Audit of Management Practices of Missions - Dakar – Final report

Table of contents

1. About the audit
2. Background
3. Observations
4. Conclusion and recommendations
5. Summary of findings
6. Annex A – management response and action plan

About the audit

In accordance with Global Affairs Canada’s approved 2022–2024 Risk-Based Audit Plan, the Office of the Chief Audit Executive conducted an audit of the management practices of the Dakar mission.

Objective

The audit’s objective was to determine whether sound management practices and effective controls were in place in order to ensure good stewardship of resources at the Dakar mission in support of the achievement of Global Affairs Canada’s objectives.

Scope

The scope of the audit included the management practices and controls in place to support mission operations for the period from April 1, 2019, to December 31, 2022, inclusively.

Criteria

1. The mission has adequate governance in place to support good stewardship of mission resources.
2. Procurement and payment of goods and services comply with applicable legislative requirements and policies while achieving value for money.
3. The mission has effective controls in place to manage monetary and non-monetary assets in compliance with applicable policies.
4. Human resources processes and practices comply with applicable legislative requirements and policies.
5. The mission complies with the department's requirements regarding the duty of care in terms of occupational health and safety and physical security.

Methodology

• Reviewing and examining relevant documents, such as Treasury Board policies and directives, departmental procedures and guidelines, and any other relevant strategic document.
• Meeting with key staff members from the mission and from the common services delivery point in Brussels, as well as suppliers and like-minded missions.
• Analyzing the Dakar mission’s financial and non-financial data and assessing procurement, contracting and human resources practices.
• Selecting and testing 50 samples that include transactions, contracts and human resources files. This discretionary selection was made based on financial and non-financial risk indicators identified through the analysis of the mission’s data.

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 external quality assurance and improvement program.

Background

• Senegal is a parliamentary republic located in West Africa and has more than 18 million inhabitants today. The country's capital and also its largest city is Dakar.
• Canada and Senegal have maintained diplomatic relations since 1962. In 2022, trade between the two countries stood at approximately $197 million, while official development assistance provided by Canada to Senegal (all channels combined) in 2021-2022 amounted to more than $97 million.
• The Embassy of Canada to Senegal, located in Dakar, constitutes the second largest Canadian mission in Africa, after that of Nairobi in Kenya, and the largest in West Africa. It has 30 Canada-based staff (CBS) and 70 locally engaged staff (LES).
• The mission is also concurrently accredited for Cape Verde, the Republic of Gambia, the Republic of Guinea, and the Republic of Guinea-Bissau.
• All ministerial sectors of activity are represented at the mission, as well as programs from Immigration, Refugees and Citizenship Canada and National Defence.
• The mission is scheduled to move to a new chancery in 2027 because the space provided by the current chancery and the Annex, which houses the immigration program, is inadequate for the mission to effectively carry out its ever-expanding responsibilities.

The Mission’s Operating Expenses

The Mission’s Real Property and Vehicle Fleet

The table entitled The Mission’s Real Property and Vehicle Fleet presents the real property assets managed by the Mission that are owned or leased by the Canadian Crown. The table also shows the composition of the mission's vehicle fleet, including [REDACTED], and motorcycles.

Observations

Governance

Criterion 1: The mission has adequate governance in place to support good stewardship of mission resources.

Summary of observations: The mission has implemented appropriate governance to support good stewardship of its resources. Roles and responsibilities are well defined and a governance structure is in place, although a lack of documentation was noted.

Roles and responsibilities

• Canada-based staff (CBS) and locally engaged staff (LES) roles and responsibilities are clear and well understood.
• CBS and LES indicated that they have access to the necessary tools to carry out their roles and responsibilities.

Oversight

• The mission has implemented a governance structure that includes various committees. The Committee on Mission Management discusses procurement, human resources, security and asset management.
• The minutes of the housing committee are not documented. In addition, the committee’s decisions have not been documented since May 2021.
• Moreover, FINSTAT reports are not reviewed by the Committee on Mission Management.

Procurement and payments

Criterion 2: Procurement and payment of goods and services comply with applicable legislative requirements and policies while achieving value for money.

Summary of observations: Overall, the mission uses procurement practices that comply with the department’s policies and directives, although there is room for improvement regarding the use of certain procurement mechanisms. Given the lack of effective controls on contract implementation, the mission runs a risk of not being able to choose the best supplier at the best price, not receiving the services expected at the established price and being invoiced for amounts that are not consistent with the work that is completed.

