Audit of the Implementation of Field Support Services Initiative

Final report

Global Affairs Canada
Office of the Chief Audit Executive

Tabling Date
December 2019

Acronyms and Symbols

CIDA

Canadian International Development Agency

DPD

International Assistance Operations Bureau

DPI

International Assistance Programming Process and Coordination Division

FAA

Financial Administration Act

FAQ

Frequently Asked Question

FSS

Field Support Services

FSSP

Field Support Services Project

GAC

Global Affairs Canada

PSU

Program Support Unit

SCM

Corporate Planning, Finance and Information Technology (Chief Financial Officer)

SGC

Development Contracting Services Division

SGD

Grants and Contributions Management Bureau

Executive summary

In accordance with Global Affairs Canada’s approved 2017-2020 Risk Based Audit Plan, the Office of the Chief Audit Executive conducted an audit of the Implementation of the Field Support Services (FSS). The objective of the audit was to determine whether a management framework was in place to ensure the effective implementation and management of Field Support Services.

Why it is important

In order to deliver on development commitments and achieve results, bilateral programs rely on outsourced support services in the field, consisting of expert advisory services, administrative and logistical support. In the past, Program Support Units (PSUs) were the vehicle used by most bilateral development programs for these services. The management of PSUs posed important risks to the department, including the risks of non-compliance with the Financial Administration Act (FAA) and the risk of employer-employee relationships developing between PSU staff or contractors and the Government of Canada. To address these risks, the department developed and implemented a new delivery mechanism called Field Support Services (FSS) units with the expectation that they would offer a more coherent, robust and arm’s length approach for the provision of support services in the field.

After exploring different implementation models for the FSS projects (FSSP), the Department decided that all bilateral programs would use the services of Executing Agencies competitively selected through International Request for Proposals. It was anticipated that this standardized model would allow the Department to obtain value-for-money, leverage the capacity of the private sector, and implement an arm’s-length approach to avoid the problems of compliancy with the FAA and the employee-employer relationships endemic to the PSU model. At the time of the audit, 18 FSS contracts were in place with a total value of $161 M. 

Considering the risks posed by the previous model, the importance of support services to bilateral programming in the field and the financial envelope involved, it is critical that a proper and effective management framework is in place to ensure that the objectives of the FSS delivery model are achieved across the department.

What was examined

The audit focused on the management frameworks in place to implement and manage the FSS at the department-level (the ‘FSS Initiative’) and at the project-level (‘FSS Projects’ or FSSPs).

The audit selected seven FSSPs for detailed examination, including three for field examination.

What was found

The audit concludes that, while some aspects of a management framework were in place to ensure the effective implementation and management of Field Support Services, there are areas that need improvement. The strategic objectives, as well as roles and responsibilities, were clearly defined and understood by key stakeholders. In addition, services were delivered as per the terms and conditions of the contract and the scope of services was generally well understood by both parties.

Areas for improvement are the following. First, the implementation of the FSS was not supported by a formal operational plan and accountability for the oversight of the FSS initiative had not been assigned. Second, there is a need for more guidelines and training to support FSS Project Team Leaders, as well as more contract monitoring activities. Strengthening these components would help ensure that each FSS project is managed as per the contract’s terms and conditions, which were designed to protect the Department from the risks associated with the previous model, and would support the implementation of the next phase of field support services.

Recommendations

Based on the audit findings, the following recommendations were made:

