Audit of Management Practices of Missions – Guatemala City

Final report

Global Affairs Canada
Office of the Chief Audit Executive

Tabling Date
June 2019

Acronyms and symbols

ADM

Assistant Deputy Minister

CBS

Canada-based Staff

CSDP

Common Service Delivery Point

FINSTAT

Financial Status report

HOM

Head of Mission

LES

Locally Engaged Staff

MCO

Management and Consular Officer

MRO

Mission Request-On-Line

NGM

Americas Branch

PRIME

Physical Resources Information - Mission Environment

SQ

Staff Quarter

Executive summary

In accordance with Global Affairs Canada‘s approved 2018-2019 Risk-based Audit Plan, the Office of the Chief Audit Executive conducted the Audit of Management Practices of Missions – Guatemala City. The objective of this audit was to provide assurance that sound management practices and effective controls were in place to ensure good stewardship of resources at the Guatemala City Mission (the Mission) to support the achievement of Global Affairs Canada objectives.

Why it is important

Global Affairs Canada (the Department) manages Canada’s diplomatic and consular relations, promotes international trade and leads Canada’s international development and humanitarian assistance programs. It also manages Canada’s International Platform Branch — a global network of 178 missions in 110 countries that supports the international work of Global Affairs Canada and 37 partner departments, agencies and co-locators. According to the 2017-18 Global Affairs Canada Departmental Results Report, $969M was spent to operate and support the missions by providing a variety of services. Therefore, proper controls and strong management practices are critical to ensure sound stewardship of resources.

What was examined

This audit examined the Mission’s management practices related to the Management and Consular Services Program and other programs of the Mission, with regard to planning and budgeting, oversight and monitoring, local procurement, asset management and human resources, between April 2015 and September 2018.

What was found

The audit team found that certain management controls and practices were in place to support sound stewardship of resources at the Guatemala City Mission with improvements required in specific areas related to fleet monitoring, procurement processes, management of contracts and petty cash, and oversight of consular revenues.

The audit found that the Mission exercised oversight of its operations through certain mandatory committees. However, they did not have any Terms of Reference. Although staff indicated clarity about their roles and responsibilities, they were uncertain about the appropriate communication channel between the Mission and the Common Service Delivery Point located in Mexico City.

Good practices were noted in the area of property management relating to planning and regular maintenance activities. The audit found that useful information about the Mission’s fleet was gathered but it was not used to perform any specific analysis to inform planning and detect issues. Instances were found of procurement transactions that did not comply with regulations including support for the initiation of purchases and the confirmation of receipt of goods and services. In addition, a lack of oversight of the management of security-related contracts was noted. 

The Mission had controls in place with regards to inventory management. However, greater rigour over the management of petty cash is required. In addition, the audit team found a lack of CBS oversight in the day-to-day consular revenue management process. Given that the majority of consular revenues were collected in cash and the banking restrictions applicable to the Consulate of Canada in Belize, it was found that close monitoring and oversight from the Mission is needed. 

The audit found staffing processes in compliance with regulations, regular performance evaluations of locally engaged staff, and monthly leave and overtime reports provided to program managers. 

Recommendations

1. The Head of Mission should review the span of responsibilities of the Personnel and Office Manager. 
2. The Head of Mission should take measures to strengthen oversight, controls and monitoring with respect to:
   • procurement and contracting processes;
   • petty cash and standing operating advance accounts;
   • consular revenue management process, in the Mission and the Consulate of Canada in Belize, and consider options to reduce or eliminate cash collections to mitigate risks associated with cash handling; and
   • fleet management.
3. The Head of Mission, in collaboration with the Assistant Deputy Minister, Corporate Planning, Finance and Information Technology (Chief Financial Officer), should optimize the operations of the Consulate of Canada in Belize to suit local banking conditions.

Statement of Conformance

In my professional judgment as the 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.

1. Background

Global Affairs Canada (the Department) manages Canada’s diplomatic and consular relations, promotes international trade and leads Canada’s international development and humanitarian assistance programs. It also manages Canada’s International Platform Branch — a global network of 178 missions in 110 countries that supports the international work of Global Affairs Canada and 37 partner departments, agencies and co-locators^{Footnote 1} . According to the 2017-18 Global Affairs Canada Departmental Results Report, $969M was spent to operate and support the missions. Therefore, administrative activities that support the Department’s missions require effective and efficient management practices to help ensure sound stewardship of resources.

