Audit of Management Practices of Missions - Pretoria

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

CSO

Common Services Officer

CSDP

Common Service Delivery Point

CMM

Committee on Mission Management

DMCO

Deputy Management and Consular Officer

FAA

Financial Administration Act

FAS

Finance and Administration System

FINSTAT

Financial Status report

HOM

Head of Mission

HQ

Headquarters

HR

Human Resources

IT

Information Technology

LES

Locally Engaged Staff

PO

Purchase Orders

MCO

Management and Consular Officer

MOPS

Mission Online Payment Services

MRO

Mission Request Online

OR

Official Residence

PRIME

Physical Resources Information - Mission Environment

RCRB

Regional Contract Review Board

SAP

Systems Applications and Products

SMFF

International Financial Operations Division

SQ

Staff Quarter

VAT

Value Added Tax

Executive summary

In accordance with Global Affairs Canada‘s approved 2018-19 Risk-Based Audit Plan, the Office of the Chief Audit Executive conducted the Audit of Management Practices of Missions – Pretoria. 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 Pretoria 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 2017-2018 Global Affairs Canada Departmental Results Report, the Department spent $969 million to operate and support the network of 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 March 2018.

What was found

The audit concluded that some management practices and effective controls were in place for planning and budgeting to ensure good stewardship of resources at Pretoria.  However, the audit found weaknesses in the management of some aspects of local procurement, contracting, financial administration, property management, fleet management, consular revenues, the recovery of VAT and human resources as some key controls were not in place or not being followed.

Recommendations

1. The Head of Mission should ensure that:
   • Roles and responsibilities regarding fleet management are clear to enhance accountability; and
   • The Mission Housing Committee receives sufficient information to take informed decisions.
2. The Head of Mission should take measures to strengthen controls over local procurement to ensure compliance with government policies, regulations and the Financial Administration Act.
3. The Head of Mission should strengthen controls and monitoring over asset management to ensure that:
   • The usage of its official fleet and fuel consumption is monitored;
   • The inventory is properly managed;
   • The disposal of assets is conducted to achieve best value;
   • Consular revenues practices comply with applicable departmental policies and procedures; and
   • Corrective actions are taken when non-compliance is detected.
4. The Head of Mission should ensure that the VAT is recovered as soon as possible in accordance with departmental procedures to avoid another.
5. The Head of Mission should ensure that the Mission complies with departmental guidelines on LES staffing.

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 — 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 2017-2018 Global Affairs Canada Departmental Results Report, the Department spent $969 million to operate and support the Missions. 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. One Mission from a low-risk environment was also identified for comparison purposes. The High Commission of Canada to South Africa in Pretoria 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 High Commission of Canada to South Africa - Pretoria

The High Commission of Canada to South Africa (the Mission) in Pretoria is a medium-sized mission comprising 67 staff: 21 Canada-based staff (CBS) and 46 locally engaged staff (LES). The Mission includes the following programs: Common Services and Consular; Foreign Policy and Diplomacy Service (FPDS); Trade; Development; and Security & Emergency Management. The Mission’s partner departments include Immigration, Refugees and Citizenship Canada, the Department of National Defence, Canada Border Services Agency, the Royal Canadian Mounted Police and Export Development Canada.

As one of the continent’s most diversified and largest economies, South Africa is a prime destination for Canadian goods and services in Africa. Canada is also a significant investor in South Africa. Canada maintains a High Commission in Pretoria that is concurrently accredited for Lesotho, Madagascar, Mauritius and Namibia. Canada also maintains a trade office in Johannesburg. Canada and South Africa are both members of a number of multilateral organizations, including the Commonwealth and the G20, and collaborate on important issues such as women’s empowerment, the environment and climate action and regional security. Canada and South Africa hold strategic bilateral consultations, which cover issues as diverse as foreign policy, trade and investment, innovation, science and technology, the environment, development cooperation and climate change, education and culture. Key management challenges in Pretoria are the security of mission employees due to the very high level of crime and the recruitment and retention of qualified local employees reflective of South Africa's diversity, both results of the country's struggle to transition socio-economically following the end of Apartheid. The Mission is designated as a hardship level 3 Mission.

