A- Capacity to Deliver the Program

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 Policy on Transfer Payments issued by the Treasury Board Secretariat, and the Financial Administration Act.

• Roles and responsibilities assigned to the CCA were found to be well defined and understood as outlined in the contribution agreements signed between LAC and the CCA.
  
  
• Adequate procedures were issued by the CCA to program applicants and this documentation is adequately communicated through its website.

B- Eligibility, Selection and Approval

• The CCA adjudication process of applicants for NADP funding is adequate and efficient, taking into account the active involvement of the provincial and territorial archives councils.
  
  
• Information provided by program applicants allows for appropriate decision making with respect to the allocation of funds.
  
  
• The adjudication process in place ensures that funding is allocated and approved based on an impartial decision process and on appropriate eligibility criteria, thus ensuring a transparent selection process for the Canadian archival community.
  
  
• The approval and documentation of the CCA national jury decisions are appropriate.

C- Agreements and Terms and Conditions

• The program is administered by LAC and the CCA, in compliance with the terms and conditions submitted to Treasury Board, as well as the2000 Policy on Transfer Payments issued by the Treasury Board Secretariat.
  
  
• The CCA is diligent in ensuring that the beneficiary duly signs the contribution agreement, which faithfully reflects the conditions of the funding.

D- Project Monitoring and Payments

• LAC management attends an annual CCA Board Planning Session and generally meets with the Board during a portion of its other meetings. LAC participates in annual general assemblies, and participates actively and regularly in other meetings and activities of the CCA.
  
  
• LAC's payments to the CCA related to the program are issued in agreement with the Financial Administration Act and the Chart of Delegation of Financial Authorities.
  
  
• The CCA's management diligently reviews the final reports submitted by recipients. This ensures that project deliverables are evaluated for results, and that the project complies with the contribution agreement and makes appropriate use of funding. When the CCA determines that a project is non-compliant, it uses tracking sheets to make comments for follow-up.
  
  
• The CCA monitors conditions on recipient activity reports appropriately by retaining holdbacks due to beneficiaries until the conditions are met to the CCA's satisfaction.
  
  
• The CCA keeps good documentation on file to support its monitoring actions, and uses tracking sheets to follow up on files for applicants and approved beneficiaries.
  
  
• With due care and attention, the CCA reviews and follows up on the majority of projects funded.

A. Banking Operations

Controls exercised by the CCA on banking operations (including issuing cheques) were lacking regarding segregation of duties, bank reconciliation review, and signing of cheques. However, the CCA management immediately took appropriate action to correct these control weaknesses by rearranging responsibilities among the staff.

We are satisfied that the CCA's banking operations are adequately performed, controlled and reviewed.

B. Applicant Eligibility, Recipient Selection and Approval

In a review of selected recipient project files maintained by the CCA, six out of twenty were lacking formal evidence of the applicant's legal status. The applicant guidelines stipulate that "all applicants must submit one of the following documents to give evidence of its [sic] legal status: letters patent, business number, charitable number, and act of incorporation, bylaw or other legal instrument". Appropriate documentation to provide evidence of legal status should be limited to letters patent, act of incorporation or law incorporating the society. This demonstrates that the applicant meets the program requirements and eligibility criteria.

Funding requests submitted by applicants were not supported by a formal commitment letter. Normally, a letter of this type is issued by the applicant's Board of Directors to endorse the project and the application to the NADP and to formally identify a representative to sign the documents issued to the CCA. This formal delegation by the Board of Directors is necessary to avoid projects being initiated and reported on by the same representative of the recipient's organization.

Management acknowledges this situation. Verification of legal documentation is performed by the CCA. The respective provincial or territorial archive council verifies that an applicant is in good standing. Nevertheless, LAC will collaborate with the CCA to define what constitutes "appropriate legal documentation" for NADP purposes, and these requirements will be clearly identified in the applicant guidelines.

C. Agreements and Terms and Conditions

The CCA's final reports are usually issued six months after year-end rather than three months, as specified in the contribution agreements. Consequently, program results are not communicated to LAC management in a timely manner. This situation is due to delays caused by project data capture, processing and analysis by the CCA. Final reports are only compiled and analyzed after all the recipients' reports are received.

The CCA's audited financial statements did not present the statement of operations by type of expenditures (e.g., wages, administration, travel, etc.), but only by activity (e.g., programs, committees, secretariat, etc.). However, the CCA periodically issues unaudited financial information on actual expenditures in its interim reports.

As requested by LAC's Finance Division, the CCA limits its reported expenditures up to the budget level determined by LAC, rather than reporting the actual level of expenditures incurred in relation to the program.

Management acknowledges this situation. To facilitate greater efficiency by the CCA in issuing its annual reports, LAC will review the new 2008 Transfer Payment Policy to see where flexibilities exist in reporting requirements for specific types of projects (i.e., low risk). LAC will also discuss with the CCA the potential receipt of project reports as the projects are completed during the year. Financial statements based on expenditures will be provided as an appendix to the current annual audited financial statements, which are based on activities.

D. Project Monitoring And Payments

The information in the project files examined was not always considered appropriate to justify the realization of the project funded. For example, projects concerning workshops or professional development did not provide lists of participants, tables of contents or feedback from participants. In addition, projects to reformat archival records did not always provide supplier invoices where applicable. The type of supporting documentation required to justify the final product is not defined in the terms and conditions of the contribution agreement signed by recipients. However, some recipients voluntarily provided additional justifications that were found to be adequate.

Recipients are required to submit the final archival description for upload to the national catalogue database, once the project has been completed. However, there has been no follow-up on this requirement and delays of up to a year before the transfer of the final product to the LAC database have been noted.

For certain projects, major increases were noticed between the initial budget and actual expenditures without having been approved by the CCA through a Project Modification Form. Moreover, the interim reports for these projects indicated that "the project was on budget.". Recipients who do not submit project changes for approval are not tracked, in order to inform the CCA national jury in case of future claims. In addition, any significant modification in the project scope could lead to a reassessment of the project objective that would not be captured by the CCA, thus leading to inaccurate program information.