Audit of Procurement

July 2017

Table of Contents

• Executive Summary
  • Introduction
  • Recommendation
  • Management Response
• Background
  • Context
• Audit Objectives and Scope
• Audit Approach
• Audit Findings
  • Theme 1 - In-Place Controls
    • Maintenance of Records and Information
    • Delegation of Authority and Segregation of Duties
    • Financial and Non-Financial Reporting
    • Value for Money
  • Theme 2 - Risk Management
  • Theme 3 - Governance
• Conclusion and Recommendation
• Appendix A - Management Response and Action Plan

Executive Summary

Introduction

The audit objective was to assess the adequacy, efficiency and effectiveness of the internal controls over the procurement process.

Several factors have affected Procurement Services at Infrastructure Canada (INFC). Procurement Services has experienced turnover at various levels. While the Treasury Board (TB) Contracting Policy was in place at the time of the audit, Procurement Services was anticipating a "reset" to the existing policy suite including a new TB Policy on Management of Assets, Procurement and Projects. In addition, INFC has continued to evolve throughout the audit period, with the addition of the Smart Cities Challenge and Canada Infrastructure Bank. These additions have resulted in a fluctuating volume of work for Procurement Services.

Overall, the audit found that INFC's procurement and contracting processes do not demonstrate the controls required to ensure compliance with relevant policies and guidelines, legislative requirements. This exposes INFC to not meeting the objectives of the Government of Canada contracting policies such as and promoting value for money, including favoring an open, fair and transparent process, when applicable. For example, in testing to see if the process was in accordance with Treasury Board Secretariat (TBS) and INFC requirements related to value for money, auditors found that out of the 12 files tested, three files did not contain sufficient information to demonstrate value for money. As such, the department's ability to mitigate risk in their procurement activities is not as strong as it should be. INFC is reliant on the diligence of individual managers to ensure compliance with relevant policies, guidelines and legislative requirements. INFC's governance structure for procurement and contracting needs to be clarified and confirmed. In particular, clarification on the division of delegated responsibility and authority between Procurement Services and its clients.

Recommendation

This audit resulted in one recommendation:

• It is recommended that the Assistant Deputy Minister of Corporate Services strengthen the management control framework for procurement and contracting to ensure that:
• A robust, risk-based control regime that will ensure compliance with relevant policies, guidelines and legislative requirements is established. This regime should also promote alignment with the principles of these documents, such as value for money;
• Accountabilities, roles and responsibilities for all participants in the regime, including the Procurement Review Committee, are clearly identified, communicated and understood.

Management Response

Management accepts the recommendations and action plans have been put in place to address the two areas for improvement identified.

The Management Action Plan can be found in Appendix A.

Background

Context

This internal audit engagement is included on the Integrated Audit and Evaluation Plan, approved by Infrastructure Canada's Deputy Minister (DM) in January 2016.

Infrastructure Canada (INFC) leads federal efforts to ensure that Canadians benefit from world-class, modern public infrastructure. INFC works in partnership with all levels of government, the private sector and non-profit organizations partners to help build and revitalize the infrastructure Canadians need and use every day.

Procurement is an essential tool that the department uses to deliver its programs and services. When managers in INFC decide to buy or contract for something, it brings into play numerous laws and policies that must be followed.

As a federal department, INFC should ensure that Government contracting is conducted in a manner that will both stand the test of public scrutiny and support national objectives such as long-term industrial and regional development. Its procurement and contracting activities must be carried out in accordance with the established Government of Canada contracting framework, stemming from the Treasury Board (TB) Contracting Policy and legal frameworks. These frameworks include the Government Contracts Regulations, Financial Administration Act, Federal Accountability Act, and Department of Public Works and Government Services Act.

As per the TB Contracting Policy, the objective of government procurement is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness. It would also result in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.

In contrast to the approach in many federal organizations where the material management function has contracting authority, authority for procurement and contracting at INFC is decentralized, with INFC`s managers having delegated contacting authority. Procurement Services, which is housed within the Corporate Services Branch, plays an advisory role, providing functional leadership and oversight to managers as required. It supports service delivery through the standardization of templates and job aids; exercising reporting, monitoring and oversight functions, and providing stakeholder training.

