Audit of the management and delivery of procurement: chapter 1

Executive summary

The Audit of the Management and Delivery of Procurement was included in the Audit and Evaluation Branch's (AEB) 2013 Integrated Risk-Based Audit and Evaluation Plan, as approved by the Deputy Minister, upon recommendation of the External Audit Advisory Committee.

The objectives of the audit were to:

• determine if key elements of a management control framework support efficient procurement activities aligned with departmental operational needs; and
• provide assurance that ECCC's procurement transactions were in compliance with Government of Canada requirements and departmental and central agency policies and guidelines.

Contracting and procurement activities are essential to support the Department in achieving its objectives. In 2013-2014, there were approximately 8,900 procurement transactions processed for an estimated total value of about $148 million, representing approximately 15% of the Department's total budget.^Footnote1

Over the last few years, the Procurement and Contracting Division of the Finance Branch has made a number of changes to improve overall procurement operations. For example, key senior positions that had been vacant for an extended period have been staffed, the service standards have been revised and the ECollab tool is now being used to centralize procurement information and documentation.

The Division continues to evolve and the audit found that, overall, many key elements of an effective procurement management framework were in place. For example, the audit noted that roles and responsibilities and procurement delegation of authorities were well defined. In addition, very noteworthy progress has been made to ensure procurement transactions are processed more evenly throughout the year. However, the audit also noted some areas for improvement, such as strengthening quality assurance, better monitoring and reporting of service standards, and reviewing the guidance to improve consistency in the application of policies and directives.

In addition, the audit found that procurement and contracting activities were mostly in compliance with policy requirements, with some exceptions noted in the following areas: approval of procurement transactions, signing and dating of contracts, and maintaining an adequate audit trail of procurement and contracting documentation.

To address the findings outlined in this report, the following recommendations are presented.

Recommendations

1. The Assistant Deputy Minister, Corporate Services and Finance Branch should review and enhance the procurement management framework to ensure that:
   • a formal quality assurance program is developed and implemented;
   • guidance to procurement officers is further developed and communicated to improve consistency in the application of the legislation, policies and procedures;
   • files are maintained such as to include a complete audit trail of key documentation; and,
   • increased monitoring and analysis of contract trends is carried out regarding, for example, sole-source contracts.
2. The Assistant Deputy Minister, Corporate Services and Finance Branch should review the approach to monitoring the efficiency of procurement and contracting activities in order to:
   • better include both procurement and client (program) key activities as part of the service standards; and
   • periodically monitor and report actual results against the established service standards.

Management response

Management agrees with the above recommendations, and the branch has already begun implementing elements on the management action plan.