1. The Director General of the International Assistance Operations Bureau should assume accountability for oversight of the FSS initiative.
2. The Director General of the International Assistance Operations Bureau, in collaboration with Geographic Assistant Deputy Ministers, should develop and implement a formal operational plan for the next phase of FSS that clearly identifies roles and responsibilities, milestones, resource allocation and risk management strategies.
3. The Director General of the International Assistance Operations Bureau, in consultation with the Chief Financial Officer, should:
• Develop and communicate clear guidelines for the management of FSS projects that meet client needs; and
• Develop and offer training to geographic program staff involved in the management of FSS projects.
4. The Geographic Assistant Deputy Ministers, in consultation with the Chief Financial Officer, should ensure that program needs are rigorously assessed and challenged, to ensure that each FSSP contract reflects actual programming needs and value for money.
5. The Chief Financial Officer, in consultation with Geographic Assistant Deputy Ministers and the Director General of the International Assistance Operations Bureau, should ensure that the FSSP contract is flexible and adaptable to changing program needs.
6. The Geographic Assistant Deputy Ministers should ensure that:
   • FSS Project Team Leaders complete the required FSS training;
   • GAC staff limit their involvement in the recruitment of FSSP staff and the procurement of technical specialists in a manner that respects the arms-length relationship;
   • Utilization of technical specialists is supported by proper work planning and performance management; and
   • FSSPs are monitored to ensure that they are managed as per the terms and conditions of the contract and in a manner that demonstrates due diligence.

Statement of Conformance

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 was 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

The Audit of the Implementation of the Field Support Services (FSS) was selected in the Global Affairs Canada 2017-2020 Risk Based Audit Plan, which was recommended for approval by the Departmental Audit Committee on April 11, 2017 and subsequently approved by the Deputy Minister. The objective of this audit was to determine whether a management framework was in place to ensure the effective implementation and management of Field Support Services.

Field Support Services

In order to deliver on development commitments and achieve results, bilateral programs in the former Canadian International Development Agency (CIDA) relied on outsourced support services in the field. In the past, Program Support Units (PSUs) provided these services, which consisted mainly of subject matter experts contracted to support program staff, as well as administrative and logistical services (i.e. transportation services and office space).
While PSUs played an integral role in contributing to achieving development results in recipient countries, they were not consistently implemented in terms of how they were contracted, managed and administered, resulting in important coherence challenges. More importantly, the PSU model presented two major risks to the Department:

• The risk of non-compliance with the Financial Administration Act as well as the Terms and Conditions for International Development Assistance, where funds were transferred to PSUs without a contract; and
• The risk of employer–employee relationships developing between PSU staff or contractors and the Government of Canada.

To address these risks, the Department decided to develop a more coherent, robust and arm’s-length approach for the provision of support services in the field, called Field Support Services (FSS). An FSS Management Framework was subsequently developed, outlining the common requirements for all FSS projects (FSSPs) and a flexible menu of options for country programs to tailor their FSSP to their needs. In 2012, the CIDA President approved the FSS Management Framework with the expectation that all PSUs would be closed and FSSPs would be implemented, by December 31, 2013. This deadline was later extended to December 31, 2016.

Following amalgamation, senior management decided that all FSSPs would be delivered by competitively selected Executing Agencies, through a standardized service contract model. This new model replaced the flexible menu previously outlined in the FSS Management Framework. All bilateral programs requiring field support services would have to conduct an International Request for Proposals to select an Executing Agency. Through the FSS project, the Executing Agency would procure technical specialists and provide local knowledge and expertise, as well as administrative and logistical services to support the department’s Official Development Assistance (ODA)-related activities in the field. The model is illustrated in Figure 1 below.

Text version

• Bilateral Development Program
  • Contract
• Executive Agency: Personnel provide administrative, financial, procurement and logistical services to GAC and GAC-designated actors.
  • Provides administrative, financial, procurement and logistical services
  • Provides and manages vehicles and drivers
  • Provides and maintains office space and equipment
  • Procures and manages technical specialists, who provide subject matter expertise to GAC and GAC-designated actors
• The Development Program assigns work and reviews and accepts deliverables of Technical Specialists

It was anticipated that this standard model would allow the Department to obtain greater value-for-money, leverage the capacity of the private sector, and implement an arm’s-length approach to avoid the problems of compliancy with the FAA and the employee-employer relationships endemic to the PSU.

