Language selection

Follow-up Task Force Audit Report

Final: January 2009

ACKNOWLEDGEMENT

We would like to acknowledge all those who assisted us with this follow-up audit. In particular, the audit team acknowledges the cooperation and assistance that was given us by Veterans Affairs Canada management and staff.

The Audit Team consisted of the following persons:
Alex Robert, Director, Audit and Evaluation Division
Roger Doiron, Auditor
Shoba Hariharan, Audit and Evaluation Officer
Tim Brown, Audit and Evaluation Officer

1.0 EXECUTIVE SUMMARY

Departments are required to have effective monitoring and follow-up measures to ensure that management action plans are implemented in response to internal audit recommendations. This requirement is set out in the Government of Canada Policy on Internal Audit as well as in the International Standards for the Professional Practice of Internal Auditing.

To carry out these responsibilities, the Director General, Audit and Evaluation Division (AED), appointed a Task Force to review and assess all outstanding recommendations from prior audit reports.

From the time a recommendation is identified in an audit or audit/evaluation until it is recommended for closure by the Departmental Audit Committee, evidence of completion is required. Evidence may be in the form of: new procedures, policy, minutes, memorandums, reports, forms, etc.. Supporting evidence is reviewed by the Task Force to obtain assurance whether it is sufficient to close the recommendation.

The follow-up procedure also considers the following criteria: whether the recommendation has been satisfactorily actioned by the lead auditor (or senior management has assumed the risk of not taking the corrective action); whether circumstances have changed resulting in a redundant or obsolete recommendation; whether the action taken is achieving the desired results; and whether the adequacy, effectiveness and timeliness of actions taken by management on the recommendation is acceptable.

For the period under review, a total of fourteen original audit and audit/evaluation reports were reviewed by the Task Force Team to identify outstanding recommendations. In the present report, six of the fourteen original reports, containing thirty-three recommendations, are being presented to the Departmental Audit Committee for consideration of closure. Therefore, AED is presenting to the Department Audit Committee six reports and thirty-three recommendations for final closure. The Task Force Team will be submitting further reports as other original reports containing outstanding recommendations are finalized.

2.0 INTRODUCTION

The Director General, Audit and Evaluation Division (AED) appointed a task force team in June 2008 to review reports that require closure of recommendations that remained outstanding since the most recent follow-up reports completed in November 2007. Prior to November 2007, an extensive and comprehensive follow-up audit had been conducted on all outstanding recommendations, with a report issued in March 2006.

The present follow-up report covers six original audit reports (one of the six was actually a combined audit and evaluation assignment) where a total number of thirty-three recommendations were outstanding at the commencement of the task force follow-up audit. All thirty-three recommendations have been fully implemented by management and are being recommended for closure.

In February 2008, the external Departmental Audit Committee (DAC) was created. The fundamental role of the audit committee is to ensure that the Deputy Minister has independent objective advice, guidance, and assurance on the adequacy of the Department's controls and accountability processes. The Departmental Audit Committee replaced the former internal Departmental Review Committee as a result of legislative amendments to the Financial Administration Act brought about through the Federal Accountability Act. The Departmental Audit Committee, which is an essential component of the Policy on Internal Audit, includes the Deputy Minister and members from outside the Federal Public Service.

3.0 SCOPE

The scope of this project was to conduct a follow-up of all original audits and audit/evaluations that were conducted by the Audit and Evaluation Division containing outstanding recommendations. Recommendations which had already been closed prior to July 2008 were not included in the scope of this audit.

4.0 OBJECTIVE

The objective of this follow-up audit was to recommend closure to the Departmental Audit Committee of all reports containing recommendations finalized by the Task Force Team.

5.0 METHODOLOGY

The methodology applied to this follow-up audit meet the requirements of the IIA's Professional Practices Framework and the Treasury Board of Canada Secretariate Policy on Internal Audit. Management Action Plans were reviewed as to the relevancy, degree of effort, and potential cost to correct, and/or that the recommendation was satisfactorily actioned by the client. In some cases the working papers of a report were reviewed to help determine the scope and intent of the original recommendation.

Interviews were conducted as required with program managers and staff, team leaders, and AED staff that were previously assigned to the audit or audit/evaluation under review. Discussions took place to determine if any recommendation was incorporated in a current project. Evidence gathered was reviewed to determine if the management action plans were executed and supported the intention of the recommendation.

As part of this follow-up, reports were reviewed to determine if there were any recommendations that should be considered in future audit planning.

For each of the reports recommended for closure, you will see excerpts from the original executive summary. As well, tables of outstanding recommendations, actions taken to date and recommendations for closure are displayed.

6.0 CRITERIA FOR FOLLOW-UP

Further to the March 2006 Follow-up Audit Report, AED has adopted as part of the criteria for follow-up, the guidance set out in Practice Advisory 2500.A1-1 “Follow-up Process” from the IIA's Professional Practices Framework. In accordance with the rating scale used (described below), all follow-up recommendations in this report were assessed at a level 5, meaning full implementation. The rating level is not repeated in the summaries in Section 8.0, as it is level 5 for all recommendations.

