Management Action Plan: Audit of the Strategic Innovation Fund

SIF agrees that an active risk management approach is key to successful managing and implementation of this program. The risk profile is actively updated at various stages of the program lifecycle and it informs measures taken during all project phases.

Each project is given an overall risk profile as a result of an assessment of the following risks: Management, Technical, Financial Stability, Financial Capability, Market, Repayment and Trade. These risks are identified via guidance documents and a robust due diligence process on all dimensions.

During the work phase, the projects are actively monitored against milestones before claims are paid. At the work, repayment and benefits phases, when the need for project amendments arise, which averages 3 to 4 times or more on most agreements, all risk profiles are updated prior to executing amendments. The amendments are reviewed via the appropriate governance processes. SIF agrees that when a non-repayable project reaches the post-work phase, the benefits monitoring will need to be monitored for risks more actively.

In addition, information gathered through the initial overall risk assessment, project database, claims process and other information such as benefit commitments inform the multi-year, risk-based Audit Plan. Should issues arise during claims or other amendments, new projects can be added to the audit plan if the risk assessment changes.

Building on this system to actively monitor changing risks, going forward, the program will take action in four areas to better identify changes in project risks. These actions include:

1. Reviewing the elements of SIF's Management Control Framework's (MCF) related to the work phase and the benefit phase;

2. Review the Progress Report Form to ensure it can better inform the assessment of risks. The review will include how the assessment can better lever the recipients' information gathered through other reporting requirements (e.g. annual financial statements and information collected through the Annual Performance Benefits Report (APBR)) to identify early signs of change in project risks;

3. Provide training among officers to improve consistency in the assessment of the Progress Report, and

4. Create a new team within SIF to more actively monitor post-work phase projects and ensure active risk validation for projects in the repayment and benefits phases. The work to create this team has been underway and the program received funding via the 2020 Fall Economic Statement to enable the staffing of this new team.