1. 2016/17 Tri-Agency Financial Monitoring Review Best Case Scenario Michael Walesiak, CPA, CA Associate Director, Finance Research Services Office, University of Alberta Phone: 780-492-1642 Email: michael.walesiak@ualberta.ca Website: www.rso.ualberta.cawww.rso.ualberta.ca Research Administration Day 2016

2. Representatives of the Agency will conduct periodic reviews of the institutions' management control framework to: assess the effectiveness of policies, systems and internal controls within the institution; confirm that the institution fulfills its research grant funds management responsibilities as outlined in the Agreement on the Administration of Agency Grants and Awards by Research Institutions; ascertain the level of confidence that research funds are used in accordance with Tri-Agency requirements; and share and disseminate information on guidelines and expectations for the continuous improvement of research fund management. What is a Financial Monitoring Review?

3. “The institution has the right and responsibility to withhold and withdraw approval of expenditures proposed by a grantee that contravene the Agency's requirements or the institution's policies…” Tri-Agency Financial Administration Guide

4. Conclusion: “…the agencies conclude that the institution has satisfactory financial controls in place to ensure that the agencies’ policies and guidelines are followed and that research funds are well managed.” Results of 2010 Monitoring Review

5. 1.Some transactions were not authorized by the grant holder or their delegate. 2.In many cases, in particular for travel, hospitality and salary transactions, relevant supporting evidence was either missing or insufficient. In fact, many justifications or supporting documentation were only gathered after the institution received the Agencies’ testing sample. 3.The institution must ensure that all expenses made against CIHR Student Research Awards are approved by the award holder rather than the supervisor or Chair. 4.Expenditures for awards granted to adjunct professors must be approved by the awardee rather than the Chair. Some Key Findings of 2010 Review

6. 1.Plan to increase use of on-line approvals for expense transactions will require PI authorization. 2.Continue centralized testing of research expenditures for compliance with sponsor requirements. 3.Changes were made to online travel claim and HR forms and related procedures to provide information on required supporting documentation. 4.Awards granted to Adjunct Professors and CIHR Students are now held by the awardee rather than the Chair or Dean. Response to 2010 Review

7. In 2016, Internal Audit Services undertook a review to assist management in preparing for the upcoming Tri-Agency Financial Monitoring Review. Their findings indicate that while the U of A has made significant improvements since 2010, we still face similar issues with respect to: Lack of adequate supporting documentation to substantiate expenses and ineligible transactions, in particular for travel, hospitality and salary transactions; Inconsistent procedures for “internal stores” throughout campus as well as incomplete supporting documentation to substantiate and authorize transactions, and Non-compliant or ineligible expenditures not being rectified on a timely basis if at all. 2016 Internal Audit Review

8. Travel claims missing the following information: 1.Purpose of trip, 2.Dates and destination of travel, 3.Conference program or prospectus, 4.Details of vehicle use, 5.Original hotel and restaurant receipts (not credit card slips), 6.Relationship of travel to the agency funded research. Examples of Non-Compliance

9. Hospitality expenses missing the following information: 1.Date of event 2.Number of participants 3.Purpose of the event Pay Action Forms and salary redistributions missing the following information: 1.Relationship of the position to agency funded research 2.Compliance with approved budget categories (i.e. Highly Qualified Personnel or HQP) Examples of Non-Compliance

10. RSO and Internal Audit Services will be working with the Senior Finance Officers from all faculties to ensure the Tri-Agency requirements are clearly communicated. Additional emphasis to be placed on testing of research expenditures and follow up on the timely remediation of non-compliant and ineligible items. Department administrators responsible for the Internal Control review of expenditures will receive additional training throughout the year. RSO will increase the amount of communication delivered to researchers and administrators during the upcoming year on expenditure eligibility and supporting documentation requirements. When RSO detects patterns of non-compliance or ineligibility, we will inform the appropriate Senior Finance Officer and develop a strategy to prevent problems going forward. Next Steps

11. Financial Monitoring Review will be conducted off-site. They may request telephone meetings with “Department Heads”, Research Ethics Boards, Deans’ offices and senior management. Review of ethics certifications and renewals. Extensive testing of a variety of expenditure types: -Travel claims -Journal entries -Purchases -Pay Action Forms -Salary redistributions -“Other” expenses What Happens During Review?

12. March, 2016: Internal Audit Report delivered June 1, 2016: Research Administration Day June-October:Conduct presentations to faculty members and administrators regarding their roles in research grant funds management October-March:Expected timeframe of Tri-Agency Review Timelines

13. Questions or Concerns? Michael Walesiak, CPA, CA Associate Director, Finance Research Services Office, University of Alberta Phone: 780-492-1642 Email: michael.walesiak@ualberta.ca Website: www.rso.ualberta.cawww.rso.ualberta.ca

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