ARCHIVED - Management Response and Action Plan (MRAP) - Audit of Contracting for Services
|Recommendations||Management Response||Planned Actions||Deliverables||Expected Completion Date||Accountability|
|Recommendation No. 1
It is recommended that the Chief Financial Officer establish periodic, post-award verification procedures where samples of contracts lower than $10,000 are reviewed to ensure compliance with policies and procedures.
In 2008, the Chief Financial Officer established a risk-based Materiel and Assets Management (MAM) Verification Plan to guide annual contract review and post completion verification activities.
The MAM Verification Plan will include low dollar value contracts (under $10,000) by June 2010. These low dollar contracts will be part of the MAM Verification testing strategy beginning in the year 2010-2011.
|Health Canada has implemented a risk-based process to guide contract review and post completion verification activities. This has been found to be efficient and effective in identifying issues, both for managers and Contract Specialists involved in process, policy and training.||The MAM Verification Plan will include procedures for the review of low dollar value contracts (under $10,000).|| June 2010
|Director, Policy, Training and Communication Division (PTCD)MAMD, CFOB|
|A MAM Verification Plan Review will be performed on an annual basis and will follow risk-based management principles relating to contracting.||October 2010||PTCD-MAMD, CFOB|
|Branches will be debriefed on the results of the MAM verification. MAMD will share supporting best practices/continuous improvement opportunities with Branch ADMs.||November 2010||MAMD, CFOB|
|Recommendation No. 2
It is recommended that the Chief Financial Officer ensure the development and implementation of service standards regarding the provision of procurement services.
In June 2010, the Materiel and Assets Management Directorate (MAMD) re-engineered the procurement function in the National Capital region (NCR). The new process includes a new Request for Proposal (RFP)/ Request for Standing Offer (RFSO) process which will impact on the amount of time required to review contracting activities. MAMD will collect data during this fiscal year to determine and develop new service standards that will include the RFP/RFSO process. National implementation of the re-engineered procurement process will occur by December 2010.
|Under the new procurement process, Materiel and Assets Management will collect data on the three different processes possible for service contracts: sole source; traditional competitive; and open bidding (posted on MERX). MAMD will analyze the data, develop and communicate service standards for the three processes noted above.||Benchmarking review, considering other Department’s standards.||February 2011||Director, Procurement and Contracting Division (PCD) MAMD, CFOB|
|Data Collection and Analysis of different contracting for services mechanisms: sole source; traditional competitive; and open bidding (posted on MERX).||April 2011||PCD-MAMD, CFOB|
|Develop service standards.||May 2011||PCD-MAMD, CFOB|
|A communications strategy to advise HC of the established Service Standards for the 3 methods of procurement.||July 2011||PTCD-MAMD, CFOB|
|Begin tracking and reporting on standards.||December 2011||PCD-MAMD, CFOB|
|Preliminary report on adherence to established service standards.||June 2012||PCD-MAMD, CFOB|
|Recommendation No. 3
It is recommended that:
The results of previous rounds of procurement planning were used to develop strategies for several high-priority commodities such as language training schools, Employee Assistance Program specialists, and laboratory services providers.
Procurement Planning data will be collected with the Investment Planning data for the 2010-11 Integrated Planning cycle and beyond.
The CFO and ADMs of Branches will collaborate throughout the procurement planning process to ensure that opportunities for SOAs can be identified and developed for use whenever possible.
|Based on information received from ADMs, the CFO will identify priority procurements and ensure that SOAs are in place, where possible.||Procurement Planning included in DIOP process.||September 2010||PTCD-MAMD, CFOB|
|A Communications Strategy with respect to the administration of standing offers will be developed and implemented.||December 2010||PTCD-MAMD, CFOB|
|Compile info from Planning exercise and identify opportunities to develop additional SOAs.||April 2011||PCD-MAMD, CFOB|
|Cost centre managers will provide input to procurement planning exercise and then meet with Procurement Officers for appropriate assessments of Branch procurement priorities taking into account timeline, risk to department, cost, etc.||During the annual Integrated Planning exercise, ADMs will provide as accurately as possible, information regarding procurement planning as part of the Investment Plan process. The information provided will be used to facilitate the development of long term strategies including expedited procurement vehicles.||February 2011||Branch ADMs and other Executives|
|Recommendation No. 4
It is recommended that the Chief Financial Officer and Assistant Deputy Ministers of Program Branches ensure that all contracts that are subject to the Employment Equity Program requirement have the necessary documentation on file confirming that the contractor has in place an employment equity program.
The re-engineering of the procurement process, implemented in June 2010, included a review of relevant contract templates to ensure the completeness of the RFP & Statement of Work (SOW) contract documents, as well as the CRCC checklist. The Employment Equity Program requirement is included on both the CRCC checklist and RFP template.
