Background

On April 8, 2024, the Legislative Assembly directed, by resolution, the auditor general to “undertake an examination of the administration of grants by MNP LLP under the Advanced Research and Commercialization Program and the Commercial Vehicle Innovation Challenge.”

The resolution followed allegations that MNP had conflicts of interest in its administration of the Advanced Research and Commercialization (ARC) program, which includes the Commercial Vehicle Innovation Challenge (CVIC).

The resolution directed the auditor general to make public an interim report no later than 90 days from the resolution (issued June 26) and a final report by Sept. 1, 2024.

Examination approach

This final report provides information and findings on MNP’s administration of the ARC program. We examined whether MNP had actual conflicts of interest in three areas, based on the allegations that led to the April 8th resolution. We asked:

1. Did MNP provide applicant advising services (e.g., grant writing) for ARC or CVIC applications?
2. Did MNP influence the ARC or CVIC evaluation process to promote its clients?
3. Did MNP use ARC or CVIC information to solicit clients for MNP’s business services, such as applicant advising, assurance or accounting?

This report also provides information and findings on the Ministry of Energy, Mines and Low Carbon Innovation’s oversight role. We asked, in response to the allegations:

4. Did the Ministry of Energy, Mines and Low Carbon Innovation identify and manage conflicts of interest in MNP’s administration of the ARC program?

What we did not examine

Our examination focused on whether MNP had actual conflicts of interest related to the allegations. We did not examine:

• the overall effectiveness of MNP’s management of conflicts of interest;
• work done by the ministry and MNP during the contract solicitation and procurement phases in 2017 and 2018; or
• MNP’s administration of other B.C. government grant programs.

Advanced Research and Commercialization grant program

CleanBC is a government strategy to reduce greenhouse gas (GHG) emissions and meet the province’s legislated GHG reduction targets. The implementation of the strategy involves several ministries.

In 2018, the Ministry of Energy, Mines and Low Carbon Innovation launched CleanBC’s Go Electric initiatives to help reduce transportation emissions in the province by about one-third by 2030.

The Advanced Research and Commercialization (ARC) program is a Go Electric initiative. It supports research and economic development in B.C.’s zero-emission vehicle (ZEV) sector. The ARC program includes the Commercial Vehicle Innovation Challenge (CVIC).

As of March 25, 2024, the B.C. government had committed $50 million for the ARC program.

Roles and responsibilities

On March 1, 2018, the Ministry of Energy, Mines and Low Carbon Innovation entered into a contract with MNP – a national professional services firm – to administer the ARC program. The ministry and MNP have renewed the contract five times since 2018. Their current agreement expires March 31, 2028, or when all program funds have been allocated.

According to the contract, the ministry provides program oversight and direction while MNP performs the day-to-day administration (e.g., running funding calls, marketing and outreach, and program administration).

MNP receives a fee for its services based on the number of funding calls. The contract states that MNP can receive a maximum fee of $2,933,750. From March 2018 to March 31, 2024, the province paid MNP $1,442,192.41 for its services.

MNP’s administrative fees per year

Funding calls

There have been four funding calls for grant applications since the program launched: ARC 2018, ARC 2020, ARC 2023 and CVIC in 2023 (see Results of funding calls). All funding calls were to support projects in B.C.’s ZEV sector.

The three ARC funding calls totalled just over $15 million of potential funding for pre-commercial research and development, commercialization or demonstration activities in B.C.’s ZEV sector. Government has allocated an additional $4.5 million for ARC funding calls.

The CVIC funding call had $20 million available for projects to advance ZEV technologies toward market readiness and commercialization. CVIC has an additional $10 million available for a second funding call scheduled in 2025.

The ARC and CVIC funding calls used a two-stage application process. Applicants first submitted an expression of interest (EOI). Selected applicants were invited to submit detailed proposals.

As of March 2024, the program had approved 32 of 98 applications from ARC 2018, ARC 2020 and CVIC, with grants totalling just over $29 million. Decisions are pending on 20 of 53 applications for ARC 2023.

Results of funding calls

Examination approach

In April 2024, an applicant to ARC 2023 and CVIC (“Company A”) publicly alleged that MNP had contacted them to write grant applications, for grant programs it administers, in exchange for a 20 percent “success fee”. In essence, Company A implied MNP was running a kickback scheme by approving grant funding for its clients in exchange for the success fee while rejecting applications from those who refused to participate.

