter is presented to the management of the Canadian Northern Economic Development Agency. It presents the detailed findings and recommendations as a result of the audit conducted within the organisation by the Office of the Comptroller General. The audit covered business processes and transactions from fiscal year 2010-2011 related to the audit objective.

These results will form the basis for the audit report which will be presented to the Small Departments and Agencies Audit Committee for recommendation to your President for approval. As a result of this audit, the Canadian Northern Economic Development Agency will be requested to develop a management action plan to address the recommendations provided in this management letter. The management action plan will require sign-off from your President showing commitment that these actions will be taken. These planned actions will also be discussed at the Small Departments and Agencies Audit Committee meeting.

I thank you in advance for your timely cooperation.

Gibby Armstrong
Executive Director, Audit Operations
Office of the Comptroller General

Audit Objective

The objective of the audit was to ensure that controls over financial management and reporting are effective and are conducted in a manner that is compliant with corresponding legislation, policies, and directives at the Canadian Northern Economic Development Agency (CanNor).

This management letter is broken into two parts. The first part relates to the business processes in place to forecast spending, monitor activity, and report on the financial situation. The second part relates to compliance with Treasury Board policies and directives in the area of financial management.

Detailed Findings and Recommendations

Part 1

Controls over financial management and reporting, include business processes in place to budget for and forecast spending, monitor activity, and report on the financial situation, in the appropriate fiscal year. These need to be based on reliable and complete information and sound analysis of that information.

Forecasting:

Appropriate forecasting procedures were not in place at CanNor. In fiscal year 2010-11 budgets were provided to revenue center managers for the year along with regular updates of year-to-date expenditures, however no formal process was in place for estimating remaining expenditures to year-end. The lack of formal forecasting procedures may be attributable to the organization's short existence in addition to significant turnover in the finance management directorate. Without a strong financial management framework that includes forecasting requirements, management is provided with unreliable financial information for decision-making and the Department is exposed to financial risks.

CanNor stayed within the budget allocated to it through the parliamentary appropriations process for fiscal year 2010-11. Aboriginal Affairs and Northern Development Canada (AANDC) provided corporate services to CanNor during the year.

Payables at Year End (PAYE):

Two significant errors were found in the reporting of PAYE in CanNor's financial statements as at March 31, 2010.

The first error involved the understatement of liabilities, by approximately $4.4M, as a result of the exclusion of PAYE related to grants and contributions for the Nunavut region. The misstatement originated from the incorrect extraction of financial data from the AANDC financial system for the preparation of the financial statements.

The second discrepancy resulted in an overstatement of PAYE of approximately $2.3M for four grant and contribution recipient balances in fiscal year 2009-10. Given that funds could not be issued for these recipients in fiscal year 2009-10, reprofiling requests were issued to transfer funds from the 2009-10 fiscal year to the 2010-11 fiscal year. Due to human error, these amounts were also incorrectly set up as PAYE in fiscal year 2009-10. As a result, these amounts were recorded as expenditures in both fiscal years 2009-10 and 2010-11. The impact of this is that grants and contributions were overstated in fiscal year 2009-10.

Given that PAYE for fiscal year 2010-11 were not finalized at the time of the audit, only preliminary PAYE were reviewed along with the processes used to determine them. Although such processes are not formal, they are appropriate in order to obtain a reasonable estimate of PAYE.

System Access:

Although CanNor finance staff has access to OASIS, the main financial system, they have only limited access to other relevant financial management systems. CanNor uses AANDC's grant and contribution management system known as the First Nations and Inuit Transfer Payment (FNITP) system. Although program staff in each region can manage their own grants and contributions in FNITP, finance staff from CanNor head office did not have sufficient training or access to FNITP to perform financial reporting of grants and contributions for any of the regions' operations. CanNor also uses AANDC's salary management system known as Oasis Salary Management System (OSMS). FNITP and OSMS are AANDC systems and CanNor data is stored in these systems as part of the corporate services agreement with AANDC. Appropriate training and access by CanNor finance staff is essential in order to ensure that the financial information from these systems is accurate and can be reconciled to OASIS.

Pursuant to this audit, training and access is now being given to CanNor finance staff to enable more efficient and effective practices in the future.

Memorandums of Understanding (MOU):

CanNor has a variety of MOUs or service agreements with other federal entities. Public Works and Government Services Canada provides accommodation and relocation services as well as human resources support in the area of staffing. CanNor also has an agreement with the Public Service Commission for staffing but it is not used. Justice provides legal support as and when needed. AANDC provides corporate services support, both through their head office in Ottawa and their regional office in Iqaluit.

During the course of the audit it was evident that the level of understanding of the roles and responsibilities in these MOUs and service agreements was not sufficient. Some of the services stipulated in the agreements had changed, and nothing formal was documented to record the effect of the changes. Further complexity was added with high turnover in the finance management directorate where new employees that came in were not aware of the impacts of changes made by prior employees.

CanNor must take action to clarify the roles and responsibilities of all their service providers. In doing so, CanNor must consider the fact that its head office will soon be relocated to Iqaluit. It would be prudent for CanNor to consider how service agreements will work most effectively with the location of their head office and design roles and responsibilities in consideration of this situation.

The largest MOU for CanNor is with AANDC. The current MOU remains unsigned by the minister or deputy minister of CanNor, although services were rendered during the 2010-2011 fiscal year. It is important that service agreements be signed to confirm and officially acknowledge the roles and responsibilities of respective parties to provide for clarity, accountability, and appropriate costing.

Recommendations:

  1. CanNor should develop and implement a financial management framework which includes, but is not limited to, processes and controls over forecasting, PAYE, and financial reporting.
  2. CanNor should revise the Fiscal Year 2009-10 financial statements in a timely manner.
  3. CanNor should obtain all necessary training and access to FNITP and OSMS.
  4. CanNor should design effective business processes for financial management for its head office in Iqaluit. This should include consideration of the most effective MOUs or service agreements with other federal entities to support CanNor's operations.

Part 2

Compliance with Treasury Board Policies and Directives
Legend
Met Greater than or equal to 99% compliance.
Met with exception Greater than or equal to 90% and less than 99% compliance.
Partially met Greater than or equal to 80% and less than 90% compliance.
Not met Less than 80% compliance.

