Follow-up of the Directed Audit of Société Santé en français (SSF) November 1, 2005

Executive Summary

Objective

The objective of this follow-up of the directed audit of Société Santé en français (SSF) was to provide reasonable assurance that improvements have been made further to our previous audit in early 2004.

In order to analyze the accounting of expenditures, we conducted an interim audit of the expenses incurred by SSF in relation to contribution agreements 6813-15-2004/5490717, 6799-15-2004/5970049 and 6799-15-2004/5970050 for the period from April 1, 2004 to December 31, 2004. We also examined contribution agreements 6799-15-2004/5970042 to 6799-15-2004/5490048.

Audit Overview

Our previous audit report concluded that Société Santé en français (SSF) needed to further develop its accounting and financial management abilities. More specifically, improvements were necessary for SSF to maintain its own accounting records and to keep them current, to resolve the lack of segregation of duties and to have the necessary internal staff to be able to fulfill its financial management responsibilities.

We reviewed the procedures implemented by SSF since our last audit.

SSF has implemented the majority of the twelve recommendations contained in the previous audit report.

SSF has made a great deal of progress in improving its internal control systems. However, the use of the services of a third party for accounting and financial management support is not a long-term solution. SSF should ensure continuity in the exercise of its financial responsibilities and in the corporate memory necessary for the accounting function.

In our view, the verified amounts in Appendix 1 accurately reflect, in all major respects, the amounts eligible to be claimed by SSF for the period from April 1, 2004 to December 31, 2004.

In some cases, the amounts advanced by SSF as of December 31, 2004 exceeded the total of the actual expenses incurred by the sub-recipients. A surplus of $493,399 had not been spent by the networks and sub-recipients prior to the end of December 2004. This information is provided solely to highlight the need to follow-up on the amounts not spent prior to March 31, 2005 and to take any corrective measures deemed necessary.