The departmental 2018-19 Risk-based Audit Plan included a series of management practices audits of select missions. The selection of these missions was determined using a risk assessment to identify missions susceptible to higher levels of fraud risk, and one mission from a low-risk environment for comparison purposes. The Embassy of Canada in Guatemala City (the Mission) was one of the selected missions. These audits are intended to provide senior management with assurance with regard to the state of management practices in supporting prudent management and good stewardship of resources in select missions. 

The Embassy of Canada to Guatemala

The Embassy of Canada in Guatemala City is a medium-sized mission with 35 staff of which eight are Canada-based staff (CBS) and 27 are locally engaged staff (LES). The Mission’s area of accreditation includes Guatemala and Belize with a Consulate of Canada (Consulate) in Belize City. The Mission has a hardship level IV and comprises the following programs: Common Services and Consular; Development; Foreign Policy and Diplomacy Service; Security; and Trade. There are no employees from any partner departments or any co-locators.

Guatemala has the largest economy and population in Central America and is Canada’s most important trading partner in the region. As the national capital and largest city in the country, Guatemala City is the economic, political, and cultural epicenter of the country. However, the Mission operates in a difficult environment that is characterized by frequent civil unrest, violent crime, the risk of corruption by government officials, and abject poverty and income inequality.

Belize is the smallest economy in Central America, is a member of the Commonwealth, and maintains a good relationship with Canada. Belize’s economy is based on tourism, agriculture and fishing but is particularly vulnerable to natural disasters.

Common Services Program

The Common Services Program in the Mission provides administrative and operational support to the Mission’s programs and is responsible for financial transactions and human resources activities. Accountability and responsibility are held by the Head of Mission (HOM). The Mission receives financial and contracting support from the Common Service Delivery Point (CSDP) in Mexico City, which provides services to other missions in the region.

The Common Services Program is managed by a Management Consular Officer (MCO) at the FS-03 level. Table 1 shows the Mission’s Common Services Program expenditures from 2015-16 to 2017-18.  Expenditures have remained relatively stable except for LES salaries that have reduced due to the closure of the Immigration, Refugees and Citizenship Canada Program in 2017.

Table 1: Common Services and Property and Materiel Expenditures from 2015-16 to 2017-18

Source: Financial Administration System, Expenditures Report as of August 14, 2018

Under the direction of the MCO, the human resources, property, materiel, reception and transportation sections are managed by an LE-08 Personnel and Office Manager. The LE-08 is supported by an LE-07 Properties and Materiel Manager, an LE-05 Administrative Assistant and an LE-04 Customs Transaction Agent. Details of the Mission’s inventory of property and vehicles are shown in Table 2 below.

Table 2: Real Property and Vehicle Fleet Inventory

Source: Real Property: PRIME database; Vehicles: 2019 Mission Inventory

Consular Program

The Mission’s Consular Program provides consular services and assistance to Canadians, including passport, citizenship and notarial services. The Consular Program is managed by the MCO who is supported by an LE-07 Consular Officer, an LE-06 Passport Examiner/Consular Assistant and an LE-05 Consular Assistant. The Mission is also responsible for the Honorary Consul in Belize who represents Canada and provides consular services to Canadians. As part of the Consular Program, the Mission is responsible for the appropriate management of consular revenues both in Guatemala City and Belize City.  

2. Observations and recommendations

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.

2.1 Accountability and Oversight

It was expected that Mission management would have clear accountabilities and exercise effective oversight of Mission activities and expenditures to ensure proper stewardship of Mission resources. The audit examined roles and responsibilities of key Mission staff as well as key oversight functions of the Mission management team. The audit team found that Mission accountabilities were generally clearly articulated and communicated, and that management exercised appropriate oversight. 

Accountability

Accountability in the Mission rests with the HOM who reports to the Assistant Deputy Minister of the Americas Branch (NGM) at headquarters. The former HOM left the position in January 2018 after which different CBS played the role of Chargés d’Affaires. At the time of the audit, the MCO and the HOM had recently arrived in August and October 2018 respectively. The audit team noted that the accountabilities for the MCO and key LES were documented through performance management agreements.