A departmental committee, the Procurement Review Committee (PRC), is responsible for reviewing, integrating, consolidating, challenging and pre-approving departmental contractual requirements for goods, services and construction. The purpose of the PRC as stated in the terms of reference of July 2016, is that it is a decision-making body that ensures that controls are in place for the effective management and processing of procurement and contracting and that they work in support of the Department of Infrastructure Canada.

Several factors have affected Procurement Services at INFC. While the TB Contracting Policy was in place at the time of the audit, Procurement Services was anticipating a "reset" to the existing policy suite including a new TB Policy on Management of Assets, Procurement and Projects. In addition, INFC has continued to evolve throughout the audit period, with the addition of the Smart Cities Challenge and Canada Infrastructure Bank. These additions have resulted in a fluctuating volume of work for Procurement Services.

Audit Objective and Scope

The audit objective was to assess the adequacy, efficiency and effectiveness of the internal controls over INFC's procurement process.

The audit's focus was assessing the procurement and contracting processes to identify controls, test controls and identify any control gaps. Non-competitive and competitive contracts awarded between April 1^st, 2014 and September 30th, 2016 were included in this audit in order to test the operation of controls. Contracts for goods and contracts awarded through Public Services and Procurement Canada (PSPC), which includes IM/IT, and contracts for bridges were not in the scope of this audit.

The following table summarizes the total volume of services and non-PSPC contracts awarded between April 1^st, 2014 and September 30th, 2016.

Table 1: Infrastructure Canada Contracting Volumes

Contract Value				Total Services Contracts
	Less than $10K	Between $10K and $25K	Equal or Over $25K
Total Value	$244,057	$1,206,999	$6,917,626	$8,368,682
Total Count	60	59	58	177

An analysis of all contracts under $10,000 found that there was no evidence of contract splitting. Given their nominal value, these contracts were also excluded from the audit scope. The remaining contracts were awarded using both competitive and non-competitive processes, 90 and 27 respectively, and exhibit the following characteristics (Table 2).

Table 2: Infrastructure Canada In-scope Contracting Values and Volumes

Contract Value			Total
	Between $10K and $25K	Equal to or greater than $25K
Competitive ($)	$679,741	$6,811,702	$7,491,443
Non-competitive ($)	$527,258	$105,923	$633,182
Competitive (N)	34	56	90
Non-competitive (N)	25	2	27

Audit Approach

The audit was conducted in accordance with the TB Policy on Internal Audit and the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing.

Audit criteria were sourced from the Federal Administration Act (FAA), Treasury Board Contracting Policy, Directive on Delegation of Financial Authorities for Disbursements and Directive on Account Verification, as well as relevant elements of the Office of the Comptroller General's Audit Criteria Related to the Management Accountability Framework.

Methods included:

• Reviews of available external and internal documentation (e.g., applicable laws, central agency policies, directive and guidelines, INFC policies and procedures);
• Interviews with members of the Procurement Services team, members of the Procurement Review Committee (PRC), departmental managers and administrative personnel using Procurement Services, the Chief Financial Officer and Assistant Deputy Minister of Corporate Services Branch (CSB) and the Director General of CSB;
• Walkthroughs of processes;
• Transaction testing – to record evidence of controls and adherence to them. A sample of 10% of each of the in-scope populations of competitive and non-competitive contracts was tested for compliance.

The transaction testing was conducted using a selected sample of procurement transactions that occurred within the in-scope period between April 1, 2014 and September 30, 2016. Audit work involving document review, interviews and process walkthroughs relied on the information that was most recently available and the latest versions in order to inform and support the audit findings. The audit work was conducted in three phases - planning, examination, and reporting - with deliverables prepared at key points. The planning phase included interviews with officials from INFC, documentation reviews and an audit risk assessment to establish the areas of investigation for the audit.

