Audit of Finance and Contracting

Prepared for
Supreme Court of Canada
Prepared by
Consulting and Audit Canada
Project No.: 330-0970-01
April 2001
Ottawa, Ontario

Executive Summary

The last Finance Audit conducted in the winter of 1996 concluded that the Finance Branch (now reorganized as the Finance and Materiel Management Branch) was well managed and continued to provide valuable guidance to the Deputy Head. This current audit was undertaken to examine several items of current interest to management: namely, the adequacy of contracting practices and account verification activities within the Finance and Materiel Management Branch (FMMB); the appropriateness of the current limit of $5,000 for goods procurement; whether certain human resource management issues which had emanated from the recent government-wide Public Service Employee Survey are being satisfactorily addressed; and the state of readiness of implementation of the Financial Information Strategy (FIS) at Supreme Court of Canada (SCC).

Based upon the results of our review, our general conclusion is that the finance function within FMMB is well managed and controlled and reflects the application of sound modern comptrollership principles. In the area of contracting, we have made a number of recommendations to strengthen contracting practices and controls and to promote improved compliance with the Treasury Board of Canada Secretariat (TBS) Contracting Policy and the Government Contracting Regulations.

Outlined below is a summary of the findings raised in the Audit Results section of this report:

  1. Although the Finance and Material Management Branch (FMMB) has taken significant steps to streamline its contracting practices, several improvements are still needed to strengthen controls over contract management and administration processes and to ensure that its contracting practices more fully comply with the policies of the TBS Contracting Policy and the requirements of the Government Contract Regulations.
  2. FMMB has implemented a sound control framework for ensuring that accounts submitted by suppliers and contractors are being verified and paid in an effective and efficient manner. All Central Agency policy and procedural requirements are being fully met.
    • The present level for goods procurement within SCC is $5,000. Based upon an operational review of transactions in excess of $5,000 covering the period from November 1, 1999 to November 22, 2000, we feel that the present level of $5,000 for goods procurement should be amended to $25,000. The move for increased goods procurement authority would serve to implement the offer that was made by the Minister of Public Works and Government Services (PWGSC) to departments and agencies in May 1998 and in June 2000.
    • FMMB has implemented effective initiatives to address the communication and workload issues which were raised pursuant to the Public Service Employee Survey. The biweekly staff meetings and the developmental and promotional opportunities that have been recently created have been well received by Branch staff.
    • FMMB has made favorable and positive progress in ensuring that SCC will be FIS-ready by the March 31, 2001 deadline date.

We wish to express our appreciation to the staff and management of FMMB for the cooperation and assistance extended to the audit team during the course of the audit. The results of this audit have been discussed with the Director General, Management Services Sector.

1.0 Introduction

1.1 Background Environment

This audit encompasses the financial activities of the Finance and Materiel Management Branch (formerly the Finance Branch), one of three branches comprising the Management Services Sector. At the time of this audit, the Supreme Court of Canada (SCC) was undergoing an extensive reorganization. Under this reorganization, the Management Services Sector reports directly to the Registrar.

The Finance and Materiel Management Branch (FMMB) is managed by a Director to whom the Head, Accounting and Materiel Management Operations reports. The Head, Accounting and Materiel Management Operations supervises four Operations Support Assistant Clerks. The FMMB is currently in a state of transition in that several financial officer positions are currently being occupied on an acting basis and two new financial officer positions will be created and staffed later in FY 2000/01. As of July 30, the responsibilities of the Director position are being discharged by a contracted resource until a new Director is hired. In addition, the position of Head, Accounting and Materiel Management Operations is currently being filled on an acting basis.

There are four clerks who currently report to the Head of Accounting Operations. Three of these clerks are responsible for the procurement and administration of goods and services for the SCC. The other clerk, who is currently acting in a junior financial officer position, is responsible for managing revenues, cheque distribution activities and petty cash.

