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Appendix A Terms of Reference and Core Management Controls

Background:

Clients may receive travel expenses associated with treatment for their health needs. Multiple delivery approaches exist among the Regions with different levels of resources applied per claim. The question has been raised about the efficacy of each approach and whether proper verification of eligibility is being applied. The potential for abuse of this benefit may exist. The 2009-2010 budget for Veterans Health-Related Travel is $20.4 million.

Rationale:

AED's Audit of the Outsourcing of Health Claims Administration, January 2006, identified potential audit work on a POC by POC basis.

Proposed Statement of Work:

To study the recent changes which have been made for processing health travel expenses for efficiency and effectiveness.

Objectives:

  1. To assess compliance with governing regulations and policy.
  2. To assess the adequacy and accuracy of management information associated with health related travel.
  3. To assess the control framework for health-related travel and test controls and verification processes.
Cost:
1,350 hours and $6,000 travel
Target Date:
Start in May 2009, complete in November 2009
Risk Analysis:
Overall rating = 11, Medium priority

The following Core Management Controls were examined over the course of the audit:

  • (AC - 01) Authority, responsibility and accountability are clear and communicated:

    • Responsibilities and performance expectations to which managers and supervisors are held accountable are formally defined and clearly communicated. Job descriptions and/or performance agreements should exist for this purpose and be up-to-date;
    • Employees' duties and control responsibilities are clearly defined;
    • Authority is formally delegated and delegated authority is aligned with individuals' responsibilities.
  • (AC - 3) A clear and effective organizational structure is established and documented.

    • Authority is delegated with consideration of risk.
    • Systems are used to enable the consistent management of delegated authorities.
  • (G 6) The oversight bodies request and receive sufficient, complete, timely and accurate information:

    • Ongoing and transparent communication between the oversight body, management and the Minister;
    • Management has access to adequate information to manage Veteran's health related travel;
    • Management has the necessary information to make decisions;
    • Useful reports exist and are being used by program management.
  • (PPL - 4) The organization provides employees with the necessary training, tools, resources, and information to support the discharge of their responsibilities:

    • Adequate training has been provided to employees responsible for Veteran's health related travel (identification of competencies, gaps and training requirements);
    • Employees have access to sufficient tools, such as software, equipment, work methodologies and standard operating procedures;
    • An information sharing process exists to support the efficient and consistent application of health related travel (collaboration between finance and program and among program deliverers).
  • (ST - 5) VAC policies are clear and understood by staff.
  • (ST - 07) Compliance with financial management laws, policies and authorities is monitored regularly.
  • (ST - 10) Transactions are coded and recorded accurately and in a timely manner to support accurate and timely processing:

    • financial transaction are coded and processed in an efficient and timely manner;
    • controls are in place to ensure accuracy of transaction coding and processing (e.g. batch totals, reconciliations, supervisory review, management approval, etc.)
  • (ST - 11) Appropriate system application controls exist:

    • degree of automation of processing;
    • system edits and rules based systems minimized the likelihood of error;
    • systems interface ensures timely, accurate and efficient processing of Veteran`s travel;
    • systems are linked appropriately to ensure accurate client status.
  • (ST - 15) Reviews are conducted to analyze, compare and explain financial variances between actual and planned:

    • requirement to compare and explain variances is document;
    • responsibility to compare and explain variances is known and understood and applied accordingly;
    • management reviews variance reporting prepared.
  • (ST - 16) Management compares results against achieved expectations, on a periodic basis:

    • evidence of management review exists (e.g. sign off)
    • management review is ongoing and is timely
  • (ST - 18) Financial and non financial reporting is reviewed and approved:

    • reporting is reviewed for completeness, accuracy, relevance, timeliness, appropriateness and reasonableness;
    • approval is evidenced (e.g. sign off, email, minutes, etc);
    • significant control breakdowns are reported to management.
  • (ST - 20) Appropriate and timely financial and non financial reporting is communicated:

    • a schedule of regular reporting is prepared and communicated in advance;
    • responsibility for reporting is clear and communicated and is reported accordingly.
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