PACC Committee Report
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14.0 PERFORMANCE REVIEW - AUDIT FRAMEWORK
The Agency's performance review and audit framework is based on a review continuum to ensure that each level of review undertaken in the Agency produces the appropriate quality, type and level of information:
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to support effective management decision making;
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to enhance management accountability; and
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to mitigate risks.
Monitoring, audit and evaluation are a significant component of SPPEs within CIDA, which have averaged 2.2 % of Gs&Cs, or about $36 million per year.
The performance review and audit framework for review continuum is comprised of the following:
14.1 Independent Performance Review Functions
The internal audit and program evaluation functions are key components of CIDA's performance review practices. The internal audit and program evaluation plans are approved annually by the Executive Committee. These audits and evaluations are in addition to the monitoring and review at the program or project level.
All Gs&Cs programs, and the systems and controls supporting them, are subject to internal audit. Internal audit plans are prepared annually and are based on the relative risk of the program, the complexity and size of the program and the interests and concerns of management. In accordance with the revised Internal Audit Policy, all internal audit plans are to be based, in part, on a review of the risks associated with the international development programs. The first review of risk required under this new policy will be undertaken in the first half of 2001. This review of risks will be done periodically to keep it current.
The revised Internal Audit Policy requires that internal audit provide assurance services on all important aspects of the Agency's risk management strategy and practices, management control frameworks and practices, and information used for decision-making and reporting. These assurance services will include ensuring that funds are managed by the program with the principles of economy, efficiency, and effectiveness.
All internal audit reports, once approved by the Audit and Evaluation Committee, are available in printed form in both official languages. A summary of the report is available on CIDA's Internet site.
All Gs&Cs programs and projects are subject to program evaluation. An Annual Evaluation Plan (coordinated with the Annual Audit Plan) is prepared, and reviewed by senior CIDA management. The Annual Evaluation Plan:
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examines in turn each Channel or priority of the Agency;
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evaluates expected results and outcomes; and
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is an essential reporting tool to Agency senior management, and all program staff.
14.2 Management Driven Reviews
CIDA periodically undertakes management driven reviews. There are three general categories: risk analysis at contract or agreement level, program or project financial compliance reviews and monitoring.
14.2.1 Risk Analysis at Contract or Agreement Level
Under all Channels, CIDA's policy requires a financial analysis and viability assessment to be performed:
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as a prerequisite in the contract award process, for all service contracts for which the fee component is over $ 1,000,000;
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on a cyclical or annual basis for canadian not-for-profit organizations receiving CIDA funding over $200,000 per year; and
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for other amounts or management issues deemed appropriate.
14.2.2 Program or Project Financial Compliance Reviews
All projects and programs funded by contributions are subject to the right to a financial compliance review by CIDA or its designated representative. The selection and inclusion of projects for financial compliance review is based on an assessment of project risks. CIDA may also review selected grant agreements.
The planning function for financial compliance reviews requires:
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the annual assessment of contribution projects and selected grants against specific risk criteria;
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CIDA staff to document the assessment and managerial decision for initiating a review;
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seeking single financial compliance reviews of recipients, where possible;
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examining the histories, and lessons learned;
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selecting appropriate consultants to perform financial compliance reviews; and
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effective and timely follow-up on findings.
CIDA's policy on financial compliance reviews of recipients of contributions reflects the policy requirements and recommended procedures contained in the TB Policy on Transfer Payments, and is based on the TB Guide on the Audit of Federal Contributions. The Agency follows the procedures laid out in the Contracts and Contribution Agreements Audit Policy.
The Agency also monitors its contribution programs, projects, and agreements by various means. At the project and agreement level, monitoring may include visits by CIDA staff and contracted resources to both offices of the recipient in Canada as well as project sites in the developing world. Monitoring is also conducted by CIDA staff in the critical review of reports from the recipients.
15.0 OTHER TERMS AND CONDITIONS
15.1 Provision for Adjustments to Payments
The contracts, agreements and arrangements under all Channels, explicitly provide for the adjustment of transfer payments, by reduction or cancellation of payments, due to changes in approved funding levels as approved by Parliament in Appropriations.
15.2 Involvement of Members of Parliament
Members of Parliament do not provide advice on projects approved by CIDA or funding decisions. Where it comes to CIDA's attention, on an exceptional basis, that a Member of Parliament may have some involvement in an organization applying for project funding, special care would be taken to ensure that the Member's involvement does not influence the project funding decision, and that the Member does not receive any benefit arising from the funding.
On an exceptional basis, Members of Parliament may be sent to act as official electoral observers or to provide technical assistance advice on Parliamentary systems in countries eligible for CIDA assistance.
Funds required in a given year for approved programs,
projects and activities must be available within the unprogrammed balance of the allotment
approved by TB for Gs&Cs, of that given
year.
CIDA may, where appropriate, require under a transfer payment agreement that Her Majesty be assigned the intellectual property rights on subject-matters that may be created under that agreement for non-commercial exploitation.
15.5 Cost of Managing and Administering the Program
CIDA has three types of votes: Operating Expenditures, Vote 20, Grants and Contributions, Vote 25, and two Non-Budgetary Votes.
The costs of managing and administering the program are paid from the Operating Expenditures Vote, with the exception of the costs borne of SPPE authority, which pays for a portion of monitoring, audit and evaluation costs. For 2000-2001, the Operating Expenditures Vote is $120.5 million representing 6.7% of the total budget of $1.8 billion per year. Furthermore, CIDA has a Non-Budgetary Vote, Vote L30, through which the Agency obtains from Parliament the authority to issue a certain amount of demand notes to the International Financial Institutions which come under the International Development (Institutional Financial Institutions) Assistance Act. In 2000-2001, it amounted to $136 million.