  1. The Professional Practices Framework (IIA) - Practice Advisory 2500.A1-1

    Determine:
    • if the recommendation has been satisfactorily actioned by the client;
    • the degree of effort and cost to correct the reported condition;
    • if the adequacy, effectiveness, and timeliness of actions taken by management on the recommendation are acceptable;
    • if the action taken is achieving the desired results or that senior management has assumed the risk of not taking the recommended corrective action;
    • if the situation has changed resulting in a redundant recommendation; and
    • the impact that may result should the corrective action fail.
  2. Rating Scale for assessing the implementation of recommendations (this is a rating scale used by the Office of the Auditor General)

The level of implementation of a recommendation is assessed using the following ratings:

  • Level 1: Actions such as striking a new committee, having meetings, and generating informal plans should be regarded as insignificant progress;
  • Level 2: If formal plans for organizational changes have been created and approved by the appropriate level of management (at a sufficiently senior level, usually executive committee level or equivalent) with appropriate resources and a reasonable timetable, the entity has achieved the planning stage;
  • Level 3: If the entity has made preparations for implementing a recommendation by hiring or training staff, or developing or acquiring the necessary resources to implement the recommendation, regard this as having achieved preparations for implementation;
  • Level 4: If the structures and processes are in place and integrated within at least some parts of the organization, and some achieved results have been identified, this should be seen as substantial implementation. The entity will probably also have a short-term plan and timetable for full implementation;
  • Level 5: Rate the progress as full implementation if the structures and processes are operating as intended and are fully implemented; and
  • Obsolete: Rate the recommendation as obsolete if it is no longer applicable because the process or issue has become outdated as a result of having been superseded by something newer.

7.0 FINDINGS

As a result of an extensive follow-up on audits and audit/evaluations tabled as final reports over the past several years, six reports (described in sections 8.1 to 8.6) are ready to be recommended for closure. Five of the six reports had eighteen recommendations that were not finalized in the March 2006 Follow-up Report. The sixth report, an audit/evaluation which was finalized in July 2006, contained the remaining fifteen recommendations.

Other reports that have recommendations requiring further follow-up by Audit and Evaluation Division will be submitted for review or closure to the Departmental Audit Committee in the future.

8.0 REPORTS RECOMMENDED FOR CLOSURE

8.1 PENSION PROGRAM COMPLIANCE AUDIT

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) August 2002 report, Pension Program Compliance Audit. The original executive summary references the seven original recommendations contained in the August 2002 audit report. A table is provided outlining the remaining two recommendations that require closure by the Departmental Audit Committee. The table provides current information as to the action plan executed by the management and staff of the program area. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

This audit was conducted to determine the extent to which the Veterans Affairs Pension Program was being delivered in accordance with governing authorities and to provide assurance that an appropriate level of risk existed within the control framework.

In 2000-01, the Disability Pension Program, Veterans Affairs' largest program, paid more than $1.2 billion in disability pensions and related benefits to approximately 151,500 recipients.

Benefits are awarded to former members of the Armed Forces and the Merchant Navy, current members of the Canadian Forces, and certain civilians who suffer from a service-related injury or disease, and to their dependents or survivors. Pension benefits are based on the relationship of a medical condition to service and the extent of the disability.

While faced with challenging turnaround times, heavy workload, changing client needs, and ongoing initiatives which impact on the Program, staff remain committed to providing quality service to clients.

Documentation used as evidence to support an applicant's eligibility for pension benefits was not being retained on the client files. The Grants and Contributions Policy requires accountability for grants through proper records and documentation of key decisions to ensure transparency, and to assist in results-based management. Clients' legislative rights to access records may be jeopardized when documents supporting decisions are not stored on their files.

A sample of client files was reviewed to assess compliance with policy and procedures. Documentation on the files was inconsistent. At times, some or all of the required documentation was present while in other cases it was difficult to determine why the account was being administered and the extent to which the client was involved in the decision. The auditors' concerns deal with insufficient documentation to determine reasons for administration; lack of documented steps throughout the process; insufficient direction for dealing with accounts; failure to monitor administration of the accounts; absence of a requirement to provide written notification to clients that an administrator has been appointed; and incorrect changes to payee.

Attendance Allowance (AA) applications were being processed without the required signature of the client or a representative. In many cases the signature of the Area Counsellor was the only signature on the application form. Area Counsellors are delegated the authority to render decisions on AA applications and to determine the grade of AA to be awarded. Processing applications without the proper signatures results in insufficient segregation of duties and essentially means a valid application has not been received.

The overpayment balance, as at September 2000, was approximately $3 million, of which almost half was recently submitted for remission. Compliance with collection procedures would result in faster recovery of over-payments and reconciliation of data would provide assurance of complete and accurate data.