Financial Management

Directive on Delegation of Financial Authorities for Disbursements
Criteria Findings Compliance
i) Delegation instruments are appropriate, current, and approved in accordance with the directive. CanNor has updated its delegation of authority chart three times since its inception in 2009. Differences were noted between the delegation chart and the signature specimen cards from 2009-2010 and early 2010-2011 that could have exposed CanNor to risk of exceeding authorities.  Following the latest delegation chart update, all signature specimen cards agree with the authorities, with the exception of one difference which is more restrictive. Met
ii) Employees receive appropriate training in accordance with requirements pertaining to financial management, contracting, and human resources There was no evidence of completion of training on file for 16 of 31 individuals with delegated authority.

Human Resources (HR) Sub-delegation forms indicated that required training for delegation of financial authorities was taken for five employees; however no evidence of course completion was retained on file.		 Not met
Recommendation: 5) CanNor should ensure managers and executives receive the required training and validate their knowledge as required prior to exercising their delegated authority. CanNor should also maintain a record of completion of all training by individuals with delegated authority.
Overall Compliance: Not met
 
Directive on Expenditure Initiation and Commitment Control
Criteria Constatations Conformité
i) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). Commitments were done by someone with the delegated authority to do so, and are recorded at the value expected to be incurred at the time of expenditure initiation for 51 of the 215 files reviewed.

The individual commitment was not approved by someone with proper delegated authority for:
  • Two of the seven acquisition card statements with purchases reviewed;
  • 19 of the 47 contracting files reviewed;
  • 14 of the 50 travel files reviewed;
  • Two of the 20 hospitality files reviewed;
  • One of the three membership files reviewed; and
  • 36 of the 88 HR and payroll files (including performance pay and casuals) reviewed.
The individual commitment was not approved prior to the event for:
  • Two of the seven acquisition card statements with purchases reviewed;
  • 21 of the 47 contracting files reviewed;
  • 11 of the 50 travel files reviewed;
  • Four of the 20 hospitality files reviewed;
  • One of the three membership files reviewed; and
  • 55 of the 88 HR and payroll files (including performance pay and casuals) reviewed.
The individual commitment was not recorded in the financial system for:
  • 24 of the 24 acquisition card statements with purchases reviewed;
  • 11 of the 47 contracting files reviewed;
  • 50 of the 50 travel files reviewed;
  • 20 of the 20 hospitality files reviewed;
  • Three of the three membership files reviewed; and
  • Two of the 88 HR and payroll files (including performance pay and casuals) reviewed.
Please refer to each individual Directive or Policy in this management letter for more detail.		 Non Met
Recommendations:

6) CanNor should ensure that expenditure initiation and individual commitments are approved by an individual with the delegated authority to do so before expenses are incurred and recorded in the financial system
Overall Compliance: Not met
 
Directive on Account Verification
Criteria Findings Compliance
i) The performance of account verification is effective and is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (Section 34 of the Financial Administration Act). Account verification was performed by someone with the delegated authority to do so, was accomplished on a timely basis, and verified the correctness of the payment requested for 67 of the 173 files reviewed.

Account verification was not performed by an individual with the authority to do so, or by an individual not directly or indirectly benefiting from the expenditure for:
  • Eight of the 28 acquisition card statements reviewed;
  • One of the accountable advance transactions reviewed;
  • 16 of the 44 contract files reviewed;
  • Ten of the 50 travel files reviewed;
  • Two of the two travel card files reviewed;
  • Four of the 23 hospitality files reviewed; and
  • Three of the 14 payroll files (overtime) reviewed.
Receipts or invoices as proof of execution and cost were missing for:
  • Five of the 28 acquisition card statements reviewed;
  • 16 of the 44 contract files reviewed;
  • Three of the 50 travel files reviewed;
  • Two of the two travel card files reviewed;
  • Two of the 14 payroll files (overtime) reviewed.
Account verification was not performed on a timely basis for:
  • 21 of the 28 acquisition card statements reviewed;
23 of the 44 contract files reviewed;
  • 13 of the 50 travel files reviewed;
  • 17 of the 23 hospitality files reviewed;
  • Two of the three membership fees files reviewed; and
  • Four of the 14 payroll files (overtime) reviewed.
Please refer to each individual Directive or Policy in this management letter for more detail.		 Not Met
ii) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
Recommendation:

7) CanNor should ensure that expenses are certified by an individual with the delegated authority to do so on a timely basis, and by someone who does not directly or indirectly benefit from the expenditure.

8) CanNor should ensure that proof of execution and cost are retained, and if missing, justification for purchase is clearly documented on file.
Overall Compliance: Not met
 
Directive on Acquisition Cards
Criteria Findings Compliance
i) Acquisition cards attribution is controlled and cardholders have acknowledged their responsibility in writing. Card holder agreements were the method by which cardholders acknowledged their responsibility in writing. There is no indication that CFO pre-approval is sought before distributing acquisition cards to individuals.

CanNor provided additional documentation after the audit was complete and as a result, signed card holder agreements were on file for three of 13 card holder agreements reviewed.

Nine card holder agreements were not on file and one card holder agreement was on file, but unsigned.		 Not met
ii) Funds commitment availability are certified adequately, by someone with the delegated authority prior to the expenditure initiation at the value expected to be incurred (Section 32 of the Financial Administration Act). CanNor provided additional documentation not available during the original file review.  One file was missing and two files were in AANDC post-audit during the original file review.

24 of the 32 statements reviewed included purchase transactions for the month in question.

Of the 24 statements, seven included purchases such as training, conference fees, and hospitality that require expenditure initiation under separate Treasury Board policies. Appropriate approval was not on file for five of the seven statements containing these types of purchases.
  • For one statement, expenditure initiation was completed after expenses were incurred for hospitality and training;
  • For two statements, hospitality forms were not on file for food and beverage purchases; and
  • For two statements, expenditure initiation was not on file for conference fees.
Please refer to Recommendation 6.		 Not met
iii) The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). CanNor provided additional documentation not available during the original file review.  One file was missing and two files were in AANDC post-audit during the original file review.

28 of the 32 statements reviewed included purchases or outstanding balances requiring account verification.

For eight of 28 statements reviewed (including three statements with outstanding balances but no transactions), account verification was not performed by the appropriate delegated authority.
  • Four statements did not have account verification on file;
  • For one statement, account verification was not performed by the appropriate delegated authority; and
  • Three statements were signed by individuals who directly benefitted from purchases on the statement.
For 21 of 28 files, account verification was not conducted on a timely basis.
  • 17 of the 21 statements were paid after the statement due date; and
  • Four of the 21 statements did not have account verification on file.
Please refer to Recommendation 7.

