Audit of Management Practices of Missions - Abidjan

June 2020

Acronyms and symbols

AAO

Mission Procurement

CBS

Canada-Based Staff

CSDP

Common Service Delivery Point

CMM

Committee on Mission Management

FAA

Financial Administration Act

FAS

Finance and Administration System

FINSTAT

Financial Status Report

HOM

Head of Mission

HQ

Headquarters

LES

Locally Engaged Staff

LESMCB

Locally Engaged Staff Management Consultation Board

MCO

Management and Consular Officer

MHC

Mission Housing Committee

P2P

Procure to Pay

PRIME

Physical Resources Information - Mission Environment

RCRB

Regional Contract Review Board

SQ

Staff Quarter

VAT

Value Added-Tax

Report summary

In accordance with Global Affairs Canada‘s approved 2019-2020 Risk-Based Audit Plan, the Office of the Chief Audit Executive conducted an audit of Management Practices of Missions – Abidjan. The objective of this audit was to determine whether sound management practices and effective controls were in place to ensure appropriate stewardship of resources at the Abidjan Mission to support the achievement of Global Affairs Canada objectives.

Why it is important

Global Affairs Canada 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 its 2018-2019 Departmental Results Report, Global Affairs Canada spent $1,040M 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 at the Mission, with regard to accountability and oversight, planning and budgeting, local procurement, management of assets, cash and revenue, and human resources, between April 2016 and August 2019.

What was found

The audit concluded that sound management practices and effective controls were in place to ensure appropriate stewardship of resources at the Abidjan Mission. Specifically, Mission management practices and controls with regard to planning and budgeting, real property, fleet, and human resources were operating effectively and according to applicable policies and procedures. In addition, the current Mission management team, led the HOM, clearly understand their respective accountabilities, roles and responsibilities.

Some areas for improvement were identified relating to local procurement and contracting, inventory management, petty cash and consular revenue management. Recommendations were made to address these areas.

Recommendations

1. The Head of Mission should take measures to strengthen the Mission’s procurement and contract management practices to ensure compliance with the Financial Administration Act and applicable departmental policies and procedures.
2. The Head of Mission should strengthen controls over asset management to ensure that all Mission assets are accurately recorded with required up-to-date information to improve the Mission’s inventory management.
3. The Head of Mission should strengthen controls to ensure that petty cash and consular revenues management practices comply with the requirements of the applicable departmental policies and procedures.

Statement of Conformance

The 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 its 2018-2019 Departmental Results Report, the Department spent $1,040M to operate and support the Missions. Therefore, proper controls and strong management practices that support the Department’s Mission operations are critical to ensure sound stewardship of resources.

The departmental 2019-20 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 risk. The Embassy of Canada in Abidjan (the Mission) was one of the selected missions. These audits are intended to provide senior management with assurance regarding the state of management practices in supporting prudent management and good stewardship of resources in select missions. 

The Embassy of Canada to Côte d'Ivoire - Abidjan

The Abidjan Mission is categorised as a small mission comprising 32 staff: 9 Canada-based staff (CBS) and 23 locally engaged staff (LES). Over the past few years, the Mission has expanded its programs and has increased in size. Currently, the Mission includes the following programs: Common Services and Consular; Development; Foreign Policy and Diplomacy Service (FPDS); Trade; and, Security and Emergency Management. The Ambassador to Côte d'Ivoire is also accredited to Liberia, where the Abidjan Mission manages the Department’s Liberia programs, including consular services and emergency management, remotely, with occasional travel to the country’s capital. The Mission is expecting to continue to grow over the next few years.

Since the post-electoral conflict in 2010, Côte d'Ivoire has been relatively stable, although the poverty rate, social inequalities and criminality remain high. Like all countries in the region, Côte d'Ivoire is also facing the threat of terrorism. [REDACTED]. Taking these factors into consideration, the Mission is designated as a hardship level IV.

Common Services Program

The Common Services Program at the Abidjan Mission provides administrative and operational support to the Mission’s programs, and is responsible for financial transactions and human resources activities. The Common Services program is managed by a Management Consular Officer (MCO), who is supported by a Common Services Officer, a Property Manager and a Consular Officer. Table 1 shows the Mission’s Common Services expenditures from fiscal years 2016-17 to 2018-19.