Monitoring activities in the Benefits Processing Unit, and in Finance Division act as controls to ensure appropriate payments are made. In 1999-00, Finance Division reported an error rate of 1.6%. Other monitoring activities were taking place and opportunities for streamlining existed.

The observations in this report focus on activities which were taking place during the audit fieldwork which was conducted September 2000 to June 2001.

Conclusion

Audit and Evaluation Division is recommending closure of the two remaining recommendations. The original recommendations and subsequent actions taken by the responsible branch are included in the following table.

Pension Program Compliance Audit - August 2002
Recommendation 1

It is recommended that the Director General, National Operations Division ensure that documents used as evidence in rendering disability pension entitlement decisions are retained on the client file.

Summary of Actions Taken by Management

A procedure has been set up requiring Head Office to photocopy the documentation, relating to the adjudication of a disability pension/award, which is to be placed in the client file. Evidence gathered is sufficient to recommend closure.

Recommendation 2.5

It is recommended that the Director General, National Operations Division in consultation with legal services: revise policies and procedures to provide clear direction to staff and to include a process for monitoring decisions.

Summary of Actions Taken by Management

A quality control process has been implemented in adjudication to monitor disability pension/award decisions. The policy and procedures have been updated to reflect the New Veterans Charter with respect to monitoring decisions. Training is provided when required. Evidence gathered is sufficient to recommend closure.

8.2 OCCUPATIONAL HEALTH AND SAFETY AUDIT

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) April 2004 report, Occupational Health and Safety Audit. The original executive summary references the twelve original recommendations contained in the April 2004 audit report. A table is provided outlining the remaining one recommendation that requires closure by the Departmental Audit Committee. The table provides current information as to the action plan executed by the program area. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

The purpose of the audit was to review the Occupational Health and Safety (OHS) management practices of Veterans Affairs Canada (VAC) for soundness and compliance with the intent and requirements of applicable legislation, policy, and directives.

Taken as a whole, the findings of the audit indicate that VAC supports, in principle, a good health and safety regime and is putting serious effort into meeting or exceeding the requirements of the Canada Labour Code (CLC) - Part II. Local health and safety committees have been established. In general, management supports health and safety committee activities. More importantly, management is emphatic that all reported and potential hazards be dealt with immediately.

The legislative and regulatory nature of health and safety requires specialized and in-depth knowledge. Appropriate training, as required, should be provided to OHS policy and workplace committee members as well as safety representatives. This should include a checklist of information, a listing of responsibilities, and an updated copy of the Canada Labour Code - Part II. All new members should be provided with orientation and training.

The findings in this report pertain to information collected from Head Office (HO) and the VAC regional offices. The audit also conducted interviews at Ste. Anne's Hospital and findings from those interviews are documented in Section 3 of this report. The audit team was impressed with a number of exemplary practices at Ste. Anne's, including OHS committee structure, ethics and ergonomics.

Within Head Office and VACVAC regional offices, with the exception of 20 - 30 individuals, there is as yet little detailed understanding of the new Code's provisions. There is also much frustration that Treasury Board has not quickly provided updated regulations, directives, standards and guides.

In view of this, there is a need to develop and implement a VAC communications strategy and plan to ensure all employees are made aware of the Canada Labour Code - Part II provisions and their responsibilities under the Code.

OHS in Canada has come a long way from a time when every boardroom and most desks were equipped with ashtrays, and computer monitors sometimes had "anti-radiation" screens fastened to them. Repetitive stress injuries were as unfamiliar as mouse pads, and ergonomics meant getting a chair that had more than one adjustment.

However, some weaknesses remain in the VAC Health and Safety program. These include:

  • The low level of attendance at due diligence training available to managers; and the current lack of basic health and safety training for VAC employees in general. (Although, some training has been conducted in HO and Ste. Anne's Hospital and a self-learning LAN-based health and safety awareness package is about to be launched. In fulfillment of the provisions of the Code, it is incumbent on management to ensure that all employees complete this on-line training).
  • Inadequate resourcing to fully respond to the amended Canada Labour Code (exception is Ste. Anne's Hospital, where three full-time staff are assigned to OHS).
  • Health and safety activities tend to be reactive, rather than pro-active.
  • The use of e-mail as a means of disseminating health and safety information is problematic for most employees due to the volume of e-mail they receive daily. This results in useful OHS material being lost in the clutter of other e-mail messages, and therefore not being well absorbed.
  • VAC regions and districts are looking for direction from Head Office in terms of providing policies or guidelines that can be adapted to local conditions.
  • "Wellness" activities are gaining popularity but employees and managers need encouragement to view wellness as a preventative measure that can mitigate threats to health and safety.

Conclusion

Audit and Evaluation Division is recommending closure of the one remaining recommendation. The original recommendation and subsequent actions taken by the responsible branch are included below.

