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Internal Audit and Evaluation Documents

Parks Canada - Audit of Key Financial Processes at the Banff National Park Field Unit


2 Observations and Recommendations

2.1 Management Control Framework

GREEN

Controlled

Controls are functioning as intended and no additional actions are necessary at this time.

Current Practices

The Field Unit refers to PCA policies for financial management. Financial signing authorities are established for PCA staff with approval authority. Training in financial management is mainly on–the–job with additional training taken in specialized areas, such as contract management. Staff interviewed are generally aware of their financial responsibilities but may not be clear on the details of Treasury Board policies. Staff refer to the Parks Canada website for direction on financial policy and procedures and rely on the services and expertise of Finance and Administration. There has been no turnover in the finance staff for the last twelve years.

Sufficient segregation of duties exists within the Field Unit. Expenditures are recorded by Finance and Administration, with spending authority exercised by the various individuals with Section 34 authority. Payment authority (Section 33) rests with two individuals for the Field Unit, the Manager, Finance and Administration and a backup. It is clearly understood that the same individual cannot exercise both payment authority and spending authority. Bank reconciliations are performed by the Revenue Coordinator, an individual outside the Finance and Administration group. Gate receipts are received by the attendants, placed in the safe and deposited by an armoured car service. At other collection points, the attendants prepare and deliver the bank deposits. Receipts are recorded by the Revenue Coordinator.

The management committee meets regularly and is attended by the managers who report to the Field Unit Superintendent. Meetings were held approximately every two weeks before the summer and are now being held every month. The management committee discusses planning, operational issues, updates and activities. A Finance update is a standing item on the agenda.

PCA does not have a risk management framework in place at the national level. Although a formal risk profile with risk associated mitigation has not been developed in the Field Unit, the Banff National Park Field Unit informally considers risks in the development of its 3 year Business Plan and the 2004–2008 Mountain Park Sustainable Financial Strategy through the identification of priorities. Formal risk assessments are often conducted by Legal Services, particularly for land claims. The Banff National Park Field Unit is considered by PCA to be the most intensely scrutinized park in the system. The field unit is involved in an average of 5–10 major legal cases/litigations every year4.

Operational plans are developed with significant consultation and participation with local stakeholder groups. The Field Unit budget is established based on several elements: the Mountain Parks Sustainable Financial Strategy, the Banff National Park Field Unit 3 year Business Plan and the historical A–Base funding allocation. At the beginning of the year, the budget envelope is allocated to the different managers largely based on historical spending. Capital spending needs are identified and resources allocated based on priorities. The Manager, Finance and Administration, has a coordinating role in the budget planning exercise but does not have a challenge function. Managers are held accountable for achieving planned results with their budgets. This is a component of performance reviews for the management team. Variances from budget are monitored by the Manager, Finance and Administration and discussed with the managers and the Field Unit Superintendent. Variance reports are prepared quarterly and submitted to the Western Canada Service Centre in Calgary for consolidation. Formal processes for project management and reporting have not been established, but has been identified as an area where skills need to be enhanced and the Field Unit Superintendent has requested training for the relevant managers.

Significant capital assets (items over $10,000) for the Field Unit are tracked in the Asset Module of SAP, including IT assets. The approval for the purchase of all IT assets rests with the manager responsible for IT. All purchases of software and hardware are tracked and maintained in a separate spreadsheet, including Blackberries. Items below $10,000 (such as furniture or digital equipment) are not centrally tracked. The accountability for these assets rests with the responsible manager.

Disaster recovery plans are in place for electronic information for the Banff National Park Field Unit. All network files are backed up locally. A contract is in place with the network service provider, Telus, that ensures connectivity and availability.

Facilities are safeguarded and locked. Safes are used to store all cash receipts for deposit and change.

Observations

The management control framework in place at the Field Unit is adequate to ensure stewardship of resources (financial, human resources, facilities, information technology systems). The audit has found some weaknesses with respect to revenues, contracting, acquisition card usage, travel and payment to suppliers. The details of those weaknesses are discussed in the relevant sections below, with corresponding recommendations. With respect to budget allocations, the following observation was made:

  • Budget allocations are not linked to plans and priorities at the start of each fiscal year. Budgets are generally allocated based on historical spending, with adjustments through the year to reflect additional transfers received. This allocation is done independent of the plans and priorities defined in the Mountain Parks Sustainable Financial Strategy and the 3 year Business Plan. There is a risk that resources will not be allocated to the highest priorities.

