Audit of Infrastructure – Enabling Accessibility Fund

Context

The objective of the Enabling Accessibility Fund (EAF) is to improve accessibility, remove barriers and enable Canadians with disabilities to participate in and contribute to their community. The EAF supports capital costs of construction and renovations related to improving accessibility and safety for persons with disabilities in Canadian communities and workplaces through the Workplace Accessibility and Community Accessibility funding streams.

The Workplace Accessibility Stream funds projects related to removing barriers and increasing accessibility and safety in workplaces across Canada through capital cost investments which could result in the creation or maintenance of job opportunities for people with disabilities. The Community Accessibility Stream funds projects related to removing barriers and increasing accessibility and safety in Canadian communities through the renovation, retrofit or construction of community facilities where programs or services are offered to people with disabilities. For both funding streams, this includes the provision of information and communications technologies for work or community use.

The Employment and Social Development Canada (ESDC) 2016–17 Report on Plans and Priorities presents $14.9 million of planned spending for the EAF and a target of 218 communities with funded projects by the end of fiscal year 2016 to 2017^{Footnote 1}. In fiscal year 2016 to 2017, EAF received $4 million of additional funding over two years, as part of the Social Infrastructure Spending increases included in Budget 2016: Growing the Middle Class. The additional funding is intended to support the capital costs of construction and renovations of community facilities that support enhanced accessibility and safety for people with disabilities in Canadian communities.

Audit objectives

The objectives of this audit are to provide assurance that:

• controls are in place and operating adequately to ensure proper stewardship of the EAF; and
• expectations for the proper management of the Social Infrastructure Funding (SIF) stemming from the Budget 2016 are met.

Scope

A statistically valid sample of EAF projects was tested to assess the design and operating effectiveness of key controls that ensure that payments are issued in a timely manner to eligible EAF recipients for eligible expenditures and activities. The statistically valid sample included 120 EAF payments from fiscal years 2015 to 2016 and 2016 to 2017 that totalled $3 million.

All 81 EAF payments completed during 2016 to 2017 that were funded by SIF totalling $1.94 million were tested. These payments were tested to assess the design and operating effectiveness of key controls that ensure that payments are issued in a timely manner to eligible EAF recipients for eligible expenditures and activities and also assess whether SIF expectations were met for 2016 to 2017. A sample of 25 non-approved applications from fiscal years 2015 to 2016 and 2016 to 2017 was tested to determine if the eligibility of the applications was properly evaluated with sufficient rationale for non-approval.

A complete assessment of the SIF monitoring and reporting criteria for 2016 to 2017 was not possible as the 2016–17 Departmental Performance Report (DPR) was not completed before the end of the audit. As a result, a review of the adequacy of the monitoring and reporting mechanisms in place during 2015 to 2016 for the DPR that would enable the Department to satisfy the SIF reporting and monitoring expectations was completed.

Data analytics were completed on the population data sets provided by the Program Operations Branch (POB) to identify duplicate or erroneous information in recipient information, addresses and organizations providing community support letters and external cost estimates. The data provided by POB included 459 Community Accessibility Stream projects totalling $13.6 million in approved funding for fiscal year 2015 to 2016 and 573 Community and Workplace Accessibility Streams projects totalling $15.6 million in approved funding for fiscal year 2016 to 2017.

The targets and results of the 2015 to 2016 Key Performance Indicators (KPI) reported in the DPR were tested for accuracy, completeness and proper approval of the calculation in accordance with the EAF Performance Measurement Strategy.

Methodology

This audit used a number of methodologies during the conduct phase completed between December 2016 and February 2017 including:

• Documentation review and analysis;
• Sampling and file review testing;
• Process observation and analysis;
• Interviews with management and staff from POB and Income Security and Social Development Branch (ISSDB); and
• On-site walkthroughs at National Headquarters.

Adequate controls are in place to ensure proper stewardship of the Enabling Accessibility Fund

Expectations for the proper management of Social Infrastructure Funding are met

On April 19, 2016, the Auditor General sent a letter to the President of the TB reminding him that infrastructure spending was a potential area of audit. The letter further outlined expectations about controls that departments should take into account when designing programs and managing the extra funding.

The audit team expected to find controls and processes in place to meet these expectations. Most of the expectations for proper management of the SIF stemming from the Budget 2016 were met. PROTECTED Two of the 81 SIF funded projects identified by POB (2.5%) fulfilled this request.

The following outlines the Auditor General expectations and the degree to which the Department has met them.

The audit team found that the current management framework is appropriate to provide oversight. There is an opportunity for the Department to identify and update the risks specific to EAF including the risks related to the planning of the delivery of infrastructure spending. PROTECTED .

EAF projects are monitored through the review of a final report from the recipient and the completion of a close-out report. PROTECTED . As per the TB Policy on Transfer Payments, grants are normally not subject to audits. Accordingly, the Quality Assurance Monitoring Unit (QAMU) within the Chief Financial Officer Branch indicated that grants are not subject to audits in accordance with the departmental recipient audit strategy. EAF is included in the QAMU 2020 to 2021 audit plan for an internal compliance assessment.

EAF recipients receive funding to complete accessibility projects such as constructing ramps and accessible doorways which have a low risk to the environment. There is an expectation that controls are in place to ensure compliance with federal environmental assessment requirements. In April 2017, Management provided the audit team with the ESDC Environmental Assessment Guidance and they indicated that EAF is excluded from obligations under the Canadian Environmental Assessment Act (CEAA). The guidance states that nothing in the eligible activities of the program could raise an obligation to conduct an environmental assessment within the meaning of the CEAA. Accordingly, no environmental assessments were completed for the projects tested. Furthermore, the Articles of Agreement signed by EAF recipients require compliance with all federal and provincial laws, including environmental laws.

A complete assessment of these SIF expectations was not possible within the time period of the audit. As a result, the audit team reviewed the annual reporting of EAF results in the 2015 to 2016 DPR and determined that the reporting process provides mechanisms that would enable the Department to fulfill the above-mentioned expectations.

There are no recommendations for this audit, but there is one recommendation presented in the “Review of the Control Framework for the Management of Social Infrastructure Funding” report completed by Internal Audit that is applicable to the Audit of EAF. This recommendation specifically identifies the need to review the reporting requirements and expectations of the respective programs relating to SIF and to PROTECTED . The audit findings presented above that pertain to the identification and assessment of the risks specific to EAF and the rationale to support the level of monitoring selected for the risk-based recipient audits should be considered when addressing the recommendation included in the “Review of the Control Framework for the Management of Social Infrastructure Funding.”

Eligibility assessments – ranking of applications for available funding

Duplicate questions were identified in the pre-screening criteria checklist and assessment grid. There is an opportunity to review the screening and assessment questions to determine whether they are required. Also, some applications had a rationale as to why the organization did not provide three external estimates of the costs because the bidding process to receive quotes was completed after the application was submitted. POB should evaluate whether ESDC needs to follow up with these organizations to ensure that three quotes were obtained before project approval.

Assessment criteria

The criteria to assess the applications adequately addressed the eligibility requirements established in the EAF Terms and Conditions for Grants and Contributions and the EAF Applicant Guide. All criteria were determined to be relevant and aligned with the EAF Terms and Conditions.

Application process

Funding applications received are paper-based. Management may consider providing the option to submit applications electronically.

Process documentation

Adequate rationale was documented on file for all approved and non-approved applications tested during the audit.

Close-out process

There were no questions in the final report that require recipients to disclose the final amount of costs incurred. Even though it is not required to monitor grant amounts at close-out, this information could assist the Department to monitor funded to actual costs variance.