At the beginning of the engagement, inherent risks in procurement and contracting were identified as part of the risk assessment. These risks are:

• Compliance and Controls
  • Risk 1: There is a risk that existing INFC procurement practices are not in compliance with the applicable contracting and procurement policy requirements, or other relevant laws or statutes.
  • Risk 2: There is a risk that current contracting and procurement vehicles and mechanisms are not being properly used by INFC employees, as a result of lack of knowledge, high complexity and the array of available tools, etc.
• Risk Management
  • Risk 3: There is a risk that there is a misalignment between procurement needs/requirements plans and activities to departmental plans and priorities. 
  • Risk 4: There is a risk that employees at INFC may not fully understand their roles and responsibilities with regards to contracting and procurement, particularly in terms of appropriate execution of authorities within the procurement process.^{Footnote 1}
  • Risk 5: There is a risk that there are inadequate, inaccurate, incomplete or unreliable procurement and contracting information used for decision-making at INFC.
• Governance
  • Risk 6: There is a risk of insufficient or inadequate oversight on contracting and procurement activities.
  • Risk 7: There is a risk that training and tools provided to new and existing employees of INFC regarding contracting and procurement may not be adequate.

This risk assessment process formed the basis for establishing the audit criteria used in the examination phase, to determine if INFC was managing these risks.

The audit criteria were:

• In-Place Controls: The procurement process of INFC demonstrates an effective set of controls in place and in compliance with relevant policies and guidelines, legislative requirements and promoting value for money, including favoring an open, fair and transparent process when applicable.
• Risk Management: INFC internal controls mitigate risk as it relates to the procurement process.
• Governance: INFC has an effective governance structure in place to monitor, receive reporting, and make decisions regarding procurement activities.

Each criteria is reviewed in more detail in the following sections.

Audit Findings

Theme 1 - In-Place Controls

Audit Criterion

It was expected that:

The procurement process at INFC would demonstrate that an effective set of controls were in place and that it would be in compliance with relevant policies and guidelines, legislative requirements, and that promote value for money, including favoring an open, fair and transparent process, when applicable. In particular:

• Processes are in place to review, approve, solicit, award, and manage procurement and contracting activities and are in accordance with the Treasury Board Contracting Policy;
• Records and information are maintained in accordance with the Treasury Board Contracting Policy;
• There is appropriate delegation of authority and segregation of duties;
• Financial and non-financial reporting with respect to procurement is reviewed and approved; and,
• Processes are in place to ensure that value for money (fairness, openness and transparency) are considered in addition to policy requirements.

Internal controls help provide reasonable assurance that the department will accomplish its goals and objectives. They are particularly useful in safeguarding resources against loss due to errors, waste, abuse and fraud, and in promoting adherence to statutes, regulations, policies and procedures.^{Footnote 2} Because public funds are being spent, procurement and contracting requires controls that are appropriate to all government financial expenditures.

To be effective, controls must be coordinated with the actual flow of work for a process so that they can be applied where deviations from required activities are most likely, or where deviations could lead to the greatest harm. As a first step, the audit sought documentation on the key activities and associated controls that should be followed in the procurement and contracting process at INFC. The audit found that there was no end-to-end process map or other up-to-date amalgamated documentation depicting this. Procurement Services indicated that it was not possible to have such documentation during the examination phase, given that the process was continuously evolving.

Transaction testing revealed that procurement and contracting, at INFC, does not ensure that key controls stipulated in applicable policies and directives are consistently applied. The audit reviewed eight competitive and four non-competitive contracts to verify that required controls are operating as intended. Each contract was reviewed for evidence of:

Procurement Review Committee (PRC) and Procurement Services oversight, the inclusion in contracts of appropriate clauses pertaining to policy requirements such as conflicts of interest, presence of required certifications prior to payment; and adherence to INFC procedural requirements. The procurement and financial file reviews revealed lapses in compliance in at least one aspect of every contract reviewed.

Lapses ranged in severity and included:

• Absence of oversight – no evidence of PRC review of non-competitive contracts; inconsistent evidence of review and sign-off of required Procurement Services checklists;
• No copy of the contract in the procurement or finance files, although available in the manager's file;
• Insufficient segregation of duties and/or lack of compensating controls;
• No justification for a non-competitive contract; and,
• Missing paper records of invoice certification and/or payment authorization.