Recommendation:

  1. The Field Unit Superintendent should consider introducing a zero–based budgeting approach to assess activities and planned spending so that resources can be allocated and clearly linked to the priorities established.

2.2 Revenue

BLUE

Minor Improvements Needed

Many of the controls are functioning as intended; however, some minor changes are necessary to make the control environment more effective and efficient.

Current Practices

The Banff National Park Field Unit has a number of different revenue streams and is forecasting revenue for 2005/06 at $21.9 million5 as follows:

Revenue Category

Total Forecast to Year End

% of Target Achieved as of September 30, 2005

National Park Entry Revenue (personal use fees, regional bus)

$14,650,000

75%

Backcountry Use (wilderness passes)

120,000

55%

Front Camping (including firewood)

2,700,000

98%

National Historic Site Revenue (Cave & Basin, Museum, Rocky Mountain House)

380,000

99%

Realty Revenues (land rents, concession/franchise fees, utility fees)

2,646,140

61%

Business Licenses

30,000

91%

Staff Housing

400,000

53%

Fishing Permits

70,000

35%

Other Revenue (filming, other)

944,000

102%

Total

$21,940,140

77%

Banff National Park is the top revenue producer of all the National Parks across Canada. The revenue is earned throughout the year with the majority coming in the summer months. The Park has several entrance points, but only one gate is within the boundaries of the Banff National Park Field Unit. That gate (the East Gate) is a key revenue collection point where over 55% of all revenues for the Park are collected. Including the East Gate, there are 15 different collection points with 1 to 4 selling kiosks each. Deposits are prepared for each selling kiosk per employee. At the East Gate, in the summer months when all kiosks are operated, there can be up to 14 deposits made a day. According to the Revenue Coordinator for the Field Unit, there were approximately 7,800 cash deposits made last year for Park revenues, many for relatively small amounts. The sheer volume of deposits increases the inherent risk of errors and losses.

Seasonal staff is hired during summer months to complement the year round staff. Many seasonal staff are returning students. At the East Gate, 10 individuals are usually hired during peak summer season to add to the 11 staff maintained throughout the year. There have been no major problems identified for seasonal staff. Seasonal staff is supervised and monitored, compensating for the fact that they are hired for a very short period of time with little formal training.

Sales from all collection points are entered into the point of sale (POS) system. The POS systems are programmed with unit fees and the operator simply enters the number of passes purchased. Staff is provided monthly with blocks of annual park passes for distribution at the time of sale. The POS system records and accounts for all sales of passes. The supervisor of the East Gate accounts for all passes issued and remaining. Staff also periodically patrol the park, requesting visitors to show their pass. This is a detective control to ensure that all visitors have paid the entrance fee, but also ensures that the gate attendants are giving out the park passes appropriately.

POS sales reports are delivered to the Revenue Coordinator daily (for the East Gate) or weekly/monthly depending on the activity at the collection point. The POS sales reports can also be downloaded remotely by the Revenue Coordinator for all POS systems. Each kiosk attendant prepares their own deposit. In the case of the East Gate, attendants prepare a "blind" deposit, i.e., they count their cash at the end of their shift, remove their starting float and record the deposit for the remaining cash and credit cards. The deposit is entered into the POS system and a bank deposit slip is generated. The POS closeout report will compare the deposit information entered to the sales generated, identifying whether any overages or shortfalls occurred. The deposits are sealed and put into a drop safe. The Supervisor or Manager will review the number of deposits and prepare it for collection by armoured car service. Only the Manager and Supervisor have the combination to the bottom half of the safe. The armoured car service delivers the deposit to a CIBC banking service centre in Calgary. A verification of deposits is then picked up daily from the local CIBC bank by the Revenue Coordinator. There have been growing delays by the bank in preparing these verification receipts, discussed in the observations below. The CIBC deposits the money directly into the Bank of Canada and the Banff Field Unit gets a download of this information into the Integrated Financial Management System (IFMS). There do not appear to be delays in the depositing of the funds in the Bank of Canada account, just the verification of the deposit. The deposit recorded in IFMS is not recorded as revenue until the verification of the deposit is received back from the bank and reconciled.