The property, materiel, and transportation section is responsible for the maintenance of the chancery, official residence, Staff Quarters (SQs), inventory, and a fleet of eight (8) vehicles. Table 2 shows details on the Mission’s inventory of property and vehicle fleet.

Since 2016, the Mission has been receiving support from the Common Services Delivery Point (CSDP) in Brussels (Belgium), which provides financial, contracting and procurement services across 25 Missions in Europe, the Middle East and Africa. Mission contracts are overseen by the Regional Contract Review Board (RCRB) that was created in 2018 and is overseen by the CSDP in Brussels. The RCRB is intended to provide a challenge function to ensure that the acquisition process is in line with the principles of transparency, fairness and value for money. Up until January 2019, services pertaining to human resources were provided by the CSDP in London; this function has since been transferred to the CSDP in Brussels.

Consular program

The Mission’s Consular Program provides consular services and assistance to Canadians, including passport, citizenship and notarial services. As part of the Consular Program, the Mission is responsible for collecting, safeguarding, recording and depositing consular fees in a timely manner. The Consular Program is overseen by the MCO, who is supported by a Consular Officer and a receptionist.

2. Observations and recommendations

This section sets out key findings and observations, divided into six (6) general themes: accountability and oversight, planning and budgeting, local procurement, asset management, cash and revenue management, and human resources. Recommendations are provided, where appropriate. Details related to the audit approach are included in Appendix A.

2.1 Accountability and oversight

Accountability, roles and responsibilities

Accountability at the Mission rests with the Head of Mission (HOM), who reports to the Director General of the West and Central Africa Bureau under the Assistant Deputy Minister of the Sub-Saharan Africa branch. Headquarters (HQ) has a role in supporting and enforcing HOM accountability. At the time of the audit, the HOM had been posted to the Abidjan Mission for approximately two years, and the MCO one and a half years.

Overall, roles and responsibilities regarding mission management were established, clear and communicated. Interviews conducted with Mission management and key staff indicated that they understood their roles and responsibilities in the respective areas and were able to fulfill their roles. Human resources, procurement, and asset management related responsibilities were also articulated in the performance management agreements of key CBS and LES. Policies and guidelines were well communicated and accessible to Mission staff via the Mission's wiki page and shared drive.

Mission committees

A governance structure was in place at the Mission with several established committees including the Committee on Mission Management (CMM), Mission Housing Committee (MHC), and Locally Engaged Staff Management Consultation Board (LESMCB).

The CMM, which is chaired by the HOM, oversees the Mission’s overall management. The Committee meets regularly and exercises oversight by discussing a wide range of topics such as human resource activities, performance management, policies and guidelines, upcoming events, and financial matters. However, there was limited discussion surrounding procurement and asset management. The limited discussion of procurement was slightly mitigated by the frequent bilateral meetings taking place between the HOM and the MCO. These meetings are used to plan and discuss procurement and Financial Status Reports (FINSTAT), in addition to a wide range of mission management issues, such as financial planning and budgeting, human resource activities and performance management.

The MHC is responsible for making recommendations to the HOM in terms of the allocation, acquisition and disposal of Staff Quarters (SQs). It is comprised of a variety of CBS representatives and a LES as an observer. The LESMCB, a consultative board between management and LES, serves as an official communication forum and prioritizes the exchange of ideas and concerns surrounding departmental programs and policies. Both committees functioned effectively vis-à-vis their mandates.

2.2 Planning and budgeting

Overall, the Mission’s planning and budgeting activities were appropriately managed. 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, including a budget for all programs. The Mission uses the corporate Financial Status Reports (FINSTAT) to monitor its financial situation and ensure budget resources are appropriately managed on an ongoing basis. Detailed annual work plans are prepared for projects and activities under the Common Services Program. These work plans, which are linked to Performance Management Plans, include performance indicators, the individual responsible, the date required and a status update.

Mission management also has monthly meetings to discuss the budget. To support financial planning, excel tools are used to track the budget. In addition, the MCO has established a process to track potential delays in procurement processes, and was working towards establishing a procurement plan at the time of the audit. 