The FSSP contract model comprises the following cost categories:

• Fixed costs:
• Personnel Fees: The cost of Executing Agency personnel dedicated to the FSS project, such as a Project Manager, a Project Coordinator and a Financial Officer.
• Service Costs: The cost of office space, equipment and transportation services.
• Paid on a usage basis:
• Technical Specialists: Contracted specialists that provide subject matter expertise and advice;
• Administrative mark-up on Technical Specialists: A mark-up rate applied to the Technical Specialist envelope. The rate is part of the consultant’s proposal; and
• Reimbursable Expenses: Pre-approved expenses such as travel and living expenses, project-related communication costs, translation and interpreter costs, fuel for transportation, and office supplies.

For Personnel Fees and Service Costs, the contract indicates a fixed monthly fee that is to be paid by the bilateral program, irrespective of the usage of these services. The contract also outlines specificities such as the Personnel positions and the number and type of vehicles required, the office space capacity and the type of equipment. Costs that are paid on usage are established by the bilateral program as envelopes for the contract duration, and their actual cost can vary significantly from month to month.

As part of the FSS initiative, 22 bilateral programs were approved by the Minister of International Development to be equipped with FSS units; 18 out of the initial 22 FSSP contracts (totalling $161 million) have been signed to date (See Appendix C). All signed contracts are aligned with the above contract structure, with the exception of the Colombia and the West Bank and Gaza FSSPs, which do not include cost of office space, equipment and transportation services.

The estimated total cost for each FSSP varies according to the specific conditions of each location, including office rental costs and local cost indices. Similarly, the proportion of budgeted expenditures allocated to each cost category varies significantly, based on program needs and the Executing Agency’s proposal. For example, the Executing Agency’s Personnel Fees could represent anywhere from 15 to 47 percent of total budgeted expenditures. Each FSS contract is between five and seven years in duration. Five of 18 signed FSS contracts are due to end in 2021-22.

Key Stakeholders

The International Assistance Operations Bureau (DPD) and the Grants and Contributions Management Bureau (SGD) are responsible for coordinating the FSS initiative^{Footnote 1}. Within DPD, the International Assistance Programming Process and Coordination (DPI) unit is responsible for horizontal coordination, promotion of information sharing and learning among programs, and ensuring coherence across FSS projects.  According to Strategia^{Footnote 2}, DPD’s commitments include:

1. Increased streamlining, simplification and harmonization or international assistance programming approaches;
2. Enhanced tools and training provided to international assistance staff;
3. Enhanced policies and guidance related to GAC’s international assistance operations; and
4. Improved tracking and reporting of GAC’s international assistance investment.

The Development Contracting Services unit (SGC) manages the contracting process and provides guidance and oversight of all contracting activities for international development grants and contributions funds. Once a contract is signed, SGC is responsible for meeting with the Executing Agency to ensure that the terms and conditions of the contract are clearly understood.

Each development country program is responsible for the implementation and management of their respective FSSP, as the project’s Contracting Authority. Development programs were responsible for identifying their needs and budget for an FSS project, conducting the evaluation of bidders, and signing the contract with the successful Executing Agency. They are also responsible for subsequent contract management.

2. Observations and Recommendations

This section sets out key findings and observations based on documentation review, interviews with stakeholders, file review and field visits. Audit findings are divided into four general themes: accountabilities, roles and responsibilities; strategic direction and plans; guidance, tools and training; and FSS contract management. A detailed description of the audit criteria can be found in Appendix B.

2.1 Accountabilities, Roles, and Responsibilities

The audit expected that accountabilities, roles and responsibilities, for the contracting and management of FSS Initiative would be clearly defined and communicated. The audit reviewed documentation and conduct interviews with stakeholders. The audit found that accountabilities, roles and responsibilities for the contracting process and for contract management were clearly defined and communicated. Further, for a new initiative such as FSS, the audit expected that an oversight function would be exercised to ensure that the model is achieving the intended objectives (mitigating PSU-related risks) and that programs properly implement it, in a consistent manner across the Department. However, the audit found that accountability for oversight of the Department’s FSS Initiative had not been assigned.

The audit found that contract-related roles and responsibilities for the Development Contracting Services unit and for bilateral development programs are clearly defined in departmental policies and procedures. SGC provides guidance and oversight of all contracting activities related to international development grants and contributions funds. Bilateral development programs are responsible for identifying their field support services needs, establishing scope of services, and evaluating bidders.