Interviews conducted with Mission staff indicated that accountabilities, roles and responsibilities were generally clear and understood. However, certain Mission staff indicated a lack of clarity of the roles between the Mission and the CSDP. More specifically, program staff was sending inquiries directly to the CSDP rather than through the Mission Common Services Officer for coordination purposes. As a result, similar inquiries to the CSDP could result in a duplication of effort and inefficiencies.

Roles and responsibilities were further supported by policies and guidelines that were readily available and referred to by staff on the departmental intranet and the Mission’s shared drive. Also, staff indicated that they were made aware of procedural/policy updates through various means such as emails from program managers, departmental broadcast messages, Committee on Mission Management minutes, and conference calls with headquarters and the CSDP.  

A Deputy MCO position that was responsible for consular and property sections was eliminated in 2017. Consequently, the property section was added to the LE-08 Personnel and Office Manager’s responsibility in addition to fleet, human resources, reception and general administration sections resulting in the direct and indirect supervision of eight employees. The audit team observed that filing and archiving of human resources files were not up-to-date. Further, the audit team was informed that the Personnel and Office Manager met frequently with the Property Manager to discuss property-related matters while the Properties and Materiel Assistant mostly did paperwork and considered himself to be underutilized. The experience of the Properties and Materiel Assistant could be drawn upon in property planning activities while alleviating some time from the Personnel and Office Manager. A review of the Personnel and Office Manager’s span of responsibilities would be beneficial to allow the fulfillment of all the duties.  

LES play integral roles in supporting Mission management through their subject matter, cultural and linguistic knowledge. Based on a sample of personnel files and interviews with staff, the audit team observed that the Mission generally had high calibre staff with the required education and experience to fulfill their roles.

Oversight

Oversight of Mission management was exercised through three key committees. The Committee on Mission Management and the Operations Committee were conducted together due to the small contingent of CBS. This dual committee met regularly to discuss a range of issues, including planning, asset management and human resources. The Mission proactively shared minutes with staff who indicated their awareness of Mission events, policy modifications and other important matters through this beneficial practice.

The Housing Committee met on an as-needed basis and minutes were taken. It was noted that  results of discussions were documented and shared with the HOM. For both committees, the audit team found that there were no Terms of Reference which would allow members to be mutually clear about the committee mandate and their roles and responsibilities.    

The accountabilities of the Regional Contract Review Board (Board) were found to be well-defined in the standardized Terms of Reference. In addition, a Service Level Agreement between the Mission and the CSDP in Mexico further outlined their respective roles and responsibilities. The Board had a roster of 12 members from multiple missions in the region. It was noted that contracting activities presented to the Board required the approval of up to three Board members, depending on the type and threshold of the activity.

In addition to the formal committees described above, oversight was also exercised through regular meetings initiated by the MCO with all of the functional areas. Normally, regular bi-lateral meetings between the HOM and the Mission’s program managers would be expected, but due to the absence of a HOM from January to October 2018, they took place with the Chargés d’Affaires.

Recommendation #1

The Head of Mission should review the span of responsibilities of the Personnel and Office Manager.

2.2 Planning and budgeting

The audit team expected that planning and budgeting would be based on needs and there would be a rationale for planned activities and forecasted expenditures. The Mission uses Strategia, the corporate integrated planning and reporting tool, for its integrated annual planning exercise, as well as FINSTAT (Financial Status Report) to assist them in forecasting the budget. The audit team was informed that program managers reviewed their respective FINSTATs and raised any issues to the MCO prior to the HOM’s approval. Similarly, the Common Services staff conducted a review for any significant variances between planned and actual expenditures. Further, it was noted that details supporting the 2018-19 Common Service budget were not available to the incoming MCO. The MCO indicated the intention to prepare detailed schedules to support budget figures in Strategia for 2019-20.

The mission developed a preventive maintenance plan that outlined the type and frequency of activities to take place at each property. In addition, the MCO met property staff every two weeks to discuss on-going activities that took into consideration property-related requests submitted by staff through the MRO (Mission Request On-line) system. 