Occupational Health and Safety Audit - April, 2004
Recommendation 8

It is recommended that the National Occupational Health and Safety Coordinator develop, and make available, a set of guidelines pertaining to travel emergencies to employees using an automobile on VAC business.

Summary of Actions Taken by Management

A motor vehicle emergency kit guideline has been developed and communicated to staff, specifically those who visit clients in their home. The directive details the minimal equipment required in an emergency kit and encourages staff to add more equipment. In addition, the evolution in technology in recent years has changed the working environment; staff who visit clients are equipped with laptops and cellphones to use while travelling. Evidence gathered is sufficient to recommend closure.

8.3 EXPENDITURE COMPLIANCE: HOSPITALITY AND TRAVEL COMPLIANCE AUDIT REPORT

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) July 2005 report, Expenditure Compliance: Hospitality and Travel Compliance Audit Report. The original executive summary references the eight original recommendations contained in the July 2005 audit report. A table is provided outlining the remaining five recommendations that require closure by the Departmental Audit Committee. The table provides current information as to the action plan executed by the program area. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

The Hospitality and Travel Compliance Audit was approved by the Audit and Evaluation Committee (AEC), chaired by the Deputy Minister and was conducted during the fiscal year 2004-2005. The audit's scope included an examination of hospitality and travel expenditures for Veterans Affairs Canada (VAC) and Veterans Review and Appeal Board (VRAB) employees during the fiscal year 2003-2004 to determine the extent to which the Portfolio is complying to the Travel Directives and Hospitality Policies issued by the Treasury Board of Canada Secretariat (TBS) and conducted in accordance with Internal Auditing Standards for the Government of Canada. Those standards require that the audit be planned and performed to obtain reasonable assurance that the hospitality and travel expenditures are made following governing authorities. The audit included examining, on a test basis, evidence supporting the amounts paid for hospitality and travel.

The audit was conducted using multiple lines of inquiry which included interviews with staff involved in the payment and approval of travel and hospitality claims, and statistical sampling. Statistical sampling was based on a random sample drawn from the total number of travel and hospitality claims paid in the fiscal year 2003-2004.

Based on the criteria used, and with the exception of the observations noted in this report, there is reasonable assurance that VA is conforming with the Travel Directive of TBS, in all material respects. The observations noted in the report have exceeded the upper error limit of 5% for this statistically based audit sample of travel claims. Based on the criteria used for hospitality claims, there is reasonable assurance that VA is conforming with the Hospitality Policy of TBS, in all material respects.

Conclusion

The Audit and Evaluation Division is recommending closure of the five remaining recommendations. The original recommendations and subsequent actions taken by the responsible branch are included below.

Expenditure Compliance: Hospitality and Travel Compliance Audit Report
Recommendation 1

It is recommended that the DG, Finance Division will communicate the importance to all managers of having travel authorized in advance and in writing.

Summary of Actions Taken by Management

A Finance Division bulletin was developed and communicated, to all Level IV managers and above, which requires all travel to be authorized in advance. Evidence gathered is sufficient to recommend closure.

Recommendation 3

It is recommended that the DG, Finance Division, ensure that all travel claims estimated to be greater than $1,000 be signed by the delegated Section 32 employee and committed as required by the FAA.

Summary of Actions Taken by Management

A Finance Division bulletin was developed and communicated, to all Level IV managers and above, which required all estimated travel greater than $1,000 be signed by the employee delegated with Section 32 by the FAA. Evidence gathered is sufficient to recommend closure.

Recommendation 5

It is recommended that the Director General, Finance Division review and revise the electronic forms so that there is only one travel expense claim form available for use.

Summary of Actions Taken by Management

There is one form that was developed for general use of all staff. Additional travel claims were developed for other specific travel purposes. Evidence gathered is sufficient to recommend closure.

Recommendation 7

It is recommended that the Director General, Finance Division develop a Hospitality Policy for VA which includes guidelines for using the Application to Extend Hospitality form.

Summary of Actions Taken by Management

A Hospitality Policy was developed for VAC which includes guidelines for using the Application to Extend Hospitality form. Evidence gathered is sufficient to recommend closure.

Recommendation 8

It is recommended that the Director General, Finance Division change the wording on the hospitality forms to reflect the Treasury Board Hospitality Policy which requires disclosure of the number of attendees listed by category (i.e., guests, government employees).

Summary of Actions Taken by Management

The evidence provided by Finance Division was reviewed and the wording has been changed on the form. The form now includes an area for listing attendees by category as well. Evidence gathered is sufficient to recommend closure

8.4 WAR VETERANS ALLOWANCE COMPLIANCE AUDIT REPORT

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) March 2005 report, War Veterans Allowance Compliance Audit Report. The original executive summary references the three original recommendations contained in the March 2005 audit report. A table is provided outlining all of the recommendations that require closure by the Departmental Audit Committee. The table provides current information as to the action plan executed by the program area. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

The audit was conducted to determine the extent to which the WVA program is being delivered in accordance with governing authorities and to provide assurance that an appropriate level of risk exists within the control framework. The audit was conducted in accordance with Internal Auditing Standards for the Government of Canada. Those standards require that the audit be planned and performed to obtain reasonable assurance that the WVA program is delivered in accordance with governing authorities. The audit included examining, on a test basis, evidence supporting the amounts paid to recipients and an assessment of program administration.

