PACC Committee Report

RESPONSES TO RECOMMENDATIONS OF THE FIFTH REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS

 

RECOMMENDATION 1 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for the adoption of a risk management approach to its responsibilities for grant and contribution programs. That Treasury Board Secretariat tables the action plan and the implementation timetable in Parliament no later than March 31, 2003.

RESPONSE:

Treasury Board Secretariat (TBS) currently follows a risk management approach to its responsibilities for grant and contribution programs. As part of this approach, TBS identifies and mitigates areas of high risk. As risk management is a continuous process these measures will be revisited and evaluated periodically.

TBS currently conducts a detailed analysis of 100% of the terms and conditions of Treasury Board (TB) submissions made by departments and agencies under the TB Policy on Transfer Payments. Comprehensive coverage is important at this time as departments build up capacity, expertise and proficiency with the revised policy.

TBS requires that all Treasury Board submissions made by departments and agencies under the Policy on Transfer Payments include a Risk Based Audit Framework (RBAF). An RBAF describes the highest risk areas of a Grant or Contribution program and identifies the monitoring and auditing activities that the department will put in place to help mitigate these risks.

 

RECOMMENDATION 2 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for strengthening its capacity to compile information and monitor departmental operations in order to assess the performance and integrity of grant and contribution programs. That Treasury Board Secretariat tables the action plan and the implementation timetable in Parliament no later than March 31, 2003.

RESPONSE:

In following up on the implementation of the revised Policy on Transfer Payments, TBS established an ongoing dialogue with departments in order to facilitate their work and deliver value for money. Secretariat officials have worked with departments to strengthen departmental capacity in the areas of internal audit and evaluation and reports of those audits and evaluations are reviewed by TBS on a regular basis. TBS is updating its inventory of all grants and contributions programs.

 

Treasury Board Secretariat works with departments to monitor performance and integrity of grant and contribution programs. For example, Secretariat officials review proposed grant and contribution program terms and conditions and work with departments to ensure that these program terms and conditions meet the requirements of the Policy on Transfer Payments. As the Secretariat continues to move towards ensuring results for Canadians, it will continue to emphasize departmental reporting on transfer payments.  TBS officials are exploring with departments the use of an integrated Results-Based Management Accountability Framework (RMAF) and RBAF document, which will require reporting both on management control issues and on results.

 

RECOMMENDATION 3 -- That Treasury Board Secretariat take all necessary steps to ensure that it receives from all departments and agencies copies of their internal audit and evaluation reports and any other relevant documentation on the management of grant and contribution programs.

RESPONSE:

The Treasury Board Policy on Internal Audit, effective April 1, 2001, requires all departments and agencies to submit their annual internal audit plans and their completed internal audit reports to the TBS Centre of Excellence for Internal Audit (CEIA).

 

Similarly, the Treasury Board Policy on Evaluation, effective April 1, 2001, requires all departments and agencies to make their annual evaluation plans accessible and to forward their completed evaluation reports to the TBS Centre of Excellence for Evaluation (CEE).

 

The information provided through audit and evaluation findings generally serves to inform and support the Treasury Board Secretariat in its efforts to maintain an ongoing awareness of the state of management practices and controls across government.

 

In the process, special attention is being paid to the management of grant and contribution programs. The Policy on Transfer Payments clearly indicates that departments and agencies must assess grant and contribution programs, through a formal program evaluation or similar review, and report back on the effectiveness of the transfer payments when requesting renewal of terms and conditions. Consequently, evaluation reports produced by departments and agencies on programs that include grants and contributions are reviewed by the CEE in order to assess findings and conclusions presented in support of TB Submissions.

 

RECOMMENDATION 4 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for its initiatives designed to improve its capacity to review and challenge terms and conditions of proposed grant and contribution programs. That Treasury Board Secretariat tables the action plan and the implementation timetable in Parliament no later than March 31, 2003.

RESPONSE:

At present, TBS examines 100% of all grant and contribution program terms and conditions and related audit and accountability frameworks requiring Treasury Board approval.

