Audit of the Ontario Community Futures Program
Audit and Evaluation Branch
Industry Canada
May 2004
Executive Summary
The audit of the Ontario Community Futures Program (CFP) was undertaken at the request of Program management.
The objectives of the audit were to assess:
- the adequacy of CFP's management control framework and practices, including its risk management strategies and practices and information used for decision-making and reporting purposes;
- compliance with the TB Policy on Transfer Payments, general compliance by recipients to terms and conditions of agreements and the adequacy of management efforts to determine compliance; and,
- the actions taken by CFP to address related recommendations arising from a November 2000 audit of FedNor.
The scope of the audit included all Community Futures Development Corporations (CFDC's) administered by FedNor during the fiscal years 2000-01 to 2002-03. The scope of the audit excluded reviews of contribution agreements made under the Knowledge-Based Innovation Program that were administered by FedNor.
This audit took place during the months of January and February 2004.
Main Findings
FedNor management and staff have been successful in delivering the Program within the terms and conditions of the Program. Program staff are dedicated and want to provide the most effective and efficient service to their clients.
The Community Futures Program (CFP) has a clearly-defined management control framework that has assisted FedNor and Industry Canada to deliver the Program at both the program and project level in a cost-effective manner and that the Program complies with appropriate acts, regulations and policies. The Program has established key controls that define the roles and responsibilities of all parties involved in the Program; its polices, guidelines and processes are well documented and provide guidance and direction to the Program's recipients and to their clients; and the Program's decision-making process is clearly outlined and transparent. Efforts are underway at a Program level to finalize the Result-Based Management and Accountability Framework (RMAF) and the Risk-Based Accountability Framework (RBAF), both of which will serve to and mitigate Program-level risks and complement existing operational risk management tools and practices.
The audit has concluded that, although the Program has established a process that requires each CFDC to report quarterly on their activities, there is a need to undertake more analysis on the information provided in these reports. Further, some of the information provided in the CFDC reports may not be supported by accurate data, in particular the job creation numbers that are being attributed to the Program. It is noted that the data/information and the basis on which this information is collected and reported has not been subject to detailed systematic examination.
The audit identifies changes that should be made to the Program's systems, practices/processes, such as the monitoring of overall payments at a Program level to ensure that the authorized spending limits for the Program are not exceeded, which may assist in the delivery and administration of the Program.
The audit noted that the Community Futures Program generally complies with the requirements of the Transfer Payments Policy. Efforts are underway to achieve full compliance with the Policy, in particular through the completion of the RMAF and RBAF as previously noted. Some other instances of non-compliance to the Program's Terms and Conditions were also noted, notably as they relate to requirement to include a clause indicating that any payment to be made is subject to there being an appropriation by Parliament for the fiscal year in which the payment is to be made and a clause addressing the use of lobbyists pursuant to the Lobbyist Registration Act. Program management is aware of the situation and, in consultation with the other regional development agencies, has begun a process to revise the Program's terms and conditions to ensure that they meet all the requirements of the Transfer Payments Policy. It is anticipated that this process will be completed in the near future. The audit did note that since July 2000, the overall quality of the individual agreements entered into with the CFDCs had improved.
A detailed review of contribution agreements for the individual CFDCs found compliance with the Program's Terms and Conditions. Amendments made to the Terms and Conditions of the recipient agreements were properly authorized and supported by appropriate documentation. In some instances where information required from the recipient was incomplete or was missing from the contribution agreement file, there was evidence of appropriate follow-up action taken by Program management to obtain the required information.
Program management has taken appropriate action to address the applicable observations and recommendations made in the 2000 audit of the FedNor Program. Increased emphasis should, however, be placed on the monitoring of individual CFDC's investment activities to ensure that expected Program results are achieved.
Final Report (PDF - 234KB - 24 pages)
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Date Created: 2004-11-16
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