This audit was conducted using multiple lines of inquiry including interviews with program staff and management at regional and head offices, statistical sampling and targeted sampling. Statistical sampling was based on a random sample drawn from the entire population of 11,985 clients in receipt of payment for the month of October 2003. Targeted sampling was based on a preliminary assessment that identified areas of potential risk.

In the auditors' opinion, based on the criteria used, there is reasonable assurance that the WVA program conforms with governing authorities, in all material respects, except for the observations noted in this report. This assurance is based on results of a statistical sample representative of the entire population of WVA recipients in receipt of payment for the month of October 2003. Statistical sampling showed that 97.81% of the WVA clients in receipt of payments meet the program eligibility criteria for the period audited. This result is accurate within a margin of error of plus or minus 3%.

The risk-based directed audit samples identified instances where payments were not in accordance with governing authorities. However, these instances were not material to total expenditures.

Conclusion

The Audit and Evaluation Division is recommending closure of all three recommendations. The original recommendations and subsequent actions taken by the responsible branch are included in the following table.

War Veterans Allowance Compliance Audit Report
Recommendation 1

It is recommended that the Director General, National Operations Division, review all incapacitated orphan's files to determine if reasonable proof of incapacitation is on file to confirm clients' eligibility.

Summary of Actions Taken by Management

All incapacitated orphans' files were reviewed by the program staff and the specific medical reason for incapacity is contained in the file. Evidence gathered is sufficient to recommend closure.

Recommendation 2

It is recommended that the Director General, National Operations Division, ensure that the review of administered accounts files is completed and that changes be made in accordance with administered accounts procedures.

Summary of Actions Taken by Management

This recommendation is considered as part of a separate audit and has been covered off by the Administered Accounts Assurance Audit Phase II (2007). Evidence gathered is sufficient to recommend closure.

Recommendation 3

It is recommended that the Director General, National Operations Division, create a segregation of duties between employees who have access to modifying disbursement instructions from employees who have access to the processing of death information and modifying client's name.

Summary of Actions Taken by Management

A quarterly report is sent to supervisors indicating any anomalies with respect to updating death notification information. The Client Service Delivery Network (Department's client information system of record) is where access is segregated on duties such as processing of death information and modification of client's name. Evidence gathered is sufficient to recommend closure.

8.5 PARTNERSHIPS CONTRIBUTION PROGRAM (PCP) COMPLIANCE AUDIT REPORT

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) March 2006 report, Partnerships Contribution Program (PCP) Compliance Audit Report. The original executive summary references the seven original recommendations contained in the March 2006 audit report. A table is provided outlining all of the recommendations that require closure by the Departmental Audit Committee. The table provides current information as to the action plan executed by the program area. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

The Partnerships Contribution Program (PCP) Compliance Audit was approved by the Veterans Affairs Canada (VAC) Audit and Evaluation Committee (AEC) on September 13, 2005. The purpose of the audit is to provide management with an independent assessment of PCP's control framework; the operating and compliance practices; and the information output associated with its administration.

The funding for this contribution program was approved by Treasury Board on July 31, 2001, under the Voluntary Sector Initiative's Sectoral Involvement in Departmental Policy Development (TB 829155). The Treasury Board submission that led to the setting-up of PCP was originally prepared by the Service Quality Division in Veterans Services Branch. PCP is delivered and managed by both Canada Remembers Division (CRD) which forms part of Public Programs & Communications Branch and Programs & Service Policy Division (PSPD) which forms part of Veterans Services Branch. PSPD has approved only three proposals since implementation of the Program in 2002-2003 and does not intend to use PCP in the future. As a result, the recommendations in this report are directed to only Canada Remembers Division and Finance Division.

The purpose of the Program is to provide a framework through which VAC can extend its reach in delivering its mandate by way of non-repayable contributions to a range of potential recipients, such as non-profit organizations, museums, education, research and health institutions, and the provinces, territories and municipalities. VAC will be seeking to renew the Program before expiration of its Terms and Conditions on July 31, 2006.

The audit was conducted in order to determine the extent to which PCP is being delivered in accordance with governing authorities (policies, guidelines, and Terms and Conditions); to provide reasonable assurance that an appropriate level of risk exists in the management and operations of the Program; and to determine whether or not the objectives of the Program are being attained. The audit was conducted in accordance with Standards for the Professional Practice of Internal Auditing adopted by the Government of Canada. These standards require that the audit be planned and performed to obtain reasonable assurance PCP is delivered in accordance with governing authorities.