• A number of improvements have been made to procurement practices over the past few years. In particular, this has led to a significant decrease in the number of confirming orders, which are used to regularize transactions carried out outside a contract or purchase order (see Exhibit 1).
• The mission properly exercises its contracting authorities and retains the required supporting documents (such as estimates, invoices and purchase orders).
• The routine procurement of goods and services is planned and scheduled. 
• The mission has controls in place, such as confirmations of receipt that are documented on the invoices, in order to confirm that goods and services purchased are received prior to the payment of invoices.

Criterion 2: Procurement and payment of goods and services comply with applicable legislative requirements and policies while achieving value for money.

The review of 41 procurement-related samples revealed instances of non-compliance with policies and procedures.

• Instances of inappropriate use of certain procurement mechanisms, including:
  • Of the 16 contracts included in the sample reviewed, three contracts did not follow the procedures in terms of soliciting and evaluating proposals of competitive processes.
  • Two instances where a contract/purchase order was not established as required, even though the transaction was greater than $5,000.
  • Three instances where transactions should have been combined under one contract or included within an existing contract.
  • One instance where an amendment was made to pay for an item that was already planned for in the contract.

2. There was one transaction where the supplier’s name in the financial and administrative system did not match the supplier’s name on the invoice.

Recommendation 1

The head of mission should strengthen procurement controls, particularly in the selection and use of the appropriate mechanism.

Asset management– real property

Criterion 3: The mission has effective controls in place to manage monetary and non-monetary assets in line with the applicable policies.

Summary of observations: The mission implemented a number of effective controls to manage its real property portfolio. As a result, this portfolio is managed in a way that meets the mission's needs and construction work and renovations are consistent with the statements of work.

• Procedures for real property maintenance are well understood by all employees involved in managing the properties.
• Preventive and ongoing maintenance is planned and carried out in accordance with the property management manual. Unplanned repairs are identified by the Mission Request Online (MRO) system and tracked in a maintenance schedule.
• Every year, the mission develops and submits a complete work plan for the maintenance program to the real estate operations (ARN) division.
• A review of 9 cases of repair and renovation work showed that this work was consistent with the statements of work and met the mission's needs.

Asset management– vehicles and fuel

Criterion 3: The mission has effective controls in place to manage monetary and non-monetary assets in line with the applicable policies.

Summary of observations: The mission has implemented a number of controls to manage its vehicle fleet although it is possible to improve some processes. Improved tracking of necessary maintenance and fuel consumption would help prevent breakdowns and improve the fuel efficiency of the vehicles.

• The mission has an accurate and updated inventory of all of its vehicles. In addition, the mission tracks vehicle maintenance using a tracking tool. 
• The purchase of fuel for vehicles and power generators is controlled through the use of fuel cards.
• However, the maintenance list for the vehicle fleet is not updated with the maintenance carried out on the vehicles and some maintenance work is not carried out in a timely manner (in particular, maintenance work on the brake systems).
• In addition, the mission does not analyze fuel efficiency based on the distance travelled and/or the vehicles’ expected fuel efficiency.

NB: The mission is involved in a departmental pilot project to implement a new fleet management system (Fleetio). This system will help the mission set up maintenance reminders (oil, tires, etc.), track the maintenance work carried out and analyze fuel efficiency per vehicle.

Asset management– physical assets and inventory

Criterion 3: The mission has effective controls in place to manage monetary and non-monetary assets in line with the applicable policies.

Summary of observations: The mission has some controls in place regarding the management of its physical assets, although some improvements are necessary. The inventory lists in place do not include all of the mission's assets and do not include sufficient details identifying the location, age and state of the assets. Full and detailed inventories would improve the tracking of Crown-owned items and ensure the appropriate planning and budgeting for replacements.

• The mission has inventories for assets in the staff quarters but they are not updated as items are added or removed.
• The mission does not have an inventory system in place to manage physical assets in the warehouses or the chancery, or the air conditioning units in staff quarters.
• Inventories for Information Technology (IT) and security equipment are not complete or up to date.

Recommendation 2

The head of mission should implement a detailed system for tracking inventories that includes lifecycle management and that prioritizes attractive assets.

Asset management– cash

Criterion 3: The mission has effective controls in place to manage monetary and non-monetary assets in line with the applicable policies.

Summary of observations: The mission has implemented controls regarding the management of its monetary assets, although procedures on the transfer of responsibilities were not followed when required. The lack of a transfer of responsibilities for monetary assets could affect the mission's ability to carry out daily activities and prepare for emergencies.

Petty cash

• During the audit team’s visit, the person in charge of the petty cash account was absent and, since this person’s responsibilities were not formally transferred to another Canada-based staff member, the mission had to create a second petty cash account.
• The review of four petty cash samples showed that a number of purchases made using the petty cash accounts were not supported by invoices from the supplier. 