Following contract signature, bilateral programs are responsible for the management of their respective FSSP. The roles and responsibilities of the bilateral development programs and the Executing Agency are clearly defined in the FSSP contract. The Executing Agency provides logistical support and procures technical specialists and other services, based on requests from the development program. The Executing Agency is also responsible for the administrative and contractual management of technical specialists. As the Technical Authority, the development program is responsible for submitting needs-based service requests, monitoring the delivery of services, assessing project performance, and reviewing and approving expenditures. Interviews conducted with GAC staff and Executing Agency personnel in the field confirmed that roles and responsibilities are generally clear and understood.

During implementation, the International Assistance Programming Process and Coordination unit (DPI) is assuming the role of horizontal coordination, promotion of information sharing and learning among programs. DPI manages an FSS intranet page (‘wiki’) and chairs an FSS Coordination Committee. However, this committee’s membership is at a working-level, and it does not have any decision-making authority.

The audit found that the expected oversight function had not been assigned and that oversight activities are not conducted. For example, the audit could not find any evidence that senior management had been informed of the status of the FSS implementation, including the delay that has materialized and the impact it has had on development programming. An effective oversight function would also help ensure a consistent approach to management, including timely decision-making on implementation issues and activities. It would also help ensure that the model is achieving value-for-money and is addressing corporate risks, as intended.

As previously mentioned, accountability for oversight is important to ensure that the new FSS model is achieving its intended objectives of addressing the corporate risks posed by the PSU.  
In addition, as the implementation of the model represents a significant business change for bilateral programs, oversight is important to ensure that it is consistently implemented and managed across geographic programs. Further, as the FSS is not yet a mature model, oversight would help ensure that information and lessons learned are gathered, to inform the future decision-making given the intention to implement a Phase II of the model.

Building on DPD’s current commitments as mentioned above, particularly its commitment to track and report on GAC’s international assistance investments, DPD would be logically positioned to assume oversight of FSS initiative.

Recommendation 1:

The Director General of the International Assistance Operations Bureau should assume accountability for oversight of the FSS initiative.

2.2 Strategic Objectives and Operational Planning

The FSS model was designed to be a contracting solution to be implemented across the Department to address the departmental risks posed by the PSU model. Converting PSUs to FSSPs constitutes a significant business change for development programs, involving significant resources and a multitude of stakeholders. As such, the audit expected that the strategic objectives of the initiative would be clearly defined and communicated. 

The audit conducted interviews with departmental stakeholders and examined strategic and planning documentation, decisional documents, and communications. The audit found that the strategic objectives of the FSS initiative have been defined in several documents, such as Memorandums to the Minister. The audit also found that these strategic objectives have been communicated through presentations to departmental committees and guidance documents provided to stakeholders. In addition, DPI has been chairing the FSS Coordination Meetings since January 2018, as a mechanism for communication and information sharing among FSS Project Team Leaders. Interviews with departmental stakeholders confirmed that the strategic objectives of the FSS initiative had been communicated and that they are generally well understood.

The audit also expected that an operational plan would be developed to help achieve the objectives of the FSS Initiative. An operational plan should include operational objectives, defined roles and responsibilities, allocated resources, identified risk and mitigation measures, timelines and completion requirements. However, the implementation of the FSS was not supported by a formal operational plan.

In 2012, a FSS Management Framework document was developed to respond to key risks associated with the PSU model and outlined the transition to full-value service contracts awarded to competitively selected EAs. As this document was developed to select the new model, it outlined requirements for the model such as competitively selected EAs, and it proposed contracting and sourcing options. In 2014, following departmental amalgamation, a PSU-FSS Conversion Summary document was drafted, outlining a plan to coordinate the conversion. The plan included the initiative’s purpose, objectives, milestones and completion requirements. However, this plan was not formally approved or used. To date, no operational plans have been developed.

