Audit at a glance: management of grants and contributions at Environment and Climate Change Canada

Transfer payments made through G&C programs are a major commitment of federal government resources. As such, they must be managed carefully. The effective management of G&C programs contributes to sound financial stewardship, the delivery of programs, compliance with the Treasury Board Policy on Transfer Payments and the ability to deliver on Government of Canada priorities.

What the audit examined

The objective of the audit was to provide assurance on the adequacy and effectiveness of G&C processes and activities, including governance, reporting and risk management, in accordance with the Treasury Board (TB) Policy on Transfer Payments. The audit reviewed evidence to determine whether:

The audit focused on processes and activities that were in place at the departmental level to support ECCC’s G&C programs during fiscal year (FY) 2017 to 2018, particularly roles and responsibilities, reporting and risk management. The audit approach included a review of relevant documentation, interviews with key personnel and the testing and analysis of a judgmental sample of G&C projects for compliance with policy requirements.

What the audit found

Governance, guidance and tools

An effective departmental governance structure is in place to support the management of G&Cs at ECCC. Relevant committees are documented. Senior executives accountable for G&Cs programs understand their roles and responsibilities. An ADM-level committee provides a forum for strategic discussions on resource allocation and results. The G&C Centre of Expertise and financial management advisors provide support to program managers. However, their roles and responsibilities are not consistently understood. Guidance and tools are readily available. Some key documents should be updated to reflect changes in the departmental management of G&Cs. There is no clear leadership for the sharing of best practices across the Department.

Reporting framework

The audit confirmed that the Department has a reporting framework in place and has taken important steps by engaging senior management in the articulation of planned results and by developing reporting tools to support program managers accordingly. Quarterly financial reports and ad hoc non-financial reports on G&Cs are provided to senior management for monitoring and decision making. Reporting of G&C results by core responsibility is a work in progress and will be fully reflected in the Departmental Results Report 2018 to 2019, which will be released in the fall of 2019. Tools are in place to support program managers.

Risk management

There is a departmental risk management framework in place for G&C programs, with readily accessible supporting risk assessment guidance and tools. Program managers perform risk assessments to determine project risks and reporting and monitoring requirements. The risk management framework has not been updated since 2010. It should be revised to include new risk factors in the control environment. There is no departmental plan in place for conducting recipient audits to ensure compliance with funding agreements.

Recommendations and management responses

Three recommendations have been developed to address the areas of concern. Management has provided an appropriate response and an action plan.

Recommendation 1 – Guidance: It is recommended that the Assistant Deputy Minister, Corporate Services and Finance Branch (CSFB):

Management response

Recommendation 2 – Risk management: It is recommended that the Assistant Deputy Minister, Corporate Services and Finance Branch:

Management response

Recommendation 3 – Risk management : It is recommended that Program ADMs and Core Responsibility Leads:

Management response

Final report

Audit of the management of grants and contributions at ECCC, final report (full report in PDF format)

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