Audit of management practices of missions – New Delhi
Global Affairs Canada
Office of the Chief Audit Executive
- Executive summary
- 1. Background
- 2. Audit Objective and Scope
- 3. Observations
- 4. Conclusion
- 5. Recommendations
- Appendix A: Organization Chart for Common Services and Consular Programs
- Appendix B: About the Audit
- Appendix C: Recommendations and Management Action Plan
- Appendix D: Acronyms
Global Affairs Canada manages Canada’s international platform — a global network of 179 missions in 109 countries that supports the international work of Global Affairs Canada and 37 partner departments, agencies and co-locators.Footnote 1 Administrative activities that support the Department’s missions require effective and efficient management practices to help ensure sound stewardship of resources.
Rationale for this audit
In 2015, the Department initiated an internal investigation into the Canadian Consulate in Haiti, and found that fraudulent schemes had been put in place by locally engaged staff that resulted in estimated government losses of $1.7 million. Given the findings in Haiti, the Deputy Minister of Foreign Affairs requested a series of management practice audits of select missions to determine whether similar issues could be taking place at other Canadian embassies abroad. The Office of the Chief Audit Executive conducted a risk assessment to identify those missions susceptible to higher levels of fraud risk and therefore selected for audit. The New Delhi mission was one of five missions operating in a higher fraud risk environment selected.
What was examined
The objective of this audit was to provide assurance that sound management practices and effective controls are in place to ensure good stewardship of resources at the New Delhi mission to support the achievement of Global Affairs Canada objectives. This audit examined the mission’s management practices with regard to oversight and monitoring, procurement and asset management, and human resources between April 2015 and March 2017.
What was found
The audit team found that monitoring of expenditures and forecasting is done and discussed regularly by mission management. The planning of property maintenance and the administration of locally engaged staff staffing actions are well managed. Furthermore, it was found that vehicle usage, repairs and fuel consumption are regularly tracked. The process to collect consular revenues was found to be appropriate, and since the mission no longer accepts cash payment for consular fees, the risks associated with cash handling are reduced.
Overtime costs claimed by drivers were found to be high, however, the mission implemented a shift work schedule for its drivers to eliminate standby charges and reduce overtime. The audit team found that a formal human resources plan would help to identify needs and better inform the Indian missions’ senior management.
The audit team found that there is some lack of rigour in procurement and asset management. The most appropriate approach to procuring goods and services was sometimes not selected and there were instances in which value for money was not clearly realized. Financial oversight was not always performed to confirm the quantity and quality of goods and services received. Although the inventory process is working well, the mission holds a large inventory without clear and immediate needs.
In addition, the audit team noted a lack of monitoring by management with regard to the safeguarding and control of diplomatic plates issued to Canada-based staff.
The audit concludes that, based on the criteria established, overall management practices and controls are in place, and certain improvements are required to ensure better stewardship of resources at the New Delhi mission to support the achievement of Global Affairs Canada objectives.
Recommendations are detailed in Section 5.
Statement of Conformance
In my professional judgment as Chief Audit Executive, this audit was conducted in conformance with the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing and with the Treasury Board Policy and Directive on Internal Audit, as supported by the results of the quality assurance and improvement program. Sufficient and appropriate audit procedures were conducted, and evidence gathered, to support the accuracy of the findings and conclusion in this report, and to provide an audit level of assurance. The findings and conclusion are based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed upon with management and are only applicable to the entity examined and for the scope and time period covered by the audit.
Chief Audit Executive
Global Affairs Canada (the Department) manages Canada’s diplomatic and consular relations, promotes the country international trade and leads Canada’s international development humanitarian assistance. Global Affairs Canada also manages Canada’s international platform — a global network of 179 missions in 109 countries that supports the international work of Global Affairs Canada and 37 partner departments, agencies and co-locators.Footnote 2 According to the 2015-2016 Departmental Performance Report, $928 million was spent to operate and support the missions.
In 2015, the Department initiated an internal investigation into the Canadian Consulate in Haiti, and found that fraudulent schemes had been put in place by locally engaged staff that resulted in estimated government losses of $1.7 million. Given the findings in Haiti, the Deputy Minister of Foreign Affairs requested a series of management practice audits of select missions to determine whether similar issues could be taking place at other Canadian embassies abroad. The Office of the Chief Audit Executive conducted a risk assessment to identify those missions susceptible to higher levels of fraud risk and therefore selected for audit. The following factors were considered:
- complexity of the mission, in terms of the number and kind of services provided;
- size of the mission, including staff complement and footprint;
- the mission’s budget for administrative services;
- the mission hardship levelFootnote 3;
- maturity of the host country’s banking system;
- the mission’s accounts payable profile;
- the mission’s expenditure trends; and
- Transparency International’s rating of the host country’s corruption perception index.
As a result of this work, and in consultation with senior officials in the Department, five missions that operate in high-risk environments were selected for audit. These were: Abuja (Nigeria), Algiers (Algeria), Moscow (Russia), Nairobi (Kenya) and New Delhi (India). An additional mission, that operates in a lower fraud risk environment, Seoul (South Korea), was selected for audit comparative purposes.
