Management Response and Action Plan: Audit of Investment Planning of Capital Assets at Health Canada
|Recommendations||Management Response and Planned Actions||Deliverable||Completion Date||Accountability/ Responsibility|
|Recommendation 1 The Chief Financial Officer, with the assistance of the four asset class leads, should improve the current capital prioritization process to integrate the formal assessment of risk in assessing options and prioritizing the capital ask. The risk assessment process should include: 1. A formal, documented risk-assessment methodology, including risk-rating levels (i.e., high-, medium-, and low-risk) and prescribed criteria defining each risk level; 2. Communication (and training, as needed) to the four asset class leads on: • The risk assessment methodology and use of the methodology; and, • The requirement to prioritize and risk rank each item on their respective capital asks, with a description of the impact of not funding them; and 3. Document evidence on the integration of a risk-based assessment process into CRIPD's centralized capital assessment and prioritization process.||Management agrees with the recommendation|
|1) CFOB will update the Investment Planning and Reporting Framework. The framework will provide standardized risk assessment criteria and methodology for use by the Investment Class leads and CFOB. 2) CFOB will communicate and provide training, as needed, to the asset class leads on the process and methodology to perform a formal risk assessment of their capital requirements, ensuring it is included in their prioritization exercises and presentations.||1.1 Updated IP Framework||March 31, 2022||CFOB|
|1.2 Communication of methodology||March 31, 2022||CFOB|
|Recommendation 2 The Chief Financial Officer should ensure adequate documentation of the analysis behind, and rationale for capital investment allocation decisions. The analysis should include sufficient information to support the thought process and risk-focused rationale for the preferred option.||Management agrees with the recommendation|
|CFOB will include documented analysis and a risk assessment in the departmental capital prioritization, the rationale for the recommended approach along with investment options.||2.1 Documented analysis and a risk assessment in the departmental capital prioritization||March 31, 2022||CFOB|
|Recommendation 3 The Chief Financial Officer should improve the capital decision-making presentation material to ensure that the DG-IP committee receives sufficient documentation from CRIPD as part of the "recommended option" presentation.
This presentation material should include: 1) a clear assessment of the risk profile of the prioritized option, 2) the short and long term risks associated with the option, 3) how this mix of projects/assets is the best option in mitigating the key risks, and 4) any asks from the asset classes that were ranked "high" risk that were not included in the preferred option.
|Management agrees with the recommendation|
|CFOB will improve prioritization communication at DG-IP by including a risk assessment of the preferred option, analysis, ranking, as well as options where appropriate. This will also identify risks associated with investments not being funded through the recommended approach.||3.1 Deck to DGIP committee to include options||March 31, 2022||CFOB|
|Recommendation 4 The Chief Financial Officer should improve the administrative function of both the DG-IP and EC-FIPT committees, ensuring that records of decision (RoDs) include key details related to decisions made, and that the terms of reference documents are reviewed and updated to reflect the current state of operations.||Management agrees with the recommendation|
|Recent changes have been implemented (September 2021) to ensure that records of decision are more fulsome and include key details related to the decisions that are being made. All terms of reference will be updated to reflect roles and responsibilities and attendance from branches and members. This is expected to be completed by March 31, 2022 to align with the renewal of the Investment Plan and Departmental OPMCA.||4.1 Updated Terms of References for EC-FIPT and DGIP committees||March 31, 2022||CFOB|
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