Company A also suggested that MNP used ARC program information to recruit clients for its grant-writing services.

If MNP engaged in the alleged activities it would violate the conflict-of-interest clause in its contract with the ministry and likely CPABC’s code of professional conduct because it would be inappropriately benefiting from its position as program administrator.

We examined the alleged conflicts of interest by focusing on whether MNP provided advising services for ARC or CVIC applications, influenced the evaluation process to benefit its clients, or used ARC program information to solicit clients for its other business services.

We did this by answering three questions:

Question 1: Did MNP provide applicant advising services (e.g., grant writing) for ARC or CVIC applications?

We found no evidence that MNP provided applicant advising services, including grant writing, for ARC or CVIC applications.

Ninety-nine applicants submitted 151 applications to ARC or CVIC funding calls. We reached out to all ARC and CVIC applicants and asked them:

• Did MNP write your ARC/CVIC application(s)?
• Did MNP provide advice or support for your ARC/CVIC application(s)? If yes, in what way?

Seventy-two per cent of the applicants responded to our questions (accounting for 92 per cent of applications that were approved or pending).

None of the applicants – including Company A – reported that MNP wrote their ARC or CVIC applications or provided any advice or support for their application, aside from general administrative support. See Appendix A for more information on our applicant outreach.

We also reviewed every engagement letter MNP had signed with clients for grant-writing services since it began offering this service in 2023. We found that none of MNP’s grant-writing clients had hired MNP to write or provide assistance for ARC or CVIC applications.

What happened in the case of Company A?

MNP did not write, nor offer to write, Company A’s ARC or CVIC grant applications.

MNP offered to assist Company A with two grant applications for programs that MNP did not administer. Both parties agreed that MNP would waive its upfront fees and instead charge a fee contingent on the client’s success in the grant program. In the end, MNP assisted Company A with one application for a grant program that was not administered by MNP.

When MNP initially contacted Company A about grant-writing services, Company A had already submitted its ARC and CVIC expressions of interest as well as its detailed proposal for CVIC. Company A hired MNP for grant writing after its CVIC proposal was rejected.

Question 2: Did MNP influence the ARC or CVIC evaluation process to promote its clients?

We found no evidence that MNP influenced the evaluation of ARC or CVIC applications to promote its clients.

MNP has clients across a wide range of services (accounting, auditing, financial modelling and digital services). Since the ARC program launched, 23 MNP clients have submitted 33 applications (25 to ARC and eight to CVIC). Ten MNP clients received funding.

We found that MNP’s position as ARC program administrator (as opposed to grant decision-maker) significantly reduced the risk that MNP could influence the process in favour of its clients. All decision points required ministry approval and MNP had no role in evaluating or scoring grant applications.

We examined the four key steps (listed below) in the evaluation process to see if MNP influenced – or tried to influence – the process to benefit its clients. We found no evidence that it influenced – or tried to influence – the process, and we confirmed that MNP and the ministry followed the process as prescribed.

ARC and CVIC evaluation process

ARC and CVIC evaluation process diagram – text version

The diagram illustrates the evaluation process for both ARC and CVIC grant applications.

• Initiate the funding call
  • MNP and ministry establish objectives and criteria of each funding call
  • MNP and ministry establish a technical review panel (that MNP is not a part of) to evaluate grant applications
  • Ministry approves funding call

At the expressions of interest (EOIs) stage:

• Applicants submit EOIs to MNP

The ARC evaluation stream during the EOIs stage:

• ARC initial screening
  • MNP reviews EOIs for mandatory criteria

• ARC technical review
  • Technical review panel scores EOIs based on evaluation criteria

• Evaluation results
  • MNP sends technical review panel’s EOI
  • MNP sends technical review panel’s EOI

The CVIC evaluation stream during the EOIs stage:

• CVIC enhanced screening
  • MNP and ministry do enhanced screening of EOIs

Both the ARC and CVIC streams during the EOIs stage:

• Final approval of EOIs
  • Ministry decides which projects to move to proposal stage based on technical review panel recommendations and notifies MNP of the decisions
  • MNP notifies applicants of the ministry’s decisions and invites selected applicants to submit proposals

At the proposals stage:

• Applicants submit detailed proposals to MNP

• Technical review of proposals
  • Technical review panel scores proposals based on evaluation criteria

• Evaluation results
  • MNP provides technical review panel scores to ministry

• Final approval
  • Ministry decides which projects to fund based on technical review panel recommendations and notifies MNP of the decisions
  • MNP notifies successful and unsuccessful applicants

Question 3: Did MNP use ARC or CVIC information to solicit clients for MNP’s business services, such as applicant advising, assurance or accounting?

