Introduction

The FJST was introduced in March 1997 to assist small and medium enterprises to develop a workforce of science, technology and engineering professionals. The program provided small businesses with the necessary assistance to enhance their competitive positions through technological adaptation and innovation. Assistance was provided to organizations employing recent graduates who assisted firms with the development and adoption of productivity enhancing technologies.

Audit Context

It is possible that in the future, WD may be tasked to offer business assistance programs similar to the FJST that WD discontinued in 2005. To support WD's commitment to management excellence, it is prudent to undertake an end-of-program internal audit to assess the effectiveness of the controls used to deliver programs like FJST, and to identify any opportunity for improvement that could be applied to future programs of similar design and delivery. The lessons learned from this audit and the audit of International Trade Personnel Program, a similar program that was also recently audited, will be beneficial in future program planning and design.

Audit Scope

The FJST was announced in March 1997 and discontinued in 2005. To ensure the relevance and currency of the audit findings, the audit period was limited to project payments and approval transactions completed from April 01, 2002 to March 31, 2007. While project approvals ceased in 2005, WD commitments were honoured until 2007. This department-wide audit covered all WD regions and headquarters.

Audit Objectives

• The objectives of the audit were:
• To assess the controls that were in place for the FJST and their effectiveness;
• To provide WD Senior Management with assurance whether or not payments made to recipients were in accordance with the terms and conditions of the programs; and
• To make recommendations for control and due diligence improvements for future programs of a similar design and delivery.

Audit Criteria

The audit criteria were drawn from contribution agreement terms and conditions, other government wide post-graduate initiatives, WD's due diligence - program assessment review procedures, and the TBS Policy on Transfer Payments. The selected audit criteria to guide conduct of the audit were:

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

The results of examining these criteria have been summarized based on four ratings:

• (4) Criteria met;
• (3) Criteria mostly met;
• (2) Criteria partially met; and
• (1) Criteria not met.

Risks Assessed

The FJST audit assessed the following program-specific risks to ensure that the management control framework was sufficient to mitigate the following:

• WD program objectives were not met;
• Federal values and ethics were not respected;
• Non-qualifying projects were approved;
• Recipients were not eligible companies;
• Individual beneficiaries were not recent graduates;
• WD did not apply appropriate due diligence in monitoring the program's success; and
• Disbursements were not made in accordance with terms and conditions of contribution agreements.