High Commission of Canada in New Delhi
The High Commission of Canada (the mission) in New Delhi (India) is the largest mission in Canada’s network, comprising 61 Canada-based staff (CBS) and 266 locally engaged staff (LES) in March 2017. The mission has six programs (Commercial Economic; Consular; Common Services; Political and Economic Affairs; Public Advocacy, and Security; and Emergency Management) and ten partners (Agriculture and Agri-Food Canada; Canada Border Services Agency; Canadian Food Inspection Agency; Canadian Security Intelligence Service; Department of National Defence; Export Development Canada; Province of Alberta; Province of Ontario; Immigration, Refugee and Citizenship Canada; and the Royal Canadian Mounted Police).
The New Delhi mission is part of the India network comprising three other missions in Bengaluru, Chandigarh, Mumbai and four trade offices in Ahmedabad, Chennai, Hyderabad and Kolkata. The Head of Mission (HOM) in New Delhi has general oversight of the delivery of departmental programs across India. Regional responsibility is shared with the Consuls General in Mumbai, Chandigarh and Bengaluru. The HOM is accredited to the Kingdom of Bhutan and the Federal Democratic Republic of Nepal. In addition, the HOM is responsible for coordinating activities with two Honorary ConsulsFootnote 4 located in Kolkata (India) and Kathmandu (Nepal).
The mission operates in a difficult environment [REDACTED]. According to Transparency International’sFootnote 5, corruption within the local government and businesses is present. [REDACTED] Personal security is generally a low concern for foreigners in New Delhi, though foreigners are warned of possible threats such as minor thefts, credit card fraud, and harassment, [REDACTED] However, in parts of India, natural disasters and weather events such as earthquakes and monsoons, as well as terrorist attacks are deemed to be high. In addition, New Delhi and many Indian cities frequently experience high levels of air pollution and dust storms occur across northern India. As a result, the quality of air is a major concern for CBS and their dependents. [REDACTED] As a consequence, living and working in this environment can be challenging for CBS.
The mission compound is a large site that houses the Chancery, 30 staff quarters (SQs), and various maintenance shops and other facilities. It was reported to the audit team that the compound is aging [REDACTED] replacements and renovations are needed but require significant capital funds from HQ that have competing priorities from all of the mission network.
Common Services Program in the New Delhi Mission
The Common Services (CS) Program within the High Commission provides administrative support (property, human resources and information technology) to the other mission programs, including its partners. The mission’s Management and Consular Officer (MCO) and Deputy Management and Consular Office (DMCO) for Physical Resources provide administrative support to the mission in Bengaluru (India) which includes regular visits. At the time of the audit, the mission received financial support from the Common Service Delivery Point (CSDP) in New Delhi and some human resources (HR) related support from the Regional Service Centre in London (United Kingdom). The CSDP is housed in the High Commission and at the time of the audit served 17 other missions located in South and Southeast Asia.Footnote 7 See Appendix A which illustrates the organizational chart for the Common Services and Consular Programs in the New Delhi Mission.
Common Services are managed by an MCO acting in an EX-02 position while the financial operations of the mission are managed under the CSDP structure, which is led by an FI-03 Financial Management Officer (FMO). He manages one FI-02 and ten LES who are responsible for all financial transaction processing relating to mission operations. Over the years, the mission’s CS expenditures have been increasing, with a slight decrease in 2014-2015, as shown in Table 1 below.
|Common Services||Operations and Maintenance||$940,005||$832,233||$850,404||$978,700|
Source: FAS Expenditures report as at April 26, 2017
The property section is managed by an AS-06 DMCO who is supported by three LES managers for transport, property and material lines of service. This section is responsible for the oversight and maintenance of the Chancery, the compound, SQs and a fleet of vehicles. Table 2 below shows the mission’s inventory of property and vehicles.
|Chancery & supplemental buildings||4||-||4|
|Official Residence & supplemental buildings||3||-||3|
|Vehicle Fleet||Armoured||Standard (soft shell)||Total|
Source: PRIME Property Footprint report, field work and observations
The HR section is managed by an AS-06 DMCO who is responsible for five LES staff. The section performs all HR related functions for the mission as well as for other missions in India, including pay and benefit administration, leave management and performance management. In addition to supporting the India network, the HR section also provides services to the missions in Yangon (Burma) and Dhaka (Bangladesh) and provides secretariat services for the Regional Classification Committee for 19 missions across Asia.
The Consular Program is led by an FS-03 DMCO who manages three LES. The mission is responsible for providing consular, passport and citizenship services throughout India, Nepal and Bhutan. To facilitate coverage of this vast territory, there are two Honorary ConsulsFootnote 8, one in Kolkata (India) and one in Kathmandu (Nepal).
2. Audit Objective and Scope
The objective of this audit was to provide assurance that sound management practices and effective controls are in place to ensure good stewardship of resources at the New Delhi mission to support the achievement of Global Affairs Canada objectives. The audit team examined common services at the mission related to procurement, asset management and human resources. Detailed audit criteria are listed in Appendix B.