To record the revenue, the Revenue Coordinator reconciles the POS sales reports with the verified CIBC bank deposit slips on a daily basis. She then matches the deposit to the Bank of Canada download. This is a complex process given the volume of deposits received daily and the frequency of variances due to items such as foreign exchange that can make reconciliations difficult.

Bus tour companies and land lessees are set up in Accounts Receivable and managed through Finance and Administration. Lease agreements are established and renewed on a multi–year basis. Under these agreements, facilities such as ski resorts and shops pay a percentage of gross sales. The Banff Field Unit invoices the companies based on the revenue reported in their audited financial statements.

Revenues are collected for the use of 6 campgrounds at two collection points, using POS systems. The National Historic Sites also collect revenue at the site using POS systems and make their own deposits.

Observations

Following interviews with key staff and transaction testing, some control weaknesses were identified in the timely recording of revenues. As a result, there is a risk that revenue may not be complete. Although daily reconciliations of POS reports with CIBC deposit slips are done, revenue is not entered into IFMS and reconciled with the Bank of Canada deposits until several months later. This is due to several reasons:

  • Delays in receiving bank deposit slips from the CIBC

    During the course of the year, there has been an increasing time lag for receipt of bank deposit slips from the bank. As of Oct 18, 2005, there were 176 deposits from April to July where PCA is waiting for bank deposit receipts, amounting to over $360K. The process requires that the bank deposit slip be received before recording the revenue in IFMS. As a result, the outstanding deposits are not recorded as revenue on a timely basis. The Banff Field Unit has worked with the CIBC to try to reduce the turnaround time for verification of deposits, without success.

    Revenue reporting, however, is done with up to date information, based on the POS data which can be downloaded remotely for all collection points. Separate spreadsheets are maintained to accumulate the revenue data from POS systems and report them monthly. These spreadsheets are manually updated (some formula driven) but subject to error. During the transaction testing, an error from the download was noted where 9 days of sales were missing.

  • Workload and complexity of the role

    There is one individual in the Field Unit who is responsible for reconciling all deposits to bank receipts and recording the revenue in IFMS. She is highly knowledgeable and experienced in interpreting and identifying reconciling items as well as navigating through the various IFMS screens. However, there are no desk procedures or a second individual sufficiently trained to backup the Revenue Coordinator.

    The workload is high for one person to reconcile and record the revenue in IFMS given the large volume of transactions. When the Revenue Coordinator was away for two months in the spring, no replacement was assigned, delaying all revenue recording for the remainder of the year. There is a significant dependency on her. The role requires a clear understanding of IFMS (SAP) revenue transactions, the POS data capture and reporting and interface with the bank – all complex processes.

  • No integration between the POS system and IFMS

    Contributing to the lengthy reconciliation process is the fact that the POS system and IFMS are not integrated. This results in the double entry of sales and the execution of manual processes to track the high volume of transactions.

    A national POS system is being considered and a tender offering has been made. It is not clear whether the new system will be integrated with IFMS. An integrated system will eliminate the double entry of sales into POS and IFMS, and reduce the number of manual processes that are required to reconcile the revenue, thereby increasing efficiency and reducing the opportunity for errors.

Recommendations:

  1. The Field Unit Superintendent should obtain the assistance of senior management from PCA national headquarters to work with the CIBC to reduce the turnaround time for verification of deposits and establish agreed upon service levels. This will help to reduce the amount of time it takes to reconcile sales with deposits and follow–up on discrepancies, thus providing more assurance over the accuracy and completeness of revenue.

  2. The Field Unit Superintendent should identify and train an additional resource in revenue accounting to backup and provide assistance to the Revenue Coordinator currently doing the revenue recording.

  3. The Field Unit Superintendent should ensure that the total revenues as recorded in the POS system are periodically reconciled with IFMS to verify accuracy and completeness of the revenue reporting. It is recognized that the reconciliation will be a difficult task, while there are still delays from the bank and many reconciling items.

2.3 Contracting

ORANGE

Significant Improvements Needed

The control environment is lacking and/or has degraded since the last audit and is a contributing factor to non–achievement of program/operational objectives. Immediate management actions need to be taken to address the control deficiencies noted.

