Update on the Federal Granting Agencies’ Financial Monitoring Activities CAUBO Conference – 19 June 2006 Update on the Federal Granting Agencies’ Financial Monitoring Activities CAUBO Conference – 19 June 2006 Germain Tremblay, Director of Finance and Awards Administration, NSERC/SSHRC Isabelle Beauvais, Manager, Financial Administration, Grants and Awards, CIHR

Outline Responsibilities of the partners Responsibilities of the partners Overview of financial monitoring review Overview of financial monitoring review –Preparation –On-site –After review (follow-up) –Resolution of Breach of Agency Policies Common occurrences of non-compliance issues Common occurrences of non-compliance issues Indirect Costs Program Indirect Costs Program Assessment Guide Assessment Guide

Mission Statement We are committed to operating in a fair and transparent manner in all our decision-making and operating processes. We have always placed paramount importance on public accountability regarding the use of our funds. We are committed to operating in a fair and transparent manner in all our decision-making and operating processes. We have always placed paramount importance on public accountability regarding the use of our funds. We are committed to working closely with the Institutions in all aspects of the management of public funds. We are committed to working closely with the Institutions in all aspects of the management of public funds.

Investing in Research Federal Government invest over $2 billion in research at institutions across Canada through the Granting Agencies Federal Government invest over $2 billion in research at institutions across Canada through the Granting Agencies These public funds are provided to researchers through Grants and to students and postdocs through Scholarships & Fellowships These public funds are provided to researchers through Grants and to students and postdocs through Scholarships & Fellowships

Agencies’ Responsibilities Provide institutions and researchers with clear guidelines on the financial administration of the agency funds Provide institutions and researchers with clear guidelines on the financial administration of the agency funds Conduct financial monitoring reviews to assess control framework in place at institutions Conduct financial monitoring reviews to assess control framework in place at institutions

Why Financial Monitoring Reviews Accountable for public funds Accountable for public funds –Ensure that funds are well managed and used effectively, economically, and in the best interest of the research supported by the awards –Ensure that Institutions have effective policies, controls and systems –Ensure that funds are used in compliance with agency and institution policies and regulations

Monitoring Review Approach Recognize partnership in the management of public funds Recognize partnership in the management of public funds –Institutions included in all steps of the review –Joint reviews (CIHR, NSERC, SSHRC) –Clear goals and objectives –Focus of the visit is on: Sharing of informationSharing of information GuidanceGuidance Adding valueAdding value

Financial Monitoring Review Objectives Objectives –Review the adequacy and effectiveness of policies, controls and systems in place –Review the expenditures to ensure that the funds are used as intended and in compliance with relevant rules –Ensure that researchers have the proper tools to manage their agency funds –Share and disseminate information and expectations

Financial Monitoring Review Phase I Planning Planning –Client Knowledge Review the control environment of the InstitutionReview the control environment of the Institution Review policies, systems, and controlsReview policies, systems, and controls Assessment of risksAssessment of risks –Select a number of accounts and transactions

Financial Monitoring Review Phase II On-site (1 week per visit) On-site (1 week per visit) –Conduct introductory session –Review selected transactions –Follow-up with researchers and Institution staff as required –Meet with relevant key staff (incl. grant & award holders and administrators) –Provide information session –Conduct final debriefing session

Financial Monitoring Review Phase III After the review After the review –Follow up on outstanding transactions –Dissemination of findings to: Management CommitteeManagement Committee Advisory CommitteesAdvisory Committees Programs staffPrograms staff –Draft report Obtain comments from institutionObtain comments from institution –Provide final report

Our Expectations Continued cooperation in resolution of outstanding transactions Continued cooperation in resolution of outstanding transactions Senior Management active involvement Senior Management active involvement Commitment towards recommended corrective measures in a reasonable timeframe Commitment towards recommended corrective measures in a reasonable timeframe Inform us of timeframe for implementation Inform us of timeframe for implementation Corrective measures in place by the specified timeframe Corrective measures in place by the specified timeframe Provide progress on implementation of measures if outside the specified timeframe Provide progress on implementation of measures if outside the specified timeframe

Resolution of Breaches of Agency Policies Bending the rules (misinterpretation) Bending the rules (misinterpretation) –Reimbursement Systematic mismanagement Systematic mismanagement –Freeze or close account(s) –Committee on Professional and Scientific Integrity Fraudulent use Fraudulent use –Legal authorities

Common Challenges Ethics Certification (humans, animals) Ethics Certification (humans, animals) –Funds released before “in-principle” approval is provided by the appropriate Ethics Committees (REB, IACC) –Process for annual review of on-going research missing or inadequate Research with human subjects or animals cannot be conducted without continued proper certification Research with human subjects or animals cannot be conducted without continued proper certification

Common Challenges Lack of sufficient supporting documentation for travel expenses Lack of sufficient supporting documentation for travel expenses –Purpose of the trip –Official conference registration receipt or prospectus This information is required to assess the eligibility, relevance and reasonableness of the expenses This information is required to assess the eligibility, relevance and reasonableness of the expenses

Common Challenges Counter signature (1/1) for travel expenses Counter signature (1/1) for travel expenses –1/1 missing –PI authorizes travel claim for visiting researcher –PI authorizes travel claim for visiting researcher 1/1 is required to attest to the relevancy of the expenses to the research 1/1 is required to attest to the relevancy of the expenses to the research

Common Challenges Delegation of Signing Authority Delegation of Signing Authority –Must be provided in writing by the grantee This information is required to ensure that only the PI or his/her authorized delegate approve expenses This information is required to ensure that only the PI or his/her authorized delegate approve expenses

Common Challenges Research Tools and Instruments (NSERC only) Research Tools and Instruments (NSERC only) –No monitoring to ensure that the equipment awarded is the equipment purchased It is essential that the institutions have a mechanism to ensure that the Agency permission is obtained prior to the purchase of an equipment other than the one awarded It is essential that the institutions have a mechanism to ensure that the Agency permission is obtained prior to the purchase of an equipment other than the one awarded

Indirect Costs Program Monitoring approach being developed Monitoring approach being developed –Institutions will be selected based on $ received and risk Visits will be conducted separately and not part of the Financial Monitoring Review visits Visits will be conducted separately and not part of the Financial Monitoring Review visits –3 to 4 institutions visited per year

Assessment Guide Objective: Objective: –Develop a tool to help the Agencies assess the institutions’ control framework and allow institutions to self-assess Initiative conducted with institutions through CAURA and CAUBO Initiative conducted with institutions through CAURA and CAUBO

Assessment Guide Established working group to review draft Established working group to review draft –Meeting held in Vancouver May 7 –Consensus reached –Updated draft and provided to working group for last comments Next steps Next steps –Send final version to all RGOs and BOs for their information by end of June 2006 –Utilise guide starting September 2006

Contacts NSERC and SSHRC NSERC and SSHRC –Carole Crête-Robidoux, Manager, Financial Monitoring –Rita Carrière, Manager, Awards Administration or CIHR CIHR –Isabelle Beauvais, Manager, Financial Administration, Grants and Awards

Questions