A breakdown of the observed errors in tested contract files is provided in the following table.

Table 3: Observed Errors in Tested Contract Files^{Footnote 3}

Type of Procurement	Test Criterion
	Procurement Services Oversight	PRC Oversight (where required)Footnote 4	Contract CompletenessFootnote 5	Segregation of Duties	Value for Money ObservedFootnote 6	Compliance with TBS Policy and INFC Procedural RequirementsFootnote 7
Competitive (8 contracts)	7	0	2	3	2	3
Non-Competitive (4 contracts)	4	1	0	0	1	1

Some contracts had multiple amendments, and most had more than one payment, so that there are more payments than contracts:

• Of the 88 payments tested for competitive and non-competitive contracts, 40 had the same individual signing FAA Sections 41, 34 and 32 (contracting, certification and expenditure initiation).
• Of 88 payments, 6 invoices were not stamped and signed for Section 33 (payment authority). Four invoices did not fully align with the contract or did not show enough details to confirm alignment with contract clauses.

Internal Audit was given a draft current process map during the reporting phase of the audit. While we have not tested it against current transactions, it could serve as a foundation for establishing a complete, consistently repeatable process with appropriate internal controls.

Maintenance of Records and Information

While the audit focused mainly on the records maintained by Procurement Services and Finance, for file completeness from a departmental perspective, given the decentralized approach to procurement, the auditors reviewed the documentation retained by each operational manager as it related to their respective contract. It was found that documentation was not consistently kept across branches and directorates and that there were variations in the type of information that was retained. Furthermore, rather than complementing the information available in the Procurement Services or Finance files, the information retained by the operational manager was often a duplicate of some of the information available there. There was no departmental procedures or guidance that stipulated what the managers' roles and responsibilities were in relation to record keeping of procurement-related documentation.

Should questions or issues arise concerning the department's procurement and contracting process, the best source of answers would be to have complete records and information about what transpired during that process readily available. Responsibility for maintaining such records should remain with those who have the related functional expertise as per the TB Contracting Policy and the Government Contracts Regulations. Not only is this a sound management practice, ensuring it is done by those with the functional expertise makes it easier to ensure there is a consistent process.

Delegation of Authority and Segregation of Duties

The risk-based delegation of functional authorities in such areas as finance, contracting and human resources is an essential element of sound management. Delegation of authorities constitutes a key internal control mechanism, which, when combined with segregation of duties, reduces the risk of erroneous or inappropriate action by having more than one employee involved in the completion of a task. Treasury Board direction clearly states that transaction, certification and payment authorities should be kept separate or, when this is not possible, there should be alternate control measures.^{Footnote 8}

The department has an up-to-date Delegation of Financial Signing Authorities document that distinguishes the following authorities according to the Financial Administration Act (FAA):

• Authority to enter into a contract (FAA section 41 - transaction authority);
• Authority to certify that there are sufficient funds to discharge any debt that, under the contract or other arrangement, will be incurred (FAA section 32 – expenditure initiation authority);
• Certification of the receipt of goods and the provision of services (FAA section 34 - certification authority); and,
• Certification of requisitions for payment or settlement (FAA section 33 - payment authority).

While delegation of authority is clear and well-documented in INFC, the department grants transaction (contracting) authority under Section 41 to the same managers with delegated authority to certify suppliers' invoices under Section 34. This is a different approach to many federal organizations where they have granted the contracting authority in the material management function to ensure segregation of these two functions. Where the two functions are not segregated, sound practice would be to have a compensating control in place.

A suitable compensating control is not widely evident at INFC. One manager stated that to ensure reasonable segregation, their superior signs the contract under Section 41, while they themselves take responsibility for signing under Section 34. However, this is neither a requirement of INFC`s delegation of authorities, nor is it prevalent: transaction testing showed that almost half (46%) of the payments sampled by audit had the same individual signing Sections 41, 34 and 32.

The PRC is charged with reviewing non-competitive contracts over $10,000 and competitive contracts over $25,000, and its procedures call for it to exercise a challenge function. While this could be regarded as a compensating control, the effectiveness of this challenge function is questionable as there is no requirement for members to have sufficient knowledge in procurement and contracting to perform a challenge function, or to have taken the department's procurement training.