Audit results were derived from the examination of documentation, data analytics of mission expenditures and walk-throughs of key Common Services and Consular Program revenue collection processes. The audit team conducted work on-site at the mission from March 14 to 24, 2017. In addition, files were tested which included a review of a sample of contracts, expenditure items, asset disposals, payroll items, overtime items, and staffing actions. Interviews were conducted with the HOM, Deputy Head of Mission (DHOM), CBS management and key LES of Common Services and Consular Programs and employees at HQ and the CSDP in New Delhi. The audit team performed on-site visits to storage facilities, local vendors, and a sample of staff quarters (SQs). In addition, the audit team met the local bank representative and with three like-minded missions, Australia, the United Kingdom and the United States of America, to gather information regarding their challenges and good practices in common services.
This section sets out key findings and observations, divided into six general themes: accountability and oversight; planning and budgeting; monitoring; local procurement; asset management; and human resources and LES staffing.
3.1 Accountability and Oversight
It was expected that mission and Headquarters (HQ) management would exercise oversight over mission activities and expenditures to ensure solid stewardship of mission resources. The audit examined roles and responsibilities of mission staff in the management of the common services.
Accountability in the mission rests with the HOM, who reports to the Assistant Deputy Minister (ADM), Asia Pacific, at HQ. HQ has a role in supporting and enforcing HOM accountability, including the provision of common services. A DHOM supports the HOM in the management of mission operations and has the required delegated financial authority. The audit team noted that although the HOM is accountable, there was limited data analysis and benchmarking done by HQ relating to procurement and asset management. Such data analysis can raise signals of discrepancies which can support the HOM’s oversight responsibilities.
The audit team found that CBS roles, responsibilities and accountabilities are clear, communicated and understood. Based on a review of the Committee on Mission Management (CMM), topics concerning common services are discussed and decisions are made accordingly. The Housing Committee meets on an as needed basis, although minutes are not taken. Roles and responsibilities of mission management are partly articulated in the Terms of Reference of the CMM, the Housing Committee and the Regional Contract Review Board (RCRB), performance management agreements and policy and procedure documentation.
The audit found that the mission uses some tools developed by HQ, such as Strategia and FINSTAT (Financial Status Report), to assist in its management. Management meetings are held regularly including communications with staff at all levels within the mission.
The audit team was told by the DMCO Facility Manager that improvements in the procurement process are needed, specifically with regard to the planning of contracting and procurement of goods and services, as well as oversight of procurement activities. Consequently, a retreat was held among the property section managers to better understand the mission’s needs and identify areas for improvement. At the time of the audit, the DMCO was in the process of reorganizing the general services team to better align it with the property work areas of expertise and mission requirements.
The LES in missions play key roles assisting with the management of the mission; they support the CBS through subject-matter, cultural and linguistic assistance. Since the LES remain at the mission while the CBS rotate, it would be expected that they provide consistency in carrying out the appropriate processes and procedures that comply with Government of Canada policies and the mandate of the Department.
Although a formal process is in place to develop handover notes, when the current senior management team leaves the mission, there may not be processes in place to ensure continuity of good practices and corporate knowledge. In addition, mission management reported that rotation on a two-year cycle did not provide sufficient time to assess and implement the proper practices to enforce due diligence.
The RCRB was created in 2012 and plays a key oversight function in the procurement process of its client missions. The New Delhi CSDP coordinates activities as the secretariat and provides support to HOMs and managers in exercising their delegated contracting authorities. The MCO in New Delhi chairs the committee and is assisted by the CSDP FMO as a co-chair. The review of a sample of 19 transactions which were either linked to a purchase order or a contract revealed that the RCRB is functioning well and exercising its challenge function. Since the RCRB is a virtual committee formed by members from various missions located in Asia, approvals are documented through email and retained by the RCRB secretariat.
3.2 Planning and Budgeting
The audit team expected that planning and budgeting would be based on need and supported by historical data to justify planned activities and forecasted expenditures.
The MCO provides a one page Management Forward Calendar to all mission management to help ensure that key mission administrative activities (i.e. review of hospitality ceilings, conduct of staff performance appraisals, and development of mission plans) are planned and take place in a timely manner. This is a good practice that could be shared with other missions.
The mission uses the corporate tool, Strategia, to outline planned activities and develop budget figures for each expenditure area under the common services and property budget envelopes from 2014-2015 to 2016-2017. A more detailed breakdown of planned activities and expenditures is prepared to support day-to-day activities of the mission, and forms the basis for the budget outlined in Strategia. This included a detailed forecast for some budget items. However for other items, forecasts were based on previous year’s spending adjusted for inflation, rather than a needs analysis. The preparation of a detailed breakdown and forecast of all planned activities and expenditures may alleviate some of the financial pressures experienced by the mission at year-end, and control inventory volume. In addition to a detailed needs assessment, using trend analysis to inform planning and budgeting can be facilitated by the use of the corporate Business Warehouse and Business Intelligence software tools to extract data.
The audit team noted that monitoring of expenditures against budgets, including forecasting is done regularly to inform management and support decision making. The MCO sends a monthly email to all managers with a detailed FINSTAT breakdown, expenditure burn rates against budgets and benchmarks, as well as foreseeable funding pressures.