2.3 Monitoring

It was expected that monitoring activities would be performed to provide information for decision making and ensure Mission compliance with policies and procedural requirements. The audit team found that certain monitoring mechanisms regarding budget and property maintenance were in place while mechanisms related to fleet management required improvement to better inform Mission management.   

The Mission used the corporate FINSTAT to monitor its financial situation and ensured budgets were appropriately managed on an on-going basis. Every month, the Common Services section provided burn rate and LES overtime reports to program managers and followed up on unspent funds.

The Mission used the MRO system for property, transportation, information technology and general office-related requests. This system allowed the Mission to formally manage work load and monitor the status and timeliness of requests to meet staff’s needs.

The audit team noted a good practice related to preventive maintenance activities in the Official Residence and the Chancery such as regular maintenance checks of the air conditioning unit and generator, cleaning of water systems, and bi-annual fumigation. This practice also extended to SQs, which were inspected twice a year by the property team using an in-house developed checklist.

The Mission used a departmental Vehicle Operating and Maintenance Report to record fuel and maintenance costs as well as mileage for each vehicle. A file containing repairs and maintenance invoices was kept for each vehicle but it required organization to monitor these costs appropriately. Further, a log was maintained for each vehicle to record the purpose of trips, destinations, passengers and mileage. Since May 2018, fuel consumption information had been recorded for each vehicle which could be used to identify any excessive consumption and monitor trends. The audit team found that although the Mission gathered various types of data related to its fleet, it was not used to perform any specific analysis to inform planning and detect issues. 

2.4 Local procurement

The audit team expected that the procurement for goods and services at the Mission would be in compliance with Treasury Board Contracting Policy and would achieve the best value for money. The audit team examined the processes, mechanisms, and tools used by the Mission for procuring goods and services from initiation to payment.

Procurement and Contract Management

The audit team reviewed a sample of 46 procurement transactions from April 2015 to September 2018.  Although the audit team found that generally the Mission complied with procurement regulations, greater knowledge by staff about contracting processes is required. The audit team found the following instances of inappropriate procurement methods and procurement administration issues:

• Contracts were signed after the date of the first invoice e.g. contract for extension of security services, contract for security monitoring services, contract to purchase goods;
• The office manager of the Consulate in Belize was working for about four months with no contract in place;
• Security Requirement Checklists were not always completed for service contracts;
• Purchase orders were not prepared for five out of 28 transactions over $2,000;
• The purchase of two motorcycles were made in two separate transactions in order to bypass the acquisition card individual transaction threshold of $5,000; and
• A payment was made to a company that was different from that indicated on the invoice.

The audit team found no evidence of pre-approval for 12 out of 46 sampled transactions prior to the procurement of goods and services e.g. training, vehicle maintenance, vehicle parts and appliances. Also, although Section 34 of the Financial Administration Act was signed by the appropriate authority, formal confirmation of goods received or services appropriately rendered was not obtained. The MCO indicated that the processes have since been modified to ensure that pre-approval was performed and documented by a CBS prior to procurement. In addition, the MCO has directed LES to sign invoices to signify that goods were received or services performed prior to review.

Security-related services are provided by two vendors. Based on a review of related contracts and meetings with the vendors, the audit team found a lack of due diligence in the management of security contracts which is demonstrated by the following:

• The security monitoring services contract had no statement of work detailing the services to be provided;
• For the contract for a security monitoring alarm at the Chancery, services provided as per invoices did not match the related statement of work;
• Under the security services contract, the Mission was billed for services that were not included in the statement of work and descriptions on invoices did not comply with the terms of payment;
• Similar monitoring services were invoiced by both vendors;
• Access (i.e. username and password) to security monitoring information was shared among Mission and vendors’ employees; and
• Payments from August 2017 to March 2018 amounting to $464 for monitoring services in addition to those covered in contracts, were made through petty cash.

Value-added Tax

According to local legislation, value-added tax recovery entails an exemption process rather than a claim reimbursement process. The audit team reviewed this process through the examination of a sample of transactions and found it to be effective. Although the Mission indicated that the related paperwork was cumbersome due to the volume of transactions, approximately $450,000 in taxes was exempted in 2017-18 indicating efforts to be worthwhile.