Five of the 28 files reviewed were not properly supported with proof of execution and cost.

Please refer to Recommendation 8. 		Not met
iv) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
v) Acquisition cards are to be used solely for authorized government business related to purchases of goods, services, and pre-approved hospitality expenses. CanNor provided additional documentation not available during the original file review.  One file was missing and two files were in AANDC post-audit during the original file review.

Acquisition cards were used for non-authorized government business related purchases for two of the 28 statements reviewed.

Both of these purchases were for grocery items that were not supported by a hospitality claim.		 Met with Exception
Recommendations:

9) CanNor should ensure that CFO approval, whether case by case or by approving general limits, is sought prior to distributing acquisition cards to individuals.

19) CanNor should obtain written acknowledgement of responsibilities and obligations from acquisition card holders prior to issuing an acquisition card and keep documentation on file.

11) CanNor should ensure that acquisition cards are used solely for authorized government business related to purchases of goods, services and pre-approved hospitality expense.
Overall Compliance: Not Met
 
Directive on Accountable Advances
Criteria Findings Compliance
i) Accountable advances are established only when required and used solely for the purpose for which they were issued. Accountable advances have been set up for appropriate reasons and are used for the purpose for which they were issued in all cases reviewed. Met
ii) Accountable advances are properly safeguarded, accounted for, and reconciled. Accountable advances are properly safeguarded, accounted for, and reconciled. Met
iii) Adequate separation of duties exists with respect to advances. Adequate separation of duties exists with respect to advances. Met
iv) Funds commitment availability are certified adequately, by someone with the delegated authority prior to the expenditure initiation at the value expected to be incurred (s.32 FAA). Petty cash is paid out on a refund basis. N/A
v) The performance of account verification is effective, is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (s.34 FAA). The performance of account verification is effective, and timely.

It was performed by someone with the appropriate delegated authority in eight of the nine files reviewed.

In one file the transaction was coded to two fund centres. The individual who performed account verification did not have authority to sign for one of the cost centres.

Please refer to Recommendation 7.		 Partially met
vi) The payment and settlement is carried out effectively, by someone with proper delegation of authority and for the correct dollar amount and to the right vendor (s.33 FAA). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
Recommendations:  None
Overall Compliance: Met with Exception

Contracting

Contracting Policy
Criteria Findings Compliance
i) Requirements Definition. The statement of requirements was defined before bids were solicited. Contract requirements were defined before bids were solicited in the statement of requirements in 34 of the 47 files reviewed. Not Met
ii) Procurement Vehicle for Non-Competitive Contracts. There is documentation on file to support the justification for non-competitive procurement contracts in accordance with section 6 of government contract regulations. 21 of the 47 files reviewed were awarded as sole-sourced contracts.

The required documentation to justify non-competitive procurement contracts was missing in 17 of the 21 sole-sourced contracts reviewed.

For one of the 21 sole-sourced contracts reviewed, evidence of contract splitting was found. Two contracts were awarded to the same service provider for the same period of time.  The second contract included a deliverable identical to one from the first contract. The second contract was intended to bridge between the existing contract with this contractor and the time to put a new one in place through a competitive process.		 Not Met
iii) Procurement Vehicle for Competitive Contracts. For competitive contracts, appropriate tendering processes for bids are used including the use of mandatory standing offers and supply arrangements, or government electronic tendering system. For competitive contracts, appropriate tendering processes for bids were used. Where applicable, contracts used existing standing offers or supply arrangements.  Met
iv) Evaluation. Bid evaluation criteria were provided on request for proposal documents and were used for contractor selection in an open, fair and transparent manner. For one of the competitive contract reviewed, the bid selection method and evaluation criteria were not clearly outlined in the bid solicitation document before the request for proposal was issued.

The evaluation of proposals and contractor selection were not conducted in accordance with pre-established criteria and no bid evaluation report or evidence of evaluation of the proposals was found on file.		 Not Met
v) Contract Award. Individual commitments and contracts are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation, and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). For 28 of the 47 contracting files reviewed, expense initiation was approved by the appropriate authority given the dollar amount and the nature of the contact.

For 37 of the 47 contracts reviewed, commitments were recorded at the value expected to be incurred.

For 26 of the 47 contracting files reviewed, expense initiation was approved prior to the contract award.

Please refer to Recommendation 6.

For 39 of the 47 contract files reviewed, there was a copy of the signed contract on file.		 Not Met
vi) Contract Approval and Management. Contracts and contract amendments were approved prior to the receipt of any goods or services or the expiration of the original contract and supporting documentation is retained on file. Contracts and contract amendments were approved prior to the receipt of any good or service or the expiration of the original contract, and supporting documentation is retained on file in 25 of the 46 files reviewed.

Supporting documentation was missing for 16 of the 46 contracts reviewed.

Four of the 46 contracting files reviewed contained a contract that was issued after the goods or services were received.
One contract amendment was issued nine days after the contract expiry date.

Justification was on file for all contract amendments reviewed.		 Not Met
vii) Account Verification. The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). Account verification was performed by someone with the delegated authority to do so in 28 of the 44 files reviewed.

Account verification was administered on a timely basis in 21 of the 44 files reviewed.

Please refer to Recommendation 7.

Invoices were properly supported with proof of execution and cost in 28 of the 44 files reviewed.

Please refer to Recommendation 8. 		Not Met
viii) Contract Payment. The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was completed (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
ix) Proactive Disclosure. Contracts valued at over $10,000 are adequately disclosed publicly. 20 out of the 47 contracting files reviewed were over $10,000. Five of 20 files were not proactively disclosed. Not Met
Recommendations :

12) CanNorshould develop business processes and keep documentation to ensure that:
  • bid selection method and evaluation criteria are clearly outlined in the bid solicitation document before the request for proposal is issued;
  • there is justification for non-competitive procurement contracts;
  • the evaluation of proposals and contractor selection are conducted in accordance with the pre-established criteria as stated in the request for proposal and in an open, fair and transparent manner;
  • a copy of the signed, written contract is on file;
  • contracts are issued before goods or services are received;
  • contract amendments are signed before the original contracts expire; and
  • contracts with a value over $10,000 are proactively disclosed.
13) CanNor should ensure that contracting officers are aware of contracting rules so that contract splitting does not occur.
Overall Compliance: Not met

Travel and Hospitality

National Joint Council Travel Directive
Criteria Findings Compliance
i) Government business travel expense are managed to achieve fair, reasonable, and modern travel practices CanNor provided additional supporting documentation for travel claims and proof of execution and cost that was not available during the original file review.