1.2 Audit Objectives and Scope

1.2.1 Objectives

The purpose of the audit is to assist management by evaluating and providing an opinion on:

  1. current contracting practices within the Finance and Materiel Management Branch, including procurement, and contracting for goods and services;
  2. the adequacy of financial controls over account verification and payment processing activities;
  3. the adequacy of the present level of $5,000 for goods procurement within SCC;
  4. the effectiveness of workload and communications initiatives that have been recently implemented within the Branch to address the results of the Public Service Employee Survey; and
  5. the extent of readiness of implementation of the Financial Information Strategy (FIS) within SCC.

1.2.2 Scope

The scope of this audit included an examination of:

  • all professional services contracts in excess of $25,000 which were administered by FMMB during the 1999 calendar year;
  • procurement transactions valued between $5,000 and $25,000 initiated by FMMB either through the standard Public Works and Government Services Canada (PWGSC) "Requisition for Goods and Services" form or the PWGSC " Call-Up Against A Standing Offer" form during the period November 1, 1999 to November 22, 2000;
  • the system of financial controls in place covering account verification and payment requisitioning activities;
  • implementation of workload/communication initiatives with FMMB; and
  • minutes of meetings and documented milestone reports regarding FIS readiness.

1.3 Audit Approach

The audit was conducted by:

  1. interviewing staff in order to understand the major processes and key activities that form part of the scope of this audit;
  2. reviewing background information to identify the environment within which FMMB operates;
  3. examining documentation such as correspondence, work plans, accounts payable files, and minutes of branch meetings, as a basis for completing our audit programs;
  4. testing a relevant sample of procurement and payment transactions;
  5. debriefing the Interim Director of FMMB and the Director General, Management Services Sector on audit results; and
  6. preparing an audit report and including management responses.

2.0 Audit Results

2.1 Contracting Practices

Our review of contracting practices within SCC focused on professional services contracts and contracts for the procurement of goods. Under the current guidelines in effect at the time of our audit, SCC has been delegated authority to purchase goods directly from suppliers valued up to $5,000 using either a Local Purchase Order or other purchase requisition, and services up to $100,000 as specified in the terms of the contract. Our review covered the 1999 calendar year and was conducted according to the policy statements and contracting limits that are outlined in Appendix C of the Government Contracting Policy (entitled "Treasury Board Contracts Directive - TB 80600, dated June 26, 1987, as amended").

According to the "Contract Control Sheet", maintained by FMMB, there were 46 professional services contracts let during the period from January 1 to December 31, 1999 of which four were in excess of $25,000. We reviewed all four contracts over $25,000 and randomly selected seven other contracts of value less than $25,000.

For each contract file reviewed, we verified that appropriate contract initiation documents were on file, that the statement of work was clearly defined, and that appropriate approvals had been given. We also reviewed documentation contained in each contract file to ensure that an employer-employee relationship did not exist and that contract splitting practices had not been followed. In the case of competitive contracts, we examined the bid solicitation process followed to ensure it complied with the requirements of Sections 5 and 6 of the Government Contracting Regulations. In the case of sole source contracts, we verified that adequate justification existed on file to rationalize why the contract had not been awarded on a competitive basis.

Based upon the results of our review, we conclude that FMMB has taken positive steps to promote adherence of its contracting practices with the overall policy objectives of the TBS Contracting Policy. A Contract Review Committee (CRC) has now been established which reviews each contract proposal from a security, informatics, legal, and corporate services perspective before the contract is signed off by the FMMB Contract Officer (Head, Accounting and Material Management Operations). In addition, a document has been prepared in draft form to assist clerical staff in discharging their responsibilities relating to procurement activities. This document effectively outlines the basic procedures to be followed for establishing a contract and the roles and responsibilities of the project authority (responsibility centre manager) and the FMMB Contract Officer. The Head, Material Management and Accounting Operations has also developed a document to assist responsibility centre managers in developing a detailed statement of the scope and objectives of work to be performed. The results of our interviews with FMMB staff confirmed that they are knowledgeable about their roles and responsibilities under goods/services procurement and contract administration.