As a result, Procurement Specialists and CCMs are advised to collaborate before contracts are initiated to ensure that Employment Equity Program requirements are met and documented.
|As part of the Re-engineering Initiative launched in June 2010, the Chief Financial Officer reviewed contract templates to ensure that the Employment Equity requirement is included in the RFP & SOW templates, as well as in the CRCC checklist.||A communications strategy will be developed and implemented. The strategy will outline the requirements for the Employment Equity Program in contracting. The strategy will include communications to functional experts and cost centre managers. This will be an annual communications.||October 2010||PTCD-MAMD, CFOB|
|Branch Directorates will reinforce the importance of ensuring that CCMs confirm employment equity requirements.||March 2011||Branch ADMs and other Executives with the support of CFOB|
|The 2010-2011, MAM Verification Plan will include a check for Employment Equity Program Requirements.||June 2010 (completed)||PTCD-MAMD, CFOB|
|A MAM Verification Plan Review will be performed.||October 2010||PTCD-MAMD, CFOB|
|The results of the MAM verification will be shared with ADMs. MAMD will identify supporting best practices/continuous improvement opportunities with Branch ADMs.||November 2010||MAMD, CFOB|
|Working with CFOB, ADMs will implement corrective actions as required.||March 2011||Branch ADMs and other Executives|
|Recommendation No. 5
It is recommended that the Chief Financial Officer and Assistant Deputy Ministers of Program Branches ensure proper price support documentation of non-competitive contract files in their respective areas of responsibility.
The TB Contracting Policy and Contracting Policy Notice 2007-04
recommend price support be obtained when only one bid is received or only one person can do the work requested (ACAN).
The re-engineering of the procurement process, implemented in June 2010, ensures Procurement Specialists and CCMs collaborate before contracts are initiated to ensure that proper documentation regarding price support and sole source justification is included on file.
The CFOB will enhance tools (solicitation documents, checklist for contract approval) to aid CCMs in ensuring appropriate documentation is on file. Procurement Specialists and CCMs will collaborate at the contract planning stage (prior to contract initiation) to ensure proper contracting procedures are followed and contracting policies adhered to.
|Steps will be taken to improve the quality of information in the documentation of the contracting process, including documenting price support when appropriate. Changes made to contracting document types (statement of work, request for proposal, etc.) as part of the re-engineering will also support improved documentation.||CFOB will update appropriate solicitation document templates (RFP and ACAN) to include a section on price support.||September 2010||PCD-MAMD, CFOB|
|CFOB will develop and implement a communications strategy to remind/advise HC of policy requirements for price support. The strategy will include communications to cost centre managers and functional experts (procurement).||October 2010||PTCD-MAMD, CFOB|
|CFOB will ensure control measures, including a check to ensure that price support information is included in the CRCC checklist for contract approval and the RFP template. Procurement Officers will ensure documentation is present prior to approving contracts in CRCC.||June 2010 (completed)||PCD-MAMD, CFOB|
|When appropriate, CCMs are responsible to obtain price support information prior to contract initiation and provide it to contract officers for approval of the contract in CRCC.||June 2010 (completed)||Branch ADMs and other Executives|
|Recommendation No. 6
It is recommended that the Chief Financial Officer and Assistant Deputy Ministers of Program Branches implement controls to ensure amounts invoiced by suppliers are consistent with terms specified in the Method of Payment.
The Health Canada Account Verification procedures include an account verification checklist for CCMs and CCAs with the following item: ‘‘The price is in accordance with the contract, authorized contract amendment, or if not specified by a contract, is reasonable.’’
|The quarterly reports from the Accounting Offices, with analyses of the quality assurance results, will be used by Accounting Offices to take any corrective actions required and by CFOB to monitor the effectiveness of the statistical sampling processes.||Quarterly reports from Accounting Offices, with analyses of the quality assurance results will be produced and circulated as required.||September 2010||FOD-CFOB|
|The Health Canada Delegation of Financial Signing Authorities Course includes the requirement to ensure invoiced amounts are in accordance with the payment terms specified in the related contracts when certifying section 34.||Accounting Offices initiate corrective actions with Branch personnel when critical errors are identified on both high risk and sampled low risk transactions.
CFOB produces and distributes departmental summary of statistical sampling error results for high and low risk transactions.
|Summary of statistical sampling error results for high and low risk transactions.||April 2010 (completed)||RAPB (Regional Senior Finance Officers), CFOB (Financial Operations/AOSD)|
|In 2008, Health Canada implemented a risk-based quality assurance on account verification procedure for payments. More recently, the CFOB has implemented statistical sampling for some payments, which provides assurance that payments are in accordance with the payment terms specified in the related contracts. Full quality assurance is performed on high risk payments and sampled low risk payments based on payment dollar value.
The SAP functionality and quality assurance procedures for statistical sampling were implemented in all regions as of April 1, 2010.
Each Accounting Office (NCR and regions) records critical and non-critical errors in SAP using standardized codes (including tracking payments made that were not in accordance with the method of payment specified in the related contracts).
On a quarterly basis, each Accounting Office will conduct an analysis of the quality assurance results and provide a report to CFOB.
These analysis reports will be used:
|Accounting Offices produce additional analysis reports to identify trends relative to payment streams and cost centres and initiate corrective actions with Branch personnel.|
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