Management Action Plan

Core Control Audit of the Canadian Environmental Assessment Agency

Canadian Environmental Assessment Agency’s opinion of the Audit Report: The Canadian Environmental Assessment Agency, the Agency, has reviewed the findings and recommendations of the Core Control Audit conducted for the fiscal year 2012-2013 and, as far as the scope of this audit is concerned, is of the view that these statements accurately reflect the Agency’s state of control over financial management, contracting, travel & hospitality and human resources.

The President and senior management committee members of the Canadian Environmental Assessment Agency take the findings of this report very seriously.  As indicated in the following pages, the Agency has already made changes in processes for identified areas for improvement.  In addition, a robust set of follow up actions in 2014-15 and subsequent years have been planned in order to address the Report’s recommendations.  This management action plan will also be posted on the Agency’s website by July 2014.

The Agency thanks the Office of the Comptroller General for its professional audit and report.

Audit Entity Sign Off on the Management Action Plan
Ron Hallman, President
Canadian Environmental Assessment Agency
June 23, 2014

Recommendations Priority Response and Planned Actions Responsibilities
(position title responsible for the action)
Timelines

1. The Agency should ensure that the Delegation of Financial Signing Authorities Instrument is reviewed annually, including updating signature specimen cards to reflect the authorities granted in the Delegation of Financial Signing Authorities Instrument.

  • The Agency should also ensure that any financial signing authorities delegated to OGDs (i.e. Environment Canada) are properly approved.
High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations.

Note: The Agency updated all Financial and HR Delegations on September 6, 2013 upon the arrival of the current President in July 2013.

Planned Actions:

  1. The Agency will review the Delegation of Financial Signing Authorities in June 2014, including updating signature specimen cards.
  2. The Agency will ensure that financial signing delegations to OGDs are reviewed and properly approved, commencing June 2014.
  3. Beginning in April 2015, a review and renewal of all financial delegated authorities will be included in the Agency’s annual operational planning exercise.
  4. In its annual Service Level Agreement negotiations for financial systems management with Environment Canada and OGDs, the Agency will include financial signing authorities.
Director, Finance and Administration
&
Director General of Corporate Services
  1. June 2014
  2. June 2014
  3. Annually, beginning April 2015
  4. Annually, beginning April 2015
2. The Agency should ensure all managers receive mandatory training before they exercise their delegation of authority. High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. For new hires, Human Resources will include in its intake more robust procedures and will review mandatory training for the exercise of delegation of authorities.
  2. As of the 2014‑15 fiscal year, training plans in annual performance management agreements for cost centre managers include a cyclical renewal of all mandatory training requirements.
  3. The Agency is in the process of implementing a Financial Delegation Tool that will electronically track all of its active delegated authorities. This tool will be accessible to all Agency staff, to confirm delegation periods – including acting periods – and identify mandatory training renewal dates.
Director, Finance and Administration & Director General,
Corporate Services &
Director, Human Resources
  1. Annual review (April 2014)
  2. March 31, 2015
  3. March 31, 2015
3. The Agency should ensure that proper documentation is retained on file for all acquisition cards to substantiate their issuance, approval and conditions of use. Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. Finance has implemented a more robust records management procedure to ensure that proper documentation is on file to track and monitor acquisition cards, including spending trends and credit limit thresholds.
  2. Electronic approval documents will be retained for the duration of time the employee is with the Agency and up to seven years.
Director, Finance and Administration & Director General, Corporate Services Beginning April 2014
4. The Agency should ensure that accountable advances are reconciled and reported upon on a monthly basis. Low

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  • In May 2014, the Agency initiated a more robust procedure to ensure that accountable advances are reconciled and reported on a monthly basis.
Director, Finance and Administration & Director General, Corporate Services Monthly, beginning in May 2014
5. The Agency should ensure business processes are improved to ensure that controls pertaining to the Directive on Payables at Year-End are implemented and supported by appropriate supporting documentation. Medium