Notwithstanding the implementation of these measures, we conclude that improvements are still needed in FMMB's contracting practices to more adequately fulfill the objectives of the Treasury Board of Canada Secretariat (TBS) Contracting Policy and to ensure improved compliance with the Government Contract Regulations. Some of our more significant findings are listed below:

(1) Bid Evaluation process not followed for one competitive contract

Our sample included one contract for the provision of communication services. This contract was for $26,750 and had been awarded on a competitive basis. Our review of the documentation contained on file indicated that the bid evaluation process had not been properly followed. For example, although detailed notes were kept of interviews held with two of the five contractors who had submitted bids, there was no evidence of a score sheet or a set of ratings being used to support the analysis of each proposal and to document the basis of the assessment team's final selection of the winning bid. In addition, no reasons were documented as to why the other three proposals received no further consideration. The use of mandatory criteria and rated criteria would accurately identify all the performance elements significant to the success of a project under consideration and would also measure the competence of both the contractor and the worth of the technical approach submitted. Competence could include such factors as key personnel, prior work experience, type of facilities offered, and financial strength. Technical worth could include such factors as the identification of key technical problems, outlines of feasible solutions, and proposed schedules of milestones, cost and time control systems to be used.

Although the Head, Accounting and Material Management Operations has developed a draft set of policies and procedures to assist staff in the management and administration of contracts, this document would be enhanced if it included detailed procedures and policy guidelines covering bid evaluation and selection of a contractor. The draft document should also include review methodology which addresses basic questions such as are funds available, are departmental signing authorities observed, does the proposal have legal clearance where required, and is the proposal in line with government policies on employment equity and conflict of interest. These considerations are outlined in Sections 10 and 11 of the TBS Contracting Policy.

  • Work undertaken before contract signed

We found two instances in which work was commenced before the governing contract was signed. In both instances, we noted that invoices submitted by each contractor had been processed and paid before the date the respective contracts were signed. In one of these instances, the problem appears to be more of a timing issue and could have been alleviated if FMMB made more extensive use of standing offer agreements to satisfy repetitive requirements such as the provision of this type of service. The standing offer method can produce speedier procurement while at the same time reduce administrative paperwork.

(3) No post contractor evaluation of services routinely undertaken

Section 16.11 of the TBS Contracting Policy covers the administration of consulting and professional services contracts. This section requires that, on completion of a contract, the contracting authority or his designate should evaluate the work performed by the consultant or the professional. Furthermore, evaluation reports should include an assessment of the quality of work performed, the efficiency of the consultant or professional in managing time and resources, and an analysis of the cost of the work and the estimated value received. Our review of professional services contracts indicated that this is not being routinely done. The post-evaluation of contracts is an essential component of the monitoring function to ensure that policy requirements continue to be met.

(4) Significant amendments to contracts are not resubmitted to the contract review committee

Although each contract reviewed had been properly signed off by members of the Contract Review Committee (CRC), we found several contracts in which the scope of work to be performed had significantly changed. In these situations, while contract amendments had been properly signed by both parties, these amendments had not been reviewed and signed off by the CRC. The use of the contract review committee is not necessary when the nature of the amendment does not significantly alter the scope of work, as in the case of extending the term of the contract. However, when the scope of work is significantly changed, such as in the nature of the work to be performed, or when the value of the contract is increased, it is important from a control perspective that amendments be reviewed and signed off by the CRC.

Conclusion

The Finance and Materiel Management Branch has taken significant steps to improve its contracting practices. However, improvements are still needed to strengthen controls over contract management and administration processes and to ensure that its contracting practices fully comply with the TBS Contracting Policy and the requirements of the Government Contract Regulations.

2.1.1 Recommendations

It is recommended that the Director, Finance and Materiel Management Branch:

  1. develop detailed procedures and policy guidelines pertaining to bid evaluation, contractor selection and contract award;
  2. formally promulgate its draft procedures and policy guidelines;
  3. ensure that all contract amendments which significantly affect the scope of work be reviewed by the members of the Contract Review Committee;
  4. use the standing offer method of selection where feasible; and
  5. ensure that post-contract evaluations are routinely performed at the completion of each professional services contract.