The audit team found the planning of property maintenance to be well managed. Planned budgets and allocated resources for property maintenance were relatively stable for the past three years as outlined in two departmental planning documents: Strategia and the Mission Property Management Plan in which maintenance and repairs are identified. In addition, a 52-week chart is prepared for SQ maintenance along with an identification of upcoming vacancies during rotation season. This is supplemented by another plan that details the allocation of work to general services staff comprising internal and external resources. Furthermore, meetings between the DMCO Facility Manager and his LES managers are held on a weekly basis to discuss property activities and review related budgets and expenditures.
However, the audit team found that planning for the procurement of goods is an area that requires improvement as it was not always linked to a plan or needs assessment. This is evidenced by the mission holding a large inventory of material stock with no identified need.
The mission has a total of 19 vehicles for which individual usage and maintenance logs are maintained and completed on a monthly basis. Given the regular tracking and reasonable level of costs incurred as described in Section 3.3 of this report, not having a formal maintenance plan appears to be justified.
The audit team expected that monitoring activities would be performed to provide general information on mission compliance with Government of Canada and department specific policies and procedures.
Based on a review of a sample of 42 procurement transactions, the audit team found that financial oversight executed by CBS requires improvement. While good processes exist to confirm receipt of goods (goods received notification) and quality of services rendered (invoice stamp and signature confirming services “rendered as per contract”), the sample demonstrated that these practices were not consistently applied. The service confirmation stamp and signature were not always completed on invoices, and it was not clear that the goods received notifications were made available to CBS prior to approving invoices. Consequently, procurement procedures and policies were not always followed.
Furthermore, the sample demonstrated that large value contracts are closely monitored for meeting their terms and conditions. However, smaller value procurement is monitored on an ad hoc basis. Considering the large volume of small value procurement expenditures, the total dollar amount is significant to warrant more consistent monitoring. At the time of the audit, mission management recognized these weaknesses and was working to adjust its practices. Since monitoring is not strict, there is a risk of non-compliance with procurement procedures and an increased opportunity for misappropriation of funds.
Another area of concern to the audit team was the monitoring of LES overtime despite CBS managers being provided with monthly reports detailing overtime expenditures incurred in their program. The audit team examined the overtime paid to the CS LES staff. It was noted that overtime decreased over the past two years from 2015-2016 to 2016-2017. The greatest amount of overtime was claimed by drivers. Drivers earned overtime pay representing on average 34% of their salaries in 2015-2016 and 30% in 2016-17. At the time of the audit, the mission did an analysis of needs and costs related to mission drivers with the objective of reducing costs while meeting operational needs. Based on this analysis, in March 2017, the mission implemented a shift work schedule for its drivers that would eliminate standby charges and reduce overtime by an estimated 75%. In addition, since summer 2016, pre-approval for overtime is requested and approved by the DMCO Facility Manager by email to his staff that report directly to him. Likewise, LES managers pre-approve overtime for their own staff as they are more aware of their staff’s day-to-day activities. This practice is reasonable given that the DMCO pre-approves the overtime budget and reviews the overtime reports on a monthly basis for the staff that work in his section.
With regard to the monitoring of the use of vehicles, it was found that there is ongoing review of vehicle logs to assess reasonability of usage in comparison to gas consumption. The review of vehicle logs for January 2017 demonstrated that usage (trips and kilometres), repairs and fuel consumption are regularly tracked. Repairs and maintenance work is done at a local garage. A review of vehicle expenditures for 2015-2016 and 2016-2017 indicated that there were no significant spikes in such costs and they were reasonable in comparison to other common services expenditures.
In addition, the audit team noted a lack of monitoring by management with regard to the safeguarding and control of diplomatic plates issued to CBS staff. [REDACTED] As a result, there is an increased opportunity for security and reputational risks.
3.4 Local Procurement
It was expected that the procurement for goods and services at the Mission would be administered and managed in accordance with applicable policies and directives. Local procurement was identified as an area of risk during the audit planning phase. To ensure adequate internal controls were in place and functioning to manage the risk, the audit team examined the processes, mechanisms, and tools used for procuring goods and services at the mission. The audit team selected a sample of 42 contracts and transactions for fiscal years 2015-2016 and 2016-2017. The audit team found that most contracts were linked to a plan or a needs assessment.
The audit team found some issues with regard to procurement administration. It was noted in some instances that the most appropriate approach to procuring goods or services was not chosen. This included sole source procurement without proper justification, invoices paid directly with no link to existing service contracts, and vendors used exclusively without a contract for recurring purchases. As well, in two instances, it was noted that contract limits were exceeded for painting services and for the purchase of uniforms for general services staff. Furthermore, a purchase order for property services was signed after work started and a sole source contract was not properly justified for the procurement of furniture. Not using the most appropriate contracting method may result in not receiving best value for money.
Instances were noted where value for money was not clearly demonstrated. These included a sole source purchase of custom furniture that appeared above market rates, and a real estate commission of $9,381 which was paid without a contract outlining the terms of service. While some issues were identified, most procurement was legitimate, appropriate and well administered.
