Management Action Plan - Core Control Audit of the Canadian Radio-television and Telecommunications Commission 2016

Canadian Radio-television and Telecommunications Commission Opinion of the Audit Report:

We have reviewed the findings and recommendations, and that as far as the scope of this audit is concerned these accurately reflect the state of control over financial management, contracting, travel & hospitality and pay administration.  Accordingly, I accept these audit findings and I am pleased that the audit did not unveil any issues of abuse or improprieties. However, as Deputy Head, I acknowledge that there is administrative work to be done to improve processes and procedures and the level of knowledge of those involved in them. I will continue to work to resolve the on-going issue regarding the Delegated Financial Authorities Chart with the Minister of Canadian Heritage. I note that none of the matters identified through the audit would impede in any way the CRTC’s ability to carry out its legislative mandate. Indeed, the audit has found that the CRTC has established a sound financial management governance structure that fosters prudent stewardship of public resources in the delivery of its mandate.

Audit Entity Sign Off on the Management Action Plan

Original signed by

Jean-Pierre Blais
Chairman and Chief Executive Officer
Canadian Radio-television and Telecommunications Commission

Date: October 4, 2016

Recommendations Priority Response and Planned Actions Responsibilities
(position title responsible for the action)
Timelines
1. The CRTC should continue working with stakeholders to resolve the outstanding legal issue and ensure that the Delegated Financial Authorities Chart is current. High

Response: Management agrees with the recommendation.

Planned Actions:

The CRTC will continue to work with the Department of Canadian Heritage and the Minister of Canadian Heritage to resolve this long outstanding legal issue until the Delegated Financial Authorities Chart is approved by the Minister.

Director General, Finance and Administrative Services Not in control of the timeline - Ongoing
2. The CRTC should ensure that employees who have been delegated financial authorities receive mandatory training before they exercise their delegated authorities, and that they revalidate their knowledge to maintain their delegated authorities. Medium

Response: Management agrees with the recommendation.

Planned Actions:

The CRTC will:

Director General, Finance and Administrative Services and
Director General, Human Resources
Confirm that all employees with delegated financial authorities have received or revalidate their knowledge; Completed
Suspend the financial authority for delegated manager that have expired qualification pending validation of the CSPS Registrar data; Ongoing to December 31, 2016
Update the specimen signature card template to include the training expiry date; and Completed
Establish a shared HR-Finance list of delegated managers and their training status. Institute a semi-annual review of all specimen signature cards to ensure employees with delegation have current training. Completed

3. The CRTC should ensure that sufficient documentation is retained on file for acquisition cards, specifically in relation to:

  • The approval of credit limit increases and changes to allowable merchant categories and countries by responsibility centre managers;
  • The acknowledgement of responsibilities by cardholders; and
  • Support that acquisition card purchases are government business-related expenses.
Medium

Response: Management agrees with the recommendation.

Planned Actions:

Director General, Finance and Administrative Services
The CRTC will develop a reference guide to support acquisition card holders and an acknowledgement form. Completed

The CRTC will introduce new acquisition cards with microchips and will update every file to include:

  • The responsibility centre manager’s approval of credit limit, limit increase, changes to allowable merchant categories and countries as applicable; and
  • The cardholder’s acknowledgement form.
November 30, 2016
A Finance/Procurement/Travel/Pay Administration Refresher Training session for managers, to be named Resource Manager Training, and a similar session for Administrative and Executive assistants will be developed and will stress the need to document the business need for acquisition card expenses. March 31, 2017

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

  • Statements of work are developed and explicitly defined prior to contract award;
  • Non-competitive contract files include sole‑source justification in accordance with section 6 of the Government Contracts Regulations;
  • Best‑value analysis is performed prior to contract award;
  • Appropriate procurement vehicles are chosen and used in compliance with their terms and conditions;
  • The bid selection method and evaluation criteria are clearly outlined for competitive contracts and requests for proposal are developed and issued;
  • The evaluation of proposals and the selection of contractors is conducted in accordance with pre-established criteria in a fair, open and transparent manner;
  • Bid evaluation reports are developed and signed by a minimum of two clearly identified evaluators;
  • Contracts and amendments are issued before goods and services are received; and
  • Contract amendments are properly justified and substantiated.
High

Response: Management agrees with the recommendation.

The CRTC spent a total of $5.6M on contracting in 2015-2016.

Planned Actions:

Secretary General and Chief Financial Officer (CFO) and Director General, Finance and Administrative Services (DCFO)
The CRTC will increase capacity from one employee to two and centralized procurement functions. March 31, 2017
A procurement manual will be developed as a reference tool for the CRTC contracting and technical authorities. Completed
A checklist will be developed and will be attached to every contract file to ensure that all documents (e.g. Statements of Work and authorities, section 32 authorities, evaluation report) are completed and on file. Completed

The Resource Manager Training is being developed; it will explain the need to:

  • Reduce the use of sole source contracts;
  • Explore alternatives to sole source contracting and promote the use of existing standing offers or that other established procurement vehicles are used;
  • Define the bid selection method and evaluation criteria before RFP is developed and issued;
  • Document and justify decisions by signing evaluation reports, justifying sole source decisions, clearly demonstrating the competiveness of vendor rates;
  • Select the winning vendor in accordance with the terms and conditions of the RFP;
  • Formally issue contracts or amendments before the work can proceed or continue beyond the terms of the contract.
March 31, 2017
For the next 12 months, every sole source contract and sole source contract amendments where the total value exceeds $25K will be verified by the CFO/DCFO to exercise the challenge function and make course adjustments as required. October 31, 2017

5. The CRTC should ensure that travel business processes are improved and are consistently performed in compliance with the National Joint Council Travel Directive, and that sufficient documentation is retained on file to ensure that:

  • Employees are reimbursed for eligible meal expenses; and
  • Accommodations are selected from the Government Accommodation Directory and within the city rate limit, and sufficient justification is kept on file when the hotel is not included in the Directory or when the identified limit is exceeded.
Medium

Response: Management agrees with the recommendation.