2.5 Asset management

The audit team expected to find adequate controls in place to ensure effective management of Mission assets. In order to assess the state of these controls, the audit examined the management of the following assets: property, vehicles, inventory, petty cash and consular revenues. The audit found that although certain controls were in place, improvements were required to strengthen the overall management of assets.

Property Management

Missions are responsible for ensuring that all Mission property is properly maintained. The Mission has Crown-owned and leased properties for which maintenance activities were identified in the Mission Maintenance Workplan and in the Mission Property Management Plan for regular maintenance of Crown-owned properties. Alternatively, leased SQs were mostly maintained by the landlord except for specialized work such as security upgrades.

Fleet Management

It was expected that the Mission would manage its fleet in accordance with the Department’s Mission Fleet Management Guidelines and have a Mission transportation policy outlining proper conduct and management of the Mission fleet. The audit team found that certain aspects of the management of the Mission’s fleet of eight vehicles require improvement. As mentioned in section 2.3 of the report, although the Mission gathered information regarding the fleet, it was not being used to monitor and make informed decisions.

The Mission purchased two motorcycles in March 2018, following the results of an emergency response exercise, in order to navigate more easily than a vehicle during a crisis. One was kept at the Mission while the other was kept at the Official Residence to facilitate movement during an emergency. Although the Mission indicated that they had not been driven yet, a maintenance regime is required to ensure continued operability.

The Mission had a comprehensive transportation policy outlining the terms and conditions of the use of its fleet which was aligned to its movement protocol. All transportation requests were made through the MRO system that allowed the fleet coordinator to meet mission needs by the pooling of two drivers and minimize overtime.

Inventory Control and Disposal

It was expected that upon purchase of an asset, it would be recorded, safeguarded, tracked through its life cycle, and disposed in accordance with policies and procedures. The corporate inventory tracking system was not in use at the Mission. However, inventories of various items were manually recorded in spreadsheets. The audit team noted that each program kept inventory lists of program-related items separate from the general Mission ones. Also, there was a list of some office furniture and equipment in the Chancery but it was not complete to facilitate tracking.

The audit team visited three SQs for which occupancy agreements including inventory lists were signed by the tenants. The audit team selected a sample of furniture and appliances and found them to be appropriately identified. In addition, the Mission maintained SQ inventory lists that captured sufficient detail to adequately manage the life cycle of assets.

The audit team observed two storage rooms in the Chancery, which held tools and surplus furniture, and found access to be restricted to Property staff and adequately safeguarded. Based on a review of a sample of tools and fine art, all assets were identified. However, a sample of IT assets, wine, and items in storage were not accounted for due to lists not being up-to-date. The need for a formal corporate inventory system was raised to headquarters in a previous Mission audit and will be addressed in 2019.

The audit team examined the disposal of assets including surplus materials, one soft Mission vehicle as well as the destruction of an armoured vehicle. It was found that the process was performed in accordance with departmental policies and procedures.

Emergency Cash Parcel and Petty Cash

It was expected that the Mission’s Emergency Cash Parcel and petty cash would be managed according to departmental policy and procedures. The Mission had [REDACTED] emergency cash parcels, one of which was reconciled by the audit team. However, [REDACTED] was not easily accessible to the audit team due to the absence of the custodian at the time. It was eventually accessed and reconciled by the Mission two weeks after the audit team’s return to headquarters. As emergency cash parcels are to be used in the event of a crisis, it is critical that the Mission ensure its accessibility at all times.   

The Mission had [REDACTED] petty cash accounts ranging from [REDACTED] and an operating standing advance in the amount of [REDACTED]. Another operating standing advance was held by the Honorary Consul in Belize which is discussed in the Consular Revenue section below. The audit team found that [REDACTED] floats (in local currency and U.S. dollars) for the Mission’s cash register were erroneously listed as petty cash accounts as per headquarters’ records. Upon review of all of the accounts, the audit team found that all monies were appropriately safeguarded and accounted for. According to departmental procedures, obtaining Section 34 (of the Financial Administration Act) approval for individual cash expenditures was no longer required. Instead, it was required only at the time of replenishment upon a CBS’ review of an Input Form which lists all of the expenditures and related details. The audit team found that although receipts were retained, they were not kept in an organized manner and expenditures had not been continuously recorded in an Input Form to facilitate periodic reconciliations, tracking and monthly replenishments. 