This audit was performed using multiple lines of inquiry including a review of relevant Treasury Board Policies and PCP's Terms and Conditions; an examination of a targeted sample of individually approved and rejected proposal files at Head Office (HO) in Charlottetown and in three regional offices (Atlantic, Ontario and Western - Winnipeg Management Centre - (WMC); a review of the documents and the processes (refer to Appendices B and C) relating to approving, rejecting, amending, disbursing, reporting and monitoring of individual proposal files at HO and in three regional offices; interviews with Canada Remembers Division (CRD) and Finance Division management and staff at HO and in three regional offices; interview with Program and Service Policy staff at HO; interviews with a targeted sample of recipients whose proposals were approved by CRD from April 1 to September 30 during the 2005-2006 fiscal year.

In the auditors' opinion, except for the observations noted in this report, there is reasonable assurance that PCP conforms with governing authorities, in all material respects.

Conclusion

Audit and Evaluation Division is recommending closure of all seven recommendations. The original recommendations and subsequent actions taken by the responsible branch are included in the following table.

Partnerships Contribution Program (PCP) Compliance Audit Report
Recommendation 1

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, ensure that the processes followed by the personnel of Canada Remembers Division for evaluating, approving and rejecting proposals as well as amending Contribution Agreements be standardized, consistently applied and meet with the Terms and Conditions of PCP.

Summary of Actions Taken by Management

There is an internal review committee comprised of responsible managers, with a minimum of three members, which recommends funding from the Community Engagement Partnership Fund (CEPF) for eligible projects. As for the Cenotaph Monument Restoration Program (CMRP), an external review committee comprising of restoration technologists and staff of CMRP recommend funding of restoration projects to the Minister. Evidence gathered is sufficient to recommend closure.

Recommendation 2

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, ensure that both the processes followed by and the documents used by the personnel of Canada Remembers Division be standardized in regards to the verification of details on invoices submitted by recipients against the eligible expenditures in the Contribution Agreements.

Summary of Actions Taken by Management

A standardized process has been developed for processing invoices submitted by recipients. An updated procedure for verification of invoices and receipts of the Partnership Contribution Agreement (PCA) was developed and is being used. Advance payments are made in exceptional cases only. Evidence gathered is sufficient to recommend closure.

Recommendation 3

It is recommended that the Director General, Finance Division, ensure that the processes followed by Financial Services personnel at Head Office and in the Regional Offices be standardized in regards to the verification of details on invoices submitted against the eligible expenditures in the Contribution Agreements and against PCP Terms and Conditions prior to approving payment under section 33 of the Financial Administration Act.

Summary of Actions Taken by Management

A finalized financial bulletin was developed with the suggested amendments and is to be sent to all staff in Head Office and Regional Office. Evidence gathered is sufficient to recommend closure.

Recommendation 4

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, ensure, prior to disbursement of any funds, that appropriate and sufficient data is provided by recipients to allow Program Officers to evaluate the progress of proposals and to measure mutually agreed upon outputs.

Summary of Actions Taken by Management

The recipient has to commit to a project undertaking under the Partnership Contribution Agreement in the form of mutually agreed upon deliverables. The agreement requires the recipient to provide a final report substantiating the completion of deliverables prior to payment. Evidence gathered is sufficient to recommend closure.

Recommendation 5

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, ensure that the Objectives in the current PCP Terms and Conditions are still relevant.

Summary of Actions Taken by Management

The new Terms and Conditions objectives state "Specifically the Department uses the PCP to support commemorative partnerships and cenotaph/monument restoration." Evidence gathered is sufficient to recommend closure.

Recommendation 6

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, ensure that prior to project completion, projects include not only an expense budget but also a revenue budget in order to make certain that there is no duplicate funding identified from other sources.

Summary of Actions Taken by Management

The recipients are required to complete a revenue and expense budget at the time of application, and additionally identify the names of other financial contributors to the project. Evidence gathered is sufficient to recommend closure.

Recommendation 7

It is recommended that the Assistant Deputy Minister, Public Programs and Communications Branch, explore alternatives to improve the cost effectiveness of Canada Remembers Division's delivery of PCP in the Regions.

Summary of Actions Taken by Management

Management has streamlined processes and procedures in order to improve the cost-effectiveness of PCP in the regions and Head Office. An analysis was completed with respect to the time lines for approval of 2007 Veterans' Week CEPF proposals. Other measures include changes to the Terms and Conditions to improve compliance with respect to determining a financial need. Evidence gathered is sufficient to recommend closure.

8.6 ORGANIZATIONAL GOVERNANCE AUDIT/EVALUATION REPORT VOLUME 1 – BUREAU OF PENSIONS ADVOCATES (BPA)

Introduction

This report includes a follow-up to recommendations identified in Veterans Affairs Canada's (VAC) Audit and Evaluation Division's (AED) July 2006 report, Organizational Governance Audit/Evaluation Report Volume I Bureau of Pensions Advocates (BPA). In this report, the original executive references the fifteen recommendations contained in the July 2006 audit report. The table provides current information as to the action plan executed by the Bureau of Pensions Advocates. Additionally, Audit and Evaluation Division assessed the implementation level relating to their response.

