Oversight for expenditure eligibility and infrastructure changes

October 28, 2016

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.

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:

Yolaine Beaulieu
Chef de section - apports affectés à la recherche
Expertise comptable et formation - Direction des finances
Phone: 514.343.6111 ext. 4192
Email: yolaine.beaulieu [at] umontreal.ca


University of Alberta

The University of Alberta uses a risk-based approach for the oversight over 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 transaction.

For infrastructure projects, the Partnerships and Institutional Programs (PIP) unit reviews all purchase requisitions greater than $10,000 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 PIP approval. Every quarter, PIP reviews all account transactions for eligibility and cost variances (including the IOF accounts). This is an important detect control that takes place after purchases are made. Ineligible expenditures are reallocated to another revenue account of the project leader if necessary.

If a change in functionality, quantity of an item, the cost of an item (other than immaterial), or a new item is identified upon review of a purchase requisition greater than $10,000, the Research Support Administrator, PIP,  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 25 percent variance, or $25,000 increase or decrease, in the total cost of an infrastructure item require approval by the Manager, PIP, who ensures the change is acceptable. Changes below this threshold can be approved by the Research Support Administrator and Agreements Administrator. This form would normally not be filled out for changes that require prior CFI approval. Rather, these changes would be escalated upon review so that an amendment request can be prepared and submitted to the CFI for approval.

The Analysis of Variance form is useful to the institution since it helps the institution 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. The information included in this template is also used by the institution when it comes time to complete CFI final financial reports as it provides the necessary information that must be entered related to infrastructure changes.

It should be noted that underlying the above control framework and practices is 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 in place.

Contact:

Kara Allanach
Manager - Institutional Projects
Partnership and Institutional Projects
Phone: 780.492.8936  
Email: kara.allanach [at] ualberta.ca


University of British Columbia

In order to be cost effective, the institution has adopted a risk-based approach when managing expenditure eligibility and infrastructure changes for CFI projects. Project leaders are responsible for ensuring that all items purchased are in line with the CFI-approved budget; purchase approval from the Institutional Programs Office (IPO) is not required. The IPO conducts workshops to ensure project leaders are knowledgeable of CFI guidelines and institutional expectations. On a regular basis, it also reviews all account transactions for eligibility and agreement with the CFI-approved budget. This is an important detect control that takes place after purchases are made. The frequency of this review depends on the risk of the project; transactions for larger and more complex projects are reviewed more frequently than smaller ones. If there is any doubt about any purchases, the IPO contacts project leaders to confirm the nature of the purchased items.

Since the CFI requires documentation to substantiate all personnel costs (amount and activities) for the CFI’s Infrastructure Operating Fund and infrastructure project awards, the IPO reviews salary confirmations to ensure activities are eligible and in accordance with CFI guidelines.

Contact:

Sharon Wu
Portfolio Finance Director, Office of Vice President, Research & Innovation
Director, Institutional Programs
Phone: 604.827.5279
Email: sharon.wu [at] ubc.ca


Related topics

Referencing CFI item numbers to facilitate review and reporting
Additional oversight for large or complex projects