Common Services Program

The Common Services Program in the Mission provides administrative and operational support to the Mission’s programs and partner departments and is responsible for financial transactions, local procurement and human resources activities. The Head of Mission (HOM) is accountable and responsible for the Common Services Program. Until August 2016, Pretoria was also functioning as a Common Services Delivery Point (CSDP) providing financial support to the missions in Pretoria, Abuja, Lagos, Accra, Addis Ababa, Dar-es-Salaam, Harare, Johannesburg, Khartoum, Lusaka and Maputo. Afterwards, Pretoria ceased to be a CSDP host Mission and clients were transferred to the CSDP in Berlin or Brussels.

The Common Services Program is managed by a Management Consular Officer (MCO) at the FS-03 level. The MCO is supported by a Deputy MCO (DMCO) at the FS-02 level. The MCO is responsible for 15 LES in the areas of human resources, finance, IT, consular services, and property and material management. Table 1 shows the Mission’s Common Services Program expenditures from 2014-15 to 2017-18. 

Table 1: Common Services and Property and Materiel Expenditures from 2014-15 to 2017-18

Source: FAS Expenditures Report as February 2019.

Under the direction of the MCO, the property, materiel and transportation section is organized and managed by the DMCO. He is supported by a LE-07 Property & Material Manager and by a LE-05 Property & Material Assistant. This section is responsible for the oversight and maintenance of the Chancery, the Official Residence (OR) and the Staff quarters (SQs). It is also responsible for inventory and a fleet of vehicles. In addition, the Administrative Assistant to the MCO is responsible for the transportation section, supervising three (3) drivers. Details on 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: 2018-19 PRIME database; Vehicles: 2018 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 DMCO, who is supported by an LE-08 Consular Officer, an LE-06 Consular/Passport Officer and an LE-5 Consular Assistant (vacant at time of audit). As part of this service, the Mission is responsible for collecting, safeguarding, recording and depositing consular fees in a timely manner.

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.

2.1 Accountability and Oversight

It was expected that Mission and Headquarters (HQ) management would exercise effective oversight of Mission activities and expenditures to ensure proper stewardship of resources. The audit team examined accountabilities, roles and responsibilities of key Mission staff from the Common Services, Trade and FPDS sections.

Accountabilities, Roles and Responsibilities

Accountability in the Mission rests with the HOM who reports to the Assistant Deputy Minister (ADM) of the Sub-Saharan Africa Branch (WGM) at HQ. At the time of the audit, the HOM had been posted to the Mission for approximately three (3) years while the MCO had been posted for two (2) months. The audit team found that accountabilities, roles and responsibilities were included in the performance management agreements of the HOM, MCO and Program Managers while being supported by policies and guidelines that are readily available on the Mission’s wiki page. During interviews with Mission staff, they also confirmed that accountabilities, roles and responsibilities were clear and understood and that they knew where to find additional guidance.

The audit team noted that the LES staff have the required education and experience to fulfill their duties. However, the audit team observed some overlap in responsibilities between the property assistant and the fleet dispatcher. These roles supported two different sections of the Mission (property and administration) and this overlap in responsibilities resulted in operational ineffectiveness:

• The property section does not monitor the diesel consumption of the generators.  The property section is responsible for the maintenance of the generators at the OR and the SQs, which operate on diesel fuel. When the property section purchases diesel fuel, it provides the receipts to the fleet dispatcher in the finance section without providing her with instructions on how to process them.
• The fleet dispatcher does not have all the information required about the vehicle used by the maintenance technician to monitor its usage. Currently, the property assistant, as opposed to the fleet dispatcher, is responsible for scheduling and dispatching the vehicle, which is used by the maintenance technician to travel to properties owned by the Mission for maintenance jobs. On the other hand, the fleet dispatcher is responsible for monitoring. The log book and the fuel receipts are provided to her. However, she does not have sufficient information to verify if the vehicle was traveling where it was supposed to be.

Mission Committees

Oversight of Mission management is exercised through three key committees acting as decision-making bodies: the Committee on Mission Management (CMM), which oversees the Mission’s overall management, and the Contract Review Board (CRB), which provides a challenge function and oversees contracting practices. In addition, the Mission has a Mission Housing Committee (MHC) to assist the HOM in the provision, allocation and administration of Crown-held property and materiel at the Mission.
The audit team found that the CMM, chaired by the HOM, met regularly, exercised appropriate oversight and discussed a wide range of topics on a regular basis, such as policies and guidelines, financial matters and performance management. However, there was limited discussion concerning asset management and procurement.