The audit team noted that certain LES in the India network are issued corporate credit cards through a local bank. Mission management indicated these cards are intended exclusively for travel or hospitality related expenses. The audit team did, however, note that in a number of instances these cards were being used for the acquisition of goods. It was indicated to the audit team that this was because the Department issued acquisition card (from a Canadian bank) is not widely accepted in India. The audit team found a lack of clarity among mission management and staff regarding the intent of these cards, and their appropriate use (acquisition card or travel card). Without clear direction and management, the mission is at risk of inappropriate use of these corporate credit cards and potential losses if the mission is held liable for any inappropriate charges.
3.5 Asset Management
Another area of increased risk identified by the audit team was with the management of assets at the mission. It was expected that once purchased, assets would be appropriately recorded, tracked, maintained and disposed of according to related policies and procedures. To examine this area, the audit team focussed on the management of inventory and cash.
The audit team found that the department’s inventory tracking system, RFID (Radio Frequency Identification System), is not used by the mission. Rather, a Microsoft Access based inventory tool is used. The audit team found that valuable goods are consistently tracked from acquisition to disposal. Similarly, furniture and household items in SQs and the Official Residence, as well as IT equipment are well tracked. One issue noted was the large volume of office supplies, and mechanical, plumbing, and electrical parts held in stock without clear needs. Many items had been held in stock for several years. Further, the stores inventory (small items and supplies) requires 75 inventory lists to manage the volume and numerous categories of goods. Overall, the inventory process is well managed although the volume of goods and supplies requires a review.
Another asset found in some missions is cash; a supply is required for small, urgent, unusual purchases not covered by other means. Some countries such as India rely heavily on cash, as opposed to acquisition cards or electronic systems. The mission has [REDACTED] petty cash accounts ranging from approximately [REDACTED]. The audit team noted that recurring services were paid by petty cash, such as diplomatic courier cargo charges, garbage removal and gardening for off-site SQs. Since these services are recurring, they should be paid electronically or as part of a contract.
While LES are responsible for the petty cash, the audit team noted that CBS did not carry out their monitoring function as they did not perform regular reconciliations. This task was done by an LES every six months, but has since been assigned to a CBS financial officer who recently arrived to support the CSDP.
Collection of Revenues
Since October 2016, the mission no longer accepts cash for payment of passport and consular fees, only bank drafts and credit card payments. As a result, the risks associated with cash handling are greatly reduced. Overall, the audit team found that the process to collect consular revenues was appropriate.
3.6 Human resources - LES staffing
It was expected that the mission would have a staffing plan in place and would monitor it to ensure operational needs were met and that staffing actions were appropriately approved, fair, open and transparent.
The DMCO of Human Resources (HR) and her team provide HR related services to the India network. The audit team reviewed the mission’s 2016-2017 HR plan in Strategia which indicated that 27 permanent and 32 emergency staffing actions took place across India. Given the high number of staffing actions that take place in the Indian missions, a formal HR plan that forecasts the demand for human resources and includes other components such as training and succession planning could better inform decision-making by senior management to meet the network’s operational needs.
Staffing actions are identified by program managers and communicated to the HR section. When required, the mission seeks assistance from the Regional Service Centre (RSC) in London (United Kingdom) with respect to posting positions in Amris, an applicant tracking system and recruiting software. Based on a sample of staffing actions that took place in 2015-2016 to 2016-2017, it was found that CBS were sufficiently involved in the process. In addition, most key documentation to support staffing actions was found in a sample of files reviewed as well as in a sample of personnel files examined. The audit team noted that good practices are in place: timelines and checklists used to track deliverables to ensure staffing actions follow a consistent process and are timely.
The audit concluded that there were effective management practices and controls in place to ensure good stewardship of resources at the New Delhi mission to support the achievement of Global Affairs Canada objectives.
Effective management controls are in place in the areas of planning, asset management and human resources. Overall, management fulfills its responsibilities and corporate reporting. Some improvement is needed in local procurement and information analysis for informed decision-making.
The audit team verbally debriefed the HOM, the DHOM and the MCO after completion of work on-site.
Recommendations to the New Delhi Mission:
- The Head of Mission should increase oversight to ensure planning and budgeting for common services includes a needs assessment, adjustments are made to account for changes, and there is periodic monitoring of high risk financial transactions.
- The Head of Mission should take measures to strengthen oversight, controls and monitoring for common services to ensure procurement and contracting processes comply with regulations, proper management of the inventory volume is undertaken, with corrective actions when non-compliance is detected.
- The Head of Mission should ensure a formal and comprehensive human resources plan is prepared to better meet the needs of the India network.
Recommendations to Headquarters:
- The Assistant Deputy Ministers, Geographic Branch, should ensure that responsibilities and accountabilities of the Heads of Mission are communicated; consequences of poor performance are reflected in performance appraisals and corrective actions taken when required.
