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Audit of Growing Forward-Federally Funded Programs – Canadian Agri-Science Clusters and Developing Innovative Agri-Products

March 27, 2015

Office of Audit and Evaluation


Executive Summary

Under the Growing Forward (GF) multilateral agreement, Agriculture and Agri-Food Canada (AAFC) committed to implementing several federally funded programs, including the Canadian Agri-Science Clusters ("Clusters") and Developing Innovative Agricultural Products (DIAP) programs.

The Clusters program was designed to be an industry-led concentration of academic, government and industry science and technical expertise in a particular sector. The DIAP program was intended to provide Canadian individuals, agri-entrepreneurs, firms and organizations, who may have had limited scientific, technical and marketing intelligence resources, greater access to government, university and other resources required to support successful transformation of innovative ideas into viable business ventures.

The Clusters and DIAP programs provided funding for third-party research projects through Vote 10 transfer payments via contribution agreements with recipients. The programs also allowed third-parties to work with AAFC through collaborative activities funded by non-pay operating funds (Vote 1). Collaborative Research and Development Agreements (CRDAs) were signed with third-parties to define the scope of research project work and the use of AAFC agricultural research resources.

During GF, the Clusters and DIAP contribution programs were managed within the former Research Branch. In 2012-2013, the contribution programs were transferred to Programs Branch (PB). At present, PB manages the contribution agreement funding (Vote 10) and the Science and Technology Branch (STB) manages the processes related to the CRDAs.

An audit of GF federally funded programming was included in the Office of Audit and Evaluation’s 2013-2016 Risk-Based Audit Plan. The Clusters and DIAP programs were selected for the audit based on the materiality of their Vote 10 contribution funding components; the fact that the number of recipients for these programs was relatively higher than the other federally funded programs; and due to the complexity of the programs.

For the areas reviewed, the audit concluded that effective controls were generally in place to support the administration of the Clusters and DIAP contribution agreements and the management of the CRDAs during GF.

Recommendations were made to improve compliance monitoring, guidance to funding recipients, and CRDA Steering Committee governance.

1.0 Introduction

1.1 Audit Context

1.2 Canadian Agri-Science Clusters Program

1.3 Developing Innovative Agricultural Products Program

1.4 Collaborative Research and Development Agreements

1.5 Audit Objective

1.6 Audit Scope

1.7 Audit Approach

1.8 Audit Conclusion

1.9 Statement of Conformance

2.0 Detailed Observations, Recommendations and Management Responses

2.1 Contribution Agreement Administration

2.2 Financial Monitoring

2.3 Values and Ethics and Conflict-of-Interest

2.4 Collaborative Research and Development Agreements Steering Committee Governance


Annex A: Audit Criteria

Recipient Financial Monitoring:
Recipient financial reporting was monitored and this information was used to support recipient risk assessments.
FAA Section 34 Certification:
Payments were processed in accordance with FAA Section 34 requirements.
Monitoring Agreement Compliance:
Recipient compliance to Program Terms and Conditions and funding agreements was monitored, and feedback was provided to recipients regarding opportunities for improvement.
Recipient Audit:
Recipient audits were conducted based on an established recipient risk framework to ensure that recipient activities were in compliance with agreement terms and conditions.
Agreement Close-Out:
Agreement closeout procedures were conducted in a timely manner to ensure that agreement responsibilities of both parties were met.
Training:
Employees were provided with training related to their grants and contributions (G&C) responsibilities.
Financial Monitoring:
Financial performance was monitored for both the contributions programs and collaborative research and development activities.
Values and Ethics:
Employees involved in contribution program delivery and CRDAs formally acknowledged their duty to comply with Public Service values and ethics and received related training.
Conflict of Interest (COI):
The Department established and implemented a COI process for staff involved in the management and execution of CRDAs.
Governance of CRDAs:
The Department established a monitoring control framework to ensure consistency and adequacy in administrative processes across CRDAs.

Annex B: List of Acronyms

AAFC
Agriculture and Agri-Food Canada;
ADM
Assistant Deputy Minister;
AIP
AgriInnovation Program;
COI
Conflict-of-Interest;
CRDA
Collaborative Research and Development Agreements;
CSSD
Cross-Sectoral Strategic Direction;
DG
Director General;
DIAP
Developing Innovative Agricultural Products;
FY
Fiscal Year;
G&C
grants and contributions;
GCDS
Grants and Contributions Database System;
GF
Growing Forward;
IO
Internal Order;
NPO
Non-pay Operating;
OAE
Office of Audit and Evaluation;
PB
Programs Branch;
PDP
Program Design and Performance;
Qs and As
Questions and Answers;
SPED
Service Programs and Excellence Directorate;
STB
Science and Technology Branch;
WBSE
Work-Breakdown Structure Element
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