Documentation to justify travel was on file in 44 of 50 files. Of the files without proper justification:
  • Three of the files did not have valid Travel Authority and Advance (TAA) forms on file;
  • One file listed locations to be visited and did not give a reason for travel; and
  • Two of the files did not have sufficient information on file to verify local travel was for government business.
For 12 of the 50 files, travel was post-authorized. Ten of the 12 applicable files did not have justified post-authorized travel requests:
  • One file included a post-authorized TAA for travel with no justification on file;
  • Three files were unable to be assessed, as no TAA was on file; and
  • Six files were unable to be assessed, as Section 32 was not dated.
For seven of the 50 files reviewed, per diems for certain meal expenses were reimbursed either at an amount lower or higher than the rate prescribed in the National Joint Council Travel Directive.

In two of the 50 files reviewed, expenses for accommodations were not claimed. For 15 of the remaining 48 files, accommodations used were not from the pre-approved

government supplier list or costs were not within appropriate limits:
  • 14 of the files included accommodations that were not on the pre-approved government supplier list with no justification for exceptions on file; and
  • One file did not provide a valid reason for the employee's overnight stay.
20 of the 50 files included the use of rental cars. For 16 of 20 files reviewed, rental vehicles, parking and kilometre rates respected limits. Of the four files that did not meet policy standards:
  • One file had a rental vehicle and rate charged that did not respect limits and was not justified;
  • One file had kilometric rates that were higher than the provincial rate specified;
  • One file did not provide justification for the need to use a rental car; and
  • One file did not provide justification for the use of a rental car and the rental vehicle and rate charged did not respect limits.
47 of the 50 travel claims included flight arrangements. For eight of these files flight arrangements were either not within appropriate limits or were not able to be assessed due to lack of information on file:
  • In six files, economy class travel could not be confirmed because supporting documentation was not kept on file;
  • For one file, an executive class flight was taken when it was not appropriate; and
  • For one file, the airfare purchased was higher than the original TAA and included a stop-over for personal leave. There was no justification for this price increase or support for the stop-over on file.
In five of the 47 files with flight arrangements, departmental travel cards were not used to the extent possible to prepay travel arrangements.

One file did not include any expenses for reimbursement such as accommodations, rental cars, or taxi fares. For the remaining 49 files, non-prepaid arrangements for two files were not supported with receipts or attestation:
  • One file did not have sufficient information on file justifying overnight stays and car rental; and
  • One file lacked sufficient information on file to verify local travel was for government business.
 Not Met
ii) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). CanNor provided additional supporting documentation for travel claims and proof of execution and cost that was not available during the original file review.

36 of the 50 files reviewed were signed by an individual without the appropriate budget authorization:
  • One file was not signed;
  • For three files, no TAA was on file; and
  • Ten files were signed by an individual without appropriate budget authorization.
For 11 of 50 files reviewed, expenditure initiation was not approved prior to the event:
  • In six files, the expenditure initiation was not dated;
  • In three files, there is no valid TAA in the travel files;
  • In one file, the travel authorization is dated after the travel without justification; and
  • In one file, the flight was booked before travel was authorized.
Commitments were not recorded for any of the 50 travel files reviewed. Please refer to Recommendation 6. 		Not Met
iii) The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). CanNor provided additional supporting documentation not available during the original file review including one signed (Section 34) travel expense claim that was previously noted as unsigned

In 40 of the 50 files reviewed, account

verification was performed by the appropriate delegated authority:
  • In eight files, account verification was completed by an individual who did not have appropriate signing authority for the budget to which the expense was coded; and
  • In two files, account verification was not signed.
For 37 of the 50 files reviewed, account verification was accomplished on a timely basis:
  • For nine files reviewed, account verification (confirmed through date of signature or entry into the financial system) was performed more than 30 days after the end of travel;
  • For one file, the expense was entered into the financial system before or during the travel, although it was not a travel advance;
  • For one file, the individual who performed account verification dated it before the travel took place; and
  • For two files reviewed, account verification was not on file.
Please refer to Recommendation 7.

For 47 of 50 files reviewed, adequate proof of execution and cost to verify the correctness of the payment was retained on file:
  • One file did not contain sufficient information to verify that costs were incurred during government business;
  • Two files did not contain flight or travel information to support the need for an overnight stay or car rental.
Please refer to Recommendation 8.		 Non Met
iv) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
iv) All travel expenses for designated senior level Government of Canada employees are proactively disclosed. Four of five files reviewed for travel expenses for a designated senior level Government of Canada employee were proactively disclosed. Partially met
Recommendations :

14) CanNor should document and keep on file the purpose of business travel so that it is fully justifiable.

15) CanNorshould develop business processes and keep documentation to ensure that:
  • post-authorized travel has documented justification on file;
  • government suppliers are used when available and justify on file use of other suppliers when not available;
  • employees are reimbursed for meals and incidental expenses when on official travel status, and should do so in a manner consistent with the allowance rates within the National Joint Council Travel Directive;
  • flight arrangements respect the appropriate limits;
  • supporting documentation is on file before paying travel expenses;
  • departmental travel cards are used when possible; and
  • travel by the deputy head is proactively disclosed in a timely manner on the CanNor website.
Overall Compliance: Not met

 

Directive on Travel Cards and Travellers Cheques
Criteria Findings Compliance
i) Travel cards are appropriately distributed and cardholders have received appropriate training or guidance and have acknowledged their responsibility in writing. The cardholder agreement and request for travel card documents provided guidance on the responsibilities of the cardholders and was the method by which cardholders acknowledged their responsibility in writing.

A signed travel card agreement and request for travel card was on file for 15 of the 22 files reviewed.		 Not met
ii) The performance of account verification is effective, is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (Section 34 of the Financial Administration Act). Account verification was performed by someone with the delegated authority to do so and was accomplished on a timely basis. However in both statements reviewed, account verification was performed by an individual for whom a travel transaction was included in the statement. No

countersignature was on file for this transaction.

Please refer to Recommendation 7.

