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Audit of the Broadband Canada Program
3.0 Findings and Recommendations
3.1 Introduction
This section presents detailed findings from the Broadband Canada program audit. Findings are based on the evidence and analysis from both the initial risk assessment and the detailed audit.
In addition to the findings presented below, observations of conditions that were non-systemic and of low materiality and risk have been communicated verbally to management for its consideration.
3.2 Application Assessment Process
During our review of project files, we noted that eligibility and assessment criteria have been clearly defined, properly approved and incorporated into the program's tools, guidelines and checklists to enable a consistent approach to assessing applications. Templates were consistently used to clearly demonstrate the results of the assessment of proponents against the pre-established criteria (i.e. pass/fail decision).
During our review of project files, we noted that each file contained a completed risk complexity assessment form. The program assessed each proponent's financial, project and applicant risk and provided an overall level of risk (i.e. high, medium, low). This risk information was used to determine whether to provide funding to a particular proponent, and formed part of the project summary form used to document project approval.
The program also developed a Risk Monitoring Strategy, which provides guidelines on the use of risk mitigation activities based on level of risk. For example, the Risk Monitoring Strategy indicates that if a project's risk is assessed as high, the recipient will not have access to cash advances and a holdback of 10% will be applied to each payment.
Finding 1.0: File Documentation
The project file is the primary record of decision for the program and as such should include all the necessary documentation to support the funding decision. The assessment scoring was clearly noted in the project files we examined; however, the approach to compiling the documentation was not consistent (i.e. the documentation was housed in various locations and in a variety of forms). As a result, project files did not always contain sufficient documentation to support the scoring against the pre-established assessment criteria.
Without a clear and organized project file containing support for all assessment decisions/scoring, there is a risk that the program may have difficulty demonstrating the consistency of decisions made.
Recommendation 1.0
We recommend that the Director General (DG), ECOM develop a structured approach to records management to ensure there is adequate documentation and transparency within project files to support the scoring assessment against the pre-established assessment criteria.
3.3 Contribution Agreement Development
Program management, in collaboration with Legal Services and Comptrollership and Administration Sector (CAS), developed a contribution agreement template that captures all the requirements from the Treasury Board directive on Transfer Payments. Legal Services was also engaged to provide advice and feedback on any proposed CA amendments.
The template was presented to the Programs and Services Board (PSB), which as part of its mandate reviews proposals against the requirements of the TB Policy and Directive on Transfer Payments (TPP/D) and against departmental policies and directives. Specifically, the PSB considers the conformity of the contribution agreement template with the requirements of the TPP/D.
3.4 Recipient Monitoring and Development
Based on our review of project files, all recipient claims contained the information required under the contribution agreement (e.g. claim for eligible expenses only). Proponents completed all the required forms supporting the claim. There was sufficient evidence that the appropriate delegated authority had reviewed and approved the claims as per the Industry Canada Delegation of Authority (DOA) matrix.
Finding 2.0: Recipient Tracking of Quarterly Reports
As a project progresses, the recipient is required to submit a quarterly progress report to enable program officers to monitor and oversee the project.
During the conduct phase of the audit, the program was just beginning to receive quarterly reports from recipients, and had not yet implemented a standard tool/template to track the receipt of these reports. We observed that some recipient reports were arriving late, and that program officers were using a variety of tools/templates to track the receipt of reports.
To ensure there is a consistent approach to monitoring the receipt of quarterly reports and immediately identify where follow-up is required for missing information, the program should develop and use a standard tool/template.
Without a standard tool/template to track the receipt of recipient reports, there is a risk that the approach to monitoring and follow-up may be inconsistent across program officers, leading to potential delays in the receipt of recipient reports.
Recommendation 2.0
As the program is in the initial stages of monitoring, we recommend that the DG, ECOM implement a consistent approach and mechanism for tracking the receipt of recipient reports to ensure timely monitoring of progress.
3.5 Program Oversight
The program has developed assessment guidelines – a series of checklists and rating grids – that have helped ensure consistency in assessing proponents. Furthermore, the program has created a number of templates (e.g. risk assessment template) that have aided in standardizing the file management process.
The employees involved in the assessment phase were provided training on scoring applicants against the eligibility and assessment criteria. The program also changed the composition of the program team as the requirements changed (i.e. a different skill set is required for developing a program vs. implementing a program).
During our review of project files, we noted that project approvals were made in accordance with the DOA matrix, which includes FAA requirements. The work descriptions developed for the program provide a clear overview of the responsibilities and accountabilities of each of the employees involved.
The program was diligent in providing timely information to senior management and oversight bodies. The deputy minister was informed of the status of the program weekly. Another tool the program used to assist with communication was a program dashboard, which provided a budget overview, claim status and overall project snapshot with weekly updates.
Finding 3.0: Collaboration for Transfer Payment Programs
During our audit, we noted that the program received support from various groups within Industry Canada including the Industrial Technologies Office, CAS, Legal Services, PSB, and the Spectrum Operations Branch. The program sought out these groups to obtain support; however, there is no mechanism in Industry Canada to efficiently identify collaborative opportunities relating to transfer payment programs.
Treasury Board's Policy on Transfer Payments specifies that collaboration and coordination should exist within and among departments to harmonize transfer payment programs and standardize their administration, when appropriate. Although collaboration exists in the department, a departmental information-sharing mechanism could provide a more efficient approach to identifying collaborative opportunities.
Without a formal departmental information-sharing mechanism, program managers may miss opportunities to fully leverage the knowledge, tools and resources within the department, and inefficiencies and delays may be experienced in the design and implementation of short-term funding initiatives.
Recommendation 3.0
We recommend that the Chief Financial Officer of Industry Canada consider opportunities to enhance collaboration within the department relating to transfer payment administration. For example, the mandate of the Programs and Services Board could be expanded to include a periodic discussion on collaboration such as sharing of best practices.
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