Operational planning is critical to support the timely achievement of strategic objectives. As previously mentioned, the full transition to the FSS model was expected to be completed by December 31, 2016. However, not all 22 approved FSSPs were operationalized by then, as planned, with three FSS contracts not yet signed. While programs put individual service contracts in place as interim measures, this delay had an impact on program operations. More specifically, interviews conducted with program staff indicated that the delay affected the programs’ ability to monitor project results in the field, to contribute to policy dialogue and to strategically plan programming.

Given the importance of field support to development programming and the upcoming expiry of some FSSPs, a formal operational plan will need to be developed to ensure the effective and timely implementation of the second phase of FSSPs. This is particularly important considering the length of time required for Departmental approval, the complexity of the contracting processes, the numerous stakeholders involved and the level of effort required.

Recommendation 2:

The Director General of the International Assistance Operations Bureau, in collaboration with Geographic Assistant Deputy Ministers, should develop and implement a formal operational plan for the next phase of FSS that clearly identifies roles and responsibilities, milestones, resource allocation, and risk management strategies.

2.3 Guidance, Tools and Training

The audit expected that bilateral programs would be provided with the necessary guidance, support, tools and training needed to manage their FSS project in accordance with the terms and conditions of the contract. The audit examined available guidance, tools, and training documentation, and conducted interviews with departmental management and staff and found that there is a need for more guidance and training.

Following the FSS contract’s signature, each program assigns a project officer as a Project Team Lead to manage the contract.  The audit found that DPI had developed some guidance documents to support Project Team Leads for their contract management responsibilities. DPI manages an Intranet page (‘wiki’) dedicated to FSSPs, which includes resources such as an FSS 101 document and Frequently Asked Questions (FAQ). These documents cover topics including how to procure technical specialists, who can use transportation services, and how to manage the performance of technical specialists. Program staff are also able to consult DPI, SGC, and Legal Services for specific matters. Further, ad hoc guidance is provided through the FSS Coordination Meetings. The FSS Coordination meeting minutes and PowerPoint presentations are made available to program staff through the Wiki page. Interviews indicated that programs find the FSS Coordination meetings to be a useful forum to share best practices and lessons learned. However, programs expressed the need to have more guidance and support to help them manage their FSS projects. For example, there is minimal guidance indicating to what extent programs should review technical specialists’ timesheets and assess their performance. Indeed, through a review of documentation, the audit found that most of the guidance documents were not sufficiently detailed. Some documentation, such as the FAQ document, was being updated and improved at the time of the audit.

In addition, the audit found that the Department does not currently offer any FSS training for project officers. However, DPI is currently developing training to support Project Team Leads and FSSP users. A Project Charter for the training module outlining the client needs, key issues, resources, and the target group for the training has been developed.

As noted, one of the risks with PSU model was the inconsistency in its delivery across geographic programs. Given the mobile nature of the Department’s programming staff and the level of effort required to manage an FSSP, and the specificity of the FSS contract, it is important that tools and guidance documentation are complete, up-to-date and readily available to support the effective and consistent management of FSS projects.

Recommendation 3:

The Director General of the International Assistance Operations Bureau, in consultation with the Chief Financial Officer, should:

• Develop and communicate clear guidelines for the management of FSS projects that meet client needs; and
• Develop and offer training to geographic program staff involved in the management of FSS projects.

2.4 FSS Contract Management

2.4.1 Value for Money

The audit expected that the Executing Agency’s services would be delivered as per the terms and conditions of the contract and in a manner that demonstrates value-for-money. The audit reviewed documentation, conducted a walkthrough during site visits, and interviewed departmental and Executing Agencies staff and management. The audit found that services were delivered in a generally satisfactory manner. However, services were underutilized.

The personnel and services (office space, equipment and transportation), which are fixed costs outlined in each FSSP contract, are based on the needs identified by the bilateral program. In addition, the contract also covers services expenses that are paid for on an as-needed basis (e.g. technical specialists and reimbursable costs).