Supporting documentation to verify expenditure correctness was on file for 31 of 75 transactions reviewed;
  • 23 transactions did not have supporting documentation on file to enable verification that the flight was taken;
  • 21 transactions were unable to be verified, as the travel claim was not found in the travel file.
Please refer to Recommendation 8. 		Not met
iii) The payment and settlement is carried out effectively, by someone with proper delegation of authority, for the correct dollar amount and to the right vendor (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
iv) Travellers cheques and advances are used in valid circumstances. CanNor does not use travellers cheques N/A
Recommendation :

16) CanNor should ensure that requests for travel cards and card holder agreements acknowledging responsibilities and obligations are kept on file.
Overall Compliance: Not Met
 
Hospitality Policy
Criteria Findings Compliance
i) Hospitality events are planned and conducted in an economical and appropriate way to facilitate government business, consistently with the events circumstances. CanNor provided additional documentation not available during the original file review.  One file was missing, two invoices were not on file, and two files were in AANDC post-audit during the original file review.

For 20 of the 23 files reviewed, hospitality planning and approval was done by CanNor while the other three were for Deputy Minister

events organized by Privy Council Office and therefore were not reviewed during the conduct of this audit.

19 of the 20 hospitality files reviewed were planned in an economical, consistent and appropriate manner while respecting the financial limitations.
  • The hospitality request form was not on file for one of the 20 files.
Although the Section 32 approval required by the policy was not on file until after the event for two of the 20 files reviewed, a manager pre-approval was on file; therefore, these two files were not counted as errors against this criterion.

All meal allowances complied with the limits prescribed in the policy.		 Met with exception
ii) Individual commitments are done by someone with the delegated authority to do so, are recorded at the time of expenditure initiation where possible, and are recorded at the value expected to be incurred (Section 32 of the Financial Administration Act). CanNor provided additional documentation not available during the original file review.  One file was missing, two invoices were not on file, and two files were in AANDC post-audit during the original file review.

For two of the 20 files reviewed, expenditure initiation was not performed by the appropriate authority.
  • For one file, the claimant requests and approves his/her own hospitality and then performs account verification on the expense; and
  • For one file, the hospitality request forms were not on file.
For five of the 18 files reviewed, expenditure initiation was performed after the event took place.
  • In four files, expenditure initiation was not completed until after the event took place, two of which were not done until after AANDC rejected the claims for lack of Section 32 approval; and
For one file, the hospitality request forms were not on file.

Commitments were not made in the financial system at the expected value to be incurred for any of the 20 hospitality files reviewed.

Please refer to Recommendation 6.		 Not met
iii) The performance of account verification is effective and done by someone with the delegated authority to do so, is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). CanNor provided additional documentation not available during the original file review.  One file was missing, two invoices were not on file, and two files were in AANDC post-audit during the original file review.

Account verification was performed by someone with the delegated authority to do so, was accomplished on a timely basis, and verified the correctness of the payment requested for six of the 23 files reviewed.

Account verification was not performed by someone with the delegated authority to do so for four of the 23 files:
  • For three of the 23 files reviewed, account verification was performed by an individual who directly or indirectly benefited from the expense; and
  • For one file, the hospitality request forms could not be located and authority could not be confirmed.
For 17 of the 23 files reviewed (including the four files noted above), account verification was not accomplished on a timely basis.
  • Two of the 17 files went through AANDC pre-audit and due to missing expenditure initiation approval, they were not processed by AANDC until a section 32 was signed;
  • The invoice for one of the 17 files was lost in the mail and the individual's card on which the purchase was made was cancelled, delaying the payment for months until a reconciliation of the acquisition card was done;
  • For nine of the 17 files, account verification was performed after the invoice due date or greater than 30 days;
For two of the 17 files, account verification was performed on the invoice prior to the account verification on the hospitality claim;
  • For two files, account verification was not dated; and
  • For one file, the hospitality request forms could not be located and timeliness could not be confirmed.
Please refer to recommendation 7.

Invoices or proof of execution was on file for all 23 files reviewed.		 Not met
iv) The payment and settlement authority is carried out by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
v) All hospitality expenses for designated senior level employees are proactively disclosed. None of the hospitality expenses reviewed required proactive disclosure. N/A
Recommendation: None
Overall Compliance: Not Met

 

Human Resources

Policy on Membership Fees
Criteria Findings Compliance
i) Memberships and registration fees are paid by the organization or reimbursed to the employee in eligible circumstances. All membership files reviewed were relevant to the employee's duties and the organization's mandate. Met
ii) Memberships and registration fees are approved by the appropriate delegated authority. One of the three membership files reviewed did not have any documentation of approval by an individual with appropriate delegated authority. Not met
iii) Memberships and registration fees are properly coded. Membership files reviewed were properly coded Met
iv) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation, and substantiating documentation is retained on file (Section 32 of the Financial Administration Act).

Documentation of expenditure approval was not on file for one of the three files reviewed.

No commitments were recorded in the financial system for any of the files reviewed.

Please refer to recommendation 6. 		Not met
v) The performance of account verification is effective, is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (Section 34 of the Financial Administration Act). Account verification was performed by someone with the delegated authority to do so, but was not performed on a timely basis for two of three files reviewed:
  • In one instance, the account verification was signed and dated after the due date of the MasterCard statement on which the amount was charged; and
  • In one file, the account verification was signed and dated 19 months after the invoice date.
Please refer to recommendation 7. 		Not met
vi) The payment and settlement is carried out effectively, by someone with proper delegation of authority, for the correct dollar amount and to the right vendor (Section 33 of the Financial Administration Act). Payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
Recommendations:

17) CanNor should ensure that funds commitment for all membership and registration fees are pre-approved by the appropriate delegated authority.
Overall Compliance: Not Met
 
Directive on Leave and Special Working Arrangements
Criteria Findings Compliance
i) Leave with pay and special working arrangements are approved and administered in accordance with the applicable directive. Leave requests were pre-authorized by a person with the delegated authority in 38 out of 50 files reviewed:
  • In four files vacation and compensatory leave was approved after it was taken;
  • In two files leave was approved after it was taken and by an individual not authorized to approved leave;
  • In five files, leave was approved by an individual who, according to the Delegation of Authorities for HR document for CanNor did not have the authority to do so. Only "Level 5 managers" and above may approve leave. In these five files, leave was approved by Level 6 non-managers, according to the HR charts provided; and
For one file, leave was approved by a level 5 individual, but one who was not in a management position according to the HR charts provided.		 Not met
Recommendation:

18) CanNor should take the necessary steps to ensure that all leave requests are pre-authorized by someone with the delegated authority
Overall Compliance: Not Met
 
Directive on Financial Management of Pay Administration
Criteria Findings Compliance
i) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). There was no evidence that expenditure initiation was performed by the appropriate authority for 36 of the 88 files reviewed.