- The Assistant Deputy Minister, International Platform Branch, in collaboration with Corporate Planning, Finance and Information Technology Branch (Chief Financial Officer) should reinforce headquarters’ oversight and monitoring of common services in missions by: assessing higher fraud risk missions; identifying specific higher fraud risk areas for increased oversight in missions; developing performance indicators to identify potential issues; and conducting comparative analysis with missions of similar risk to support Heads of Mission.
- The Assistant Deputy Minister, Human Resources Branch, should adapt rotation process for higher fraud risk missions to consider: longer postings; overlap of key positions; composition of Canada-based staff with the required competencies; and past Canada-based staff performance and experience in the selection process; as well as customized training for higher fraud risk missions.
Appendix A: Organization chart for Common Services and Consular Programs
Appendix A: Long Description
The diagram shows the structure of the Common Services and Consular Programs at the Mission in New Delhi and the reporting relationships.
At the top of the hierarchy, there is the Minister-Counsellor (EX-02). The following positions report to the Minister-Counsellor:
- DMCO Physical Resources (AS-06)
- General Services Manager (LES-09)
- Material MNGMNT Officer (LES-08)
- Transport Coordinator (LES-06)
- Program/Admin Assistant (LES-05)
- DMCO Human Resources (AS-06)
- HR Manager (LES-09)
- Recruitment Officer (LES-07)
- CSDP HR Assistant (LES-05)
- Human Resources Specialist (LES-06)
- CSDP HR Assistant (LES-05)
- Travel Coordinator/Administrative Assistant (LES-06)
- 2 Receptionists (LES-04)
- HR Manager (LES-09)
- FSITP (CS-03)
- Senior Systems Administrator (LES-08)
- 3 Information Technology Professionals (LES-07)
- Foreign Service Information Technology Professional (CS-02)
- Senior Systems Administrator (LES-08)
- DMCO Consular (FS-03)
- Senior Consular Program Officer (LES-09)
- 2 Passports Examiners/Consular Assistants (LES-06)
- Senior Consular Program Officer (LES-09)
- Financial Officer (Fl-03)
- Contracting & Procurement Coordinator (LES-06)
- CSDP Banking & Accounts Receivable Specialist (LES-06)
- Payable Account Supervisor (LES-07)
- 7 CSDP Account Payable Assistants (LES-05)
- DMCO Physical Resources (AS-06)
Appendix B: About the Audit
The objective of this audit was to provide assurance that sound management practices and effective controls are in place to ensure good stewardship of resources at the New Delhi mission to support the achievement of Global Affairs Canada objectives.
The scope of the audit included those management practices and controls in place to support the New Delhi mission operations excluding the administrative service provided to Bengaluru. Specifically, the audit examined processes related to procurement and the management of finances, materials, vehicles and property. Human resource processes relating to LES staffing actions, LES payroll and overtime were also examined.
The most up to date documentation available as at March 2017 was reviewed. In addition, Common Services expenditures and data for property and fleet were examined from 2013-2014 to 2016-2017 to obtain trends. A sample of files and transactions were tested from activities that took place from 2015-2016 to 2016-2017.
|Description of Testing Sample||Number of Samples|
|Procurement transactions with associated contract or purchase order||19|
|Procurement transactions through direct purchase (no associated contract or purchase order)||20|
|Acquisition card purchases||2|
|Petty cash transactions||1|
|Visits to staff quarters to review maintenance work and on-site inventory||5|
|Disposed asset files||1|
|LES staffing action files||6|
|LES personnel files||8|
Criteria were developed based on a detailed risk assessment.
Criterion 1: Adequate and effective oversight and accountability are in place to support stewardship of mission resources.
1.1 Management exercises effective oversight of procurement, asset management and human resource activities.
1.2 Authorities and accountabilities for procurement, asset management and human resources are clear, communicated and understood.
1.3 Planning processes are in place for procurement, asset management and human resources, which consider needs, asset life cycle, and resources.
1.4 Monitoring and reporting of procurement, asset management and human resource activities take place to inform decision-making.
Criterion 2: Effective management practices and controls are in place to ensure stewardship of mission resources and compliance with relevant policies and legislative requirements.
2.1 Effective controls are in place to ensure that procurement of goods and services comply with relevant policies and legislative requirements and achieve value for money.
