Update on the Federal Granting Agencies’ Financial Monitoring Activities CAUBO Conference – 19 June 2006 Update on the Federal Granting Agencies’ Financial.

Update on the Federal Granting Agencies’ Update on the Federal Granting Agencies’ Financial Monitoring ActivitiesFinancial Monitoring Activities

CAUBO Conference – 19 June 2006CAUBO Conference – 19 June 2006

Germain Tremblay, Director of Finance and Awards Administration, Germain Tremblay, Director of Finance and Awards Administration, NSERC/SSHRCNSERC/SSHRCIsabelle Beauvais, Manager, Financial Administration, Grants and Isabelle Beauvais, Manager, Financial Administration, Grants and Awards, CIHRAwards, CIHR

OutlineOutline

Responsibilities of the partnersResponsibilities of the partners Overview of financial monitoring reviewOverview of financial monitoring review

– Preparation Preparation

– On-site On-site

– After review (follow-up)After review (follow-up)

– Resolution of Breach of Agency PoliciesResolution of Breach of Agency Policies

Common occurrences of non-compliance issuesCommon occurrences of non-compliance issues Indirect Costs ProgramIndirect Costs Program Assessment GuideAssessment Guide

Mission StatementMission Statement

We are committed to operating in a fair and We are committed to operating in a fair and transparent manner in all our decision-making and transparent manner in all our decision-making and operating processes. We have always placed operating processes. We have always placed paramount importance on public accountability paramount importance on public accountability regarding the use of our funds.regarding the use of our funds.

We are committed to working closely with the We are committed to working closely with the Institutions in all aspects of the management of Institutions in all aspects of the management of public funds. public funds.

Investing in ResearchInvesting in Research

Federal Government invest over $2 billion Federal Government invest over $2 billion in research at institutions across Canada in research at institutions across Canada through the Granting Agencies through the Granting Agencies

These public funds are provided to These public funds are provided to researchers through Grants and to students researchers through Grants and to students and postdocs through Scholarships & and postdocs through Scholarships & FellowshipsFellowships

Agencies’ ResponsibilitiesAgencies’ Responsibilities

Provide institutions and researchers with Provide institutions and researchers with clear guidelines on the financial clear guidelines on the financial administration of the agency funds administration of the agency funds

Conduct financial monitoring reviews to Conduct financial monitoring reviews to assess control framework in place at assess control framework in place at institutions institutions

Why Financial Monitoring ReviewsWhy Financial Monitoring Reviews

Accountable for public fundsAccountable for public funds– Ensure that funds are well managed and used Ensure that funds are well managed and used

effectively, economically, and in the best effectively, economically, and in the best interest of the research supported by the awardsinterest of the research supported by the awards

– Ensure that Institutions have effective policies, Ensure that Institutions have effective policies, controls and systemscontrols and systems

– Ensure that funds are used in compliance with Ensure that funds are used in compliance with agency and institution policies and regulationsagency and institution policies and regulations

Monitoring Review ApproachMonitoring Review Approach

Recognize partnership in the management Recognize partnership in the management of public fundsof public funds – Institutions included in all steps of the reviewInstitutions included in all steps of the review– Joint reviews (CIHR, NSERC, SSHRC)Joint reviews (CIHR, NSERC, SSHRC)– Clear goals and objectives Clear goals and objectives – Focus of the visit is on:Focus of the visit is on:

• Sharing of informationSharing of information

• GuidanceGuidance • Adding valueAdding value

Financial Monitoring ReviewFinancial Monitoring Review

ObjectivesObjectives – Review the adequacy and effectiveness of Review the adequacy and effectiveness of

policies, controls and systems in placepolicies, controls and systems in place– Review the expenditures to ensure that the Review the expenditures to ensure that the

funds are used as intended and in compliance funds are used as intended and in compliance with relevant rules with relevant rules

– Ensure that researchers have the proper tools to Ensure that researchers have the proper tools to manage their agency fundsmanage their agency funds

– Share and disseminate information and Share and disseminate information and expectations expectations

Financial Monitoring Review Financial Monitoring Review Phase IPhase I

PlanningPlanning

– Client KnowledgeClient Knowledge• Review the control environment of the Review the control environment of the

InstitutionInstitution• Review policies, systems, and controlsReview policies, systems, and controls• Assessment of risksAssessment of risks

– Select a number of accounts and transactionsSelect a number of accounts and transactions

Financial Monitoring Review Financial Monitoring Review Phase IIPhase II

On-site (1 week per visit)On-site (1 week per visit)– Conduct introductory session Conduct introductory session

– Review selected transactionsReview selected transactions

– Follow-up with researchers and Institution staff as Follow-up with researchers and Institution staff as requiredrequired

– Meet with relevant key staff (incl. grant & award Meet with relevant key staff (incl. grant & award holders and administrators)holders and administrators)

– Provide information sessionProvide information session

– Conduct final debriefing sessionConduct final debriefing session

Financial Monitoring Review Financial Monitoring Review Phase III Phase III

After the review After the review – Follow up on outstanding Follow up on outstanding transactions transactions – Dissemination of findings to: Dissemination of findings to:

• Management CommitteeManagement Committee• Advisory Committees Advisory Committees • Programs staff Programs staff