At the time of the audit, the Mission relied on a mission-level Contract Review Board (CRB). The Contracting and Procurement section of the CSDP in Berlin had recently begun providing services to the Mission but it did not begin performing as the regional CRB until November 2018.

The audit team found that the Mission CRB and the MHC were not functioning as expected. In 2018, there were no formal Mission CRB meetings.  Instead, Mission CRB members discussed issues through email exchanges based on incomplete information, which prevented them from making informed decisions.  In addition, the Mission CRB had outdated terms of reference (TOR). The Mission CRB had no records of discussions/decisions during the period in scope. There was an instance where the property section solicited Mission CRB’s concurrence for a contract that had already been pre-approved by the contract-issuing authority in London (ARNF), which effectively circumvented the Mission CRB’s role. It is expected that with the launching of the Regional CRB through CSDP Berlin, this area of practice would improve. The audit team also noted that MHC members were provided with a limited number of options for housing selection and incomplete information about these options. These practices resulted in members questioning the value and purpose of the Mission CRB and MHC.

Recommendation #1:

The Head of Mission should ensure that:

• Roles and responsibilities regarding fleet management are clear to enhance accountability; and 
• The Mission Housing Committee receives sufficient information to make informed decisions.

2.2 Planning and Budgeting

It was expected that planning and budgeting would be based on mission needs and that there would be a rationale for planned activities and forecasted expenditures.

The audit team examined Mission planning and budgeting activities and found that adequate practices were in place to ensure that proposed budgets were in line with forecasted expenditures and planned operational needs.

For its annual integrated financial planning exercise, the Mission uses Strategia, the corporate integrated planning and reporting tool, to outline planned activities for each expenditure area under the common

services and property budget envelopes. This tool is designed to ensure that the Mission’s financial planning and budgeting aligns with departmental planning commitments.

Programs are responsible for their own budgets and determining their needs for the upcoming year. The common services officer (CSO) gathers information from the programs and works with the MCO to review it. The common services section then prepares the required financial plans. The audit team found that the Mission’s financial plans were approved and that each expenditure area within the plans was supported by detailed budgets. Once the budget was finalized by HQ, the CSO, on behalf of the MCO, ensured that funds were allocated to their respective commitment item and entered into the financial system. The Mission also had a detailed maintenance work plan describing planned expenditures for the chancery, the OR and each of the SQs owned by the Crown.

2.3 Monitoring

It was expected that monitoring activities would be performed to provide general information on Mission compliance with Government of Canada and Department-specific policies and procedures.

The audit team found that the Mission monitored its budget, utilities expenditures, vehicle usage and overtime. However, the Mission did not monitor procurement.

The Mission uses the corporate Financial Status Report (FINSTAT) to monitor its financial situation and ensure budget resources are appropriately managed on an ongoing basis. On a monthly basis, the CSO informs the program managers of their budget burn rate and follows up with them on unspent amounts.

Procurement

The audit team found that the Mission did not conduct any trend analyses on procurement expenditures that could have informed the Mission CRB. For example, the Mission does not have information on the number of sole-source contracts, renewals or amendments to contracts. The absence of trend analyses limits the Mission management’s ability to carry out effective monitoring in support of decision-making.

Overtime

The audit team reviewed a sample of three (3) LES overtime transactions and found that the hours claimed appeared to be warranted and reasonable based on operational requirements. The audit team found that two of the transactions had been pre-approved verbally and not documented. Still, the audit team found that the MCO monitors overtime and excess amounts. In addition, the audit team was told that the mission is changing its practices to ensure that the overtime process is clearly documented. Also, the audit team noted that overtime usage, ceilings and budget are not discussed at the CMM.

2.4 Local Procurement

According to the Treasury Board Contracting Policy, the objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown

and the Canadian people. The audit team examined the mechanisms and tools in place to procure goods and services and expected the Mission to comply with the Treasury Board Contracting Policy. For this examination, the audit team selected and reviewed a sample of 43 procurement transactions and contracts based on a judgmental sampling strategy.