Response: The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. For fiscal year 2013/14, the Agency has implemented new business processes to ensure that controls pertaining to the Directive on Payables at Year End are implemented and supported by appropriate supporting documentation.
  2. A new financial system will be implemented in the 2015-16 fiscal year. This new system will include improved controls relating to the Directive on Payables at Year End are implemented and supported by appropriate supporting documentation.
Director, Finance and Administration & Director General, Corporate Services
  1. May 2014
  2. 2015-16

6. The Agency should ensure that contracting business processes are improved, consistently performed in compliance with the Treasury Board Contracting Policy and that documentation is retained on file to ensure that:

  • The chosen procurement method is used in compliance with its terms and conditions;
  • Non-competitive contract files contain justification for sole source in accordance with section 6 of the Government Contracts Regulations;
  • Supporting documentation for best-value analysis is kept on file;
  • Security requirements are addressed to ensure compliance with the provisions of the Government Security Policy; and
  • Contract amendments are justified and signed before the original contracts expire.
High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. The Agency’s Procurement Unit will manage the use of mandatory and non-mandatory methods of procurement made available by PWGSC and comply with the terms and conditions stated in individual standing offers or supply arrangements.
  2. Since November 2013, all procurements are presented to the President’s Management Committee for oversight and approval.
  3. Since November 2013, the use of any of the four exceptions to the bidding requirement, including sole-sourcing, must be justified to the President’s Management Committee and documented in contract files.
  4. In June 2014, the Agency’s Procurement Unit will ensure that all relevant costs over the useful life of an acquisition – and not only the initial or basic contractual costs – are considered and documented on contracting files.
  5. The Agency’s Security Unit will provide awareness training to managers at all levels to ensure compliance with the provisions of the Government Security Policy and the management of contracts.
  6. Starting in June 2014, managers will be required to provide more robust explanations of why additional costs or extensions are required for contracts and this information will be included in the contract file. Amendments to contracts will be made prior to either end of contract date or expiry of funds.
Director, Finance and Administration & Director General of Corporate Services
  1. Implemented as of April 2014
  2. November 2013
  3. April 2014
  4. June 2014
  5. May 2014
  6. June 2014
7. The Agency should ensure that documentation supporting the hospitality events is retained on file. It should also ensure that justification is documented and on file in cases where the cost per person exceeds the standard cost up to the maximum identified in the Directive on the Management of Expenditures on Travel, Hospitality and Conferences (Directive on Travel, Hospitality, Conference and Event Expenditures DTHCEE). Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations

Planned Actions:

  1. The Agency will provide additional education and training to administration staff and managers to ensure compliance with the Directive on the Management of Expenditures on Travel, Hospitality and Conferences.
  2. Finance will review more claims in the post-verification review to ensure that justification is documented and on file where the cost per person exceeds the standard cost up to the maximum as per the DTHCEE.

Director, Finance and Administration & Director General of Corporate Services

All administration staff

All delegated managers

June 2014
8. The Agency should ensure that employee leave is approved in a timely manner. Low

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. In May 2014, Human Resources will communicate with all employees and managers to remind staff of the requirement to enter and approve leave within certain timelines.
  2. Human Resources will perform spot checks throughout the year to ensure this is occurring. Any instances of non-compliance will be followed up with and monitored.
  3. Human Resources will more actively monitor the use of leave entitlements and Special Working Arrangements and continue to report trends and corrective measures to the Agency’s Human Resources Committee on a bi-annual basis.

Director, Human Resources

All delegated managers

All employees

  1. May 2014
  2. Bi-annually
  3. May 2014 and ongoing
9. The Agency should ensure that key terms and conditions requirements for casual employees are administered correctly. Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  • Offers for casual employment will be more actively reviewed and monitored to ensure compliance with the conditions and requirements for casual employment and appropriate justifications for employees that are paid at the highest increment.