2.2 Account Verification Activities

Our review of the account verification activities within FMMB was undertaken to complement the testing performed within the contract administration phase of the contracting process. Specifically, we examined whether the verification and settlement of accounts had been performed in a cost-effective and efficient manner while, at the same time, ensuring that a required level of control was being maintained.

The verification and payment of suppliers' accounts follows a rigorous process within FMMB. Upon receipt of any goods that have been previously requisitioned (either through a local purchase order or through a Public Works and Government Services Canada Requisition - PWGSC 9200) , one of the Operations Support Assistant Clerks date-stamps the accompanying packing slip and verifies that the information on the packing slip agrees with the information indicated on the requisition or purchase order. Goods are then physically delivered to the originator where the packing slip is signed by the responsibility centre manager or his designate indicating acknowledgment for the receipt of goods. When the supplier invoice is received by FMMB, it is date-stamped and coded with the appropriate responsibility centre number, project number and line object before being sent, together with all supporting information, to the responsibility centre manager for approval under Section 34 of the Financial Administration Act (FAA). The approved invoice is then returned to FMMB for verification before being input into the Free Balance System for payment.

When invoices are ready to be processed for payment, they are grouped in batches and a draft payment report is prepared and given to the Acting Head, Accounting and Material Management Operations for approval under section 33 of the FAA.

Our review of the procedures followed by staff indicate FMMB has implemented a sound control framework for ensuring that invoices submitted by suppliers and contractors are being verified and paid in an effective and efficient manner. Our review of a sample of contract and supplier files confirmed that policy and procedural requirements outlined in Sections 4 and 5 of the TBS Account Verification Policy and Sections 5 and 6 of the TBS Policy on Payment Requisitioning and Payment on Due Date are met.

2.2.1 Recommendation

No recommendation is required.

2.3 Increased Delegation Authority For Goods Procurement

In May 1998, the Minister, Public Works Government Services Canada made a formal offer to all Ministers to increase the delegation of authority to procure goods to $25,000. This offer resulted from the Program Review II exercise in which Ministers responsible for Program Review had accepted a recommendation to increase the delegated authority for goods procurement from $5,000 to $25,000. Because the offer was felt to contain too many restrictive conditions, most departments responded that this offer could not be accepted as presented. As a result, the Deputy Minister, PWGSC issued a second memorandum, dated June 21, 2000, to all Ministers advising them that many of the conditions of the original offer had been removed.

At the time of this audit, the contracting limits at SCC for goods procurement have remained at $5,000 both for competitive and for non-competitive contracts. In the course of our verification work, and at the request of the Director General, Management Services Sector, we reviewed this issue to determine whether an increase in the authority to procure goods up to $25,000 would be appropriate under SSC's present contracting practices. As part of our assessment, we also examined the efficiency by which a contract was awarded when the corresponding requisition was sent to PWGSC.

When a requirement has been identified for goods in excess of SCC's current procurement limit of $5,000, FMMB staff must either initiate a call-up against a standing offer using a PWGSC Form 942 "Call-Up Against A Standing Offer" (providing a standing offer is already in place), or submit a requisition for goods to PWGSC using a PWGSC Form 9200 "Requisition for Goods and Services". As a first step, we examined all transactions in which Form 942 or Form 9200 were used. Based upon information obtained from SCC's Free Balance System, which was implemented in November 1999, the table below outlines the number of requisitions in excess of $5,000 which were initiated.

Number of Requisitions In Excess of $5,000

Period Covered Number of Form 942 Number of Form 9200
1/11/99 - 31/3/00 15 4
1/4/00 - 22/11/00 17 4

Our review of the procurement process indicates that the initiation of a call-up against a standing offer or a requisition for goods or services creates an extra step in the procurement process because all documentation must be forwarded to PWGSC before the procurement transaction can be completed. Our review also indicates that the volume of procurement transactions in excess of $5,000 has remained in the same range for the period examined. FMMB staff have indicated that they can continue to achieve best value for money in a more expedient manner with greater procurement authority. We support FMMB's opinion and note that an increase in the authority for goods procurement from $5,000 to $25,000 is in compliance with the offer of the Minister of PWGSC that was communicated to department and agencies in May 1998 and in June 2000.

