Directed audit of the expenses incurred by the Société Santé en français Inc. according to Contribution Agreements nº 6799-15-2002/0370032 and 6799-15-2002/0370033

Report Summary

Objective

The objective of this audit was to provide a moderate level of assurance as to the accuracy and reliability of the expenses incurred by the Société Santé en français Inc. (SSF) between August 15, 2002 and May 31, 2003.

Scope

The audit covered expenses incurred by SSF under Contribution Agreements (CAs) 6799-15-2002/0370032 and 6799-15-2002/0370033. During the course of the audit, given that the same project activities were covered in a third Contribution Agreement, no. 6798-15-2002/0390703, the audit team deemed it appropriate to include all three CAs in the scope of the audit.

The audit also covered the eligibility of expenses incurred between August 15, 2002 and May 31, 2003, based on statements by SSF, and in compliance with the CA budget envelopes.

Background

SSF does not maintain a project accounting system for expenses in relation to each CA. Following the CAC audit, SSF prepared a spreadsheet that allocates all SSF cash disbursements and accounts payable between the three CAs, i.e., the two contribution agreements included in the scope of the audit and a third CA signed by Health Canada for $700,000 and numbered 6789-15-2002/0390703, which was not included in the scope of our audit. The spreadsheet was provided to Audit and Accountability Bureau's audit team. The distribution of expenses between the three CAs was based on arbitrary percentages established by SSF.

We examined the spreadsheet against the totals in the audited financial statements, and traced the amounts recorded in the financial statements to the supporting documentation, such as cancelled cheques and bank statements.

In order to carry out the audit, we analysed all of SSF's cash disbursements to the end of May 2003 that had been allocated between the three CAs, however, we were not able to verify the accuracy of the allocation of the disbursements between the three CAs since the distribution was done on an arbitrary basis. This approach was considered appropriate in order to achieve a moderate level of assurance, which was the objective of the audit. The Director General, SSF was in agreement with this approach.

Conclusion

In our opinion, the audited amount of $1,994,116 fairly and in all material respects represents the eligible expenses of the Société Santé en français Inc. for the period August 15, 2002 to May 31, 2003. Of the audited amount of $1,994,116, $1,230,000 was transferred to the provincial/ territorial networks at the end of March 2003.

We also identified $81,884 in other expenditures which could be added to the verified amount, subject to the Department's approval. Additional information is provided in Appendices 1 and 2 of this report.

During our audit, we identified a number of issues that require SSF's attention and these are the subject of specific recommendations. SSF could strengthen its management control framework by implementing these recommendations. It should be noted that on January 22, 2004, these recommendations were discussed with officials of the audited organization.