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Executive Summary

The audit of health related travel began in May 2009. The objectives of the audit were to assess compliance with governing regulations and policy; to assess the adequacy and accuracy of management information; and, to assess the control framework and test controls and verification processes.

The scope of the audit included all aspects of processing health related travel claims, including remuneration of an escort, to ensure that control frameworks are in place, the process complies with governing authorities and required management reporting is accessible and useful. The audit scope was commensurate with the budgeted resources and was considered a small audit (i.e., 1350 hours).

The following table provides an overview of historical (H) program expenditures and forecasts (F):

Table 1 : Forecast of Program Spending
Fiscal Year Health Related Travel Expenses (in thousands)
2006-2007 (H) $18,618
2007-2008 (H) $17,353
2008-2009 (H) $19,561
2009-2010 (F) $20,349
2010-2011 (F) $20,811
2011-2012 (F) $20,382
2012-2013 (F) $19,612
2013 - 2014 (F) $18,605

Source: VAC Statistics Directorate

In terms of compliance with governing authorities, the audit team observed that clarification was required in reference to the Veterans Health Care Regulations (VHCR) and policy interpretations. First, there are varying opinions on whether Veterans Affairs Canada (VAC) has the authority to reimburse clients for travel to provincially insured services. Second, the VHCR stipulates that a five dollar taxi deductible must be recuperated from clients who take taxis to attend appointments. The deductible may be waived in certain instances. The audit team observed varying interpretations of the criteria required to waive the taxi deductible and that the application of the deductible varied nationally. In addition, there were instances of non compliance to financial authorities, leading to high error rates in the post-payment verification process. Specifically, there was a need for additional guidance for and oversight over those completing the requests for payment.

VAC uses post payment verification for health related travel to assess the adequacy of account verification. The post-payment verification results are statistically comparable nationally on an annual basis. The audit team observed that the post-payment was reporting on a monthly basis, and by region which does not ensure a large representation of claims regionally. A review of the sampling methodology would be useful in an effort to enable greater monitoring of errors, particularly since the error rates have been consistently high.

Control weaknesses were found in terms of the adequacy of the management control framework for health related travel. Although authority was formally delegated to individuals processing health related travel, there was a need for clarification on the dollar limit that employees were delegated in terms of whether the limit was per claim, per client, per batch, etc. The procedures and guidance available online also need to be updated. In order to ensure consistency, there is a need for clarification on tolerance for mileage discrepancies. There was a desire for additional training in regards to travel for rehabilitation clients and training for linking the travel to a pensioned condition. Training gaps should be identified on a district and regional basis.

There was duplication and overlap between the payment system and the employees completing the account verification. Prior to submitting for payment, employees are required to ensure the claim is not a duplicate payment and the payment amount was correct, among other things. The payment system (Federal Health Claims Processing System) has system edits in place to ensure there are no duplicate payments, that calculations are correct and that the correct rates are used.

The process for health related travel is highly manual and involves several transcriptions of data, increasing the likelihood of error. The preparation of claims is time consuming and there are opportunities for improvement. The implementation of rules based tools for staff, such as smart forms, and more automation in the processing of health related travel should be explored to ensure efficiencies and fewer errors or omissions.

Recommendations

Recommendation 1 (Critical)

It is recommended that the Director General, Service Delivery Management, in consultation with Legal Services Unit and the Director General Program Management, clarify the eligibility of clients to receive reimbursement for travel to provincially insured services and communicate the results to those responsible for processing and approving health related travel.

Recommendation 2 (Essential)

It is recommended that the Director General, Program Management, in consultation with Legal Services Unit, the Director General, Service Delivery Management and the Director General, Finance Division, provide functional direction on waiving the taxi deductible, including the criteria required to approve waiving the fee and communicate the results to staff responsible for processing and approving health related travel.

Recommendation 3 (Critical)

It is recommended that the Assistant Deputy Minister, Corporate Services Branch, in consultation with the Director General, Service Delivery Management,

  • document procedures for account verification in the districts and regions;
  • develop a process for quality assurance of account verification (Section 34 of the FAA);

Recommendation 4 (Essential)

It is recommended that the Director General, Finance Division, in consultation with the Director General, Service Delivery Management, review informal transportation agreements to ensure that direction is provided on the appropriate source documentation required prior to certifying Section 34 of the FAA and ensure appropriate quality assurance occurs.

Recommendation 5 (Important)

It is recommended that the Director General, Program Management, develop a schedule of reporting, including the relevant information required to determine program performance and objective achievement.

Recommendation 6 (Essential)

It is recommended that the Director General, Finance Division, review the sampling methodology to ensure it is meeting the reporting needs.

Recommendation 7 (Important)

It is recommended that the Director General, Finance Division, in consultation with the Director General, Service Delivery Management, clarify the dollar limits established for delegated authority. Processors need to be clear on how to apply the limit (i.e. per transaction. Per claim etc.)

Recommendation 8a (Essential)

It is recommended that the Director General, Service Delivery Management, in consultation with the Director General, Finance Division, provide guidance on any allowance for kilometer distance discrepancies;

Recommendation 8b (Important)

It is recommended that the Director General, Service Delivery Management, update and maintain business processes and information available on the intranet;

Recommendation 9 (Critical)

It is recommended that the Director General, Service Delivery Management, explore opportunities for streamlining and modernizing the processing of health related travel. There are opportunities for greater automation and less duplication of effort and could include rules-based tools, smart forms, and system interfacing.

Statement of Assurance

The audit evidence gathered is sufficient to provide senior management with a high assurance concerning the results derived from this audit. The Audit and Evaluation Division concludes with a high level of assurance that the overall control framework for the administration of health related travel in place and used by the Department from February to September, 2009 was inadequate to ensure the accuracy and compliance of the transactions processed with relevant authorities. In particular, weaknesses were found relating to account verification, reporting and oversight. Please refer to the body of this report for further details regarding the audit findings.

In the professional judgment of the Chief Audit Executive, sufficient and appropriate audit procedures have been conducted and evidence has been gathered to support the accuracy of the opinion provided in this report. This opinion is based on the conditions, as they existed at the time of the audit. The opinion is only applicable to the entity examined and for the scope and time period covered by the audit.

Orignal Signed By
Orlanda Drebit
Chief Audit Executive

February 1, 2010
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