Emergency Cash Parcel (ECP)

• During the visit of the audit team, the person responsible for the ECP was absent and the Canada-based staff on site led the auditors to count a sum of money that did not correspond to the expected amount. Subsequently, the key Canada-based staff told the audit team that the amount of cash counted during the visit included the ECP as well as cash used by another mission program. Since the visit of the audit team, the mission has provided assurance that the situation has been rectified.

Recommendation 3

The head of mission should put in place a process to secure the content of the emergency cash parcel and to carry out an effective transfer of responsibilities allowing for the location of the emergency cash parcel to be known at all times and to have access to it.

Human resources

Criterion 4: Human resources management processes and practices are consistent with applicable policy requirements.

Summary of observations: The mission’s staffing processes and practices are consistent with applicable policies, although an inconsistency was noted in the key documentation that is retained in the staffing and human resources files. In addition, the hiring of emergency employees is not always consistent with related procedures and policies.

Staffing processes

• The mission has clear and documented staffing procedures.
• Staffing actions are generally consistent with government and departmental policies and directives. 
• The three sample staffing files reviewed showed an inconsistency in the key documentation that was retained.

Human resources files

• The human resources files analyzed did not include completed performance assessments. 

Emergency contracts

The mission relies on emergency employees on a regular basis and without always complying with government procedures and policies. Based on a sample of six emergency employee files:

• Four employees were under an emergency contract for more than 92 days.
• Six employees were there for more than 125 days within one fiscal year.
• Five of these employees received several consecutive emergency contracts.

Recommendation 4

The head of mission should implement:

• A management plan to ensure compliance with the departmental policy on emergency contracts.
• An effective process for documenting staffing and human resources files. 

Human resources – overtime

Criterion 4: Human resources management processes and practices are consistent with applicable policy requirements.

Summary of observations: The salaries of locally engaged staff (LES) and the payment of overtime are correct and complete. However, it was noted that some employees were doing overtime without obtaining documented pre-approval. Pre-approval helps ensure that overtime is planned and carried out to in order to respond to urgent needs only. 

• The mission has implemented controls to manage overtime, such as requiring employees to obtain documented pre-approval.
• The review of the salaries and overtime paid to LES and a sample of overtime transactions showed that payments were accurate and complete. However, some employees from the property section continue to do overtime without obtaining a documented pre-approval.

Occupational health and safety & physical security

Criterion 5: The mission complies with the department's requirements regarding the duty of care in terms of occupational health and safety and physical security.

Summary of observations: The mission has processes in place to identify and assess the risks and hazards relating to occupational health and safety and physical security. However, the mission does not regularly identify new occupational health and safety risks and some risks are not mitigated in a timely manner. A quick mitigation of the risks and hazards would help the mission prevent or reduce workplace accidents and health issues.

Occupational health and safety

• The mission has established an occupational health and safety committee (OHSC). 
• The OHSC did not conduct its annual inspection in 2022, as required.
• The most recent inspection was conducted in November 2021 and included 48 recommendations.
• Twelve recommendations (25%) are pending almost 2 years after the risks were identified. 

Physical security

• The mission's security program developed all the documents indicated in the department’s Manual of Security Instructions, which includes an Emergency Plan, Local Standing Security Orders, Mission Movement and Travel Protocols, the mission's security infractions program, and an Emergency Destruction Plan.
• However, some operational information is missing in the local standing security orders, particularly the security procedures for using [REDACTED].

Duty of Care

• The Dakar mission receives funding from the Duty of Care (DoC) envelope for various security expenses, such as payments for the security guards contract.
• The mission also receives DoC transfers in the commitment items for Foreign Service Allowance and Relocation for the position at the mission funded with the DoC envelope.

Conclusion and recommendations

Conclusion

The mission has implemented effective and sound internal control and management practices. Ongoing efforts are necessary in the areas of local procurement, the management of monetary assets and inventories, and human resource management.

Recommendations

1. The head of mission should strengthen procurement controls, particularly in the selection and use of the appropriate mechanism.
2. The head of mission should implement a detailed system for tracking inventories that includes lifecycle management and that prioritizes attractive assets.
3. The head of mission should put in place a process to secure the content of the emergency cash parcel and to carry out an effective transfer of responsibilities allowing for the location of the emergency cash parcel to be known at all times and to have access to it.
4. The head of mission should implement:
   • A management plan to ensure compliance with the departmental policy on emergency contracts.
   • An effective process for documenting staffing and human resources files.

Summary of findings

Annex A – management response and action plan