2.2 Effective controls are in place to ensure that procurement expenditures are accurate, appropriate, and legitimate.
2.3 Inventory control and asset management practices are adequate and appropriate.
2.4 Cash is managed in accordance with relevant policies and legislative requirements.
2.5 LES staffing actions comply with relevant policies and legislative requirements and are fair, open and transparent.
2.6 LES salaries and overtime payments are accurate and complete.
Approach and Methodology
In order to evaluate the above audit criteria, and based on identified and assessed key risks internal controls associated with the related business processes, the audit methodology included, but was not limited to the following:
- Planning documentation review
- Walkthrough of key business processes at Mission
- Data analysis of Common Services Program expenditures
- Transactions testing (contracts and expenditures relating to Common Services Program, asset disposal, payroll, overtime costs and staffing actions)
- Interviews with key management positions at Mission, HQ and Common Service Delivery Points (CSDP) in Manila
- Inventory review
- Petty cash counts
- On-site examination of Chancery, storage facilities and a sample of staff quarters
- Benchmarking with like-minded Missions (Australia, Sweden and the United States of America)
- Visits to a sample of local vendors and Mission bank
Appendix C: Recommendations and Management Action Plan
|Audit Recommendation to Mission||Management Action Plan||Area responsible||Expected completion date|
|1. The Head of Mission should increase oversight to ensure that planning and budgeting for common services includes a needs assessment, adjustments are made to account for changes, and there is periodic monitoring of high risk financial transactions.||The property team is preparing a procurement plan identifying all regular or planned spending for the year to provide increased oversight on expenditures, including an A-based review of materiel requirements for next Strategia planning cycle||Head of Mission / New Delhi||July 31, 2017|
|All small value procurement (not including petty cash) is approved in writing by property managers (locally engaged staff) with a copy to the Deputy Management and Consular Officer-Facility Manager to provide oversight function; recurring, petty cash and regular small value purchases are being analyzed to identify potential monthly billing or supply arrangements||Implemented April 2017 and ongoing|
|Overtime budgets are being allocated to the property section shops on a monthly basis by the Deputy Management and Consular Officer-Facility Manager based on a request template including previous month’s use and an explanation of planned overtime for the coming month; written approvals are required for all overtime worked||Implemented April 1, 2017|
|Number of petty cash accounts has been reduced and relocated to all be physically close to the Management and Consular Officers at mission; each petty cash has been designated for specific types of expenses to increase the ease of verifications.||Implemented May 1, 2017|
|2. The Head of Mission should take measures to strengthen oversight, controls and monitoring for common services to ensure procurement and contracting processes comply with regulations, proper management of the inventory volume is undertaken, with corrective actions when non-compliance is detected.||Mission is completing a systematic review of all contracts which had been undertaken prior to the audit, and is enhancing procurement processes for contracts becoming due with wider selection of qualified service providers to invite to tender to increase competitiveness||Head of Mission / New Delhi||Review began in January 2017, ongoing|
|Holistic review of inventory levels, re-order triggers and quantities is being completed in Stores in the next three months; inventory breadth and quantity will be reduced as a result and automated inventory system upgraded.||Review and system upgrade commenced May 1, 2017, expected completion Aug 31, 2017|
|Management oversight over procurement expenditures will be enhanced by cross-checks against pre-approved procurement plan and inventory status updates using the enhanced automated system|
|3. The Head of Mission should ensure a formal and comprehensive human resources plan is prepared to better meet the needs of the India network.||Current 2017-2018 Human Resources Plan filed as part of Strategia Common Services Business Plan in January 2017 has been enhanced and updated to include succession planning for critical positions whose incumbents exercise key roles in program and services delivery for which managers will be mitigating risk of loss of corporate memory by documenting business processes and procedures and contact lists, training and development of other team members and targeted staffing in the event of turnover||Head of Mission / New Delhi||Updated June 2017|
|Mission already undertakes a robust annual learning planning cycle, engaging all program managers in January with a learning needs assessment, which then informs the Learning Committee in configuring the annual learning plan submitted to Mission Operations, Policies and Innovation Division (AFS) in February for funding, outside of the Strategia Human Resources plan submission process.||Already ongoing|
|Audit recommendation to headquarters||Management Action Plan||Area responsible||Expected completion date|
|1. The Assistant Deputy Ministers, Geographic Branch, should ensure that responsibilities and accountabilities of the Heads of Mission are communicated; consequences of poor performance are reflected in performance appraisals and corrective actions taken when required.||The Assistant Deputy Minister, Asia Pacific Branch, will ensure that the Head of Mission responsibilities and accountabilities related to sound management practices and stewardship of resources are communicated via the Head of Mission mandate letters and executive performance agreement objectives/indicators.||Assistant Deputy Minister, Asia Pacific Branch||September 2017|
|The importance of maintaining sound management practices and stewardship of resources is, and will continue to be, communicated via quarterly the Assistant Deputy Minister/Head of Mission calls and in quarterly Director General messages (DG grams) to Heads of Mission.|
|Poor performance in this area will be reflected in the Head of Mission performance appraisals.|
|Responsibilities and accountabilities of the Heads of Mission are currently communicated by the responsible Assistant Deputy Minister and Director General through a number of mechanisms:||Assistant Deputy Minister, Sub-Saharan Africa Branch||Ongoing|
|To address concerns raised in the audit, the Director General will ensure that the Head of Mission addresses the mission-specific recommendations, and reports on actions taken. Failure to do so will be reflected in the Head of Mission’s performance management agreement.|
