6.9 Monitoring and auditing activities
The CFI conducts periodic monitoring visits and contribution audits of projects to ensure that the institution complies with the guidelines and manages the funds properly. The CFI reserves the right to make the final determination of eligible costs and fair market value, to disallow expenditures and to reduce the CFI award. To avoid a situation where costs may later be deemed ineligible or incorrectly valued, we advise the institution to contact us early in the process if it foresees a problem in complying with the guidelines for a given project.
The CFI conducts monitoring visits at recipient institutions.
The objectives of the monitoring visits are threefold:
- Understand and assess the adequacy of the key policies, practices, processes and controls in place at the institution for the management of CFI awards
- Value to the institution:
- Provide information on CFI policies, guidelines and expectations for accountability, integrity and communication with stakeholders, and share examples of good practices used by recipient institutions in managing CFI awards
- Bring to the institution’s attention possible areas to improve efficiency
- Feedback and knowledge building:
- Obtain feedback from the institution that will help the CFI ensure that its policies, guidelines and expectations are clear and adequate
- Gain knowledge in specific areas of interest to the CFI.
During each monitoring visit, the CFI may review a sample of the institution’s Infrastructure Operating Fund expenditures. If a recipient institution has transferred funds to another institution (e.g., an affiliated research hospital or another eligible institution participating in the project), the CFI may monitor the project account at the location where the funds are spent.
The CFI conducts audits to ensure that the funding received by an institution for a given project has been used in accordance with the agreed-upon terms and conditions of the award agreement and with applicable policies and guidelines. The CFI reserves the right to audit any CFI-funded project, even when the final instalment for the holdback has been paid.
A risk-based audit approach is used for the selection of projects to be audited. Various risk factors are considered, such as the value of the CFI contribution and the in-kind contributions, the complexity of the project, and the CFI’s experience with both the project and the institution (including findings from monitoring visits). All projects with a CFI contribution exceeding $10 million are automatically subject to an audit. The risk of a project will determine the scope, timeline, nature and extent of the audit activities. The CFI reviews project risk and assesses the need for audits periodically. The institution will be notified when a project is selected for an audit.
Audit costs are not eligible costs and cannot be reported as such in a CFI-funded project. Within certain guidelines, the CFI will pay for the audit costs out of its administrative budget. However, if an institution has not prepared the required documentation by the dates set by the auditors or has not cooperated with the auditors by providing them with the required information on a timely basis, the CFI may request that the additional costs incurred be paid by the institution.