Audit of Contracting
Executive Summary
Audit and Evaluation Branch
October 2002
Objectives
The objectives of the audit were to examine the contracting practices applied in the Micro-Economic Policy Analysis Branch (MEPA), and the Canadian Biotechnology Secretariat (CBSec). The audit sought to ensure that:
- The contracting principles of best value and open access are followed;
- Government Contract Regulations, Treasury Board Secretariat Guidelines and Industry Canada’s own policies are complied with;
- The contracting process is fair and transparent; and
- Operational requirements and development needs are met.
Scope and Methodology
The audit focused on the contracting processes currently in place in the two branches under examination. The period under review included contracts with start dates between April 1, 2000 and January 31, 2002, and covered five types of contracts, including: call-ups against standing offers, service contracts, travel letters, temporary help and purchase orders. A stratified sample of 45 files was randomly selected using audit software (ACL). Given that sole-source service contracts under $25,000 represent 97% of all service contracts issued, service contract files selected were weighted in the under $25,000 value range.
Work performed included: an analysis of the overall list of files for possible contract splitting and/or repeat contracting; an examination of contract files; and, discussions with branch personnel to confirm contracting practices. Work for this audit was carried out between March and April 2002.
Criteria for this audit were developed in support of the audit objectives, and were based on Treasury Board Secretariat Contracting Policy, the Government Contracts Regulations and Industry Canada Contracting Policies.
While this audit was conducted in accordance with standard audit practice, the information is based on a sample and there may be other evidence not obtained during the course of the audit that could affect the nature of our conclusion.
Results
In our opinion, the contracting practices applied within the Canadian Biotechnology Secretariat and the Micro-Economic Policy Analysis Branch are generally in compliance with the Government Contracts Regulations, Treasury Board Secretariat Guidelines and Industry Canada policy. Efforts are made by both branches to award and manage contracts in relation to best value, open access, fairness and transparency. However, these efforts are not consistently complemented by documentation on file.
Recommendations
Based on our audit findings, we recommend a number of areas for improvement. The following recommendations apply to both CBSec and MEPA:
- Formalize the use of source lists, and develop associated procedures.
- Establish mechanisms to ensure all contract files contain relevant information.
- Clearly establish responsibility for maintaining the "official" contract file.
- Ensure periodic reviews of contract file documentation by the contracting authorities.
- Develop standard processes for contract monitoring.
- Establish a more rigorous process to verify that the supplier is not a current or former public servant in receipt of a pension.
- Establish procedures to ensure contracting requirements are addressed using the appropriate contracting vehicle, and supported by appropriate justification and/or documentation.
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Date Created: 2004-01-13
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