Executive Summary (Extracted from Original Report)

As part of the 2005-2006 Audit and Evaluation Plan, an Organizational Governance (OG) project was approved by the Audit and Evaluation Committee (AEC). It is intended that, over the next several years, OG reviews will be conducted on a cyclical basis by Audit and Evaluation Division of the control frameworks, activities and processes for governance for each regional and affiliated district offices, and for Ste. Anne's Hospital and Head Office organizations.

Central to the concept of organizational governance is the Management Accountability Framework (MAF), introduced by Treasury Board Secretariat (TBS) in 2003. The MAF consists of ten elements that taken together, provide public service managers with a clear list of management expectations within an overall framework for high organizational performance. The framework is designed to assist managers to assess progress within their organization, strengthen accountability and improve client service. Two senior Veterans Affairs Canada (VAC) managers, the Chief Pensions Advocate, Bureau of Pensions Advocates (BPA) and the Regional Director General, Veterans Services Branch, Atlantic Region agreed to have their organizations participate in the initial pilot.

This report, titled Organizational Governance Volume I - BPA, outlines observations and findings from the study's MAF-oriented assessment of BPA. The Bureau provides free legal advice, assistance and representation for individuals dissatisfied with decisions associated with disability pension claims.

The study is divided into three main sections: compliance audit, evaluation summary and highlights from the self-assessment exercise.

The compliance audit portion contains nine recommendations, requiring management action. The focus of these recommendations is to improve the efficiency and effectiveness of BPA operations.

The evaluation section of the report has six recommendations. These reflect an assessment of how BPA is performing with respect to organizational governance within the context of the ten MAF elements.

Results from a self-assessment questionnaire completed by the majority of BPA managers and employees is included in the report, as well as, a list of commendable practices.

Conclusion

Audit and Evaluation Division is recommending closure of all fifteen recommendations. The original recommendations and subsequent actions taken by the responsible branch are included in the table below.

Organizational Governance Audit/Evaluation Volume 1 – Bureau of Pensions Advocates (BPA)
Recommendation 1

It is recommended that the Chief Pensions Advocate (CPA) and the Director General, Program and Service Policy Division develop a formal mechanism to capture and utilize 'outside in' information.

Summary of Actions Taken by Management

An 'Issues of Mutual Concern' Committee was formed with a Terms of Reference. Representation includes BPA, National Operations Division, Veterans Services, and Program Service Policy Division and they meet on an ad-hoc basis. Included in the evidence is the terms of reference, a sample of an agenda, and previous meeting minutes. Evidence gathered is sufficient to recommend closure.

Recommendation 2

It is recommended that the Chief Pensions Advocate address potential occupational health and safety issues, including adequate file storage and air quality testing.

Summary of Actions Taken by Management

The Chief Pensions Advocate (CPA) requested the Director, Security and Real Property Services Division do a site review of all BPA offices across the country. Ten of fifteen offices have been visited and reviewed and the remaining five are scheduled to be reviewed. A sample site review is included as evidence as well as the original request to Real Property and Services Division from BPA. Evidence gathered is sufficient to recommend closure.

Recommendation 3

It is recommended that the Chief Pensions Advocate periodically review the BPA communications strategy for effectiveness and share the results with all BPA employees.

Summary of Actions Taken by Management

A Communications Plan for 2007-08 was created containing objectives, messages, targeted audiences, and activities. Included in the evidence is the Communications Plan, samples of articles published, and activities/outreach performed. Evidence gathered is sufficient to recommend closure.

Recommendation 4

It is recommended that the Chief Pensions Advocate adopt a formalized and documented approach to risk management for BPA, including the development of a risk profile that is updated annually.

Summary of Actions Taken by Management

The CPA developed a risk profile in line with a Management Accountability Framework for BPA. The evidence includes the MAF and the Risk Summary. Evidence gathered is sufficient to recommend closure.

Recommendation 5

It is recommended that the Chief Pensions Advocate ensure that BPA district offices adhere to the national medical fees policy.

Summary of Actions Taken by Management

BPA revised their medical fees policy for consistency and circulated this information to all staff. A 'Procedures Teleconference' was held to encourage discussion about medical fees issues. Evidence includes the revised policy and a teleconference agenda. Evidence gathered is sufficient to recommend closure.

Recommendation 6

It is recommended that the Chief Pensions Advocate take action to ensure that all BPA files and premises are adequately secure.

Summary of Actions Taken by Management

The CPA requested the Director, Security and Real Property Services Division do a site review of all BPA offices across the country. Ten of fifteen offices have been visited and reviewed and the remaining five are scheduled to be reviewed. A sample site review is included as evidence as well as the original request from BPA. Evidence gathered is sufficient to recommend closure.

