Compliance Assessment Management Letter: Arctic Connection
c/o James & Loreen Ramsay
1178 Sanford Street
Winnipeg MB R3E 2Z9
RE: Compliance Assessment Report Results and Follow-Up
Dear Mr. & Mrs. Ramsay:
Deloitte recently conducted a Compliance Assessment of your organization for the 2015-2016 fiscal year to ensure that Recipients are compliant with the terms and conditions outlined in their Contribution Agreements with Nutrition North Canada (NNC). Specifically, our Auditors were looking to verify the following:
- Whether the Recipient is passing on the full value of the subsidy to consumers;
- Whether program visibility requirements are met and that the subsidy is transparent to consumers;
- The Recipient's reporting and claiming systems and procedures with regards to gaps and controls issues; and
- Whether the Recipient respected program rules in regards to sales to ineligible clients.
The attached Compliance Assessment Report describes the Auditor's observations, conclusions and recommendations for your organization. They found that the full subsidy is being passed on to the consumer and that profit margins applied were not eroding the subsidy. They noted the need for additional controls, and as such provided five recommendations. Please provide a written response within 30 days of the date of this letter with a plan that outlines how your organization has addressed or will be addressing the recommendations below:
- Implement a process whereby there is an independent review of claims prior to submission to NNC for processing. This has the potential to reduce the number of errors in the claims.
- The Recipient should ensure that the preparers and reviewers of claims are familiarized with the most recent NNC coding and obtain clarification from NNC representatives where coding classification is unclear. This will ensure that claims are maximized for the consumer.
- The Recipient should establish a process to ensure that the ultimate consumer is an eligible consumer per the terms and conditions of the Program. We recommend that the Recipient implement a process to ensure that ineligible parties do not have access to goods shipped by the Recipient under the Nutrition North Canada program.
- The Recipient should establish a clear policy in regards to profit margins in order to ensure that markups calculated on goods and invoices are correctly applied and do not erode the subsidy. The Recipient should be able to demonstrate that the margins do not erode the subsidies.
- The Recipient should consider implementing a process to periodically review their agreed upon rates with preferred airlines with market rates published online in order to ensure they are shipping goods at the most cost-effective prices.
Please note that the Compliance Assessment Report, Management Letter and Action Plan will be posted to the Department's website.
Should you have any questions or concerns regarding this Compliance Assessment or the posting of information within it, please do not hesitate to contact your NNC representative.
Nutrition North Canada
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