Executive Summary

The audit of First Jobs in Science and Technology (FJST) is an internal audit assurance engagement to report on management controls used to deliver FJST, and to identify any opportunity for improvement that could be applied to future programs. The audit topic is identified in the Western Economic Diversification Canada (WD) 2008 - 2011 Risk Based Audit Plan. The audit examined evidence of the effectiveness of management controls that were in place for the delivery of the FJST program and to provide assurance to WD Senior Management whether or not payments made to recipients were in accordance with the terms and conditions of the program. The audit examined the extent to which management controls for the FJST program met the standards and criteria established by the Treasury Board of Canada Secretariat (TBS) Policy on Transfer Payments.

Findings

The audit found that overall the FJST program was reasonably managed during the audit period and until its discontinuation in 2005. There were appropriate controls for disbursing payments to recipients in accordance with the terms and conditions of contribution agreements.

Results of the criteria examined are summarized as follows:

Criteria	Assessed Results
A business risk and management control framework exists	Criteria mostly met
Projects qualified for funding	Criteria met
The company and graduate were eligible and qualified	Criteria mostly met
WD complied with appropriate authorities	Criteria met
Claims and payments were supported with adequate documentation	Criteria mostly met
WD performed sufficient due diligence throughout the project life cycle	Criteria partially met

The audit work identified opportunities for improvement. Most of the opportunities for improvement have already been implemented based on recommendations from other recent audit engagements on grants and contributions that have occurred since the FJST program was discontinued in 2005. The specific gaps identified through this audit were:

• Risk levels, once assessed at the project approval stage, were not reassessed during the project life cycle;
  
• Insufficient documentation of risk mitigation strategies was developed and kept on file when unusual circumstances were encountered;
  
• The monitoring approaches used could have been more rigorous given business and inherent risks associated with most of the small and medium enterprise recipients; and
  
• There was a general lack of evidence in measuring project results.

Conclusion

In summary, controls established for the FJST program by management were reasonably effective in design and operated satisfactorily. Based on internal audit standards and criteria selected, sufficient audit work has been completed and analyzed to support the conclusion that the management control framework for which WD management is responsible was appropriate for the size and risks of the FJST program.

In accordance with the Government of Canada internal auditing standards, a reasonable assurance is provided that relevant and reliable management controls existed for the delivery of the FJST program from 2002 through to 2005 when the program ceased.

In addition, opportunities for improvement have been identified in this report where those controls can be strengthened in order to mitigate risk and contribute to management excellence for future programs of similar design and delivery.