Current Practices

Contracts are used primarily for services. Contracting (along with all purchasing) is decentralized to the various business units. Some managers with spending authority have received formal training in contracting regulations and advice can be sought from a contracting specialist in the Calgary Service Centre. However, there is no contract coordinator or specialist in the Field Unit to provide regular advice and oversight over the contracting practices to ensure compliance with TBS and PCA policies. There are no documented procedures on contracting processes to assist the managers in the required steps and documentation necessary to comply with TBS contracting regulations. At the time of the site visit, the auditor was told that an information package was being assembled to provide more step by step instruction on contracting practices for use by the various business managers.6

The most common contracting instruments used by the Field Unit are:

  • Sole source contracts

  • Competitive process, where bids are obtained (often informally submitted through email)

  • Standing Offers

Based on information supplied by Finance, there were 117 contracts issued in the current fiscal year. However, key information (amount, contactor, type and competitive process) was not recorded for 16 of the contracts, since the information had not been supplied to Finance. Of the 101 contracts with information, 6 contracts were over $25,000.

Contracts are prepared by the business units, which are then forwarded to Finance for contract reporting and tracking purposes. Sometimes the contracts are sent immediately after signing; other times, the contracts are sent in support of an invoice. Finance does not review the quality of the contract document, nor does it review the procurement practices supporting the contracting action. The individual in Finance has developed some understanding of contracting regulations through previous experience and can provide some advice when asked. For more complex procurements, such as MERX notifications (which are rare), the contracting specialist in Calgary is involved.

Procurement of goods is generally done through Local Purchase Order, acquisition card or standing offer. Standing offers, at both the national and regional levels, are in place for certain goods including fuel, office supplies, photocopier rentals. The use of standing offers for some commodities was made mandatory April 1, 2005. Communications have been sent out from Finance to the managers for their information, but it continues to be difficult to ensure that call–ups for standing offers are used where appropriate.

All supporting documentation on whether bids were obtained is maintained by the various business units and managers. This made the assessment of the contracting practices very difficult. Some tests were abandoned due to the unavailability of the managers during the site visit. However, based on the contracting documentation maintained in the Administration office, it was possible to draw several conclusions on the contracting practices, as described below.

Observations

Based on interviews and limited sample transaction testing, the control environment over contracting is weak. Due diligence should be strengthened with respect to monitoring contracting practices. We offer the following observations:

  • Based on the limited information supplied to Finance, it appears that 85% of contracts issued were sole sourced. In one case, it was noted that a competitive process was carried out, however, Finance recorded the contract as non–competitive due to the limited information available to make the determination. As a result, it is not clear whether the information reported on contracting activities in the Field Unit is complete and accurate.

  • Amendments were not properly prepared. In one case, to add a paragraph to an existing contract, the manager modified the original contract using the same contract number and asked the contractor to re–sign the new contract document, instead of processing an amendment to the originally signed contract. This resulted in two virtually identical contracts, both with valid signatures. In another case, a large contract with 8 amendments did not use standard amendment forms to clearly label the amendment as such or number it to track the different amendments.

  • In four separate service contracts, there were indications of possible contract splitting. Two individuals (a husband and wife) working for the same company each were issued individual contracts for two separate research projects. Each contract was below $25,000 but the combined amount for one project would total $40,400. This may indicate that the contracts were issued to two separate individuals for each project to avoid a competitive process.

  • Files maintained in Finance and Administration lack justification for price. In many cases, a statement of work is missing. There is very little documentation on file that demonstrates whether competitive bids were solicited, obtained and evaluated or whether a standing offer can or should be used. The files kept in Finance did not include documentation on the justification for a sole source contract. This documentation may be maintained by the business units but was unavailable for review at the time of the site visit. Nevertheless, there is no monitoring function to ensure that the documentation exists or that the right processes were followed.

  • There is no commitment control over payments against contracts since the Field Unit does not enter commitments into IFMS. This is a contravention of Section 32 of the Financial Administration Act which requires the recording of commitments. Beyond the legislative requirement, there is a business need for commitment accounting, to manage the risk of overspending, particularly important in managing contracts. In the example of the large contract with 8 amendments, there were many progress payments against this contract which required tracking through additional spreadsheets. There was some disagreement between Finance and the contracting manager on the outstanding balance of the contract, since they maintained separate spreadsheets to track the payments. Without a definitive record of the overall commitment as defined in the contract and its amendments, and the expenditures against it, there is the risk of overspending.