We found no evidence that MNP used ARC or CVIC information to solicit business for its other services, such as applicant advising, assurance or accounting.

We reached out to all ARC applicants and asked: “Did MNP ever contact you to sign up for their grant-writing services?” Sixty-eight of the 71 applicants who responded said MNP had never contacted them to offer grant-writing services.

For the three applicants (companies A, B and C) who said that MNP had contacted them to offer grant-writing services, we found no evidence that MNP used information from the ARC program to contact them.

• MNP contacted Company A due to their large social media presence and area of business.
• MNP discussed grant writing with Company B, an existing MNP client, during an annual client meeting.
• Company C reported they’d had contact with MNP about grant-writing services. However, they were unable to provide additional information. The timing of the contact – prior to 2020 – was before MNP added grant writing to its list of services.

We also looked at all correspondence in MNP’s ARC program email account – more than 5,200 messages – and did not find any evidence that the MNP grant administration team attempted to solicit business for MNP’s other services.

MNP’s policies and procedures to prevent information sharing

MNP has several different teams that provide distinct services – such as accounting, assurance and advisory (e.g., grant writing, data analytics, and consulting). In 2022, MNP formally segregated its grant administration work from other MNP lines of business.

We reviewed MNP’s policies and found it had a confidentiality policy for the whole firm. It also had a confidentiality policy for the grant administration team that prohibited grant administration staff from sharing ARC and CVIC applicant information with the firm’s other staff. The grant administration policy forbade the team from seeking out “any information on past, present, or prospective clients of the firm” beyond the grant administration practice.

The firm-wide policy suggested restricting access to client files to authorized team members only. We found that this hadn’t occurred with the grant administration files. Approximately 170 MNP staff outside of the grant administration team could access the files, including staff who provided grant-writing services. However, as noted, we found no evidence that unauthorized staff used ARC program information to solicit business from applicants.

What happened in the case of Company A?

Three MNP team members who worked in business areas separate from the grant administration team contacted Company A to solicit its business between Oct. 13, 2023, and Feb. 26, 2024.

We did not see any evidence that MNP contacted Company A based on information from its ARC and CVIC applications. Instead, MNP staff reported accessing Company A’s contact information through its public profile.

The first MNP team member contacted Company A because its business aligned with the team member’s portfolio. The second team member reached out because they followed Company A on social media and thought they’d be a good client for MNP. Once Company A demonstrated interest in grant-writing services, the third MNP team member became involved in the discussions.

Question 4: Did the Ministry of Energy, Mines and Low Carbon Innovation identify and manage conflicts of interest in MNP’s administration of the ARC program?

We found evidence that the ministry did work to identify whether there was a conflict of interest to manage by inquiring with MNP when the allegations arose.

Ministry’s initial inquiry

The ministry conducted an initial inquiry between Feb. 28, 2024, and March 5, 2024, after Company A brought forward allegations of a conflict of interest to the Minister of Energy, Mines and Low Carbon Innovation’s staff.

The ministry worked with MNP to understand its grant-writing services and success fees to determine whether a conflict of interest existed. The ministry did not request or receive documentation in support of MNP’s explanations or conduct additional work to understand MNP’s conflict-of-interest policies and procedures.

After discussions with MNP, the ministry concluded that there was no conflict of interest in MNP’s administration of the ARC program with respect to Company A.

Inquiry re-opened

The ministry re-opened its inquiry following questions raised in the Legislative Assembly on April 2, 2024. The ministry went back to MNP for more information about its grant-writing services, its involvement with Company A, and to discuss new information regarding the allegations.

The ministry’s inquiry did not reach a conclusion prior to the Legislative Assembly’s April 8th resolution directing the auditor general to undertake this examination. The ministry applied interim measures to the administration of the ARC program pending results of the examination.