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Oversight for expenditure eligibility and infrastructure changes

The CFI expects institutions to purchase the specific infrastructure items approved for a project. If a change to an infrastructure item or the…

The CFI expects institutions to purchase the specific infrastructure items approved for a project. If a change to an infrastructure item or the purchase of a new item is necessary, the institution must ensure the change is acceptable. Guidance is provided in the Policy and program guide to help the institution make this determination. In some instances, CFI approval may be required. Institutions are encouraged to consult with their CFI Senior Program Officer if there are uncertainties about any given change.

To help reduce the risk of unacceptable project changes and related financial consequences, many institutions have implemented controls to ensure that the infrastructure purchases they make are in line with the CFI-approved budget, that the expenditures they report to the CFI are eligible, and that any proposed infrastructure changes are acceptable.

While many institutions review purchase requisitions associated with all CFI-funded items before proceeding with a purchase, others have adopted a risk-based approach and tailored their review procedures to the transaction risk. The practices described below are all acceptable to the CFI. The adoption of a given practice will often depend on an institution’s risk tolerance level.

Note:

Although the CFI requires that institutions have appropriate oversight for expenditure eligibility and infrastructure changes, it is not prescriptive on how this should be done. The practices described below are being shared as examples of good practices put in place at institutions who have aimed to operationalize this CFI requirement. Other practices may also be acceptable.

Here's how some institutions have implemented these practices.

University of Alberta

The University of Alberta uses a risk-based approach for the oversight of expenditure eligibility and infrastructure changes. The level of review and approval of purchase requisitions depends on the type of fund and the dollar value of the transactions.

For infrastructure projects, the CFI/Institutional Programs team in Research Administrative Services reviews all purchase requisitions greater than $25,000 for eligibility and agreement with the CFI-approved budget. Project leaders can purchase lower dollar value items, as well as all items claimed under the Infrastructure Operating Fund (IOF), without CFI team approval. Every quarter, the CFI team reviews all account transactions for eligibility and cost variances for infrastructure projects. This is an important detection control that takes place after purchases are made. Ineligible expenditures are reallocated to another revenue account of the project leader, if necessary.

If a new item or a change in an item’s functionality, quantity or cost (other than immaterial) is identified upon review of a purchase requisition greater than $25,000, the Financial Analyst will fill out an Analysis of Variance form. This form is mainly used to support the review, institutional approval and documentation of the infrastructure changes that do not require prior CFI approval. Changes that result in a negative impact to the project, or relate to a new item (including an increase in quantity) for which the costs exceed $50,000, will be identified in the form and sent to CFI for pre-approval as per the CFI policy and program guide section 6.6.1 with a formal amendment. For all other changes, the Finance Analyst, in consultation with the project leader, will prepare a justification for review by the Contract Specialist for internal approval, ensuring the change is acceptable. If there is any uncertainty, the Contract Specialist will escalate the request to the CFI for pre-approval at their discretion.

The Analysis of Variance form is useful to the institution since it helps systematically ensure that every important aspect is given proper consideration before approving a change and that the relevant information is retained on file for future reference. This is especially useful for new staff given there are many CFI-funded projects at the institution. This form is also used by the institution when completing CFI final financial reports, as it provides the necessary information that must be entered to identify infrastructure changes not previously approved by the CFI.

The above control framework and practices are a strong education process about expenditure eligibility and infrastructure changes, including discussions and one-on-one meetings with project leaders. The framework and practices in place have allowed the university to streamline its review procedures in areas of lower risk, purchase items in a more timely manner and ensure an appropriate documentation and audit trail of the controls is in place.

Contact:

CFI/Institutional Programs Team
Research Administrative Services
Email: rsoinnov [at] ualberta.ca (rsoinnov[at]ualberta[dot]ca)

Université de Montréal

The finance office at the Université de Montréal approves all purchase requisitions related to a CFI-funded project and performs the same level of review regardless of the dollar value. It reviews the requested item for eligibility and agreement with the CFI-approved budget and informs the research office of any changes. Changes that require CFI approval are communicated to the CFI. The research office also approves the scope of construction and renovation projects, including change orders, to ensure they conform to the CFI proposal and approved budget.

Contact:

Cindy Ortiz
Cheffe de section, Apports affectés à la recherche
Services financiers, Expertise comptable
Phone: 514-343-6111, ext. 4192
Email: cindy.ortiz [at] umontreal.ca