    At the time of the audit visit, the auditor was informed that the Field Unit only recently began recording commitments in the financial system for expenditures over $10,000. This will improve the information available to managers to assess their true free balance. However, it will be important that managers inform Finance on a timely basis when they have entered into a commitment (and not when the invoice arrives) to realize the benefits of commitment accounting. This may be a particular challenge given the decentralized nature of contracting and procurement at the Field Unit.

Recommendations

  1. The Banff National Park Field Unit should establish a contract coordinator role who would have oversight responsibility to ensure fairness and ongoing compliance with Treasury Board Policy on Contracting and to PCA contracting guidelines.

  2. The Field Unit Superintendent should assess training requirements for all staff with contracting authorities such that they are aware of proper contracting practices and documentation requirements to demonstrate fairness and compliance with TBS requirements.

  3. The Field Unit Superintendent should continue with plans to implement commitment accounting and stress to her managers the importance of informing Finance of the commitment when it occurs.

2.4 Acquisition Cards

BLUE

Minor Improvements Needed

Many of the controls are functioning as intended; however, some minor changes are necessary to make the control environment more effective and efficient.

Current Practices

Using the acquisition card is the preferred method of procurement in the Banff National Park Field Unit. It allows for streamlining of payments and filing. They are used to purchase items such as office supplies, books, ammunition, communications, computer equipment, other equipment, food for the Park employees in remote locations and barn supplies.

The Acquisition Card Coordinator is in Banff. Requests for new acquisition cards are prepared by the individual's manager and submitted to the Acquisition Card Coordinator, who together with the manager determine the credit limit up to a maximum of $15,000. In addition, a limit is placed on each transaction, up to a maximum of $5,000. Applications are sent to the Bank of Montreal for processing and the cards are sent to the Coordinator. The cardholder claims the card from the Coordinator and signs a receipt, acknowledging that they understand their responsibilities in using the card and eligible expenditures. The list of cardholders for the Unit is available through a secure login to the Bank of Montreal website. The listing on the bank website is considered always current and shows the history of all cards issued. The Acquisition Card Coordinator has been with the Banff National Park Field Unit for over 20 years and is familiar with all cardholders and can verify that the list of cardholders is correct. Per review of the website, there have been 192 cards issued to individuals in the Unit, including some that have been closed (cancelled) for various reasons such as the card was lost or stolen or the cardholder has been irresponsible in the card use. During the time of the site visit, it was decided that one staff member would have his credit card cancelled due to inappropriate use and repeated lateness in submitting receipts for payment. The individual was identified by Finance and discussed with the manager. When an employee leaves the Field Unit, an employee clearance report is completed to ensure employees return items such as keys, credit cards, and other equipment before departure.

Mastercard invoices are sent to the individual directly. It is the cardholder's responsibility to complete a log of purchases, attach receipts, obtain Section 34 approval and forward to Finance for payment processing. Finance performs a review to ensure that the appropriate individual has signed Section 34 on the invoice. Payment approval (Section 33) is done by the Manager, Finance and Administration, or in her absence, a designated Senior Financial Officer.

Observations

Based on information gathered from interviews, file reviews and transaction testing, it appears that several key processes are in place and provide control on spending limits and the approval of payments. However, some instances of non–compliance were noted in the transaction testing.

  • One payment was for travel expenses, which are not permitted with the acquisition cards.

  • One purchase through the acquisition card included a receipt signed by someone other than the cardholder. This practice was previously permitted, but the Field Unit has attempted to stop this practice through communications.

  • One payment where receipts were not attached to verify the amount paid. Some correspondence was attached confirming the order, although no amounts were shown to support the claimed amount.

Recommendations

  1. The Field Unit Superintendent should ensure that adequate communication and training in eligible acquisition card purchases is provided to all cardholders, particularly those found non–compliant.

  2. The Field Unit Superintendent should ensure that the review of acquisition card purchases by Finance is enhanced to review for ineligible expenditures, cardholder signatures on receipts and adequate documentation is attached to support the claimed amounts.

