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2000 October Report of the Auditor General of Canada

October 2000 Report—Chapter 11

Exhibit 11.10—Advance not Cleared—Tube Fab Ltd., Machine Products Division, Prince Edward Island

This $495,000 TJF project included the expansion of the Tube Fab facility and the purchase of new equipment and machinery.

The agreement was signed on 23 March 1999 for a funding period extending from 22 March 1999 to 31 March 1999. According to the Minister's approval of the project, its activities funded under TJF had to be completed by 31 March 1999.

On 25 March a first payment of $445,000 was made - 90 percent of the approved total. This payment was an advance. A second payment for the remainder of the contribution was made on 16 April 1999 before HRDC had received the documentation required to clear the advance. This was contrary to Treasury Board policy.

Invoices on file for machinery and equipment indicate that the expenditures were made after 31 March 1999, beyond the funding period.

Source: Analysis based on departmental records