Executive Summary

The Infrastructure Canada Program was created in 2000 to enhance municipal infrastructure in urban and rural communities across the country and improve Canada's quality of life through investments that protect the environment and support long-term growth. Under the Canada - British Columbia Infrastructure Program (CBCIP) Agreement, which was signed on October 10, 2000, the federal, provincial and local governments are investing more than $800 million in British Columbia over six years. Each government is contributing up to one-third of the total program funds.

A Management Committee, which includes federal, provincial and municipal representatives, has been established to administer the program. Under the CBCIP, the Province is responsible for the implementation of all projects approved by the Management Committee. Green local government infrastructure ("Green") projects are administered by the Ministry of Community, Aboriginal and Women's Services (MCAWS). Other infrastructure ("Other") projects are the responsibility of the Ministry of Competition, Science and Enterprise (MCSE). As of March 3, 2003 there were 103 approved projects with total eligible costs of $422 million.

The scope of this internal audit included an assessment of the internal controls within the management framework for each of the stages in the management of the project cycle. The management control framework includes the management, financial, administrative and operational processes and systems in place to ensure the effective and efficient delivery of the CBCIP program.

The observations and recommendations in this report are based on our internal audit, which was conducted in February and March 2003. In addition, this report includes commentary and reporting on any other significant matters which came to our attention during two audits of CBCIP claims and nine pre-payment site reviews of CBCIP recipients carried out over the same period.

The recommendations, summarized under each of the stages in the management of the project cycle and other significant matters, are as follows:

4.A Initial Screening of Project Applications

MCAWS should ensure that all of the engineer's files related to a project evaluation are maintained and either filed with or cross-referenced to the main project file.

4.B Scored Applications

MCAWS should ensure that all project files have a copy of the Composite Priority Ranking form on file.

For future infrastructure programs, MCSE and MCAWS should base their ranking out of the same score in order to avoid potential misunderstandings about project rankings.

4.C Approval of Applications

4.C.1
Management Committee should make every effort to reduce the time from the date of application to the date of approval by Management Committee.

4.C.2
Management Committee and MCSE should ensure that all decisions for Other projects are fully documented on the project files and in meeting minutes.

Management Committee should ensure that only projects which meet the criteria for nomination are nominated and approved as eligible projects.

4.C.3
MCSE should ensure that a copy of the Management Committee Briefing Book Summary Report with approval signatures is contained in each project file.

4.C.4
Evidence of the Expanded Treasury Board approval should be included in the relevant provincial project files.

4.C.5
Management Committee should monitor and document decisions which result in allocations of funding which differ from the population-based targets.

Management Committee should develop and implement a process for approving more Other projects and ensuring that those projects are commenced within a reasonable time period.

4.C.6
Management Committee should document the decision-making process to support the funding allocated to the different priorities within the Agreement, especially where no funds have been approved for a particular category.

4.C.7
Management Committee meetings should be scheduled on a regular basis in order to ensure that projects are approved on a timely basis.

4.C.8
MCAWS and MCSE should develop and implement a process for follow up of approved projects and specify a time period for the contracts to be completed/signed after approval by Management Committee and successful completion of the Environmental Assessment (EA). This time period should be communicated in the award letter to the recipient so that contracts can be finalized in a timely manner. If the recipient cannot meet the cut-off date, the funds should be reprofiled and returned to the Program for award to another project.

4.D Amendment Process

MCAWS and MCSE should consider sending a follow-up letter to recipients to clarify the procedures that should be followed for changes in project scope, costs, dates, cash flows and other adjustments.

4.E Claims Approval

4.E.1
The CBCIP should ensure that claims are audited as early in the claim process as possible to ensure that recipients are only being reimbursed for eligible costs since detailed supporting information (invoices) are not submitted with each claim.

4.E.2
MCAWS and MCSE should develop and implement a process for follow up of the quarterly claims from recipients with signed contracts.

4.F Payment Process

4.F.1
MCAWS should not make any further advance payments without a policy in place that has been approved by the Management Committee.

Documentation of these advance payments should be filed in each official project file at MCAWS.

These advance payments should be accounted for under the relevant projects in the provincial books and records to ensure that all future claims are offset against this advance.

4.F.2
The B.C. provincial government should finalize their costing agreement for administrative expenses, obtain approval from Management Committee, and submit up-to-date claims to the federal government as soon as possible.

4.F.3
MCAWS and MCSE should develop and implement a formal process to follow up on cash flow requirements of recipients on a timely basis prior to project approval and throughout project implementation.

4.G Project Completion

There are no recommendations related to project completion at this early stage of the program.

4.H Environmental Assessment

MCAWS and MCSE should ensure that evidence is placed on each project file for projects which are on the Environmental Assessment exclusion list.

4.I Information Systems

4.I.1
CBCIP should develop and implement a process to verify and ensure completeness and accuracy of all data in SIMSI.

4.I.2
The provincial government should work towards finding a solution that will provide full functionality of SIMSI to users in MCAWS and MCSE.

4.J Monitoring of Project Benefits

The federal and provincial ministries should develop a convention for recording the findings from site visits in the "Notes" section of SIMSI. Findings from site visits should be entered into SIMSI on a timely basis for project management purposes.

4.K Other Significant Matters

4.K.1
The Communication Plan should be finalized and approved by Management Committee as soon as possible.

4.K.2
The annual audit plan should be finalized and submitted to Management Committee for approval as soon as possible.

Audits and site visits should be coordinated between the federal and provincial governments to minimize the intrusion to recipients.

4.K.3
For clarity, "Start Date" should be defined in "Definitions" section of the contract with the recipient.

CBCIP management and staff should ensure that specific terminology with a specific definition is used correctly to avoid confusion or possible future disagreements about the eligibility of claimed costs.

4.K.4
The covering letter sent with the contract should contain a date by which the document must be signed and returned to the provincial Ministry, otherwise the contract expires.

MCAWS (and MCSE) should implement a formal follow-up procedure to ensure that signed contracts are returned on a timely basis in order that problems are identified and resolved as soon as possible.

4.K.5
Significant scope changes and revisions to the original application should be clearly documented on the project file. There should also be a certification on file signed by the applicant in which they agree to the changes and revisions.

MCAWS and MCSE should use more detailed project descriptions in their contracts in order to provide a framework for future monitoring and audit of projects.

<< previous | next >>