All Managers

Director, Human Resources

May 2014
10. The Agency should ensure that annual performance reviews (and subsequent performance pay) are based on pre-set performance objectives which are completed and documented at the start of the performance period. High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  • Human resources will more actively communicate the timelines for performance reviews and will implement a management reporting process to confirm and document the achievements of performance management activities.
Director, Human Resources Ongoing – commencing May 2014
11. The Agency should consider performing credit assessments of private sector debtors to minimize credit risk. Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  • The Agency will consider options for assessing the credit risk of potential debtors.
Director, Finance and Administration & Director General of Corporate Services March 31, 2015
12. The Agency should ensure that supporting documents are on file for all contribution payments made, in accordance with the documentation requirements of the funding agreement. Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. The Agency will ensure that business processes are more formally documented and standardised. All supporting documents for contribution payments will be retained in the Agency’s records system, and Agency staff responsible for contribution payments will be provided with the education and training required.
  2. The lessons learned from the Core Control Audit will be taken into consideration for a planned 2014 evaluation of the Agency’s Participant Funding Program. This evaluation will include a provision to confirm that all necessary supporting documents are on file.

National Programs Director

Participant Funding Program Manager

  1. Implemented as of April 2013 and ongoing
  2. 2014/15 year
13. The Agency should exercise proper due diligence when confirming that transfer payment amounts do not exceed the stacking limit. Medium

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. Agency employees responsible for the Participant Funding Program will continue to ensure that the stacking limit is not exceeded by requiring applicants to disclose and attest whether they are receiving funding from outside sources.
  2. A planned 2014 evaluation of the Participant Funding Program will include a provision to confirm that Agency staff are exercising proper due diligence with respect to stacking limits.

National Programs Director

Participant Funding Program Manager

  1. Implemented as of April 2013 and ongoing
  2. 2014/15 year
14. The Agency should ensure that funds commitment availability is certified by someone with appropriate delegated authority, dated and that expenses are recorded at the value expected to be incurred. High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. Communication and training for all staff with delegated authorities.
  2. All EX performance management agreements will be amended to include the appropriate exercise and required documentation related to this delegated authority.
  3. The Agency’s Finance and Administration payment officers will exercise increased diligence in tracking payment invoices that are in breach of the appropriate and delegated funds commitment requirement.
  4. Personnel found to be in breach of the policy – and their managers – will be advised of breaches, and training or corrective action will be taken as required.
  5. A more rigorous internal post-payment verification will be conducted, starting with fiscal year 2014‑15. For any payments processed where there are breaches of policy, corrective actions relative to each breach will be taken.

All managers with delegated authorities

All EX staff & Director of HR

Director, Finance and Administration & Director General of Corporate Services

  1. Beginning April 2014
  2. June 2014
  3. June 2014
  4. June 2014
  5. June 2014

15. The Agency should ensure that the performance of account verification is done by someone with the delegated authority to do so, is accomplished on a timely basis and verifies the correctness of the payment requested. Specifically:

  1. The Agency should ensure that account verification is performed by the appropriate delegated authority for the following areas:
    1. Accountable advances; and
    2. PAYEs.
  2. The Agency should ensure that expenses certified are properly supported with proof of execution and cost for the following areas:
    1. Contracting;
    2. Acquisition cards;
    3. Pay administration (casuals, performance pay);
    4. Hospitality.
  3. The Agency should ensure that account verification is dated when exercised.
High

Response:
The Agency accepts the findings of the audit and will implement the following to address the recommendations:

Planned Actions:

  1. The Agency’s Finance staff will communicate and provide training for all staff with delegated authorities.
  2. All EX performance management agreements will be amended to include the appropriate exercise and required documentation related to this delegated authority.
  3. In June 2014, the Agency’s Finance and Administration staff will provide training to administration staff regarding the requirements of the performance of account verification.
  4. Personnel found to be in breach of the policy – and their managers – will be advised of breaches, and training or corrective action will be implemented as required.
  5. A more rigorous internal post-payment verification will be conducted, starting with fiscal year 2014‑15. For any payments processed where there are breaches of policy, corrective actions relative to each breach will be taken.

Director of Finance & Administration & Director General of Corporate Services

All EX staff

June 2014
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