 

Program proposals are subjected to a thorough assessment including selecting the right funding instrument and establishing clear performance expectations. Based on these reviews, requests to create or renew transfer payment programs may be approved, rejected, or approved conditionally. TBS provides training to analysts to ensure that departments seeking approval of transfer payment programs are provided with sound, knowledgeable advice and guidance.

 

The TBS coverage of grant and contribution program terms and conditions requiring approval is appropriate at this time. TBS reviews its processes periodically and may modify its approach based on risk assessments.

 

RECOMMENDATION 5 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable regarding initiatives aimed at supporting departments and agencies in building capacity in due diligence, particularly in the training and guidance of program managers and officers in managing transfer programs. That Treasury Board Secretariat tables the action plan and the implementation timetable in Parliament no later than March 31, 2003.

RESPONSE:

The Treasury Board Secretariat has recently developed a Learning Framework for the management of transfer payment programs. This entailed an assessment of departmental training needs, activities and materials. An interdepartmental training committee has been formed to address issues pertaining to training and due diligence. TBS currently offers training on risk based audit frameworks and results based management and accountability frameworks- two essential components of a transfer payment program design framework. In conjunction with the working group, TBS will develop a workshop on preparation of program terms and conditions in support of transfer payment program design and development. Issues of concern to most departments would be included in that workshop.

 

A number of departments have a comprehensive training compendium of transfer payment courses. An inventory of training modules has been established and shared with the interdepartmental training committee thereby enabling them to build on each other’s training programs. Canadian Heritage and Indian and Northern Affairs Canada are currently working on an integrated RMAF/RBAF pilot project. This project includes the development of guides and training materials for eventual distribution and use government wide.

 

TBS ensures that all proposed and revised transfer payment programs are compliant with the policy with respect to controls and accountability as well as risk-based audit. This facilitates the management of programs with regard to due diligence. The importance and need to demonstrate due diligence is a message that is continuously shared amongst members of the transfer payment community and is a key element in training packages.

 

RECOMMENDATION 6 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for initiatives designed to ensure that departments and agencies include in their departmental websites a section containing information on complete and clearly defined performance expectations for each grant and contribution program over $5 million.

RECOMMENDATION 7 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for initiatives designed to ensure that departments and agencies include in their departmental websites a section containing performance and other relevant information for each grant and contribution program of over $5 million, where the results achieved did not measure up to performance expectations.

RECOMMENDATION 8 -- That Treasury Board Secretariat prepare an action plan with an implementation timetable for initiatives designed to ensure that departments and agencies include in their departmental websites a section containing downloadable versions of internal audit and evaluation reports on grant and contribution programs, and that these reports remain posted on the website until superseded by the follow-up audit or evaluation report.

RESPONSE:

The Policy on Transfer Payments requires that departments include performance expectations in their Report on Plans and Priorities (RPPs) for each transfer payment program with transfers in excess of $5 million. Similarly, the policy requires departments to provide evidence of results achieved, relative to their performance expectations in Departmental Performance Reports (DPRs).

These reports are regularly posted on the Treasury Board Secretariat website and are tabled in Parliament.

The new TBS policies and standards for internal audit and evaluation, which came into effect on April 1, 2001, encourage greater transparency and accessibility to internal audit and evaluation reports, including those on grants and contributions. Both policies require that departments and agencies issue completed reports in a timely manner and make them accessible to the public with minimal formality in both official languages. The Treasury Board Secretariat has signalled the importance of this matter through an Information Bulletin from the Deputy Comptroller General to all departments and agencies.

Departments and agencies are required to send copies of completed internal audits and evaluations to the Treasury Board Secretariat, including those on grant and contribution programs. Departments are encouraged to post all completed studies or summaries on their own websites. To ensure public access, TBS maintains a list of completed studies and provides hyperlinks to posted studies (or departmental contact information). The list of audits and evaluations that are specifically relevant to grants and contributions is available at http://www.tbs-sct.gc.ca/rma/database/aevepp_e.asp?id=1999.