The audit team was informed by the MCO that the operations of petty cash and standing advance accounts have not yet been reviewed since the MCO’s arrival in August 2018. Hence, no periodic reconciliations had taken place and replenishments were found to have taken place after a few months rather than monthly as required by departmental procedures.

Consular Revenues

It was expected that consular fees would be accounted for, reconciled, safeguarded and deposited according to departmental procedures. The Guatemala City Mission and the Consulate of Canada in Belize City collected fees for passport, citizenship, notarial and consular services. Due to the higher number of Canadian residents and tourists in Belize, the volume and dollar value of activity was much higher e.g. deposits in August 2018 of $14,700 in Belize City compared to $2,400 in Guatemala City.

Based on a review of August 2018 passport revenues, the audit team calculated cash collections to be 68 percent and 90 percent of revenues in Guatemala City and Belize City respectively. There is an opportunity for the Guatemala City Mission to encourage other forms of payments to minimize risks related to cash handling. However, the audit team was informed that a large community of Canadians in Belize refrains from using electronic mechanisms. Therefore, alternative means of payment would be difficult to completely eliminate cash handling.

Overall, the audit team found the consular management process to be carried out well by the Mission’s consular staff who indicated that they were generally clear about their roles. It was found that the consular staff collected and safeguarded cash appropriately. In addition, the consular staff reconciled and summarized revenues in a report prior to transfer to the Common Services staff who arranged for immediate deposits to be done. Although the MCO reviewed the summary reports of consular revenue prior to submission to the CSDP, the audit team noted a lack of CBS monitoring and oversight in the daily revenue collection and reconciliation process.  

The audit team reconciled the passport revenues collected in Guatemala City and Belize City to that recorded in the departmental system, Cosmos, and traced them to deposits in the related bank accounts.  It was found that passport revenues were recorded in Cosmos accurately and deposited in a timely manner.

Since the MCO’s arrival at the Mission in August 2018, a visit had not been made to the Consulate at the time of the audit. Given the high volume of activity and the significant amount of consular fees that was collected in cash, it is important that the MCO make occasional visits to the Consulate to verify processes in order to mitigate the risks associated with revenue collection and cash handling.

Consulate of Canada to Belize

The Consulate of Canada in Belize City was operated by an Honorary Consul with the support of two assistants. The Consulate’s main services related to passports, consular, notarial and citizenship services. The Honorary Consul was occasionally called upon to represent Canada at events. The roles, responsibilities and accountabilities of the Honorary Consul are usually governed by a mandate letter which was not in place.   

Under the responsibility of the Mission, the Honorary Consul was the custodian of an operating standing advance [REDACTED], which was used for operating expenses of the Consulate. The audit team reviewed a sample of requests to replenish the advance and found claims for eligible expenditures as set out in departmental procedures for Honorary Consuls.  

The audit team was informed that there was a restriction in the flow of U.S. currency in and out of Belize resulting in sporadic remittances of revenue. As such, the Consulate is required to obtain authority to purchase a bank draft in U.S. currency in order to remit revenues to the Mission. Upon receipt of the bank draft, the Mission enters revenue information into the Financial Administration System. Due to the sporadic remittances, there was a gap of several months between the collection and recording of revenues. Since revenues could not be remitted to the Mission in a timely manner, the balance in the Consulate’s bank account accumulated to levels frequently exceeding the standing operating advance amount. Consequently, the Consulate used the excess balance of funds to cover operating expenses, which is not permitted according to departmental regulations. Therefore, this resulted in irregular requests to replenish funds rather than every month. In addition, the Mission and the Consulate had to continually purchase U.S. drafts to send funds back and forth resulting in significant bank charges per transaction.

Furthermore, according to departmental procedures, an Honorary Consul is required to operate a separate personal bank account for transactions related to their consular responsibilities without bearing any name that implies the official status. However, it was found that the official name of the bank account was “Honorary Consul of Canada to Belize,” which is not in compliance. Given all of the issues relating to operations described above, there is a need to optimize the Consulate’s activities while taking into consideration the banking conditions in Belize as well as compliance to departmental policies.  