2.3.1 Recommendations

On the condition that the recommendations presented in section 2.1.1 of this report are accepted and implemented, it is recommended that FMMB submit a formal request to have the current level of authority for goods procurement within SCC amended from $5,000 to $25,000.

2.4 Human Resource Management Issues

In FY 2000/2001, SCC has chosen to improve human resource management in the areas of communication and workload. In this regard, we reviewed the responses of the Public Service Employee Survey and found that there were three branch-specific issues pertaining to communication and workload sharing. These issues were:

  • information is not always shared with staff on a timely basis;
  • quality of work and the ability to complete workload within regular working hours sometimes suffer because of unreasonable deadlines; and
  • it is difficult for staff to secure promotional opportunities.

On April 17, 2000, the Finance and Materiel Management Branch met to discuss these issues. We reviewed the minutes of this meeting as well as the minutes of bi-weekly staff meetings subsequently held. We also interviewed several staff members within the branch to inquire whether they felt these issues were being dealt with on a periodic basis. The results of our review and of our interviews with staff indicate that staff perceives an improvement in the way information is being shared. Bi-weekly staff meetings are viewed as a useful method for sharing information. Staff are encouraged by management's efforts to share information. Although month-end deadlines will invariably continue to exist, staff feel that deadlines can be managed with adequate advance notification of month-end cut-off dates and/or special deadlines imposed. All staff expressed a high degree of satisfaction with the work environment. Finally, with the recent reclassification of the clerical positions to the CR 05 level, with several employees now occupying financial officer positions on an acting basis, and with new staffing opportunities that are expected to become available in the fall, there is a definite improvement in developmental and promotional opportunities within the branch.

2.4.1 Recommendation

No recommendation is required

2.5 Assessment of Financial Information Strategy (FIS) Readiness

The target date to implement the Canadian federal government's new Financial Information Strategy (FIS) is March 31, 2001. The purpose of FIS is to implement a model of accounting and financial records in the Government of Canada which more closely conforms with Generally Accepted Accounting Principles (GAAP) as practiced in the private sector. As part of the scope for this audit, SCC has requested an assessment of the progress made to date in the implementation of FIS.

Our approach consisted of reviewing background information, examining key documentation such as FIS implementation plans and minutes of meetings, and interviewing the FIS Project Team Leader. The FIS Project Team Leader has informed the audit team that the work of both the Free Balance Cluster Group and the Systems Interface Working Committee (SIWC) 2001 Group to be very valuable for SCC. They are reportedly both useful forums for keeping abreast of government- wide initiatives and for monitoring progress. According to the team leader, meeting FIS requirements will be enhanced with the help and direction of these two groups.

Our understanding of the situation within FMMB, as at the time of this audit, is as follows:

  • The Director, FMMB is the official FIS Project Leader within SCC. However, this individual has been on extended leave since mid February, 2000. As a result, a consultant has been hired to assume the position of Interim Director of the Branch and to exercise the responsibilities of the FIS Project Leader until such time as the Director's position is filled.
  • Due to the limited number of personnel and other workload priorities, none of the FIS team members have been able to work on a full time basis on the FIS implementation project.
  • To date, in so far as FIS is concerned, the majority of the Project Leader's time has been spent attending working group meetings and ensuring that central reporting requirements are being met. Meetings have been held primarily with the Free Balance Cluster Group, the SIWC 2001 Group, the Small Agencies Financial Action Group (SAFAG), and the PWGSC/Free Balance Cluster working group. Reporting requirements consist of the preparation of various updates on plans and accomplishments on a bi-weekly and monthly basis, as requested by PWGSC and Treasury Board Secretariat, respectively.
  • The consultant's engagement with SCC ends on March 31, 2001. It is expected that the FMMB director position will be staffed. Once staffing has been completed, the new Director will have direct responsibility for implementation of FIS and, it is expected that the interim Project Leader will gradually transfer FIS responsibilities over to the new Director prior to his departure at FIScal year end. In the interim, the current Acting Special Projects Financial Officer within FMMB will assume the responsibilities of the FIS Project Manager.