2.5 Payments to Suppliers

BLUE

Minor Improvements Needed

Many of the controls are functioning as intended; however, some minor changes are necessary to make the control environment more effective and efficient.

Current Practices

Invoices are received and stamped in the mailroom. They are sorted and assembled into large envelopes that include a summary sheet of the key financial codes relevant to their activity. The envelopes are delivered to the responsible manager for signature and coding.

Purchase authorizations (e.g., purchase orders) are maintained by the business units and are sometimes returned with the invoice, but not always. If the purchase order is attached, Finance will match the information to ensure consistency. Problems in coding and supporting documentation will be challenged if they are encountered, but there is not a systematic challenge performed on every payment. However, Finance will ensure for every payment that spending authorization (Section 34) has been signed off by an authorized person. Finance then enters the payment into IFMS. IFMS generates a payment number and the finance officer writes the payment number on the invoice with the date.

Payment runs are produced daily. The Manager, Finance and Administration, with Section 33 authority, reviews the payments and electronically releases payment within IFMS. The original invoices are attached to the payment run for the Manager to review and reference. A senior finance officer also has Section 33 authority, as backup to the Manager. The Manager, Finance and Administration has Section 34 authority but will request that those payments be released by the senior finance officer. Typically, however, the Manager, Finance and Administration will request that the Field Unit Superintendent provide the spending authorization (Section 34) for those purchases authorized by the Manager, Finance and Administration.

Although Finance conducts a limited review on the payments submitted for processing, a detailed account verification process is in place for all payments over $25,000 and payments considered high risk7. A formal account verification checklist is completed, where the amount, payee/address, approval, financial coding and payment support is verified. This same account verification checklist is used for the statistical sample identified by PCA Headquarters and conducted in the Field Unit. The Banff National Park Field Unit recently (since September 2005) began logging all problems identified locally through account verification for the purposes of identifying training requirements or corrective action. Finance plans to meet with the responsible managers to discuss corrective actions, once recurring errors and trends have been identified and sourced8.

The above payment process applies to various payments to suppliers including contracts, acquisition card payments, and travel expenses for employees.

As needed, managers request financial reports from IFMS on their expenditures to date. Some maintain their own listings to track and monitor their expenses against budget. Managers submit forecasts of revenues and expenses on a quarterly basis for comparison against the Business Plan. The Manager, Finance and Administration consolidates the information, identifies significant variances, obtains explanations as required and discusses variances with the superintendent.

Observations

Based on our review of the accounts payment process, interviews with key personnel and sample transaction testing, the processes and controls related to supplier payments appear to be adequate, with the following exceptions:

  • As previously identified, the Banff National Park Field Unit does not practice commitment accounting, a contravention of Section 32 of the Financial Administration Act. There is the risk that some business units may overcommit their budget and thus, overspend. Some compensating controls are in place including IFMS automated control that will not permit overspending of the overall Field Unit budget, and manual review performed by the Manager, Finance and Administration of the actual spending against budget along with reported forecasts. However, these controls are limited in that they will not prevent a manager from overspending on their own budget if they have not properly recorded and managed their upcoming commitments.

  • Some instances of non–compliance were found in the transaction testing. The most significant were:

    • Local Purchase Order Authorizations (LPOA) were not always prepared. In one case, the LPOA was prepared after the invoice was received and paid. In another case no LPOA was attached; and

    • Two purchases under standing offers did not have call–ups on file to authorize the purchase. One payment was for fuel and is covered under a national master standing offer. The other payment was for hauling and is covered under a regional standing offer.

At the time of the audit visit, Finance was preparing a package of information to send to all managers with spending authority. This package is being designed as detailed instructions on procurement practices including contracting, procurement under a standing offer and requirements for payment.9

Recommendations

  1. The Field Unit Superintendent should ensure that adequate communication and training in proper procurement practices, including the preparation of Local Purchase Order Authorizations (LPOA) and the process required to prepare a call–up from a standing offer is provided to all managers with spending authority.

  2. The Field Unit Superintendent should ensure that the review of payments by Finance is enhanced to review for appropriate purchase authorization.

2.6 Travel Expenditures

BLUE

Minor Improvements Needed

Many of the controls are functioning as intended; however, some minor changes are necessary to make the control environment more effective and efficient.