With significant departmental growth over the last two years, INFC has a clear need for a more formal and clearly defined controls to ensure that incompatible responsibilities are not combined.

Financial and Non-Financial Reporting

Financial reporting is compliant with Treasury Board Policy: INFC prepares quarterly reports of contracts and amendments over $10,000. In addition to these mandatory reports, the department has a quarterly Contracting Activity Report that is regularly sent to PRC members. This report provides an overview of contract details by major organizational unit.

In addition to these financial reports, Procurement Services also has shared its first annual Year in Review report for 2015-16 on the INFRAnet. This report provides an overview of activities for the fiscal year, including a summary of the results of a Client Satisfaction Questionnaire and recommendations going forward. Procurement Services management advised that these actions are underway and that there would be an update on them in the 2016-17 Year in Review report.

The "Contracting and Procurement Team Looking Ahead 2016-2017" report was also presented to the INFC HIC and HMC management committees and published^{Footnote 9} on the INFRAnet in July 2016. The report outlines the commitments made by Procurement Services to implement a revised terms of reference for the PRC and to strengthen the CFO's oversight mandate by developing policy instruments.

Financial and non-financial reporting is satisfactory.

Value for Money

Value for money is a complex concept in government procurement and, as the Treasury Board Contracting Policy acknowledges, acquisition cost (lowest price) is not its only influence. However, sound practice is that value for money can be best achieved by following consistent processes that ensure all qualified suppliers have a fair opportunity to compete for well-documented requirements. If a non-competitive process is to be followed, there should be a written justification that is appropriately vetted before abandoning the competitive process.

The department's processes for procurement and contracting make reliably demonstrating value for money challenging. As shown in Table 3: Observed Errors in Tested Contract Files, gaps in documentation in some files associated with competitive procurement processes make it difficult to unambiguously demonstrate that a fair, open and transparent process was followed. In addition, justification for a single-source contract was not present in one file examined.

Theme 2 - Risk Management

Audit Criterion

It was expected that:

INFC internal controls would mitigate risk as it relates to the procurement process. In particular, whether:

• The procurement process internal controls are designed efficiently to mitigate against potential risks; and,
• Existing internal controls are identified and assessed by Management to manage risks.

These risks would include such things as misstatement of the requirement, impractical timeframes, biased specifications, use of an improper purchasing method, actual or perceived favoritism, actual or perceived breaches of confidentiality, failure to follow effective evaluation procedures, making decisions on subjective grounds, inadequately administering the contract, unauthorized increase in scope of work, failure to meet liabilities of third parties, and fraud.

Establishing and maintaining a comprehensive internal control regime provides reasonable assurance that risks of improper conduct, whether by design or accident, are at acceptable levels. As per the findings in Theme 1 of this audit, INFC does not have a complete and comprehensive internal control regime. As well, given the decentralized process, we would expect to see that managers have appropriate training and understand their roles and responsibilities.

There are some elements of risk management evident in Procurement Services. There is a significant amount of information on the INFRAnet, such as regulations for compliance as well as job aids and templates that are designed to mitigate the risks of non-compliant actions in the procurement process. However, our interviews have highlighted that it is not user-friendly for an operational manager who does not already understand the complexities of government procurement.

While there is also mandatory delegation training provided by the Canada School for the Public Service, its focus is much broader than just procurement and managers are only required to take it every five years.

Another element is the training developed by Procurement Services. The training is open to all employees and provides an overview of contracting and procurement at INFC. The training is non-mandatory and attendance is not consistently tracked. Of those employees with delegated authority that were interviewed, most indicated that they had not taken the training.

The portal and training lay a foundation for providing assurance that risks are at acceptable levels, but need to be complemented by a robust internal control regime. Otherwise the department will remain overly reliant on managers making appropriate procurement decisions.