Procurement and Contract Management

The departmental Directive on Recording of Contracts in the Financial and Administrative System Material Management Module (FAS/MM) (the Directive) requires the Mission, as the contracting authority, to ensure that the contracting process satisfies legal and policy obligations and that the contract and financial information is recorded accurately in FAS. The Directive also requires the creation of a Purchase Order (PO) for every purchase over $2,000 CAD to allow the Mission to commit funds for the acquisition and ensure that funds are available. Overall, the audit team found that the Mission did not sufficiently document the contracting process put in place to procure goods and services.

Through the testing of the sampled 43 procurement transactions, the audit team identified instances where the Mission used an inappropriate procurement method. These instances included:

• Twenty-four (24) transactions over $2,000 where 11 transactions had no PO. For these transactions, the Mission did not use the appropriate procurement method to ensure that the transaction satisfied legal and policy obligations. For example, the Mission did not use a PO for a large transaction over $10,000 CAD to install a generator at the chancery. As a result, this transaction was not reviewed as it should be by the Mission CRB.
• Sixteen (16) transactions used a competitive contracting process and all of them were missing documentation to demonstrate that competing vendors were individually assessed against requirements. Ten (10) out of these sixteen (16) transactions either did not meet the Mission’s specifications as per original solicitation (2) or lacked proper documentation (8) to make an informed assessment.

Financial Administration Processes

The audit team found that the Mission does not regularly document the justification/need for a transaction under Section 32 of the FAA. Of the 43 transactions sampled, 32 transactions had no documentation on file demonstrating that it had been pre-approved by the authorized persons. The Mission indicated that all transactions were approved verbally, which resulted in the majority of the sampled transactions not having any documentation on file for Section 32 to demonstrate that there was a commitment against the budget.

The audit team also found that the Mission did not always appropriately exercise Section 34 of the FAA. Even though the payments were accurate, the Mission did not demonstrate due diligence to certify that the work was performed, the goods were supplied, or the services were rendered as per the contract or agreement terms.

Recommendation #2:

The Head of Mission should take measures to strengthen controls for local procurement to ensure compliance with government policies, regulations and the Financial Administration Act.

2.5 Asset Management

It was expected that adequate controls would be in place to ensure the effective management of assets. The audit team found that the Mission needs to pay greater attention to the management of property, fleet, inventory, consular revenues and the recovery of value-added taxes.

Property Management

Mission properties include Crown-owned and leased buildings, which are tracked in the Physical Resources Information – Mission Environment (PRIME) system. For regular maintenance on Crown-owned facilities, the Mission relies on an annual maintenance schedule while leased SQs are maintained by the landlord.  For corrective maintenance, the MRO system is used to request services, track requests and generate monthly reports. However, the Mission does not maintain a log or conduct any periodic reporting on repairs done for each SQ against their detailed maintenance work plan.  Without specific historical data on individual SQs, it is difficult for the Mission to properly plan for the life cycle management of the Crown-owned SQs.

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 Mission generates an official Vehicle Maintenance report on a monthly-basis, which provides general information (registration number, make, model, etc.) and vehicle usage information, such as local registration due date, current mileage, last service date, next service date and whether or not the vehicle has a service plan. However, the audit team noted that there are incomplete and inaccurate vehicle records related to logs, fuel purchases and mileage. Furthermore, some vehicles have no logs at all. Without specific historical data on individual vehicles, the Mission cannot analyze the reasonableness of the fleet size based on the Treasury Board fleet management directive.

The audit team also found weaknesses with respect to Mission fleet operations. Specifically, 

• The Mission did not collect the minimum information necessary to track fuel consumption;
• There were incomplete vehicle records for Fiscal Year 2017-18, such as logs, fuel purchase receipts and mileage. Furthermore, one vehicle had no log at all;
• Drivers have the same work schedule from 7:30am to 4:30pm, as stated in their Terms and Conditions. The Mission informed the audit team that they often need the drivers to be available outside standard work hours. With the current work schedule, the Mission automatically pays overtime outside work hours. A staggered schedule to cover work hours could minimize the use of overtime; and,
• The car keys were either kept by the drivers after working hours or left in the car at the end of the day.  Mission employees did not ensure that the cars were parked in the garage. If the driver takes the car outside the chancery, security guards do not stop them at the gate.