The audit found that office space and furniture, vehicles and equipment met the terms and conditions of the contract in the three FSS projects visited. In addition, technical specialists had been recruited and logistical and administrative support were provided as requested by programs. Interviews with program staff and management indicated that they were generally satisfied with the services provided by their FSSP.

However, through an examination of financial expenditures, the audit noted that there was a significant gap between the level of implementation of each FSS project and its expenditures burn rate. This was mainly due to the low utilization of technical specialists and related expenses. Nonetheless, programs still incurred fixed costs for Executing Agency personnel, office space, and equipment. In the seven FSSPs reviewed by the audit team, fixed costs represented between 55 and 83 percent of the expenditures claimed by the Executing Agency in 2018-19. This is an indication that value-for-money is not fully obtained. 

In addition, the audit found office and equipment were underutilized, due to the low number of technical specialists working concurrently or technical specialists were often working from personal offices using personal equipment.

This underutilization of FSS services was due to a combination of the following factors:

• A lack of rigour of the needs assessment by the program (i.e. replicating PSU structure);
• A change in program needs and priorities over time;
• Delayed operationalization of the FSSPs; and
• Lack of effective planning for technical specialist needs.

As previously mentioned, fixed costs, such as Executing Agency Personnel Fees and Transportation costs, are established in the contract, including specificities such as the positions and the number and type of vehicles required. Following contract signature, the bilateral program is not able to add or reduce the number of personnel or vehicles, if their needs change during the implementation period. Given the multi-year duration of the FSSP contracts and the dynamic nature of development programming, it is important that the contract structure is flexible enough to allow programs to adapt it to their needs.

Recommendation 4:

The Geographic Assistant Deputy Ministers, in consultation with the Chief Financial Officer, should ensure that program needs are rigorously assessed and challenged, to ensure that each FSSP contract reflects actual programming needs and value for money.

Recommendation 5:

The Chief Financial Officer, in consultation with Geographic Assistant Deputy Ministers and the Director General of the International Assistance Operations Bureau, should ensure that the FSSP contract is flexible and adaptable to changing program needs.

2.4.2 Management Practices

The audit expected that the FSSP contracts would be managed as per the terms and conditions of the contract and in a manner that demonstrates due diligence and value-for-money, and protects against the departmental risks posed by the PSU model.

Scope of Services

The scope of services of each FSSP is defined in the contract and further detailed in a Manual of Operations, which is developed by the Executing Agency and approved by the program. Based on a review of documentation and interviews, the audit found that the scope of services was well understood by both parties. However, the audit noted cases where Executing Agency personnel or technical specialists were occasionally performing functions and activities that are the responsibility of departmental staff and funded through O&M. For example, FSSP personnel were involved in the recruitment of mission staff and technical specialists performed communications activities on behalf of the mission. The audit also found one case where the technical specialists’ financial envelope was used to remunerate consultants who were not procured or managed by the Executing Agency, but by a partner organization. This should be clarified in guidelines and training for program staff.

Furthermore, FSS projects are designed to support the Department’s overall international assistance mandate. While each FSSP is managed by a bilateral development program, the services provided by the Executing Agency are intended to be accessible by all international assistance programs, such as the Peace and Stabilization Operations Program and the Canada Fund for Local Initiatives (CFLI). Interviews indicated there is a lack of clarity concerning who can access these services – specifically whether the FSS can provide support to CFLI and local partners. Clarifying the eligible users of FSSP services can help increase the utilization of services, which would enhance Departmental programming results and increase value-for-money.

The audit noted a case where the bilateral program was aware of the low utilization of their FSSP’s services, especially the technical specialist envelope, and had made significant efforts to increase utilization. More specifically, the Program Team Lead conducted outreach activities and communications to eligible development programs and local partners to increase awareness of the FSSP’s services and encourage utilization. The audit noted this as a good practice to maximize the benefits of the FSSP, given that the contract could not be modified during implementation.