The CRTC spent a total of $617K on travel in 2015-2016.

Planned Actions:

Director General, Finance and Administrative Services
The CRTC will centralize the review process for pre-approval and for account verification to improve effectiveness and standardization. In order to implement the new process, the CRTC will develop procedures to support administrative staff. Completed
The Resource Manager Training and the one to administrative staff will be mandatory. The training will increase awareness for compliance with Directives and provide guidance on how to document expense reports for exceptions (e.g. meals and hotel rate). March 31, 2017

6. The CRTC should ensure that hospitality business processes are improved and are consistently performed in compliance with the Directive on Travel, Hospitality, Conference and Event Expenditures, and that sufficient documentation is retained on file to ensure that:

  • Planning documentation reasonably justifies the operational need for the hospitality expenditures, especially in situations where hospitality is extended to a gathering of public servants only; and
  • The most efficient and economical alternatives for hospitality expenditures have been considered.
Medium

Response: Management agrees with the recommendation.

The CRTC spent a total of $120K on conferences and $29K on hospitality in 2015-2016.

Planned Actions:

Director General, Finance and Administrative Services
The CRTC will centralize the review process for pre-approval and for account verification to improve effectiveness and standardization. In order to implement the new process, the CRTC will develop procedures to support administrative staff. Completed

The mandatory Resource Manager Training will stress the need to:

  • Ensure planning documentation is reasonably justified and documented; and
  • Demonstrate that the most efficient and economical alternatives for hospitality expenditures have been considered.
March 31, 2017
7. The CRTC should ensure that detailed year-end performance reviews are completed for all eligible employees, and that performance agreements and year-end performance reviews are signed and dated by all concerned parties. Medium

Response: Management partially agrees with the recommendation taking into consideration third party systems are flawed.

Planned Actions:

Director General, Human Resources

CRTC will ensure that detailed year-end performance reviews are completed for all eligible employees.

With the implementation of Public Service Performance Management (PSPM), in 2014-2015, and Executive Talent Management System (ETMS), in 2015-2016, these systems were intended to provide electronic signoff and automatic date stamps.

Both systems are provided by and under the control of the Office of the Chief Human Resources Officer (OCHRO). Serious reliability concerns exist as systems have been off-line for considerable periods of time and create a culture of distrust of systems and a direct impact of end-user usability.

Ongoing
HR will implement a monitoring mechanism to the extent possible to ensure all eligible employees have performance reviews that are electronically signed and dated by concerned parties. Ongoing, taking into consideration systems challenges and limitations.
Also a manual validation process will be implemented to ensure accuracy of both ETMS and PSPM databases to ensure the integrity of the data imported from Phoenix. Completed

8. The CRTC should ensure that expenditure initiation (pre-approval and commitment) is properly documented and performed by an individual who has the appropriate delegated authority before expenses are incurred, specifically in relation to acquisition card purchases, contracting, hospitality expenditures and pay administration actions.

High

Response: Management agrees with the recommendation.

Total O&M and salary budget expended in 2015-2016 was $51.3M.

Planned Actions:

Director General, Finance and Administrative Services and
Director General, Human Resources
The CRTC will establish materiality to ensure the cost of controls are proportionate to the value of the expenses. March 31, 2017
The CRTC will centralize the review process for pre-approval and for account verification to improve effectiveness and standardization. In order to implement the new process, the CRTC will develop procedures to support administrative staff. Completed
The Human resources delegation instrument will be reviewed and align with the proposed Delegated Financial authorities chart (see recommendation #1). March 31, 2017
The Resource Manager Training will include information on pre-approval for contracting, acquisition card purchases, hospitality expenditures and pay administration action, such as, overtime, annual leave and HR actions request. March 31, 2017
The Resource Manager Training will be incorporated in the Orientation for new Manager and will also be available on the CRTC intranet. March 31, 2017
A list will be developed to include all sub delegated managers showing finances and HR training expiry dates.  Delegation authority will be verified before financial transactions are processed. March 31, 2017

9. The CRTC should ensure that account verification is performed by the appropriate delegated authority on a timely basis, and supported by complete documentation (proof of execution and cost), specifically regarding acquisition card purchases, contracting, hospitality expenditures and pay administration actions.

High

Response: Management agrees with the recommendation.

Planned Actions:

Director General, Finance and Administrative Services and
Director General, Human Resources
The CRTC will centralize the review process for pre-approval and for account verification to improve effectiveness and standardization. In order to implement the new process, the CRTC will develop procedures to support administrative staff. Completed
The Resource Manager Training will include information on Section 34 and 33 approval in a timely basis, proof of execution and cost for financial transactions and pay administration actions, such as, annual leave and HR actions request. March 31, 2017
The Resource Manager Training will be incorporated in the Orientation for new Manager and will also be available on the CRTC intranet. March 31, 2017
A delegation authority list will be developed to include all sub delegated managers including finances and HR training expiry date.  Delegation authority will be verified before financial transactions or HR actions are processed. March 31, 2017
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