The date scheduled for full implementation of FIS within SCC is March 31, 2001. Progress on the accomplishment of FIS milestones is currently being communicated in regular bi-weekly progress reports which are updated in conjunction with PWGSC's Departmental FIS Interface Plan. A more detailed project plan is in the process of being developed by FMMB which will include comprehensive checkpoints and milestone dates. This plan, once complete, will be presented to the Director, Management Services Sector and then submitted for final approval to the Registrar.

An assessment of the extent to which progress has been achieved in the implementation of FIS is provided below:

Communications and change Strategies-Launched

In terms of accomplishments, two things can be noted. First, FIS has been placed on the agenda for all Management Committee meetings as a Standing Item. Pursuant to this, the Interim Director provides the Management Committee with a brief update on FIS at each meeting. Secondly, the Interim Director has attended both a FIS Forum and a Free Balance Cluster Meeting where the topic of "Engaging Managers" was presented. The expectation is that managers will continue to receive coaching and orientation well into the year 2001.

Accounting Policies-Defined

To date the SCC has not developed any of its own accounting policies and/or procedures. However, through SAFAG, the SCC has collected ten draft generic accounting policies and plans to adapt them to its own situation. Actual progress will depend, to a large extent, on the policies developed by cluster groups and working groups such as SAFAG.

Capital Assets and their Historical Costs - Identified

No formal plan has yet been developed, and none is planned until clear guidelines are provided by TBS, regarding the materiality level for Capital Assets and what is characterized as the "minimum rule".

Financial Systems Ready to Support FIS

Before SCC commences its interface testing with PWGSC, it will have to upgrade to the latest version of Free Balance. As well, SCC will have to decide on what other software upgrades may be necessary to integrate information from human resource systems with information from Free Balance.

Arrangements for Connecting to the New Receiver General (RG) Systems - In Place / Milestone Update

Currently, interface testing is planned for "Window Two" which is open until February 2nd, 2001. SCC has not yet determined the slot it will request in each window. However, it would like to undertake the testing in the near future. Before testing, the chart of accounts (COA) has to be completed. A FIS-compliant COA was prepared by SCC. However, feedback received from the SIWC 2001 indicated that SCC should revisit its COA to make it less cumbersome. Plans are in place to re-examine the COA.

Training of Finance Officers - Completed / Milestone Update

A Branch training plan was developed and approved both by the Director General, Management Services Sector and the Registrar. However, with the current reorganization taking place within SCC, and with much of the FIS Team being new to the their roles and responsibilities, the training plan will have to be revisited.

Manager's Learning Strategy / Milestone Update

SCC has no detailed learning plan for managers. However, SCC hopes to be able to use the Oracle Training Strategy and Plan as a basis to developing something less ambitious taking into account its size. It is expected that a plan will be developed and approved by the end of February 2001.

In completing our assessment of FIS readiness within SCC, we use a benchmark to measure progress achieved. The results, presented in the graph in Appendix B, shows favorable progress achieved by SCC when compared to Departments that are also using Free Balance as their financial reporting system.

Conclusion

Our assessment of the results achieved to date leads us to conclude that SCC has made favorable and positive progress in ensuring that it will be FIS-ready by March 31, 2001, as planned. The appointment of a full-time FIS Project Manager will help ensure that the March 31, 2001 implementation deadline will be met. On a short term basis, the FIS Project Manager's priority will be to complete the detailed FIS plan including the finalization of the chart of accounts, completion of the mapping, upgrading of the current Free Balance system to ensure integration and interface testing with PWGSC, and training of staff.

3.0 Management Action Plan

Section 3.0 presents the Management Action Plan of Finance and Material Management Branch.