Two leave without pay forms were not signed by an individual with the authority to do so.

Supporting documentation was not on file for:
  • 11 of the 16 casual contracts reviewed (HR request);
  • 20 of the 23 new employee files reviewed (HR request);
  • Two of the seven leave without pay transactions reviewed (leave form);
One of the 14 overtime transactions
  • reviewed (overtime form); and
  • Two of the three maternity allowance files reviewed (agreements).

There was no evidence that the expense was approved prior to the event for 55 of the 88 files reviewed:

  • 11 of the 16 casual contracts;
  • 20 of the 23 new employee files;
  • Eight of 15 acting assignments;
  • Two of seven leave without pay transactions;
  • Two of the three maternity allowance files; and
  • Twelve of 14 overtime transactions.
Commitments were recorded at the value expected to be incurred for 86 of the 88 files reviewed. No commitment was recorded in the system for:
  • One of the 16 casual contracts reviewed; and
  • One of the 10 performance pay files reviewed.
Please refer to Recommendation 6. 		Not Met
ii) Pay is accurate, timely and processed in accordance with regulations and policies including the administration of Sections 33 and 34 of the Financial Administration Act. There was no evidence that account verification was performed by an individual with the delegated authority to do so, with proof of execution and cost, and on a timely basis for five of the 14 overtime files reviewed:
  • Three files were not verified by the appropriate delegated authority;
  • For two files, proof of execution and cost was missing; and
  • For four files, account verification was not performed on a timely basis (already counted as errors above).
Please refer to Recommendations 7 and 8.

Process of all other pay transactions and payment requisitions are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor.		 Not Met
iii) Adequate segregation of duties, such as ensuring the custody and distribution of cheques and direct deposit payment statements, exists in pay administration roles. Segregation of duties in pay administration roles is achieved through a memorandum of understanding between the Department of Indian and Northern Affairs Canada and CanNor. N/A
iv) Departure procedures for the department are followed CanNor uses a departure form created and distributed by the Department of Indian and Northern Affairs Canada.

For seven of the nine files reviewed there was no evidence that a signed departure form was kept on file.		 Not Met
Recommendation:

19) CanNor should retain written documentation to support that departure procedures have been followed to certify that all money owing to the Crown, or any other assets, and are accounted for before an employee leaves the agency.
Overall Compliance: Not Met
 
Performance Pay Administration
Criteria Findings Compliance
i) Performance pay is administered correctly and approved by the appropriate delegated authority Annual Performance Review was based on pre-set objectives and was completed and documented on a yearly basis.

Performance pay was allocated to an eligible employee and was reviewed and authorized by the proper delegated authority.		 Met
Recommendation: None
Overall Compliance: Met
 
Casual Employees
Criteria Findings Compliance
i) Key terms and conditions requirements for casual employees are being administered correctly. For all casual files reviewed, employees were retained for no longer than the 90 day limit.

No leave with pay was awarded to the casual employees reviewed. All supporting documentation was kept on file and supports decisions made.		 Met
ii) Employee security screening is managed properly and subject to proper delegated authority. Security clearances of employees are the responsibility of the Department of Indian and Northern Affairs Canada through a memorandum of understanding with CanNor. N/A
Recommendation: None
Overall Compliance: Met

Appendix 1: Policies and Directives Tested

Areas Tested

Financial Management

  • Directive on Delegation of Financial Authorities for Disbursements
  • Directive on Expenditure Initiation and Commitment Control
  • Directive on Account Verification
  • Directive on Acquisition Cards
  • Directive on Accountable Advances

Contracting

  • Contracting Policy

Travel and Hospitality

  • National Joint Council Travel Directive
  • Directive on Travel Cards and Travellers Cheques
  • Hospitality Policy

Human Resources

  • Membership Fees Policy
  • Directive on Leave and Special Working Arrangements
  • Directive on Financial Management of Pay Administration
  • Performance Pay Administration Footnote 1
  • Casual Employees

Appendix 2: Risk Ranking of Recommendations

The following table presents the recommendations and their assigned priority ranking. Rankings were determined based on the relative importance of the recommendations and their potential to motivate long-term change and reduce risk in the Canadian Northern Economic Development Agency.

Recommendations Priority
1) CanNor should develop and implement a financial management framework which includes, but is not limited to, processes and controls over

forecasting, PAYEs, and financial reporting.


2) CanNor should revise the Fiscal Year 2009-10 financial statements in a timely manner. .


3) CanNor should obtain all necessary financial system training and access, to FNITP and OSMS.

4) CanNor should design effective business processes for financial management for its head office in Iqaluit. This should include consideration of

the most effective MOUs or service agreements with other federal entities to support CanNor's operations.

5) CanNor should ensure managers and executives receive the required training and validate their knowledge as required prior to exercising their

delegated authority. CanNor should also maintain a record of completion of all training by individuals with delegated authority.

6) CanNor should ensure that expenditure initiation and individual commitments are approved by an individual with the delegated authority to do so before expenses are incurred and recorded in the financial system.

7) CanNor should ensure that expenses are certified by an individual with the delegated authority to do so on a timely basis, and by someone who

does not directly or indirectly benefit from the expenditure..

8) CanNor should ensure that proof of execution and cost are retained, and if missing, justification for purchase is clearly documented on file.

9) CanNor should ensure that CFO approval, whether case by case or by approving general limits, is sought prior to distributing acquisition cards to individuals.

10) CanNor should obtain written acknowledgement of responsibilities and obligations from acquisition card holders prior to issuing an acquisition

card and keep documentation on file.

11) CanNor should ensure that acquisition cards are used solely for authorized government business related to purchases of goods, services and

pre-approved hospitality expenses.

12) CanNorshould develop business processes and keep documentation to ensure that :
  • bid selection method and evaluation criteria are clearly outlined in the bid solicitation document before the request for proposal is issued;
  • there is justification for non-competitive procurement contracts;
  • the evaluation of proposals and contractor selection are conducted in accordance with the pre-established criteria as stated in the request for proposal and in an open, fair and transparent manner;
  • a copy of the signed, written contract is on file;
  • contracts are issued before goods or services are received;
  • contract amendments are signed before the original contracts expire; and
  • contracts with a value over $10,000 are proactively disclosed.
13)CanNor should ensure that contracting officers are aware of contracting rules so that contract splitting does not occur.