Recommendation 7

It is recommended that the Chief Pensions Advocate and District Pensions Advocates review Head Office national procedures with District Office procedures for standardization/consistency.

Summary of Actions Taken by Management

To improve consistency, all operational procedures were posted on the Intranet. 'Procedural Issues' teleconferences were started to address issues of inconsistency across the country. BPA Renewal Messages were released to BPA staff with procedural information. The 'Advocates Without Borders' program was launched Canada-wide to enhance client service. Evidence includes Intranet and e-mail messages, an index of operational procedures, teleconference minutes, and BPA Renewal Messages. Evidence gathered is sufficient to recommend closure.

Recommendation 8

It is recommended that the Chief Pensions Advocate conduct a workload and resource allocation analysis of BPA district offices with a view to ensuring a consistent and adequate resource structure at the field level.

Summary of Actions Taken by Management

The 'Advocates Without Borders' program was launched to ensure speed of service and a consistent resource structure across the country. Evidence includes a description of the 'AWB' program and various messages released to staff. Evidence gathered is sufficient to recommend closure.

Recommendation 9

It is recommended that the Chief Pensions Advocate review the use of delay codes, and if appropriate, work with staff to raise the level of acceptance.

Summary of Actions Taken by Management

A Delay Code Directive was issued to staff and posted on the intranet. The directive described when delay codes are to be used and the processes involved. Delay Code processes for CSDN were also created and posted on the intranet. Evidence includes the directive, the processes, and messages to staff to raise their level of awareness. Evidence gathered is sufficient to recommend closure.

Recommendation 10

It is recommended that the Chief Pensions Advocate re-communicate the mandate and overall objectives of the Bureau of Pensions Advocates to all employees and managers.

Summary of Actions Taken by Management

Laminated prints of BPA's mandate were sent to all offices for display. The mandate was also communicated in the new Communications Plan. BPA's mandate was posted on the intranet and internet. Evidence includes a copy of the mandate. Evidence gathered is sufficient to recommend closure.

Recommendation 11

It is recommended that the Chief Pensions Advocate in consultation with the Director General, National Operations Division develop a more formalized committee structure between BPA and VS to discuss and resolve operational issues of mutual interest.

Summary of Actions Taken by Management

An "Issues of Mutual Concern" Committee was formed with a Terms of Reference. Representation includes BPA, NOD, VS, and PSPD and they meet on an ad hoc basis. Included in the evidence is the terms of reference, a sample of the agenda, and meeting minutes. Evidence gathered is sufficient to recommend closure.

Recommendation 12

It is recommended that the Chief Pensions Advocate authorize a security assessment of the reception areas of BPA district offices, and that necessary modifications be implemented.

Summary of Actions Taken by Management

The CPA requested the Director, Security and Real Property Services Division do a site review of all BPA offices across the country. Ten of fifteen offices have been visited and reviewed and the remaining five are scheduled to be reviewed. A sample site review is included as evidence, as well as the original request from BPA. Evidence gathered is sufficient to recommend closure.

Recommendation 13

It is recommended that the Chief Pensions Advocate working with the Human Resources Division, provide management training to District Pensions Advocates.

Summary of Actions Taken by Management

All BPA District Directors who requested management training were approved. Available courses are circulated to all BPA staff. Management team meetings occasionally include training when possible. Sample conferences, available courses, and emails are included as evidence. Evidence gathered is sufficient to recommend closure.

Recommendation 14

It is recommended that the Chief Pensions Advocate develop more meaningful performance measures for Advocates and their Assistants.

Summary of Actions Taken by Management

The Bureau established expectations for Legal Administrative Assistants and Advocates and circulated these measures to all staff. The 'Advocates Without Borders' program was launched to improve client service and speed of delivery. Performance measures were included in the Renewal messages sent to all staff. Performance measures and email messages are included as evidence. Evidence gathered is sufficient to recommend closure.

Recommendation 15

It is recommended that the Chief Pensions Advocate develop a Results-based Management Accountability Framework for BPA which identifies objectives, activities, outputs and outcomes.

Summary of Actions Taken by Management

A Results-Based Management Accountability Framework was created for 2007-09. Evidence includes the draft and final versions of the framework. Evidence gathered is sufficient to recommend closure.

9.0 DISTRIBUTION

Deputy Minister

Departmental Audit Committee Members

Chief of Staff to the Minister

Assistant Deputy Minister, Corporate Services Branch

Senior Assistant Deputy Minister, Policy, Programs and Partnerships Branch

Assistant Deputy Minister, Services Delivery and Commemoration Branch

Chief Pensions Advocate

Director General, Communications Division

Director General, Human Resources

Director General, Departmental Secretariat and Policy Coordination

Deputy Coordinator, Access to Information and Privacy

General Counsel

The Registrar, Internal Audit Sector, Office of the Comptroller General, Treasury Board of Canada Secretariat

Office of the Auditor General

Date modified: