Management Action Plan - Core Control Audit of the Canadian Transportation Agency

Canadian Transportation Agency’s Opinion of the Audit Report:

The Canadian Transportation Agency (CTA) has reviewed the findings and recommendations of the Core Control Audit conducted by the Office of the Comptroller General for the fiscal year 2013-2014.  The Agency is of the view that these statements accurately reflect the Agency’s internal control for financial management, contracting, travel & hospitality and human resources.

The Chair and Chief Executive Officer and senior management of the CTA take the findings of this report very seriously.  As indicated in the following pages, the Agency has already implemented process changes in areas identified for improvement.  In addition, follow-up actions have been planned for 2015-2016 and subsequent years to implement and monitor the Report’s recommendations.

The Agency wishes to thank the Office of the Comptroller General for its professional services.

Sam Barone
Interim Chair (Deputy Head)
Canadian Transportation Agency

Recommendations Priority Response and Planned Actions Responsibilities
(position title responsible for the action)
Timelines
1. CTA should ensure that the Delegation of Financial Signing Authorities Instrument and specimen signature cards are reviewed and updated annually.

High

Response:

The Agency accepts the findings of the audit.  The Agency has implemented the following to address the recommendations:

The Agency updated all specimen signature cards in February 2015 to respond to the recommendation.  A review and update of the specimen signature cards is now included as part of the Agency’s annual integrated business planning and reporting exercise, whereby all plans are approved by the Executive Committee at the end of March for the start of the new fiscal year in April.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

2. CTA should ensure that:
  • Proper documentation is retained on file for all acquisition cards to substantiate their issuance, approval and conditions of use; and   
  • Reassessment of employees’ need for an acquisition card or reassessment of the credit limit amount is performed on a periodic basis or when responsibilities change.

Medium

Response:

The Agency accepts the findings of the audit.  During the examination phase, it was found that the Agency had partially met its obligations (16 out of 19 transactions).  To ensure full compliance, the Agency will implement the following to address the recommendations:

Planned Actions:

  1. A more robust records management procedure will be implemented to ensure that the Agency's acquisition card coordinator maintains proper documentation on file to track and monitor acquisition card issuance, approval, and conditions of use.
  2. The Agency's acquisition card coordinator will implement and document an annual reassessment in February-March of employees' needs for an acquisition card and of the credit limit amount.
  3. Annual documented monitoring in May of each year of the Agency's core controls will ensure that the Directive on Acquisition Cards is fully respected.

Chief Financial Officer and Deputy Chief Financial Officer

  1. New records management procedure to be in place by September 2015
  2. b. March 2016
  3. May 2016
3. CTA 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 certify that:
  • Appropriate procurement vehicles are chosen and used in compliance with their terms and conditions;
  • Non-competitive contract files contain justification for sole source in accordance with section 6 of the Government Contracts Regulations;
  • Statements of work are developed, explicit and documented prior to contract award;
  • Supporting documentation for best-value analysis is kept on file;
  • Bid evaluation criteria are provided on Request for Proposal (RFP) documents and are used for contractor selection in an open, fair and transparent manner for competitive contracts;
  • Contracts are approved by the appropriate delegated authority before the goods and services are received and contract amendments are justified; and
  • Contracts valued at over $10,000 are publicly disclosed.

High

Response:

The Agency accepts the findings of the audit.  Since 2013-2014, the Agency has moved the procurement model from one of generalist expertise (AS classification) to one of specialized expertise (PG classification).  As a result, in September 2014, the Contracting team underwent a thorough modernization of its business processes.  Due to the complexity of this area, the modernization of the procurement business processes required a considerable amount of time, analysis and consultations with the clients to ensure that the updated processes would meet their operational requirements and that they would comply with central agency procurement requirements.  In addition, contracting templates and guidelines were reviewed, updated, and included in a Procurement Guide to ensure that all relevant information related to justification/ substantiation/expenditure initiation/best value and appropriate contracting vehicle are documented and that bid evaluation criteria are provided on Requests for Proposal and are used in an open, transparent, and fair manner for competitive contracts, among other items.  All information related to contracts over $10,000 has been highlighted on the Agency's website under Proactive Disclosure.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on procurement to provide management with information on whether deficiencies have been addressed in a sustained way, as well as to ensure that the Procurement Guide remains in compliance with the Contracting Policy.  In addition, errors related to contracting are noted in performance management evaluations for all delegated managers starting in 2015-2016.  When Procurement training is provided, participant lists are kept and materials are posted on the intranet for future reference.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

4. CTA should ensure that business processes are improved and are consistently performed in compliance with the Travel Directive, and that documentation is retained on file to certify that:
  • Employees are reimbursed for meals, incidentals and mileage expenses at applicable limits or justification is retained on file; and
  • Employees select hotels from the pre-approved government supplier list or within the city rate limit, where applicable, and manager’s justification and approval is kept on file in cases where the limit identified in the Travel Directive is exceeded or when the hotel is not included on a list.

High

Response:

The Agency accepts the findings of the audit. 

In January 2015, the Agency realigned internal resources to create a unit responsible for ensuring that all financial transactions are in compliance with the National Joint Council Travel Directive.  As a result, the Chief Financial Officer Directorate is now reviewing all claims to ensure that all required information is available to, among other things, corroborate travellers' distance documentation, justify exceeding city limit rates, and justify using accommodations not on the pre-approved list of government suppliers.  During the operational business planning process, a global travel, outreach, conference, and hospitality plan is approved by the Chair for the fiscal year to provide expenditure initiation authority to delegated managers for travel.  This plan is reviewed on a quarterly basis.  Errors related to travel are logged in a document and presented to the Executive Committee on a quarterly basis.  These errors may also be noted in performance management evaluations for delegated managers starting in 2015-2016.  The Agency has also provided and will continue to provide additional education and training to administrative staff and managers to ensure compliance with the National Joint Council Travel Directive.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on travel to provide management with information on whether deficiencies have been addressed in a sustained way.  When travel training is provided, participant lists are kept and materials are posted on the intranet for future reference.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

5. CTA should ensure that documentation supporting the hospitality events is retained on file to certify that:
  • Planning documentation reasonably justifies the operational need for hospitality expenditures and related event costs; and
  • The assessment of whether the most economical means to avoid or minimize hospitality event costs have been considered in the approval process.

Medium

Response:

The Agency accepts the findings of the audit.  In January 2015, the Agency realigned internal resources to create a unit responsible for ensuring that all financial transactions are in compliance with the Directive on the Management of Expenditures on Travel, Hospitality, and Conferences.  The hospitality business process has since been mapped, streamlined, and rendered more efficient.  As a result, the Chief Financial Officer Directorate is now reviewing all hospitality requests and claims to ensure that all required information is available to, among other things, justify why using hospitality was the most economical alternative, that expenditure initiation is performed by someone with the proper delegated authority and is dated, and that all hospitality expenses are approved prior to the event.  During the operational business planning process, a global travel, outreach, conference, and hospitality plan is approved for the fiscal year to provide expenditure initiation authority to delegated managers for hospitality.  This plan is reviewed on a quarterly basis.  Errors related to hospitality are logged in a document and presented to the Executive Committee on a quarterly basis.  These errors may also be noted in performance management evaluations for delegated managers starting in 2015-2016.  In addition, the Agency has provided and will continue to provide additional education and training to administrative staff and managers to ensure compliance with the Directive on the Management of Expenditures on Travel, Hospitality, and Conferences.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on hospitality to provide management with information on whether deficiencies have been addressed in a sustained way.  When hospitality training is provided, participant lists are kept and materials are posted on the intranet for future reference.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

6. CTA should ensure that employee leave is approved in a timely manner and by an individual with the proper delegated authority.

Low

Response:

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

Planned Actions:

  1. The Agency will document, streamline, and implement a revised leave approval business process to ensure that all leave is approved in a timely manner and by an individual with the proper delegated authority.  Implementation of My GCHR will ensure that only individuals with delegated authority are able to approve leave.
  2. Human Resources will formally communicate with managers to remind them of the requirement to approve leave within certain timelines
  3. Human Resources will monitor and document the results of this business process to ensure this is occurring; errors related to leave are noted in performance management evaluations for all delegated managers starting in 2015-2016.

Director of Human Resources

  1. March 2016
  2. April 2015
  3. Semi-annually starting in September 2015
7. CTA should ensure that performance reviews are based on pre-set performance objectives which are completed and documented at the start of the performance period and are signed by all concerned parties.

High

Response:

The Agency accepts the findings of the audit.  As a result of the Treasury Board Public Service Performance Management Initiative, the Agency has implemented the prescribed management reporting process to confirm and document the achievement of performance management activities, and actively communicates timelines for performance reviews.  As of 2015-2016, a report on the number of completed performance agreements is provided to the Director of Human Resources.  Instances of non-compliance are logged in a document and presented to the Executive Committee on a quarterly basis.  These instances may also be noted in performance management evaluations for delegated managers starting in 2015-2016.

Planned Actions:

Follow-up to ensure that performance objectives and evaluation respect the prescribed timeframes.

Director of Human Resources

April 30, 2015

8. CTA should ensure that expenditure initiation and commitment control is documented, properly dated and recorded at the value expected to be incurred.

High

Response:

The Agency accepts the findings of the audit.    In January 2015, the Agency realigned internal resources to create a unit responsible for ensuring that all financial transactions are in compliance with legislation, regulations, policies and delegated authorities.  This unit reviews all financial transactions to ensure the requirements of section 32 are being met.  Managers and administrative assistants use an invoice verification checklist to document expenditure initiation.  Errors related to section 32 are logged in a document and presented to the Executive Committee on a quarterly basis.  Errors may also be noted in performance measurement evaluations of delegated managers starting in 2015-2016.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on expenditure initiation to provide management with information on whether deficiencies have been addressed in a sustained way.  The Agency now ensures that expenditure initiation and commitment control is documented, properly dated, and recorded.  When expenditure initiation training is provided, participant lists are kept and materials are posted on the intranet for future reference.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

9. CTA should ensure that account verification is properly dated, supported by complete documentation and completed on a timely basis.

High

Response:

The Agency accepts the findings of the audit. 

In January 2015, the Agency realigned internal resources to create a unit responsible for ensuring that all financial transactions are in compliance with legislation, regulations, policies and delegated authorities.  This unit reviews all financial transactions to ensure the requirements of section 34 are being met.  Managers and administrative assistants use an account verification checklist to document expenditure initiation.  Errors related to section 34 are logged in a document and presented to the Executive Committee on a quarterly basis.  Errors may also be noted in performance measurement evaluations of delegated managers starting in 2015-2016.  The financial and administrative business processes have since been mapped, streamlined, and rendered more efficient.  In addition, the Agency has provided and will continue to provide additional education and training to administrative staff and managers to ensure compliance.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on account verification to provide management with information on whether deficiencies have been addressed in a sustained way.  As a result, the Chief Financial Officer Directorate ensures that account verification is properly dated, supported by complete documentation and completed on a timely basis.  When account verification training is provided, participant lists are kept and materials are posted on the intranet for future reference.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

10. CTA should ensure that payment requisition is completed for the correct amount and on a timely basis.

High

Response:

The Agency accepts the findings of the audit.  In January 2015, the Agency realigned internal resources to create a unit responsible for ensuring that all financial transactions are in compliance with legislation, regulations, policies and delegated authorities.  The financial and administrative business processes have since been mapped, streamlined, and rendered more efficient.  The Agency's internal control monitoring plan will be adjusted to incorporate a greater focus on payment requisition to provide management with information on whether deficiencies have been addressed in a sustained way.  As a result, the Chief Financial Officer Directorate ensures that payment requisition is completed for the correct amount and on a timely basis.

Planned Actions:

Completed

Chief Financial Officer and Deputy Chief Financial Officer

Completed

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