14) CanNor should document and keep on file the purpose of business travel so that it is fully justifiable.

15) CanNorshould develop business processes and keep documentation to ensure that :
  • post-authorized travel has documented justification on file;
  • government suppliers are used when available and justify on file use of other suppliers when not available;
  • employees are reimbursed for meals and incidental expenses when on official travel status, and should do so in a manner consistent with the allowance rates within the National Joint Council Travel Directive;
  • flight arrangements respect the appropriate limits;
  • supporting documentation is on file before paying travel expenses;
  • departmental travel cards are used when possible; and
  • travel by the deputy head is proactively disclosed in a timely manner on the CanNor website.
 HIGH
16) CanNor should ensure that requests for travel cards and card holder agreements acknowledging responsibilities and obligations are kept on file..

17) CanNor should ensure that funds commitment for all membership and registration fees are pre-approved by the appropriate delegated authority.

19) CanNor should retain written documentation to support that departure procedures have been followed to certify that all money owing to the Crown,
or any other assets, and are accounted for before an employee leaves the agency.		 MEDIUM
18) CanNor should take the necessary steps to ensure that all leave requests are pre-authorized by someone with the delegated authority. LOW
 

Appendix 3: Criteria Source List 

Financial Management

Directive on Delegation of Financial Authorities for Disbursements
Criteria Source
i) Delegation instruments are appropriate, current, and approved in accordance with the directive. 

Directive on Delegation of Financial Authorities for Disbursements

6.1, 6.2.3, 6.3.1
ii) Employees receive appropriate training in accordance with requirements pertaining to financial management, contracting, and human resources. Directive on Delegation of Financial Authorities for Disbursements
6.3.1
 
Directive on Expenditure Initiation and Commitment Control
Criteria Source
i) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation, and substantiating documentation is retained on file (Section 32 of the Financial Administration Act).

Directive on Expenditure Initiation and Commitment Control
6.1, 6.2

Financial Administration Act – Section 32
 
Directive on Account Verification
Criteria Source
i) The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). Directive on Account Verification 6.1, 6.2.1, 6.2.2, 6.3.1.1, 6.3.4

Financial Administration Act - Section 34
ii) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Directive on Account Verification 6.1, 6.2.1, 6.2.2, 6.3.1.1, 6.3.4, 6.3.5

Financial Administration Act - Section 33
 
Directive on Acquisition Cards
Criteria Source
i) Acquisition cards attribution is controlled and cardholders have acknowledged their responsibility in writing. Directive on Acquisition Cards 6.1.7, 6.2.1, 6.3.1, 6.3.2
ii) Funds commitment availability are certified adequately, by someone with the delegated authority prior to the expenditure initiation at the value expected to be incurred (Section 32 of the Financial Administration Act). Financial Administration Act – Section 32
The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). Financial Administration Act - Section 34
iv) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Financial Administration Act - Section 33
v) Acquisition cards are to be used solely for authorized government business related purchases of goods, services and pre-approved hospitality expenses. Directive on Acquisition Cards 6.1.7
 
Directive on Accountable Advances
Criteria Source
i) Accountable advances are established only when required and used solely for the purpose for which they were issued Directive on Accountable Advances 6.1.1, 6.1.3, 6.1.4, 6.1.5, 6.1.6, 6.2, Accountable Advances Regulations 5(b), 5 (e)
ii) Accountable advances are properly safeguarded, accounted for, and reconciled Directive on Accountable Advances 6.1.6, 6.2.1, 6.3, 6.7, 7.1.1, Accountable Advances Regulations, 6 (1), 6 (3)
iii) Adequate separation of duties exists with respect to advances. Directive on Accountable Advances 6.4, FAA S.33, S.34
iv) Funds commitment availability are certified adequately, by someone with the delegated authority prior to the expenditure initiation at the value expected to be incurred (s.32 FAA). FAA S.32
v) The performance of account verification is effective, is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (s.34 FAA). FAA S.34
vi) The payment and settlement is carried out effectively, by someone with proper delegation of authority and for the  correct $ amount and to the right vendor (s.33 FAA). FAA S.33

Contracting

Contracting Policy
Criteria Source
i) Requirements Definition. The statement of requirements was defined in an unbiased manner before bids were solicited Policy on Contracting – Section 4.1.9, 4.1.10, 4.2.10, 11.3, 12.5.2, 16.1.2, 16.1.3, 16.2, 16.13
ii) Procurement Vehicle for Non-Competitive Contracts. There is documentation on file to support the justification for non-competitive procurement contracts in accordance with section 6 of government contract regulations. Policy on Contracting - Section  10.2.1, 10.2.6, 10.5, 10.7.30, 11.2.7, 16.8.3, 16.8.4, Appendix C

Government Contract Regulations – Section 6
iii) Procurement Vehicle for Competitive Contracts. For competitive contracts, appropriate tendering processes for bids are used including the use of mandatory standing offers and supply arrangements, or government electronic tendering system.   Policy on Contracting - 4.1.4, 10.4, 10.5, 10.7, 10.8, 16.8.4, 16.8.5, 16.8.10, Appendix H - 2.3, 2.4
iv) Evaluation. Bid evaluation criteria were provided on request for proposal documents and were used for contractor selection in an open, fair and transparent manner Policy on Contracting – Section, 10.5, 10.8, 11.1
v) Contract Award. Individual commitments and contracts are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation, and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). Policy on Contracting – Section  4.1.8,  Appendix C

Financial Administration Act – Section 32
vi) Contract Approval and Management. Contracts and contract amendments were approved prior to the receipt of any goods or services or the expiration of the original contract and supporting documentation is retained on file. Policy on Contracting – Section 12.9, Appendix C, Appendix H - 2.6
vii) Account Verification. The performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). Financial Administration Act – Section 34
viii) Contract Payment. The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was completed (Section 33 of the Financial Administration Act). Loi sur la gestion des finances publiques – Article 33
ix)Proactive Disclosure. All contracts and amendments, call-ups, standing-offers, and supply arrangements with a value over $10,000 are proactively disclosed on a timely basis. Policy on Contracting – Section 5.1.4