Theme 3 - Governance

Audit Criterion

It was expected that INFC would have an effective governance structure in place to monitor, receive reporting, and make decisions regarding procurement activities. In particular, whether:

• Accountabilities, roles and responsibilities are clearly identified, communicated and understood;
• Authority is formally delegated and delegated authority is aligned with individual responsibilities; and,
• There is process planning and an oversight function within the procurement process, in charge of monitoring, making decisions and flagging risks to the department.

Procurement and contracting in the federal government is governed by numerous acts, regulations, intergovernmental agreements, policies and guidelines.^{Footnote 10} The complexity of this landscape makes navigating it a challenge for operational managers that need to acquire goods and services to fulfill their mandates and discharge their responsibilities. Procurement and contracting specialists in government must therefore strike a balance between:

• Ensuring that the rules are respected so that government contracting stands the test of public scrutiny in matters of prudence and integrity, facilitating access, encouraging competition, and reflecting fairness in the spending of public funds; and,
• Providing timely, efficient and effective services that ensure the distinction of the operational requirements of responsible managers.^{Footnote 11}

Effective governance and accountability in such an environment requires that all stakeholders have a clear and shared understanding of their roles and responsibilities.^{Footnote 12} This not only supports the effective coordination of activities, it increases the efficiency of program delivery.

Roles and responsibilities within Procurement Services and between Procurement Services and its clients have not been sufficiently defined. Steps have been taken recently to clarify the division of responsibilities within the Procurement Services team, and this remains a work in process. In addition, interviews with operational managers raised questions about the extent to which the roles and responsibilities of the Procurement Services team, PRC and managers themselves are understood across the department.

Procurement Services has developed an approved framework and a proposed structure for an extensive suite of policies and directives pertaining to procurement and contracting. The framework and proposed structure were presented at joint Horizontal Implementation Committee (HIC) / Horizontal Management Committee (HMC), in June and August 2016. The framework was approved by the Director General, Finance and Contracting and by the Chief Financial Officer (CFO). Most of the other policies and directives remain under development. In the interim and pending the new TB Policy on Management of Assets, Procurement and Projects, the Procurement Services team stated that it follows the current TBS policy.

It is Internal Audit's opinion that following established central agency policy is the prudent use of resources for a smaller organization such as INFC, and that, resources would be better deployed in ensuring that an internal control regime is established and implemented. This should include mandatory tools, templates and procedures.

Conclusion and Recommendation

Overall, the audit found that INFC's procurement and contracting processes do not demonstrate the controls required to ensure compliance with relevant policies and guidelines, legislative requirements. This exposes INFC to not meeting the objectives of the Government of Canada contracting policies such as promoting value for money, including favoring an open, fair and transparent process, when applicable. Transaction testing revealed that procurement and contracting does not ensure that key controls stipulated in applicable policies and directives are consistently applied. For example, in testing to see if the process was in accordance with Treasury Board Secretariat (TBS) and INFC requirements related to value for money, auditors found that out of the 12 files tested, three files did not contain sufficient information to demonstrate value for money. As such, the department's ability to mitigate risk in procurement is not as strong as it should be. INFC is reliant on the diligence of individual managers to ensure compliance with relevant policies, guidelines and legislative requirements. INFC's governance structure for procurement and contracting needs to be clarified and confirmed. In particular, clarification on the division of delegated responsibility and authority between Procurement Services and its clients is needed.

This audit resulted in one recommendation designed to strengthen the control regime as well as clarify accountabilities. These elements are critical to appropriately manage the risks related to procurement:

It is recommended that the Assistant Deputy Minister, Corporate Services strengthen the management control framework for procurement and contracting to ensure that:

• A robust, risk-based control regime that will ensure compliance with relevant policies, guidelines and legislative requirements is established. This regime will also promote alignment with the principles of these documents, such as value for money;
• Accountabilities, roles and responsibilities for all participants in the regime, including the Procurement Review Committee, are clearly identified, communicated and understood.

Management response: Management accepts the recommendations. Action plans have been put in place to address the two areas for improvement identified.

Statement of Conformance

The audit conforms to the International Standards for the Professional Practice of Internal Auditing and the Internal Auditing Standards for the Government of Canada as supported by the results of the quality assurance and improvement program.