– Draft report Draft report • Obtain comments from institutionObtain comments from institution

– Provide final reportProvide final report

Our ExpectationsOur Expectations

Continued cooperation in resolution of Continued cooperation in resolution of outstanding transactionsoutstanding transactions

Senior Management active involvementSenior Management active involvement Commitment towards recommended corrective Commitment towards recommended corrective

measures in a reasonable timeframe measures in a reasonable timeframe Inform us of timeframe for implementation Inform us of timeframe for implementation Corrective measures in place by the specified Corrective measures in place by the specified

timeframe timeframe Provide progress on implementation of measures Provide progress on implementation of measures

if outside the specified timeframeif outside the specified timeframe

Resolution of Breaches of Agency Resolution of Breaches of Agency PoliciesPolicies

Bending the rules (misinterpretation)Bending the rules (misinterpretation)

– ReimbursementReimbursement

Systematic mismanagementSystematic mismanagement

– Freeze or close account(s)Freeze or close account(s)

– Committee on Professional and Scientific IntegrityCommittee on Professional and Scientific Integrity

Fraudulent useFraudulent use

– Legal authoritiesLegal authorities

Common ChallengesCommon Challenges

Ethics Certification (humans, animals)Ethics Certification (humans, animals)– Funds released before “in-principle” approval is Funds released before “in-principle” approval is

provided by the appropriate Ethics Committees provided by the appropriate Ethics Committees (REB, IACC) (REB, IACC)

– Process for annual review of on-going research Process for annual review of on-going research missing or inadequate missing or inadequate

Research with human subjects or animals Research with human subjects or animals cannot be conducted without continued cannot be conducted without continued proper certificationproper certification

Common ChallengesCommon Challenges

Lack of sufficient supporting Lack of sufficient supporting documentation for travel expenses documentation for travel expenses – Purpose of the trip Purpose of the trip – Official conference registration receipt or Official conference registration receipt or

prospectusprospectus

This information is required to assess the This information is required to assess the eligibility, relevance and reasonableness of eligibility, relevance and reasonableness of the expenses the expenses

Common ChallengesCommon Challenges

Counter signature (1/1) for travel expensesCounter signature (1/1) for travel expenses– 1/1 missing 1/1 missing – PI authorizes travel claim for visiting PI authorizes travel claim for visiting

researcherresearcher

1/1 is required to attest to the relevancy of 1/1 is required to attest to the relevancy of the expenses to the research the expenses to the research

Common ChallengesCommon Challenges

Delegation of Signing AuthorityDelegation of Signing Authority – Must be provided in writing by the granteeMust be provided in writing by the grantee

This information is required to ensure that This information is required to ensure that only the PI or his/her authorized delegate only the PI or his/her authorized delegate approve expensesapprove expenses

Common ChallengesCommon Challenges

Research Tools and Instruments (NSERC Research Tools and Instruments (NSERC only)only)– No monitoring to ensure that the equipment No monitoring to ensure that the equipment

awarded is the equipment purchasedawarded is the equipment purchased It is essential that the institutions have a It is essential that the institutions have a

mechanism to ensure that the Agency mechanism to ensure that the Agency permission is obtained prior to the purchase permission is obtained prior to the purchase of an equipment other than the one awarded of an equipment other than the one awarded

Indirect Costs ProgramIndirect Costs Program

Monitoring approach being developed Monitoring approach being developed – Institutions will be selected based on $ received Institutions will be selected based on $ received

and riskand risk Visits will be conducted separately and not Visits will be conducted separately and not

part of the Financial Monitoring Review part of the Financial Monitoring Review visits visits – 3 to 4 institutions visited per year3 to 4 institutions visited per year

Assessment GuideAssessment Guide

Objective:Objective:– Develop a tool to help the Agencies assess the Develop a tool to help the Agencies assess the

institutions’ control framework and allow institutions’ control framework and allow institutions to self-assess institutions to self-assess

Initiative conducted with institutions Initiative conducted with institutions through CAURA and CAUBOthrough CAURA and CAUBO

Assessment GuideAssessment Guide

Established working group to review draftEstablished working group to review draft– Meeting held in Vancouver May 7Meeting held in Vancouver May 7– Consensus reachedConsensus reached– Updated draft and provided to working group Updated draft and provided to working group

for last comments for last comments Next stepsNext steps

– Send final version to all RGOs and BOs for Send final version to all RGOs and BOs for their information by end of June 2006 their information by end of June 2006

– Utilise guide starting September 2006 Utilise guide starting September 2006

ContactsContacts

NSERC and SSHRC NSERC and SSHRC – Carole Crête-Robidoux, Manager, Financial Monitoring Carole Crête-Robidoux, Manager, Financial Monitoring

[email protected]@nserc.ca or @sshrc.ca or @sshrc.ca– Rita Carrière, Manager, Awards Administration Rita Carrière, Manager, Awards Administration

[email protected]@nserc.ca or or [email protected]@sshrc.ca

CIHRCIHR– Isabelle Beauvais, Manager, Financial Administration, Isabelle Beauvais, Manager, Financial Administration,

Grants and Awards Grants and Awards [email protected]@cihr-irsc.gc.ca

QuestionsQuestions