Smart Communities Program Management and Financial Control Audit
Audit and Evaluation Branch
Industry Canada
June 2003
Executive Summary
Background
The Smart Communities Program (SCP) is one of the six pillars of the connectedness agenda established by the federal government to make Canada the most connected nation in the world.
In June of 1999 the Minister of Industry announced the opening of a competition to fund twelve Smart Community Demonstration Projects, one in each province, one in the North and one in an Aboriginal Community. A national selection committee met throughout late 1999 and early 2000 to review 128 letters of intent and business plans submitted to Industry Canada by 46 organizations.
The final allocated funding totaled $55 million for the twelve demonstration projects and $5 million was allocated from O&M; funds to the funding of three complementary programs and program administration costs.
Objectives of the Audit
The focus of the audit of the SCP was on the management and financial control of the program. The objectives were to determine that:
- Management has reasonable assurance that the program is well managed and has been implemented in a timely manner; and
- Proper financial controls exist for the program.
Methodology and Approach
Interviews were conducted with the staff responsible for the program and those responsible for providing and controlling the financial assistance to the individual projects. The audit team reviewed business plans, project summaries, contribution agreements and modifications, as well as the web sites for all twelve projects. Specific samples were selected from all twelve projects for in-depth reviews of monthly claims, quarterly and annual reports, and evidence of regional monitoring.
Conclusions
- Management has reasonable assurance that the program is well managed and has been implemented in a timely manner.
Quarterly and annual reports have been submitted by all demonstration projects. Although reports were submitted late in the first year of the program or projects, the timing and the quality of the submissions have improved over the past year. The Smart Communities Program Directorate (SCPD) is receiving sufficient information to track the financial progress and results of individual demonstration projects on a regular basis.
Although certain performance measurement results have been communicated in the quarterly and annual reports that have been submitted by the Demonstration Projects, performance measurement reports have been submitted for only seven of the twelve projects. The SCPD should ensure that performance measurement results are reported by all of the projects so that it has sufficient information to track the performance of the program as a whole.
- There appears to be proper financial controls in place for the program. Claims are generally submitted and reviewed promptly by the SCPD providing pertinent and timely information to management. Due diligence has been exercised in the spending of the funds and the funds have been used for the purposes intended.
Based upon our limited review of certain claims for all the projects there have been some expenses paid, though not of a material nature, where eligibility of the expense is questionable. The Smart Communities Demonstration Projects are generally managing the projects in accordance with the terms and conditions of the contribution agreements.
Details of various costs are not submitted by the recipients as required by the monitoring guidelines for either actual supported costs or in-kind contributions. This has precluded SCPD officials from having the information to possibly challenge or question more elements of submitted claims.
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Date Created: 2004-06-10
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