2.3 Local procurement

Procurement and contract management

A sample of 34 procurement transactions were examined, including contracts and purchases made using acquisition cards. A number of issues with the management and administration of procurement activities were identified such as:

• Three (3) transactions over $10,000 were not reviewed by the Regional Contract Review Board as required.
• Two (2) contracts were amended exceeding 50% of the original value.
• One (1) transaction exceeded the daily limit of the acquisition card.
• Four (4) transactions over $2,000 were processed without a Purchase Order as required.
• One (1) contract was for reoccurring services, where the vendor continued working for 6 months before the contract was renewed.

Issues were also identified with the Mission’s security contract. When additional services were required by the Mission during the option year, the Mission requested (and obtained) additional services and equipment from the security provider, without first requesting an amendment to the contract. Moreover, the Mission paid for occasional guards using cash, even though this service was already included as per the contract at no additional cost. Finally, the contract’s payment terms specified that the company could only charge the Mission when costs for items or services (i.e. training) were actually incurred, based on the prices outlined in the contract. The Mission, however, had been paying the total maximum cost identified in the contract in monthly installments. In this regard, HQ’s Mission Procurement (AAO) informed the audit team that it has developed a new contract template for security services to clarify the basis of payment section for all future contracts.

Recommendation 1: The Head of Mission should take measures to strengthen the Mission’s procurement and contract management practices to ensure compliance with the Financial Administration Act and applicable departmental policies and procedures.

2.4 Asset management

Property management

Mission property management practices were sound and related controls were effective. A Mission Maintenance Workplan, which includes projects above $10,000, was in place and was communicated to the Life Cycle Management division at HQ. Properties were tracked in the Physical Resources Information – Mission Environment (PRIME) system and the Mission had developed annual plans and checklists for preventative service and routine maintenance to prioritize projects. In addition, based on a review of a sample of projects completed at the official residence and SQs, repairs and maintenance costs were well controlled and the quality of work was in line with expectations.

Fleet management

Overall, the Mission's fleet was managed effectively. There was an up-to-date transportation policy in place to govern transportation activities; the Mission used trip logs to manage usage; and, maintenance and repairs of the Mission's fleet were planned and actively tracked.

Over the last few years, the Mission has put in place additional controls. For instance, fuel cards are under the exclusive control of the MCO and card usage is systematically documented. Each vehicle is tagged and linked to a specific fuel card, such that a fuel card can only be used for a specific tagged vehicle.  The Mission also tracks trends of the fleet’s fuel consumption rates.  However, further analysis regarding variations in fuel consumption (i.e. comparing actual consumption against the expected fuel consumption) would strengthen controls.

Inventory management

The Mission manages a large inventory of furniture, equipment and supplies, such as household furniture, appliances, electronic items, and office supplies. Based on the walkthrough of the Mission’s inventory practices and an inspection of onsite storage areas, it was confirmed that assets were secured, and access to the storage areas was limited.

However, when the audit team performed inventory checks for the official residence, selected SQs and the two (2) storage rooms in the chancery basement, some control gaps in inventory management were identified. For instance, the inventory lists did not include sufficient details about items (e.g. acquisition date and price), which does not allow for effective lifecycle asset management, nor does it facilitate the Mission’s procurement planning and budgeting. Moreover, when the audit team conducted an inventory check of the chancery storage rooms and a sample of three SQs, including a reconciliation of a sample of procured goods against inventory records, it was determined that the inventory lists were not complete, up-to-date or accurate.

Recommendation 2: The Head of Mission should strengthen controls over asset management to ensure that all Mission assets are accurately recorded with required up-to-date information to improve the Mission’s inventory management.

2.5 Cash and revenue management

Petty cash, cash account and emergency cash parcel

The Mission has [REDACTED] petty cash accounts for the consular and the property sections, respectively. Petty cash funds were properly safeguarded, as they were secured in locked cabinets with restricted access. However, periodical and/or random counts of the petty cash funds were not performed, as required by departmental policy. One account had excess funds and records showed that some transactions exceeded the daily limit. The excess of funds was later explained and the custodian was able to balance the account. 

The Mission is one of the few missions that still requires the use of a cash account, which is used exclusively for travel advances. Controls and segregation of duties were appropriate over the receipt of cash and payments (i.e. official receipts were issued and signed). The account is monitored and reconciled as required on a monthly basis.

The Mission also has [REDACTED] emergency cash parcels, [REDACTED] parcels were appropriately managed in accordance with departmental procedures.