Action Plan and Management Updates for the 2000/01 Audit of the Finance and Materiel Management Branch

Area of Observation Audit Recommendation Management Update / Response OPI Milestone Dates

2.1. Contracting Practices

The audit notes that the F&FMM Branch has taken significant steps to streamline its contracting practices. However improvements could made in the following areas to strengthen controls and ensure practices more fully comply with the TBS policies and regulations.

Observation

Bid solicitation process not followed for one competitive contract

  • sample included one contract for the provision of communication services ($26,750)
  • although detailed notes were kept of interviews held with two of the five contractors who had submitted bids, there was no evidence of a score sheet or a set of rating
  • no reasons were documented as to why the other three proposals received no further consideration.
  • Although a draft set of policies and procedures re: administration of contracts has been developed, it would be enhanced if it included detailed procedures and policy guidelines covering the solicitation of bids and the selection of a contractor
  • the draft document should also include review  methodology which addresses basic questions such as are funds available, are departmental signing authorities observed, does the proposal have legal clearance where required, and is the proposal in line with government policies on employment equity and conflict of interest.

It is recommended that the Director, Finance and Materiel Management Branch:

(a) develop detailed procedures and policy guidelines pertaining to bid solicitation, contractor selection and contract award;

(b) formally promulgate its draft procedures and policy guidelines;

As noted in the audit report, the F&MM Branch has taken positive steps in the area of contracting practices. This includes the establishment of a Contract Review Committee, and draft documentation for the procedures relating to procurement, establishing a contract, and roles and responsibilities of the F& MM Branch and RC managers.

The identification of one incident of the bid solicitation process not being followed does not necessarily indicate a systemic problem.

Nonetheless, management is in agreement that contracting processes would be strengthened by more detailed internal procedures and guidelines, supplemented by training of Court managers.

Director, F&MM Branch

The promulgation of procedures and guidelines to be carried out in the Fall 2001, supplemented by information sessions for managers and support staff.

Observation

work undertaken before contract signed

  • two instances were found where work was commenced before the governing contract was signed.
  • invoices submitted by each contractor had been processed and paid before the date the respective contracts were signed.
  • in one of these instances, the problem appears to be more of a timing issue and could have been alleviated if the F&MM Branch made more extensive use of standing offer agreements to satisfy repetitive requirements such as the provision of this type of service.

It is recommended that the Director, Finance and Materiel Management Branch:

(d) use the standing offer method of selection where possible;

Management agrees that the more extensive use of standing offer agreements to satisfy repetitive requirements could help eliminate situations where work starts before a contract is actually signed.

The Director, F&MM Branch will also discuss this matter with Branch staff but believes that the planned information sessions to be provided to Court managers and staff in the Fall of 2001 should result in improvements in contracting practices.

Director, F&MM Branch

Branch staff discussion to take place in April 2001.

Information sessions to be planned for the Fall 2001.

Observation

no post contractor evaluation of services routinely undertaken

  • on completion of a contract, the contracting authority or his designate should evaluate the work performed by the consultant or the professional.
  • evaluation reports should include an assessment of the quality of work performed, the efficiency of the consultant or professional in managing time and resources, and an analysis of the cost of the work and the estimated value received

It is recommended that the Director, Finance and Materiel Management Branch:

(e) ensure that post-contract evaluations be routinely performed at the completion of each professional services contract.

Agreed. A framework (template) for the evaluations will be developed to ensure consistency in the criteria evaluated and will be covered in the contracting information sessions planned for the Fall 2001. CAC will be asked to supply sample evaluation templates from other organizations to assist the F&MM Branch.

Director, F&MM Branch

Template developed in summer 2001.

Training sessions, as noted, in the Fall 2001.