The Mission has put in place a centralized GPS tracking system which is capable of collecting vehicle usage information, such as mileage and vehicle location. However, the Mission did not perform any type of analysis using the readily available GPS tracking system. For example, the tracking system could be used to perform fuel consumption analysis or spot check of vehicle logs by comparing with the GPS tracking system records. During the audit field work, the audit team performed an analysis of the vehicle logs with what the information recorded by the Mission’s tracking system. The result of the work revealed that one vehicle log recorded on a specific day was obviously inaccurate. In fact, the vehicle was used in the afternoon, as indicated by the Mission’s tracking system, but the log was recorded for the morning.

Inventory Control and Disposal

It was expected that once an asset was purchased, it would be recorded, safeguarded, tracked through its life cycle and disposed of in accordance with policies and procedures. The audit team found that the Mission’s assets are not managed based on these principles.

The Mission prepares, maintains and updates inventories for materiel assets used in storage areas and living quarters. Although the Mission does not use the Radio Frequency Identification (RFID) corporate inventory tracking system, the Mission tracks its assets using spreadsheets. Due to the fact that the Mission performs inventory counts infrequently, these spreadsheets were not kept up-to-date. For instance, inventories were not physically verified when personnel moved between staff quarters. Moreover, the Mission’s property section and custodians did not sign and date the inventory checklist to indicate that verifications were completed after the arrival of the custodian at the Mission.

In 2015, the Mission stored surplus furniture from the OR at a local warehouse. The audit team did not find evidence to demonstrate that the mission obtained the required authority from HQ to remove furniture from the OR. In addition, the audit team found that the furniture at the OR was not traceable to the warehouse inventory lists. In 2017, the Mission moved all the items it had at the warehouse to the chancery, including the OR furniture that had been stored there in 2015. The Mission had no records if items originally at the OR had all been returned, or which item actually belonged to the OR. 

The audit team examined two of the Mission’s vehicle disposals and found that the Mission did not demonstrate their effort to obtain the best value since the vehicle was not disposed through an auction or call for tender. While one vehicle was sold to the highest bidder, the other one was sold directly to a dealer.  As a result, based on the available data for that particular vehicle, the Mission received less than the fair market value.

Petty Cash

The audit team expected that the Mission’s petty cash would be managed according to departmental policy and procedures. It was also expected that petty cash would be overseen by a CBS with signing authority, who would conduct random and regular reconciliations. The Mission has [REDACTED] petty cash accounts. [REDACTED]. The audit team reviewed the documentation for each petty cash account and noted that [REDACTED] were properly used but needed some improvements.

While LES are responsible for management of the petty cash, each petty cash holder was overseen by a CBS. However, the audit team found that the Mission did not perform regular reconciliations or surprise counts.

Mission management acknowledged that the petty cash counts had not been performed as frequently as they should.

Consular Revenues

The Mission, through the Consular Services section, collects fees for passport services, citizenship services and notarial services. Some of these fees, such as citizenship services, are collected on behalf of Immigration, Refugees and Citizenship Canada. As of September 1, 2018, the MCO put in place a policy to minimize the local cash handling where the Mission only accepts CAD for cash, bank drafts or cheques. Most of the transactions are now settled through credit card payments. The audit team expected that fees collected for consular services would be properly accounted for, reconciled, safeguarded and deposited as required. Overall, the audit team found weaknesses in the management of consular revenues related to daily revenue control, timely deposit and coding to proper accounts. 

Departmental procedures require that a Daily Summary Report and the consular fees collected during the day be submitted to the MCO or DMCO for review and signature/approval. The audit team found that the personnel responsible for consular revenues did not perform a count, reconcile the daily revenues received before transferring them to the Common Services section or approve the Daily Invoice System Report. Instead, the personnel responsible for consular revenues approved the transfers only after receiving the deposit slips from the Common Services section, which had already deposited the funds.

The departmental procedures also require consular fees to be transferred from the Consular section to the Common services section in a timely manner, either on a daily basis or when cash reaches [REDACTED] CAD. For Fiscal Year 2017-18, the Mission did not systematically make timely deposits as it took three weeks on average for consular revenues to be deposited from the time it was received. Furthermore, the audit team found coding errors (e.g., a notary service was coded as a passport service) affecting the accuracy of the consular revenue recorded by the Mission. These controls are important as they ensure consular revenues are reconciled, deposited and recorded correctly and in a timely manner.

Value Added Tax

It was expected that the Mission would be operating in accordance with departmental procedures for the reimbursement of the value-added tax (VAT) and recover the VAT for exempted goods and services purchased.