Current Practices

Most employees at the Banff National Park Field Unit have an American Express Travel Card. New travel cards are requested by the manager and applications sent to American Express. Cards are sent directly to the employee's home address. Statements are also sent to the homes of cardholders and there are no records at the Banff Field Unit on the status of accounts of American Express Travel cardholders. Cardholders are responsible for paying their balances

When travel is required, a requisition for travel is completed and signed by a person with Section 34 authority. The name of the person, location and purpose of the travel, as well as the dates are recorded on the requisition for travel form. In the case of the management team, a blanket travel authorization has been prepared for their travel for the year.

Travel claims are prepared using different forms. Some travel claims were submitted using the old Canadian Heritage forms, the Government of Canada Travel Expense Claim form, or on an excel spreadsheet. Travel claims are authorized under Section 34 by supervisors at all levels, including the Field Unit Superintendent. Payment of travel expenses follows the Treasury Board Travel Directive.

Observations

Following interviews and transaction testing, it appears that due diligence is being exercised in most cases in the management of travel expenditures to mitigate the risk of non–compliance to TBS and PCA policies and practices. However, during the file review it was noted that travel authorizations were not always being prepared nor was there evidence of challenge by Finance of the claimed amounts, as described below.

  • Travel authorizations were not completed or attached to the travel claim form for three files reviewed. These individuals did not have blanket travel authorization. For one of these files, the travel authorization was documented through an email but no cost estimate was provided.

  • Some claims reviewed posed questions that needed to be followed up with the traveller at the time of the audit, indicating that this level of challenge was not conducted by Finance at the time the claim was processed. In one case, the traveller claimed accommodation for only one night but claimed meal allowances for 3 additional days. It was later determined that a colleague from another department paid for the 2 additional days of accommodation. In another case, meals were claimed for 3 days for travel over a four day period, but 6 days of incidentals were claimed and paid. In another case, calculations were not shown for total mileage or meals and incidentals claimed to verify the proper per diem and mileage rate were used. In some cases, depending on the form used, the standard per diem amounts differed.

Recommendations:

  1. The Field Unit Superintendent should introduce a more formal review and challenge of travel expenditures by Finance to ensure that all claims are fully authorized and supported.

2.7 Financial Coding

GREEN

Controlled

Controls are functioning as intended and no additional actions are necessary at this time.

Current Practices

Financial coding is assigned by the managers with spending authority or their assistants. When Finance routes the invoices to the appropriate manager for Section 34 signature, the invoice is stamped where the financial coding is to be manually written in. Managers have been provided with a filtered list of the financial coding that is most relevant to their activities. This list of financial coding is also included in the envelope of the invoices awaiting signature, for their convenience. If the manager does not provide coding, a default coding is used, however, managers typically do add in the coding.

Finance performs a detailed review of the financial coding for those payments selected where detailed account verification is conducted, i.e., for payments selected through statistical sampling, high risk transactions and payments over $25,000. Other than those payments, errors in coding may be encountered by Finance and corrected. However, Finance is not purposely reviewing the financial coding for accuracy prior to entering the payment in IFMS.

The coding associated with the new Parks Canada Program Activity Architecture is being applied and recorded as the activity code, reflecting the functional area.

Internal order numbers are used to track expenditures for capital projects.

Observations

Based on the interviews conducted and the transaction testing, it appears that managers are aware of the financial coding and that due diligence is being exercised to ensure that financial coding is accurate.

During the transaction testing, it was noted that activity codes were identified for all payments, financial codes were provided by the business unit in all but two cases where a default coding was used and general ledger account codes were appropriately applied.

Recommendations

None.


4 Banff Field Unit 2002–2005 Business Plan

5 2005–2006 Revenue Summary as of September 30, 2005, prepared by the Revenue Coordinator.

6 Information on various financial processes, including contracting, call–ups on a standing offer and travel claims, was created on the Field Unit website on November 18, 2005. This information was communicated to all staff.

7 High risk payments include foreign currency payments, US travel, conferences, hospitality, relocation, grants & contribution payments and land purchase.

8 As of November 28, 2005, no meetings have yet taken place with managers to discuss corrective actions.

9 As noted earlier, information on various financial processes, including contracting, call–ups on a standing offer and travel claims, was created on the Field Unit website on November 18, 2005. This information was communicated to all staff.