Technical Specialist Procurement and Management

One of the main services provided by the FSSP is the procurement of technical specialists. Upon program request, the Executing Agency is expected to conduct the process for the procurement of technical specialists, including defining terms of reference, developing assessment tools, advertising, reviewing proposals, and selecting the specialist. According to documented guidance, the program’s role in the process is limited to the expression of needs for the technical specialist at the outset of the process, and non-objection of the final selection, as necessary. This process ensures an arms-length relationship and avoids a potential employer-employee relationship.

The audit found that while the procurement process was generally managed according to the procedures outlined above, there were cases where program staff were over-involved in the Executing Agency’s areas of responsibility. This included cases where program staff drafted the Terms of Reference and selection tools, participated in interviews, was involved in the establishment of the fee rate, and even directed the Executing Agency to procure a specific candidate. Through interviews, programs explained this over-involvement as a means to ensure that the procured specialist met their needs or to procure a specialist familiar to them. Nonetheless, this level of involvement in the procurement process may create an agency relationship and contribute to a potential employer-employee relationship.

Technical specialists are selected based on their technical expertise and local knowledge. As such, it is expected that they have the necessary skills and qualifications to perform the work without a need for additional training. However, in order to effectively support GAC’s programming, technical specialists also need to be aware of GAC’s priorities, policies, and processes. Interviews indicated that technical specialists would benefit from communication and orientation documentation for context. Improving communication and documentation can help ensure that the support provided meet expectations, taking into consideration Canada’s programming priorities and to the local context.

Technical specialist services are contracted on a lump-sum basis with payment against deliverables or time. The audit expected that the program would subsequently develop a work plan to task the specialist based on program needs. This work plan is expected to identify clear deliverables, level of effort and a schedule of work to allow the program to monitor that work is completed as expected and provides value-for-money. In addition, the work plan should be updated frequently enough to reflect actual work. The audit found that work planning was not consistently performed by programs and found cases where technical specialists worked full-time hours for the duration of their contracts without a work plan identifying clear deliverables, level of effort, and a schedule. This practice contradicts the notion that tasking should be based on actual demand. Proper work planning will facilitate the validation of specialists’ timesheets, which form the basis of invoicing and payment.

While the Executing Agency is responsible for the administration of the technical specialist contracts, it is the responsibility of the program to assess the quality of the deliverables and the performance of the specialists and to inform the Executing Agency of any issues. Once informed of performance issues, the Executing Agency should implement measures to correct the situation. The audit expected to find a process in place to assess technical specialists’ performance, provide feedback and communicate issues to the Executing Agency. Interviews indicated that while there are some issues with technical specialists’ performance, there is not always a mechanism in place to systematically assess and document performance. Proper performance management would allow the program to provide specialists with feedback to improve their work and would help the Executing Agency manage the contract, including rationale for the termination and renewal of the technical specialists’ contracts.

Due Diligence

As outlined in the FSSP contracts, each program is invoiced by the Executing Agency on a monthly basis for expenditures incurred during the previous month. Monthly invoices include the cost of personnel, office, transportation, and equipment according to the fee rate established in the FSSP contract. They also include the actual cost of technical specialists (including the related administrative mark-up) and other reimbursable expenses.

Upon receiving monthly invoices, the program is responsible for confirming that the services were rendered (Section 34 of the Financial Administration Act) and costs were accurate. According to the contract, the Executing Agency is not required to submit supporting documentation for expenditures claimed. However, the audit expected that the program would demonstrate due diligence using a risk-based monitoring approach to ensure costs are legitimate and accurate. The audit reviewed a sample of claims and conducted interviews to understand the claim review process. The audit found cases where the Executing Agency was reimbursed for expenses that had not yet been incurred and for ineligible expenses. For example, while the Executing Agency may only invoice GAC for the services of the technical specialists after they have paid the technical specialist, the audit found cases where the Executing Agency requested payment from GAC prior to paying the specialist.

As previously mentioned, technical specialists are paid based on their monthly timesheets. Since the program is responsible for assigning tasks to technical specialists and accepting deliverables, the audit expected that the program would review and validate technical specialists’ timesheets prior to payment. This expected due diligence is in line with Section 34 responsibilities – the program must confirm that the time invoiced was actually worked. However, the audit could not find evidence that programs consistently validated technical specialists’ timesheets prior to payment.

