Archived - Management Practices Audit of the Manitoba Region

Background

A second round of Management Practices Reviews (MPRs) were included in the 2010-13 Risk-Based Audit Plan (RBAP) on the basis that MPRs provide Indian and Northern Affairs Canada (INAC) with an effective and economical approach to improving management practices and increasing awareness of leading practices. The RBAP was recommended by the Audit Committee and approved by the Deputy Minister on April 19, 2010.

The approach for the second round of MPRs include a regional Control Self-Assessment (CSA) workshop and an audit of management practices focused on the areas of highest risk as identified by the Audit and Evaluation Sector (AES) through the CSA workshop and a review of previous audit and review findings.

Audit Objective and Scope

The objective of this audit was to provide senior management with assurance over a selection of management practices assessed as being higher risk during the regional CSA workshop, a review of previous audit and review findings, and a review of departmental priorities. For management practices identified as high risk, AES assessed whether the controls and activities in place are adequate and effective in supporting the achievement of objectives in a manner that is compliant with applicable policies, procedures and regulations.

The scope of this audit covered April 1, 2009 to September 30, 2010. As described in the audit objective, the audit examined higher risk management practices and activities in terms of relative importance and performance. The audit scope for the Manitoba Region included the broad management practice areas of external client service standards, human resources management, risk management, and stewardship.

Observed Strengths

Throughout the audit fieldwork, the audit team observed several examples of how controls are properly designed and are being applied effectively by Manitoba's regional management. This resulted in several positive findings which are listed below:

• The Regional Executive Team (RET) reviews all staffing actions to ensure that they are appropriate and meet the Region's needs.
  
  
• Anticipatory staffing needs are managed using a three-year Strategic Staffing Plan and collective staffing (i.e. pools);
  
  
• Regional management places emphasis on completing Employee Performance Management (EPM) evaluations;
  
  
• enerally, expenditures are accurately recorded on a timely basis;
  
  
• Management analyzes, completes and reviews financials variances on a regular basis; and,
  
  
• Financial and non-financial information is reported through the Quarterly Report to both Regional Senior Management and Headquarters. The Quarterly Report is prepared using an established format and schedule;

Recommendations

The regional management practices were found to be generally well controlled; notwithstanding the audit team identified moderate issues resulting in nine recommendations where management controls can be improved in the areas of integrated human resource planning, documentation of human resources staffing decisions, timeliness of employee performance management process, risk management, external client service standards, and appropriate execution of the Financial Administration Act (FAA) on non-salary transactions.

It is recommended that the Regional Director General of the Manitoba Region:

• collaborate with Headquarters to define external client services offered by INAC and develop performance targets for the delivery of these services as part of ongoing management and monitoring of these standards. To ensure a consistent, national approach is adopted, standards, performance expectations and monitoring requirements should be formally communicated by Headquarters to all Regions.
  
  
• collaborate with Headquarters to ensure Human Resource Plans and regional Business Plans are integrated and provide details on anticipated human resource requirements and its impact on financial resources. Headquarters should communicate the approach to all Regions and Sectors to ensure a consistent, national approach to regional planning.
  
  
• formalize and document the process of linking staffing actions to the three-year Strategic Staffing Plan.
  
  
• ensure that supporting control documentation is retained in staffing files for audit and file continuity purposes.
  
  
• have all statements of merit signed by the supervisor for each staffing action to confirm that the statement of merit is still valid.
  
  
• analyze staffing actions, trends, and review the hiring process on a regular basis.
  
  
• ensure that approval of EPM goals and objectives occurs at the start of performance evaluation cycle (i.e. by May 31st for continuing employees, and within a month of a new employee's start date). In addition, it is recommended that the opportunities for improvement portion of the EPM be clearly articulated.
  
  
• develop and implement a formal, documented approach to risk management, including an ongoing process and governance structure for identifying, assessing, and monitoring risk mitigation actions. Headquarters should communicate guidance to all regions and sectors to ensure a consistent, national approach to risk management. "Headquarters" includes Policy and Strategic Direction, the INAC Risk Champion, and the Risk Management Centre in Audit and Evaluation Sector).
  
  
• ensure that Section 32 and Section 34 of the Federal Administration Act (FAA) are properly executed and that staff be provided with adequate training to perform appropriate expenditure initiation and commitment control (Section 32) and account verification (Section 34).

Conclusion

Generally, management practices were found to be effective and adequate; however, some improvements are required in the following areas: external client service standards; integrated human resource planning; human resources recruitment, hiring, and promotion; management of staff performance; risk management; and non-salary transaction processing.

1.1 Management Practices Initiative

AES conducted twenty (20) Management Practices Reviews (MPRs) between 2007 and 2010, as part of a Department-wide initiative to assess the relative strength of Region and Sector management practices. Following the completion of the first round of MPRs, the Deputy Minister and the Audit Committee recommended that a roll-up document be prepared to highlight the strengths and weaknesses of the process and to make a recommendation on whether the management practices initiative should be continued. As a result of the analysis, a second round of MPRs, using a revised approach, was recommended by the Audit Committee and later approved by the Deputy Minister.

Under the new approach, engagements were to be conducted in two phases to provide the departmental management with an audit-level of assurance: a Control Self-Assessment (CSA) workshop and a limited scope audit. Based on the feedback received from the control self-assessment as well as the results of previous audits and reviews, and a review of departmental priorities, a limited number of management practices were to be selected for inclusion in an audit.

1.2 Control Self-Assessment

The CSA workshop is the venue through which internal audit gathers participants' opinions on the importance, efficiency, and effectiveness of key management practices. Specifically, their views on how well each of their key management practices is functioning to support achievement of the Region's objectives. The CSA workshop was facilitated by an AES facilitation team, led by an external third-party, and was designed to allow for maximum discussion, with anonymous voting technology used to encourage open and honest feedback. As a result of the workshop discussions, preliminary interviews, and the review of previous engagement findings, AES identified six key areas of potential risk that required further analysis. These six areas of risk were as follows: external client service standards; human resources planning; management of staff performance; recruitment, hiring and promotion; risk management; and stewardship. These risk areas were mapped to relevant Core Management Control (CMC) categories and relevant audit criteria were developed and assessed (audit criteria are included in Appendix A).

1.3 Manitoba Region

The First Nations in Manitoba are represented by three active provincial political organizations divided on a north-south basis, and seven regional Tribal Councils with the common goal of strengthening Manitoba First Nations communities.

The Manitoba Region is organized into eight directorates: Executive Office (including Communications and Strategic Planning); Government; People & Trust Responsibilities; Lands; Infrastructure and Housing; Funding Services Operations; Human Resources; Corporate Services.

2.1 Audit Objective

The objective of this audit was to provide senior management with assurance over a selection of management practices assessed as being higher risk as identified through a regional CSA workshop, a review of previous audit and review findings, and a review of departmental priorities. For management practices identified as high risk, AES assessed whether the controls and activities in place are adequate and effective in supporting the achievement of regional objectives in a manner that is compliant with applicable policies, procedures and regulations.

The audit objective is supported by detailed audit criteria developed and aligned with the Core Management Controls.

2.2 Audit Scope

The scope of this audit covered April 1, 2009 to September 30, 2010. The audit examined management practices and activities considered by management and AES to be higher risk in terms of relative importance and performance. In certain instances where audit work was recently conducted or where future audit work is planned, management practices identified as high risk were excluded from the scope of this audit. In addition, management practices considered to be the primary responsibility of Headquarters were removed from the scope of the audit. Headquarters areas consistently identified as a high risk will be subject to future department-wide audits.

The scope for the Manitoba Region included the following management practices areas: external client service standards; human resources planning; management of staff performance; recruitment, hiring and promotion; risk management; and stewardship. The audit fieldwork was conducted from January 17 to 21, 2011 during a site visit to the Manitoba regional headquarters in Winnipeg, Manitoba.

5.1 Client Service Standards

5.2 Human Resources Management

5.3 Risk Management

5.4 Stewardship