Audit, Evaluation and Integrated Risk Management

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Slide 1 - Audit, Evaluation and Integrated Risk Management:
Lessons Learned

Slide 2 - Audit and Evaluation Directorate Activities

• During the two year period from 1 April 2004 to 31 March 2006 DFO Audit, Evaluation and Integrated Risk Management activities included:
  • The completion of 20 audits and evaluations tabled and approved by the Departmental Audit and Evaluation Committee (DAEC)
  • Working with program managers to assist in the review and formal tabling at DAEC of 32 status reports on Management Action Plans (MAP)
  • Oversight of the development by management of 24 Results-Based Management and Accountability Frameworks (RMAF) and Risk-Based Audit Frameworks (RBAF)
  • Implementation of a standardized integrated risk management approach across DFO, involving:
    • The determination and assessment of departmental risks
    • The consistent and explicit implementation of risk management in decision-making and resource allocation

Slide 3 - Audit and Evaluation Activities

• Audit and evaluation activities during this two year period covered a range of programs and activities that included assessments of:
  • The effectiveness of management control frameworks with respect to departmental resources
  • The effectiveness of standards, policies, procedures and performance measurement mechanisms in place to support efficient, effective and relevant program delivery
• Notable Areas By Lead Sector:
  • Human Resources and Corporate Services (Travel and Hospitality, Information Technology, Security, Occupational Health and Safety, Revenue, Grants and Contributions)
  • Fisheries and Aquaculture Management (Pacific Salmon Selective Fisheries Program, Pacific Salmon Foundation, Yukon Salmon Subcommittee, Sustainable Aquaculture, Fisheries Access Program, First Nations Mentor Deployment Program)
  • Science (Experimental Lakes)

Slide 4 - Audit, Evaluation and Integrated Risk Management: Lessons Learned

• The audit and evaluation engagements and the implementation of the integrated risk management (IRM) have resulted in some key lessons learned:
  • Managers are engaged and responsive
  • Key recommendations are being implemented
  • Risks to achieving departmental objectives are identified, assessed and managed
  • In planning, decision-making and resource allocation risk assessment has become explicit

Slide 5 - Audit and Evaluation - Managers Are Engaged and Responsive

• Standardized monitoring tools are emerging
  • i.e. Travel (reports are now generated and provided to managers to assist in monitoring travel expenses)
  • Sampling methodology is under-development for the travel account verification process
• Managers are proactively developing RMAFs to clarify what results are expected, who is to deliver them and how they will be measured.
  • Two RMAFs in Oceans and Habitat Management
• The quality and completeness of documentation in support of financial transactions have improved
  • i.e. Travel and Fisheries Access Program - Expense files are better documented
• MAP updates have contributed to improvements in the control framework
  • i.e. Travel and Hospitality, Fisheries Access Program, Environmental Compliance and Communications

Slide 6 - Audit and Evaluation – Key Recommendations Are Being Implemented

• Where policies and directives were in conflict, clarifications have been issued
  • Many explanatory bulletins and directives were issued as a result of both the travel and hospitality and credit card audits
• Procedure Manuals are being modernized to provide program personnel with updated and improved procedures. Training sessions are being given resulting in enhanced accountability and compliance in financial transactions
  • Expenditure and payment authority training has been provided and is now a condition of having delegated financial signing authority
  • For credit cards, a draft financial, materiel and administration manual was developed
• Monitoring the effectiveness of controls is improving
  • i.e. verification of expenditure transactions
• Managers are exhibiting increased risk sensitivity and are increasingly using the departmental corporate risk profile in the management of their operations
  • i.e. Science and CCG Integrated Risk and Performance Measurement Frameworks

Slide 7 - IRM - Identification, Assessment and Management of Risk

• The Departmental Management Committee has completed a risk escalation exercise which identified the need for changes to the management model so risks were managed at the appropriate level.
• 70% of the Program Activity Architecture has completed risk profiling.
• The Departmental Integrated Business Planning Framework has been amended to incorporate risk information and support risk based allocations.
• The Department Wide Test demonstrated to senior management how risks to departmental outcomes vary between Regions and where there are best practices and areas for improvement.

Slide 8 - IRM – Identification, Assessment and Management of Risk

• Conservation and Protection are developing tools to use risk information for management of staff and resources on a day to day basis
• Specific analyses of the risks associated with government wide and international issues has been seen as a best practice and is being implemented more broadly
  • The impact of Climate Change on DFO’s mandate and programs
  • Risks associated with International Fisheries and Oceans Governance

Slide 9 - IRM - Application of Risk Management in Planning, Decision-Making and Resource Allocation

• Consistency is achieved through the implementation of a standardized approach across DFO which is applied to:
  • Integrated business planning
  • Planning for Major Capital
  • Ranking funding pressure proposals
• DFO now has a clear and consistent "risk lens" in decision making, specifically in:
  • Decisions on allowable catch
  • Allocation of resources to problem areas

Slide 10 - IRM - Application of Risk Management in Planning, Decision-Making and Resource Allocation

• The completion of integrated performance measurement and risk management frameworks in Science and the Coast Guard clearly identify key results, how they are measured, who is accountable and what risks are limiting achievements
• DFO’s culture is now risk aware and is framing planning and operating decisions using risk information. Leadership in this area is being shown by:
  • Coast Guard
  • Science
  • Conservation and Protection

Slide 11 - Areas for Future Consideration for Management

• To build on lessons learned, managers must continue to focus on:
  • Developing realistic action plans to implement audit and evaluation recommendations
  • Embedding risk analysis in all program activities
  • Investing in the development and enhancement of management control frameworks that emphasize efficient, effective, responsible, and accountable resource stewardship
  • Ongoing development of policies, procedures, guidelines and standards that support control frameworks and communicating these across the department to build an organizational learning culture that shares best practices
  • Ongoing investment in the development of RMAFs and RBAFs
  • Embedding performance measurement strategies into the fabric of programs and activities
  • Improving information systems to report on performance
  • Strengthening the communication of audit and evaluation results in DFO to sustain change