As programs are accountable for their FSSPs, they must perform sufficient monitoring activities to ensure that the FSSP contract is implemented as per the Terms and Conditions and in a manner that demonstrates value-for-money. In this regard, a risk-based monitoring strategy would help achieve these objectives.

Recommendation 6:

The Geographic Assistant Deputy Ministers should ensure that:

• FSS Project Team Leaders complete the required FSS training;
• GAC staff limit their involvement in the recruitment of FSSP staff and the procurement of technical specialists in a manner that respects the arms-length relationship;
• Utilization of technical specialists is supported by proper work planning and performance management; and
• FSSPs are monitored to ensure that they are managed as per the terms and conditions of the contract and in a manner that demonstrates due diligence.

3. Overall Conclusion

The audit concludes that, while some aspects of a management framework were in place to ensure the effective implementation and management of Field Support Services, there are areas that need improvement. The strategic objectives, as well as roles and responsibilities, were clearly defined and understood by key stakeholders. In addition, services were delivered as per the terms and conditions of the contract and the scope of services was generally well understood by both parties.

Areas for improvement are the following. First, the implementation of the FSS was not supported by a formal operational plan and accountability for the oversight of the FSS initiative had not been assigned. Second, there is a need for more guidelines and training to support the management of FSS projects, as well as more monitoring activities. Strengthening these components would help ensure that each FSS project is managed as per the contract’s terms and conditions, which were designed to protect the Department from the risks associated with the previous model, and would support the implementation of the next phase of field support services.

Appendix A: About the Audit

Audit Objective

The objective of this audit is to provide reasonable assurance that a management framework is in place to ensure the effective implementation and management of Field Support Services.

Audit Criteria

The following criteria were developed based on the results of audit risk assessment and drawn from generally accepted controls expected to be in place:

1. Management has clearly defined and communicated the objectives and planned results of the FSS initiative.
2. Oversight mechanisms are in place to ensure the effective implementation and management of FSS initiative.
3. Accountabilities, roles, and responsibilities for the implementation and management of FSS are clearly defined, communicated, and exercised.
4. Processes, practices, controls and tools are in place to support the effective implementation and management of FSS projects, including any interim measures put in place prior to the operationalization of the FSS.
5. Country programs have put in place appropriate controls and monitoring activities to ensure FSS projects are managed as per the terms and conditions of contracts and that performance and expected results are achieved and reported.

Audit Scope

The focus of the audit will be the management frameworks in place to implement and manage the FSS at the department-level (the ‘FSS Initiative’) and at the project-level (‘FSS Projects’ or FSSPs). The audit will also examine the contracting process related to the implementation of the FSSPs. The audit scope will not cover the closure of the PSUs.

The scope of the audit will include the initial 22 approved FSSPs^{Footnote 3}, including those that have not yet been implemented. Further, field visits were conducted in three countries: Vietnam, Tanzania, and Senegal. These three projects were selected based on the following considerations: project duration, materiality of the contract, level of implementation, budget burn rate, recommendations by stakeholders, geographic distribution and travel restrictions. Remaining FSSPs will be covered through documentation review to be performed from auditors’ desks and by any other relevant means as per the methodology identified below.

Audit Methodology

The audit will be conducted in accordance with the Treasury Board Policy on Internal Audit. This requires that the audit be planned and performed in such a way as to obtain reasonable assurance that the audit objective is achieved. 

In order to conclude on the audit objective, the following methods will be used to gather evidence:

• Identify and review relevant policies, directives, and guidelines;
• Review and analyze relevant documents related to program operations;
• Conduct interviews with Geographic Program management, program officers and other stakeholders;
• Perform walkthroughs and mapping of key processes, from which related risks and controls will be identified;
• Select samples of projects for detailed testing;
• Perform analysis of financial and non-financial information; and
• Apply other relevant methods as deemed necessary by the audit.

Appendix B: Management Action Plan

Appendix C: Field Support Services Contracts Profile

Source: Departmental Financial System