National Energy Board

www.neb-one.gc.ca

Common menu bar

• Français
• Home
• Contact Us
• Help
• Search
• canada.gc.ca

Breadcrumb

Financial Management - Hearing Process - Audit Report

Please note that certain documents in this section are available in PDF format. To inquire about receiving these documents in another format, please contact us. If you do not have PDF viewing software, you can download a free PDF viewer from the Adobe® Web site.

Financial Management - Hearing Process - Audit Report - 2008 [PDF 49 KB]

Purpose and Scope of Audit

Currently all costs of conducting hearings, other than staff costs, are managed by the Secretary's Office. The Secretary is responsible and accountable for the budget in total with the Hearing Managers expected to provide a budget to the Secretary for their hearing. All other activities relating to the management of hearings are the responsibility of the Hearing Manager who usually resides in Applications.

The audit consisted of four phases:

• Through interviewing Secretary's Office staff determine the benefits to their management of financial matters and the benefits accruing to the Board.
• Through interviewing the Business Unit Leader, Applications, and selected Hearing Managers determine the satisfaction with the current process, any added-value improvements possible and any benefits or disadvantage to changing responsibility.
• Through interviews with some of the above staff and Regulatory Officers, gain an understanding of the budgeting process and the process for approving and spending of funds.
• Review financial analyses.

Audit Summary

• There is very little opportunity for Hearing Managers or the Secretary's office to "control" the overall budget or individual budgets for hearings.
• While certain assumptions can be made from available information at the beginning of the year as to the number, location or duration of hearings, this can all change with additions or deletions as the year progresses.
• For budgeting purposes Regulatory Officers maintain information on standard costs (airlines, hotels, hearing room costs, translators, reporters) which is provided to Hearing Managers for input to budgets.
• Costs of individual hearings and assumptions as to length of time and location can also change depending on various dynamics.
• Reviewed with the Secretary and Regulatory Administrator (Danielle Comte) the process by which the overall budget for hearings is determined and the oversight that is provided to costs incurred in individual hearings.
• The Regulatory Administrator provided copies of the analysis she maintains and explanations as to the process followed to record budgeted costs and the process for approving and paying for actual costs incurred.
• Actual costs are approved by the Secretary on the recommendation of the Regulatory Officer, and are paid by the Regulatory Administrator. Hearing Managers are in agreement with this process.
• An up to date spreadsheet is maintained by the Regulatory Administrator showing both budgeted and actual costs by hearing although there is not a cumulative comparison of budgeted to actual costs.
• Good oversight over costs is maintained through the knowledge of the Regulatory Officers and their review and approval of invoices.
• Hearing Managers and the Applications Business Unit Leader do not have any concern with the current process.
• Hearing Managers, in consultation with the appropriate Team Leaders and the Panel Chairs approve the participation of NEB staff on the project working group. Staff costs are borne by that individual's team. Any overtime pay must be approved by the individual's Team Leader.
• It was suggested by a Hearing Manager that a periodic summary comparing actual and budgeted costs could be useful once significant costs start to be incurred on their particular hearing.
• Comparisons would be useful in identifying higher than expected costs to either query costs (e.g., cost for a hearing room that was budgeted but not used) or as a tools for budgeting costs on a future hearing. Hearing Managers do not have a significant oversight or approval role for individual costs incurred during the hearing.
• The Hearing Manager Checklist and the Procedure for Resource Management for Project Managers Pilot were reviewed.
• The Checklist is primarily a project management procedure, is current (updated 2008-07-11) and is a useful tool especially for less experienced Hearing Managers.
• The Pilot was a project undertaken by Ruth Mills with a working group and was reviewed with the prior Chief operating Officer in early 2007. While detailed, there does not appear to have been any follow-up to integrate into the Checklist or to otherwise establish as a separate procedure for posting on the Dashboard.
• Also reviewed was a report from Graham Emmerson to Business Unit Leader, Applications entitled Role of the PMO in NEB Hearing Management. Although outside the scope of this audit the report is useful in understanding the different roles and responsibilities and is attached to this report for information.

Audit Results and Conclusions

There is very little opportunity for individual Hearing Managers and the Applications Business Unit Leader to exercise control over the cost of individual hearings. The Secretary's Office does have knowledge of the scope and amount of hearings likely to occur in a given year and has knowledge of certain standard costs (interpreters, court reporters). The Regulatory Administrator has the tools to manage hearing budgets and record actual costs. The Regulatory Officers know actual costs as they are the ones who are actually incurring the costs. Salaries and overtime costs of the project working group are appropriately controlled with the oversight provided by the hearing manager, team leader and panel chair.

Subject to the recommendations following, it is the conclusion of Internal Audit that control over the overall Hearings Budget properly resides with the Secretary's Office.

Recommendations

1. To provide better oversight and to provide better information for Hearing Managers, it is recommended that periodic (no less than monthly) analyses should be provided by the Regulatory Administrator to the Hearing Manager comparing budgeted costs to actual costs by budget category.
2. Currently, information provided by the Hearing Manager to the Secretary's Office and others is sporadic at best. Changes to the number of people travelling, estimated duration of the hearing, and the need for consultants can impact the need for funds to complete the hearing. To provide for a regular dialogue it is recommended that at least a monthly update on changes and estimated changes be provided to the Secretary's Office, the Panel Chair, the Business Unit Leader and the Team Leader.
3. In the current process the Regulatory Officer recommends invoices for approval and payment by the Secretary. It is recommended that invoices for costs in excess of a minimum level and any costs that exceed budget by more than an agreed percentage be forwarded to the Hearing Manager who will provide justification and for the overrun and recommend approval and payment by the Regulatory Officer and the Secretary.
4. The Hearing Manager Checklist and the Procedure for Resource Management for Project Managers Pilot should be reviewed by responsible parties (the Secretary's Office, the Application BU leaders and Hearing Managers) and to the extent they believe the Pilot is useful, either integrate the Pilot with the Checklist or establish a separate procedure.

Primary navigation (left column)

Date Modified:

2011-10-28