Audit of the Broadband Rural and Northern Development Pilot Program — Appendix A – Audit Criteria

Appendix A – Audit Criteria

The following table outlines the audit criteria that were used to assess Industry Canada's management of the Broadband Program for each audit objective.

Audit Objective #1: A management control framework is in place to effectively and efficiently manage the Broadband Program.

Table 1 - Audit Objective #1: Criteria

Criteria	Applicable to
	Phase I	Phase II
1. a) Management and Operational Practices
Staff and management who are responsible for program delivery have the required skills, knowledge and capacity	X	X
Proper financial controls have been designed and implemented to help ensure that payments are subject to control, account verification and payment requirements under the terms and conditions of the contribution agreements, and Sections 32, 33 and 34 of the Financial Administration Act (FAA)	X	X
b) Integrated Risk Management
A mechanism exists to systematically identify, assess, monitor and report on risks facing the program.	X	X
A risk-based approach to the monitoring of contribution agreements exists and is followed.	X	X
c) Information Management and Reporting for Decision Making
Results expected from the program are clear, measurable, and directly related to program objectives	X	X
Expected results are monitored and communicated on a regular basis and support management decision-making.	X	X
Reporting on project results against achievement of objectives is timely and accurate.	X	X
Recipients share their knowledge and expertise with other communities by working with the National Program Office in developing best practices, lessons learned, and other pertinent resource materials.	X	X
Roles and responsibilities for managing and delivering the program are well defined.	X	X

Audit Objective #2 a): Internal controls related to the selection, approval, payment and review of Broadband Projects are in place and working as intended to ensure funds are used for intended purposes.

Table 2 - Audit Objective #2 a): Criteria

Criteria	Applicable to
	Phase I	Phase II
Project Selection
Applicant's eligibility is proven and documented	X	X
Applicant demonstrates appropriate knowledge and capability, and support structures to undertake the project	X	X
Project Approval
Assessment criteria are defined and support program objectives	X	X
Project complies with program eligibility and assessment criteria	X	X
There is an appropriate approval or rejection of the project by a delegated authority, based upon review of the project summary form (PSF).	X	X
There is certification by a responsible officer that sufficient funds were available in the appropriation before the agreement was signed under Section 32 of the FAA	X	X
The rationale for each funding decision is appropriately documented to permit supervision and review	X	X
Terms and conditions in contribution agreements are consistent with the Program's Terms and Conditions and clearly outlines expected project results	X	X
Contribution agreements meet accountability requirements including: statement of objectives; clear understanding between parties on required outcomes or expected results before funding begins; monitoring provisions based on assessment of risk; and conditions that must be met to receive payments.	X	X
Claims Verification and Approval
Officers have complied with financial controls including: Section 34 – there is proof that performance conditions of the agreement were met before each payment was made Section 33 – proof that finance officer signing was assured that Section 34 was met prior to payment authorization.	X	X
Claims are reviewed for reasonableness and accuracy and are examined for compliance with terms of contribution agreements.	X	X
Advance payments are properly authorized on the PSF and contribution agreement and are in accordance with TBS guidelines.	X	X
Project Review
There is a process in place to determine whether the project was successful in contributing to expected program results.	X	X

Audit Objective #2 b): The Broadband Program is managed in compliance with Treasury Board Secretariat's Policy on Transfer Payments, including the existence of effective management practices and controls to monitor recipient compliance with the terms and conditions of their contribution agreements.

Table 3 - Audit Objective #2 b): Criteria

Criteria	Applicable to
	Phase I	Phase II
Broadband program guidelines are fully consistent with the Policy on Transfer Payments.	X	X
Progress reports prepared by the recipient, either on a monthly basis or in conjunction with the submission of claims, are reviewed to ensure the project is progressing consistently with the contribution agreement statement of work.	X	X
A mechanism exists to verify that the terms of contribution agreements have been met. Consequences for non-compliance have been defined and are adhered to in practice.	X	X
Monitoring and audit requirements of the program's Risk-Based Audit Framework have been met and issues identified are resolved on a timely basis.	X	X