Consular revenue

The Mission collects fees, [REDACTED], for consular services - passport, citizenship and notarial services. Some weaknesses were identified in the management of consular revenues related to daily revenue control and timely uploading to the Procure-to-Pay (P2P) tool.   

Departmental procedures require that a Daily Summary Report (i.e. Daily Sylvia Report) and the consular fees collected during the day be submitted to the MCO for review and signature/approval before transferring to the Common Services Section. A review of the existing process indicated that this control procedure was not performed.

Moreover, the transfer of consular fees to the Common Services section must be done either on a daily basis if the collected amount reaches $2,000 CAD, anytime it reaches $2,000 CAD within a week, or on a weekly basis (at a minimum). This timeline was not respected as the summary reports were generated only every two weeks. In addition, it was taking about 13 days on average to upload the information to the P2P tool. These delays do not allow the mission to ensure that consular revenues are reconciled, deposited and accurately recorded in a timely manner, as required.

Recommendation 3: The Head of Mission should strengthen controls to ensure that petty cash and consular revenues management practices comply with the requirements of the applicable departmental policies and procedures.

2.6 Human Resources

The Mission’s HR planning activities were regularly discussed at CMM and were documented in its Strategia business plans. Staffing actions reviewed were completed in a fair, open and transparent manner. Performance issues, including detailed action plans to address issues, were adequately documented in personnel files (as appropriate). It was noted, however, that at times some key documentation, such as security clearances, signed values and ethics declarations and proof of education, was not included in personnel files.

Based on a review of LES salary, all staff were being paid at the correct salary.  The team noted, however, that the employee’s incremental salary increases were not always updated in the files. The audit team also noted that although overtime was not always formally pre-approved, it did appear to be warranted and reasonable.

3. Conclusion

The audit concluded that sound management practices and effective controls were in place to ensure appropriate stewardship of resources at the Abidjan Mission. Specifically, Mission management practices and controls with regard to planning and budgeting, real property, fleet, and human resources were operating effectively and according to applicable policies and procedures. In addition, the current Mission management team, led by the HOM, clearly understand their respective accountabilities, roles and responsibilities.

Some areas for improvement were identified relating to local procurement and contracting, inventory management, petty cash and consular revenue management. Recommendations were made to address these areas. 

Appendix A: About the audit

Objective

The objective of the audit was to determine whether sound management practices and effective controls are in place to ensure appropriate stewardship of resources at the Abidjan 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 Abidjan Mission’s operations. Specifically, the audit examined processes related to procurement and asset management (including property, fleet, cash, revenues and materials). Human resource processes relating to LES staffing actions, and LES payroll and overtime were also examined.

The most up-to-date documentation available as of August 2019 was reviewed. In addition, Mission expenditures and data for property and fleet were examined from 2016-17 to 2019-20. A sample of files and transactions were tested from activities that took place from 2016-17 to 2019-20, as presented in Table 3.

Criteria

The criteria were developed following the completion of a 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 clients. The detailed criteria are presented as follows.

Criterion 1: Adequate governance is in place to support good stewardship of mission resources.

1.1 Accountabilities, roles and responsibilities of mission management are established,   clear, and communicated.

1.2 Effective oversight is in place to support good stewardship of resources.

Criterion 2: Effective controls are in place to ensure that procurement of goods and services comply with relevant policies and legislative requirements and achieve value for money.

Criterion 3: Effective controls are in place to ensure that the management of assets (non-cash) complies with relevant policies and legislative requirements.

Criterion 4: Effective controls are in place to ensure that the management of cash complies with relevant policies and legislative requirements.

Criterion 5: Effective controls are in place to ensure that human resources activities comply with relevant policies and legislative requirements.

5.1 LES staffing actions are adequately documented to support that fair, open and transparent processes were followed.

5.2 LES salaries and overtime payments (in cash and time) are accurate and complete.

Approach and methodology

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 November 25th to December 6th, 2019
• Documentation review (budgets, business plans in Strategia, property management plans etc.)
• Walkthrough of procurement processes, property and materiel, and consular processes.
• Data analytics of Mission 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 CSDP)
• Inventory testing, and cash account, petty cash and emergency cash parcel counts
• On-site examination of the Official Residence, Chancery, storage facilities and a sample of staff quarters
• Visits to selected like-minded Missions
• Visits to a sample of local vendors

Appendix B: Management action plan