The Mission is recovering the VAT in accordance with South African legislation. However, the Mission had a backlog of unrecovered VAT for periods dating as far back as 2011, in part due to the deletion of Mission positions with the establishment of the CSDP. According to local legislation, the Mission has a five-year window to claim recoverable VAT. The Mission started the recovery process for the backlog in 2017. At the time of the audit, the Mission had recovered VAT up until 2016.  Due to missing required information for claiming the VAT and the expiration of the five-year period, $26,216 CAD was unrecoverable as of March 31, 2018 and had to be written off.  The Mission still had an outstanding balance of $315,494 CAD as of August 31, 2018.  The Mission continued to address the VAT backlog and as of February 14, 2019, the mission was able to reduce it to $57,995 CAD. In addition, after the new MCO joined the Mission in August 2018, the Mission developed a Policy and Procedures for VAT Recoverable and put in place procedures for VAT recovery.

Recommendations #3:

The Head of Mission should strengthen controls and monitoring over asset management to ensure that:

• The usage of its official fleet and fuel consumption is monitored;
• The inventory is properly managed;
• The disposal of assets is conducted to achieve best value;
• Consular revenues practices comply with applicable departmental policies and procedures; and
• Corrective actions are taken when non-compliance is detected.

Recommendation #4:

The Head of Mission should ensure that the VAT is recovered as soon as possible in accordance with departmental procedures.

2.6 Human Resources and LES Staffing

It was expected that the Mission’s HR activities would be managed effectively to ensure operational needs are met and that transactions are appropriate and compliant with policies and procedures. The audit team assessed whether HR staffing plans were in place and if they were addressing needs. LES staffing actions were also assessed to determine if they were appropriately approved, fair, open and transparent. The audit team found that the Mission’s HR practices were generally governed appropriately. However, there are opportunities to improve staffing activities. 

Human Resources Planning

The audit team reviewed the Mission’s HR Plans from 2015-16 to 2018-19 and found that, overall, the Mission seems to have a stable workforce. However, after the CSDP in Pretoria closed in August 2016, the Mission experienced higher staff turnover and had to launch more competitions and completed more staffing actions than usual. The CMM approved the annual HR plan and discussed HR matters regularly during its meetings. For example, members have had discussions on how many processes are taking place, what stage the process is at and/or when the process will be launched.

The audit team examined three (3) LES staffing processes to determine whether they were in compliance with relevant policies and procedures, whether the process was conducted in a fair, open and transparent manner and whether staffing files contained the required documentation. The audit team found that one of the staffing files did not contain an assessment of the selected candidate. The Mission informed the audit team that the appointee was the only individual who applied on the process. However, as per the Manager’s Guide to staffing of LES, a candidate is selected on the basis of merit even if only one individual applies. In another file, the audit team found that an individual was hired under Emergency Employment for a total of 180 work days, a period which exceeds the maximum 125 days permitted in the Emergency Employment Guideline. The HOM may authorize an extension beyond the 125 days under certain circumstances. However, the audit team did not find the HOM’s justification on file.

Recommendation #5:

The Head of Mission should ensure that the Mission complies with departmental guidelines on LES staffing.

3. Conclusion

The audit concluded that some management practices and effective controls were in place for planning and budgeting to ensure good stewardship of resources at Pretoria.  However, the audit found weaknesses in the management of some aspects of local procurement, contracting, financial administration, property management, fleet management, consular revenues, the recovery of VAT and human resources as some key controls were not in place or not being followed.

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

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 Pretoria Mission to support the achievement of Global Affairs Canada objectives.

Scope

The scope of the audit included management practices and controls in place to support the Pretoria Mission operations. Specifically, the audit examined processes related to the management of consular revenues, procurement and asset management (including property, vehicles, cash and materials). 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, Mission expenditures and data for property and fleet were examined from 2015-16 to 2017-18. A sample of files and transactions were tested from activities that took place from 2015-16 to 2017-18, 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 9 to October 19, 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 HQ and Common Service Delivery Point)
• Inventory testing
• Petty cash counts
• On-site examination of Chancery, storage facilities and a sample of staff quarters
• Comparisons with like-minded Missions
• Visits to a sample of local vendors
• Visit to the Mission bank

Appendix B: Organizational chart for the management and consular services program

Appendix C:  Management action plan