Appendix A - Management Response and Action Plan

#	Recommendation	Management Response and Action Plan	OPI and Due Date
1	It is recommended that the Assistant Deputy Minister (ADM), Corporate Services Branch (CSB) strengthen the management control framework for procurement and contracting to ensure that: A robust, risk-based control regime is established that will ensure INFC acts in compliance with relevant policies, guidelines and legislative requirements and to promote value for money, including favoring an open, fair and transparent process,; Accountabilities, roles and responsibilities for all participants in the regime, including the Procurement Review Committee are clearly identified, communicated and understood.	ADM, CSB agrees and accepts this recommendation.  The ADM, CSB will undertake an analysis of the current procurement approach and put forward options for Departmental Management Committee (DMC) as to whether to keep the current accountability structure or go to a more centralized approach. A procurement framework with relevant tools, will be implemented and aligned to TB policy (note that these timelines may need to be adjusted depending on the outcome of 1 above). The CFO-approved Assets, Procurement and Projects Framework will be implemented; The drafted Mandatory Procedures on Information Management for Procurement Files will be approved and implemented; A workflow allocation tool will be implemented - partly designed to improve controls, monitoring and reporting activities. Interim process maps will be developed. PRC membership will be reviewed with a view to using external resources to strengthen its oversight role. The Procurement Services organizational structure will be reviewed in consideration of the team's, client's and PRC's currently approved roles, accountabilities and performance indicators. Training materials will be developed in collaboration with Finance in order to communicate responsibilities associated with procurement and in respect to procurement delegated financial signing authorities. This training will be mandatory for managers and staff exercising FAA s.32, s.34 and s.41 authorities. ADM, CS will periodically review compliance with accountabilities and provide feedback to ADMs on their employee's compliance, such as by reporting to DMC.	ADM, CSB Targeted completion November 15, 2017   Targeted completion September 30, 2017 Targeted completion November 15, 2017 Targeted completion October 31, 2017 Targeted completion November 15, 2017 Targeted completion December 31, 2017 Targeted completion December 31, 2017 Targeted completion March 31, 2018 (online version targeted for completion by March 31, 2019)

Footnotes

Footnote 1

http://laws-lois.justice.gc.ca/eng/acts/f-11/page-10.html#h-14/

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Footnote 2

Treasury Board Policy on Internal Control, Appendix A.

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Footnote 3

The error rates shown in Table 2 understate the situation: multiple instances of the same, evident control failure in a single contract file have not been included in the tallies.

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Footnote 4

The PRC does not approve bids going through a competitive process or amendments to such contracts valued at less than 40% of the original value.

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Footnote 5

For example, the contract outlines the requirements of the work to be delivered, there is a clause covering possible conflict of interest situations, the contract itself is on file, etc.

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Footnote 6

For example, work description outlining outputs or deliverables are clearly defined in the RFP, if sole source approach is used, there is justification on file as why a non-competitive process was adopted, etc.

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Footnote 7

For example, bids are solicited before a contract is issued, contract amendment shows justification, and security clearance checks are obtained as required, etc.

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Footnote 8

Treasury Board Directive on Delegation of Financial Authorities for Disbursements, Section 6 and Treasury Board Guideline on Guideline on Common Financial Management Business Process 3.1 - Manage Procure to Payment

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Footnote 9

Report was first "annual" report. Provides overview of the activities intended to be undertaken by Procurement Services from April 2016 to March 2017. Client confirms that the next report will be posted in June 2017 and that both reports are for any interested parties at the department – its sent to the D.G. and CFO prior to publication and presenting at HIC/HMC.

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Footnote 10

Financial Administration Act, Department of Public Works and Government Services Act, Government Contracts Regulations, North American Free Trade Agreement, Agreement on Internal Trade, Treasury Board Common Services Policy, Treasury Board Contracting Policy, Treasury Board Policy on Internal Control, Treasury Board Guideline on Common Financial Management Business Process 3.1 - Manage Procure to Payment, and others as appropriate.

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Footnote 11

Treasury Board Contracting Policy, Section 2

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Footnote 12

Treasury Board Policy on Financial Management Governance, Section 4.1 and 4.2

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