Recommendation #2

The Head of Mission should take measures to strengthen oversight, controls and monitoring with respect to:

• procurement and contracting processes;
• petty cash and standing operating advance accounts;
• consular revenue management process, in the Mission and the Consulate of Canada in Belize, and consider options to reduce or eliminate cash collected to mitigate risks associated with cash handling; and
• fleet management.

Recommendation #3

The Head of Mission, in collaboration with the Assistant Deputy Minister, Corporate Planning, Finance and Information Technology (Chief Financial Officer), should optimize the operations of the Consulate of Canada in Belize to suit local banking conditions.

2.6 Human resources and LES staffing

The audit team expected that Mission human resource activities be managed effectively to ensure operational needs are met, and that transactions are appropriate and compliant with policies and procedures.

As required by headquarters, the Mission documented human resource activities for 2017-18 and 2018-19 directly in Strategia, rather than preparing separate human resource plans. This was found to be a reasonable practice given the minimal volume of staffing activities. Based on an examination of a sample of four human resource files, the staffing actions were found to be in compliance with relevant policies and procedures and the files contained key documentation. 

A sample of five personnel files were reviewed to ensure retention of required documentation. It was noted that not all job descriptions were up-to-date and the 2017-18 year-end performance agreements had been completed yet not all filed. Based on the audit team’s overall observation of human resource files, it was found that old files required archiving/destruction and current files required up-to-date documentation and general organization. 

Overall, the audit team found overtime to be well managed. Overtime represented 3.7 percent of total LES salaries in 2017-18 and the most overtime was performed by drivers. Pre-approval for drivers was not formally sought but was supported by requests for transportation through the MRO system. Similarly, any overtime required by consular staff as a result of emerging consular cases was known by the MCO due to the MCO involvement in cases. The program managers indicated that they reviewed monthly LES leave and overtime reports provided by the Common Services Program to manage according to their operational needs and the 5 percent overtime threshold as directed by headquarters.

3. Conclusion

The audit team found that certain management controls and practices were in place to support sound stewardship of resources at the Guatemala City Mission with improvements required in specific areas related to fleet monitoring, procurement processes, management of contracts and petty cash, and oversight of consular revenues.

The audit team verbally debriefed the HOM and MCO on the major audit findings after completion of on-site work.

Appendix A: About the audit

Objective

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 Guatemala City Mission to support the achievement of Global Affairs Canada objectives.

Scope

The scope of the audit included those management practices and controls in place to support the Guatemala City Mission including Consulate of Canada to Belize. Specifically, the audit examined processes related to the management of consular revenues, procurement and asset management (including cash, materials, vehicles, equipment, 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 of September 2018 was reviewed. In addition, Common Services Program expenditures and data for property and fleet were examined. A sample of files and transactions were tested from activities that took place from April 2015 to September 2018, as shown in Table 3.

Table 3: Sample Description

Criteria

The criteria were developed following the completion of the detailed risk assessment and considered the Audit Criteria related to the Management Accountability Framework developed by the office of Comptroller General of the Treasury Board Secretariat. The audit criteria were discussed and agreed upon with the auditees. The detailed criteria are presented as follows:

Approach and Methodology

In order to conclude on the above criteria, and based on identified and assessed key risks and internal controls associated with the related business processes, the audit methodology included, but was not limited to the following:

• On-site audit procedures performed at the Mission from October 22 to November 2, 2018
• Documentation review (budgets, business plans in Strategia, property management plans etc.)
• Walkthrough of key common services, property and materiel, and consular processes
• Data analytics of Management and Consular Services Program expenditures
• File testing (Mission contracts and expenditures, payroll, overtime costs and staffing actions)
• Interviews (Head of Mission, CBS management and key LES staff, and relevant employees at headquarters and Common Service Delivery Point)
• Inventory testing
• Petty cash counts
• On-site examination of storage facilities and a sample of staff quarters
• Comparisons with like-minded Missions
• Visits to a sample of local vendors
• Visit to Mission bank

Appendix B: Management Action Plan