 

Observation  

significant amendments to contracts are not resubmitted to the contract review committee

  • several contracts were found where the scope of work to be performed had significantly changed.
  • in these situations, while contract amendments had been properly signed by both parties, the amendments had not been reviewed and signed off by the CRC

It is recommended that the Director, Finance and Materiel Management Branch:

(c) ensure that all contract amendments which significantly affect the scope of work to be done under a contract be reviewed by the members of the Contract Review Committee;

The current role of the Contract Review Committee does not provide for the sign-off of amendments to contracts, whether considered significant or not. The Director, F&FMB proposes that the roles and responsibilities, including membership of the Contract Review Committee be reviewed and documented in the detailed procedures and policy guidelines to be developed in the Fall of 2001.

Director, F&MM Branch

Fall 2001

2.2 Account verification activities

  • the review of the procedures followed by staff indicate the F& MM Branch has implemented a solid control framework for ensuring that accounts submitted by suppliers and contractors are being verified and paid in an effective and efficient manner.
  • the review of a sample of contract and supplier files confirmed that all of the policy and procedural requirements outlined in Sections 4 and 5 of the Treasury Board Account Verification Policy and Sections 5 and 6 of the Treasury Board Policy on Payment Requisitioning and Payment on Due Date are bing fully met

No recommendations in this area

N/A

 

 

2.3. Increased delegation of Authority for Goods Procurement

Observation

  • the review indicates that the volume of procurement transactions in excess of $5000 has remained in the same range for the period examined
  • FMMB staff have indicated that they can continue to achieve best value for money in a more expedient manner with greater procurement authority.
  • CAC supports FMMB's opinion and notes that an increase in authority for goods procurement from $5,000 to $25,000 is in compliance with the offer of the Minister of PWGSC that was communicated to departments and agencies in May 1998 and in June 2000.

On the condition that the recommendations presented in section 2.1.1 of the report are accepted and implemented, it is recommended that FMMB submit a formal request to have the current level of authority for goods procurement within SCC amended from $5,000 to $25,000.

Agreed. Preparatory work will be required, prior to seeking this increased delegation, in the area of systems. Also additional training may be required.

Director, F&MM Branch

To be determined. Dependent on timing of approval from PWGSC and branch readiness.

To be implemented in FIScal year 2001-02.

2.4 Human Resources Mgmt. issues

  • the results of the review indicate that staff perceives an improvement in the way information is being shared.
  • bi-weekly staff meetings are viewed as being useful communication tools.
  • staff are encouraged by management's efforts to share information.
  • staff expressed a high degree of satisfaction with the work environment.

No recommendations in this area

N/A    

2.5 Assessment of FIS readiness

  • SCC has made favorable and positive progress in ensuring that it will be FIS-ready by March 31, 2001, as planned.
  • The appointment of a full-time FIS Project Manager will help ensure that the March 31, 2001 implementation deadline will be met.

No recommendations in this area

N/A

   

Appendix A: List of Interviews

  • O'Connor, Irene - Director General, Management Services Sector
  • O'Brien, Glenn (consultant) - Interim Director, Finance and Materiel Management Branch
  • Sayed, Nicole - Acting Special Projects Financial Officer
  • Meloche, Nicole - Acting Head, Accounting & Materiel Management Operations
  • Daoust, Jacques - Acting Junior Financial Officer
  • Clarke, Eva - Operations Support Assistant
  • Martel, Hélène - Operations Support Assistant
  • Bolduc, Nicole - Operations Support Assistant

Appendix B: Progress Achieved in the Implementation of FIS

Comparaison Table on the Progress Achieved in the Implementation of Financial Information Strategy

Description of image

SCC Percentage of Completion (as of May 2000)

Preliminary Plan: 100%
TCP/IP: 100%
COA: 80%
4.1G1: 100%
Mapping: 80%
IF Test: 0%
Training: 0%

Average Progress achieved by all 2001 FreeBalance Depts. (as of May 2000)

Preliminary Plan: 100%
TCP/IP: 94%
COA: 95%
4.1G1: 68%
Mapping: 82%
IF Test: 6
Training: 0%

Legend: TCP/IP: Transfer Communication Protocol / Internet Protocol (Connectivity between PWGSC and SCC)
COA: Chart of Accounts
4.1G1: Free Balance Accounting / Financial Software version
IF Test: Interface Testing