|Starting this year, letters will be sent to all new Heads of Mission by the Assistant Deputy Minister outlining broad expectations, including mission management and stewardship of resources. (Last year, letters were sent only to new, first-time Heads of Mission). New this year, Heads of Mission will be expected to report on how they have met the stated expectations.||Letters to be sent when all new Heads of Mission are announced. |
Head of Mission responses to the letters will be requested for early fall 2018
|Management oversight over procurement expenditures will be enhanced by cross-checks against pre-approved procurement plan and inventory status updates using the enhanced automated system33037Armoured|
|Europe, Middle East, Maghreb and Circumpolar Affairs Branch accepts the recommendation and will implement it through discussions between the Assistant Deputy Minister, relevant Director Generals and Heads of Mission during the year, specifically during the performance management agreement process.||Assistant Deputy Minister, Europe, Eurasia, Middle East, Maghreb and Circumpolar Affairs Branch||Ongoing|
|2. The Assistant Deputy Minister, International Platform Branch, in collaboration with the Assistant Deputy Minister, Corporate Planning, Finance and Information Technology Branch (Chief Financial Officer) should reinforce headquarters’ oversight and monitoring of common services in missions by: assessing higher fraud risk missions; identifying specific higher fraud risk areas for increased oversight in missions; developing performance indicators to identify potential issues; and conducting comparative analysis with missions of similar risk to support Heads of Mission.||The International Platform Branch agrees with the recommendation and is actively engaged with the Assistant Deputy Minister, Corporate Planning, Finance and Information Technology (Chief Financial Officer), the Inspector General Office, and others to reinforce headquarters’ oversight and monitoring of common services in the network abroad through the development of a framework to identify and assess higher fraud risk missions and higher fraud risk areas at missions; the identification of performance indicators to monitor on-going implementation of the framework and identify potential issues; and the development of a mechanism to conduct comparative analysis with missions of similar risk. In addition, fraud mitigation measures have been identified in the 2017-18 Corporate Risk Profile under Fund Management and Fiduciary Oversight and the International Platform Branch is involved along with other stakeholders to support their implementation.||Assistant Deputy Minister, International Platform Branch||March 31, 2019|
|In terms of immediate measures, the International Platform Branch is delivering enhanced training to Management and Consular Officers in the field, with the support of the Canadian Foreign Service Institute, focused on fraud awareness and financial management in a regional context– in particular those managing the Common Services Delivery Points. The International Platform Branch is also proactively engaged in planning/participating in inspections of Common Services Delivery Points ; generates lessons learned from feedback received from missions and partners as implementation of the Common Services Delivery Point model moves forward; and consults with other Ministries of Foreign Affairs regarding lessons learned and best practices related to similar issues.|
|3. The Assistant Deputy Minister, Human Resources Branch, should adapt rotation process for higher fraud risk missions to consider: longer postings; overlap of key positions; composition of Canada-based staff with the required competencies; and past Canada-based staff performance and experience in the selection process; as well as customized training for higher fraud risk missions.||Within the discussion of adapting the rotational process for higher fraud risk missions, if the concept of overlap is retained as an option, Human Resources will consider implementing it if funding is sourced/identified (funding is with Geographic Branches).||Assistant Deputy Minister, Human Resources Branch||September 2017|
|The Fraud Awareness Training has been made mandatory for all Management and Consular Officers this year and over 30 outgoing Management and Consular Officers have had an intensive one day Fraud Awareness Training before they depart for post. Approximately 60 outgoing Program Managers, 15 Foreign Service Executive Administrative Assistants and 40 new Heads of Missions have had Fraud Awareness included in their pre-departure training program.||June 2017|
|The Canadian Foreign Service Institute is working with the Special Investigations Division to provide one on one meetings with the Management and Consular Officers that the Division identified as going to high risk missions.||July 2017|
|An online Fraud Awareness Course will be developed.||November 2017|
|Revisions of assignment guidelines for 2018 assignments will consider adding that all applicants put down at least one hardship mission amongst their six assignment preferences. Rotationality as a condition of employment is also being reinforced in consultation with managers, employees and unions in an effort to expand the assignment horizons of our existing employees. Business needs will be better balanced against employees preferences.||September 2017|
|Longer postings in high risk (and by definition higher hardship) missions will be considered for the management teams – including all managerial positions (EX and non-EX) and the Heads of Mission. Those decisions have to be looked at in terms of the impacts on staff and their families, declining value compensation packages controlled by Treasury Board Secretariat and the ability of the department to secure high performing candidates for high risk and high hardship assignments.||July 2018|
|As the Competency-Based Approach matures, it can better track the competencies and experiences of employees and the requirements of the positions. The approach will allow assignment decisions to better align the requirements of the positions, and not just for fraud risk issues. The approach will also permit the department to better identify and track the training requirements, integrated into the assignment process. The competency database is now making its way through the Signet build/certification process and is hoped to be in production sometime in 2018. Once in production, the competency profiles for employees and positions will take a few years to become fully effective in support of the risk mitigation strategy.||September 2018|
Appendix D: Acronyms
- Assistant Deputy Minister
- Canada-based staff
- Chief Financial Officer
- Committee on Mission Management
- Common Services
- Common Service Delivery Point
- Deputy Head of Mission
- Deputy Management and Consular Officer
- Financial Status Reports
- Financial Management Officer
- Foreign Service Information Technology Professional
- Head of Mission
- Locally engaged staff
- Management and Consular Officer
- Physical Resources Information Mission-Environment
- Regional Contract Review Board
- Radio Frequency Identification Device
- Regional Service Center
- Staff Quarter
- Date Modified: