PPP Canada Inc.—Special Examination Report—2015

Audit at a Glance Special Examination Report—PPP Canada Inc.

What we examined (see Focus of the audit)

This audit examined whether the systems and practices we selected for examination at PPP Canada Inc. (the Corporation) were providing it with reasonable assurance that its assets were safeguarded and controlled, its resources were managed economically and efficiently, and its operations were carried out effectively. We selected systems and practices based on our assessment of risks in the following areas:

  • corporate governance;
  • strategic planning, risk management, and performance measurement and reporting;
  • human resource management;
  • project selection and management;
  • stakeholder relations and outreach;
  • safeguarding of information; and
  • investment management.

What we concluded

We concluded that, based on the criteria established, there is reasonable assurance that during the period covered by the examination there were no significant deficiencies in PPP Canada Inc.’s systems and practices that we selected for examination. The Corporation has maintained these systems and practices in a manner that provides it with reasonable assurance that its assets are safeguarded and controlled, its resources are managed economically and efficiently, and its operations are carried out effectively.

What we found

Corporate governance

Overall, we found that the Corporation had in place the elements of good governance. However, some improvements were needed in the areas of clarifying roles, ensuring that the Board of Directors could exercise its responsibilities, and providing information to the Board for decision making.

This is important because clearly defined roles and responsibilities facilitate the relationship between the Board and the Corporation’s management, and enhance accountability. The Board is responsible for approving and monitoring key policies that govern the Corporation’s operations and its allocation of resources. Appropriate information enables the Board to exercise oversight and monitor the Corporation’s performance.

Strategic planning, risk management, and performance measurement and reporting

Overall, we found that the Corporation had systems and practices in place that clearly defined and guided its operational activities. We also found that it had in place key elements for risk management. However, the Corporation’s strategic objectives were not clearly reported, and the Corporation’s performance reporting did not clearly demonstrate how its activities contributed toward achievement of the key corporate outcomes.

This is important because establishing clear strategic objectives allows the Corporation to determine how best to allocate resources in support of the achievement of its mandate. A lack of clearly reported strategic objectives makes it difficult to see how business line achievements facilitate progress toward outcomes. Risk management supports the achievement of strategic objectives.

This finding is also important because performance reporting supports effective management and accountability. It is particularly important in the context of the public-private partnership (P3) approach promoted by the Corporation for infrastructure projects. Performance reporting supports decision making.

Human resource management

Overall, we found that the Corporation had the systems and practices for managing human resources in a manner that provided it with the human resource capacity for achieving corporate objectives.

This is important because an effective human resource framework aligns planning, training and development, compensation, performance management, and health and safety with long-term direction. The Corporation’s success in achieving its mandate depends largely on having the right people with the right specialized competencies required to deliver high-quality public-private partnership projects.

Project selection and management

Overall, we found that the Corporation had systems and practices in place for approving project applications, establishing contracts, disbursing funds, and monitoring approved projects. However, there were opportunities to further strengthen reporting on approved projects.

This is important because formal monitoring of a project’s status and documentation helps to ensure that risks related to the project’s success are identified and mitigated in a timely manner.

Stakeholder relations and outreach

Overall, we found that the Corporation had systems and practices in place for regularly engaging and communicating with stakeholders, with the purpose of increasing awareness of the use of public-private partnerships (P3s) and building stakeholder capacity to work within a P3 project model. Further, in instances where the Corporation provided advisory services for projects undertaken by federal clients, we found that systems and practices were in place for defining and overseeing those projects. However, there were some weaknesses:

  • lack of a complete and implemented corporate-wide communications and outreach strategy,
  • lack of a more regular and consistent approach to measuring the effectiveness of knowledge products, and
  • limited project management mechanisms to permit more formal and sound reporting to federal clients on the status of projects.

This is important because a corporate communications and outreach strategy is a critical mechanism for management. Such a strategy facilitates strategic targeting of stakeholder groups, including segments within each stakeholder group. It helps management develop appropriate messaging, communications, and knowledge products. It also helps management prioritize outreach activities for each target group.

Safeguarding of information

Overall, we found that the Corporation had systems and practices in place to safeguard the security of its information technology applications protecting client data. However, some weaknesses were identified in the areas of policy, external assessments, disaster recovery planning, and monitoring of service providers.

This is important because the Corporation receives and retains information from applicants and funding recipients (clients), including information of a confidential nature. The Corporation has a responsibility to ensure that its information is protected.

Investment management

Overall, we found that the Corporation had the systems and practices required for sound management of public-private partnership (P3) funding received in advance of disbursements. However, the investment policy was missing some key elements, such as investment objectives, a reference to concentration risk, and guidelines for reinvesting interest.

This is important because the Corporation receives funding from Parliament for the P3 Canada Fund in advance of the dates on which it must make disbursements. As of 31 March 2015, the Fund had a balance of $1.4 billion that had not yet been disbursed for P3 projects. The balance is currently growing and clear investment guidelines would help in managing the funds.


The audited entity agrees with our recommendations, and has responded (see List of Recommendations).

Related Information

Report of the Auditor General of Canada
Type of product Special Examination
Audited entities
Completion date 12 August 2015
Tabling date 14 September 2015
Related audits

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