Travel and Hospitality

National Joint Council Travel Directive
Criteria Source
i) Hospitality events are planned and conducted in an economical and appropriate way to facilitate government business, consistently with the events circumstances. Travel Directive – Section 1.1, 1.1.2, 1.5, 1.6.1, 1.6.2, 1.8, 2.2, 3.1.11, 3.2.11, 3.3.1, 3.3.11, 3.4.11, Appendix C, Appendix D, Appendix E Special Travel Authorities
ii) Individual commitments are done by someone with the delegated authority to do so, are recorded at the time of expenditure initiation where possible, and are recorded at the value expected to be incurred (Section 32 of the Financial Administration Act). Financial Administration Act – Section 32

Travel Directive – Section 1.1.1, 1.1.2, 1.5.1, 1.5.2, 1.8
iii) The performance of account verification is effective and done by someone with the delegated authority (Section 34 of the Financial Administration Act). Financial Administration Act – Section 34

Account Verification Policy

Special Travel Authorities
iv) The payment and settlement authority is carried out by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Financial Administration Act Section 33

Special Travel Authorities
v) All hospitality expenses for designated senior level employees are proactively disclosed Guidance Document: Proactive Disclosure of Travel and Hospitality Expenses – Section 1
 
Directive on Travel Cards and Travellers Cheques
Criteria Source
i) Travel cards are appropriately distributed and cardholders have received appropriate training or guidance and have acknowledged their responsibility in writing. Directive on Travel Cards and Travellers Cheques – Section 6.1.1, 6.1.2, 6.1.3, 6.1.5, 6.1.13, 6.2.1, 6.3.5, 6.4.9
ii) The performance of account verification is effective, is performed by someone with the delegated authority, verifying the expenditure correctness on a timely basis (Section 34 of the Financial Administration Act). Directive on Travel Cards and Travellers Cheques – Section 6.3.4, 6.4.10

Financial Administration Act – Section 34
iii) The payment and settlement is carried out effectively, by someone with proper delegation of authority, for the correct dollar amount and to the right vendor (Section 33 of the Financial Administration Act). Directive on Travel Cards and Travellers Cheques – Section 6.3.4, 6.4.10

Financial Administration Act – Section 34
iv) Travellers cheques and advances are used in valid circumstances. Directive on Travel Cards and Travellers Cheques – Section 6.2.4
 
Hospitality Policy
Criteria Source
i) Hospitality events are planned and conducted in an economical and appropriate way to facilitate government business, consistently with the events circumstances.

Hospitality Policy – Section 1, 2, Appendix B

Travel Directive – Appendix C
ii) Individual commitments are done by someone with the delegated authority to do so, are recorded at the time of expenditure initiation where possible, and are recorded at the value expected to be incurred (Section 32 of the Financial Administration Act). Hospitality Policy – Appendix C
Financial Administration Act – Section 32
iii) The performance of account verification is effective and done by someone with the delegated authority (Section 34 of the Financial Administration Act). Hospitality Policy – Appendix C
Financial Administration Act – Section 34
iv) The payment and settlement authority is carried out by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Hospitality Policy – Appendix C
Financial Administration Act – Section 33
v) All hospitality expenses for designated senior level employees are proactively disclosed. Guidance Document: Proactive Disclosure of Travel and Hospitality Expenses – Section 2

Human Resources

Policy on Learning, Training and Development
Criteria Source
i) Employees receive appropriate training in accordance with requirements pertaining to financial management, contracting and, human resources.  Policy on Learning, Training and Development – Section 6.2.1
 
Membership Fees Policy
Criteria Source
i) Memberships and registration fees are paid by the organization or reimbursed to the employee in eligible circumstances. Membership Fees Policy – Section 4
ii) Memberships and registration fees are approved by the appropriate delegated authority. Membership Fees Policy – Section 1, 2, 3, 5, 6, 7
iii) Memberships and registration fees are properly coded and adequately substantiated for monitoring. Membership Fees Policy – Monitoring
iv) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation, and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). Financial Administration Act – Section 32
v) The performance of account verification is done by someone with the delegated authority to do so is accomplished on a timely basis, and verifies the correctness of the payment requested (Section 34 of the Financial Administration Act). Financial Administration Act – Section 34
vi) The payment requisition is done by someone with the delegated authority to do so and there is evidence that a quality assurance review of the account verification was done (Section 33 of the Financial Administration Act). Financial Administration Act – Section 33
 
Directive on Leave and Special Working Arrangements
Criteria Source
i) Leave with pay and special working arrangements are approved and administered in accordance with the applicable directive. Directive on Leave and Special Working Arrangements – Section 6.2, Appendix A

Collective Agreement for Program and  Administrative Services – Part IV Article 34.11, 38

Public Service Employment Act
 
Directive on Financial Management of Pay Administration
Criteria Source
i) Individual commitments are done by someone with the delegated authority to do so, are recorded at the value expected to be incurred at the time of expenditure initiation and substantiating documentation is retained on file (Section 32 of the Financial Administration Act). Financial Administration Act – Section 32
ii) Pay is accurate, timely and processed in accordance with regulations and policies including the administration of Sections 33 and 34 of the Financial Administration Act.

Financial Administration Act – Section 33 and 34

Account Verification Policy – Section 4
iii) Adequate segregation of duties, such as ensuring the custody and distribution of cheques and direct deposit payment statements, exists in pay administration roles. Directive on Financial Management of Pay Administration – Section 6.1.8, 6.2.2
iv) Departure procedures for the department are followed. Directive on Financial Management of Pay Administration – Section 6.6
 
Performance Pay Administration
Criteria Source
i) Performance pay is administered correctly and approved by the appropriate delegated authority. Policy on the Management of Executives Section 5.2

Directive on Executive Compensation - Section 3.2, Appendix B

Directive on Terms and Conditions of Employment for Certain Excluded or Unrepresented Employees – Section 6.2, Appendix B
 
Casual Employees
Criteria Source
i) Key terms and conditions requirements for casual employees are being administered correctly. Public Service Employment Act – Part II Article 50.2, 50.3, 50.4

Term Employment Policy – Section 7.2.d

Directive on Terms and Conditions of Employment – Section 19.2.1, 19.2.2, 19.2.3, 19.2.4, 19.2.5, 19.2.6, 19.2.7, 19.2.8, 19.2.9
ii) Employee security screening is managed properly and subject to proper delegated authority. Public Service Employment Act – Part II Article 50.2, 50.3, 50.4 Policy on Government Security, Section 6.1.5, 6.1.6

Appendix 4: Links to Applicable Legislation, Policies and Directives

Applicable Legislation, Policies, and Directives

(Links current as of February 2011)

  • Financial Administration Act 

Financial Management

Contracting

Travel & Hospitality

Human Resources

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