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Audits and Evaluations

Audit of the National Archival Development Program

Audit Report
June 2010

Executive Summary

Audit Services Canada was hired to conduct an audit of the National Archival Development Program (NADP) of Library and Archives Canada (LAC). The NADP provides financial assistance to the Canadian Council of Archives (CCA) and related organizations to increase their capacity to preserve and make accessible unique archival materials about Canada and Canadians. Funding for the NADP has remained stable since 1989 with an annual budget of $1.7 million. This program covers a period of five years ending March 31, 2011.

The audit covered all contributions paid to ultimate recipients in relation to the NADP for the years ending March 31, 2008 and 2009. The CCA's operational activities were also audited for the same period since they were supported by funding provided through the NADP.

The audit was performed in June 2009.

Background

The NADP is delivered by a third party, the Canadian Council of Archives (CCA). The CCA is a non-profit organization involved, since 1988, in the administration of various federal contribution programs related to Canadian documentary heritage and the archival system. The CCA's capacity to deliver the NADP depends on its workforce of seven full-time equivalents (FTEs) and on the efforts of volunteers from the Canadian archival community.

Assessment of project proposals are performed jointly by the provincial and territorial archives councils and the CCA national jury, which is in charge of reviewing applications recommended for funding by the archives councils and adjudicating applications made by the councils. This process adds the necessary oversight to the selection of applicants.

The CCA has experienced an increase in its workload and has faced budget constraints due to recent initiatives incurred to improve its system capacity and to meet LAC requirements in terms of monitoring and reporting. All projects are subject to monitoring by the CCA, irrespective of their degree of risk. The CCA also administers two other federal programs. Staff members face a high volume of work in administering NADP projects. This limited capacity and the potential for turnover of experienced CCA staff and volunteers creates a risk to deliver the NADP.

Audit Objectives

The objectives were to provide LAC senior management with the assurance that:

• the management control framework and the governance structure related to the NADP are adequate and effective;
  
  
• the management of the program is in compliance with the 2000 Policy on Transfer Payments issued by the Treasury Board Secretariat, and the Financial Administration Act;
  
  
• the monitoring, risk management and performance measurement are effectively incorporated into program activities to ensure that funding allocated to recipients is used as intended.

Overall Audit Conclusion

Based on the documentation reviewed and interviews conducted, the management control framework and the governance structure applied to manage the NADP were found to be adequate. Management of the program was in compliance with the 2000 Treasury Board Secretariat Policy on Transfer Payments and the Financial Administration Act. Project selection followed a rigorous process and all projects were monitored annually by the CCA. At the time of the audit, performance measurements were being developed jointly by LAC and the CCA, and collection of data had begun.

Recommendations and Management Response

This report identifies the following recommendations for both LAC and the CCA:

1. Modify the contribution agreement signed between LAC and the CCA to ensure that, on a random basis, the CCA follows up on the deposit of archival descriptions in provincial and territorial catalogues and that these, in turn, are sent to LAC for upload to the national catalogue it maintains;
   
   
2. Improve the CCA's financial follow-up on actual project expenditures compared to the initial budget by undertaking a pilot project of random audits that focus on higher risk projects;
   
   
3. Provide a narrative in the final report on NADP activities to demonstrate that program objectives and result outcomes have been met successfully.

Management agrees with the recommendations and has developed an action plan to address these recommendations.

Other Matter

The audit found that the program was in compliance with the 2000 Treasury Board Secretariat Policy on Transfer Payments (TPP). Currently, all projects are reviewed by CCA staff regardless of the degree of risk incurred. The 2000 TPP was revised and changed as of October 1, 2008. The new Policy stipulates that "transfer payments be managed in a manner that is sensitive to risks, that strikes an appropriate balance between control and flexibility, and that establishes the right combination of good management practices, streamlined administration and clear requirements for performance". A risk-based approach to monitor recipient auditing activities needs to be developed and implemented, taking into account the limited capacity of the CCA. The requirements of the new TBS Policy should be addressed when the NADP is renewed in 2010.

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