Audit of Commercial and Aboriginal Fisheries - Conservation and Protection

Project Number 6B236
Internal Audit Report
March 2012

Table of Contents

1.0 EXECUTIVE SUMMARY

The Commercial Fisheries Program of Fisheries and Oceans Canada supports long-term sustainability of commercial fish stocks and industry efforts to improve economic prosperity. Commercial Fishing is an important industry across Canada, with a landed value of close to $1.7 billion in 2009.

In keeping with its mandate to manage Canada's fisheries in a sustainable manner, the Department is responsible for enforcing the Fisheries Act and supporting regulations, as well as other legislation. The Conservation and Protection Program’s activities are designed to promote and maintain compliance with legislation, regulations and management measures to achieve the conservation and sustainable use of Canada’s aquatic resources, and the protection of species at risk, fish habitat and oceans.

The audit has found that, overall, the Conservation and Protection governance framework and control activities for Commercial and Aboriginal Fisheries are well established; however, the program is currently not assessing the effectiveness of the controls to ensure that compliance with relevant regulations and legislation is maintained and achieved. The audit team identified the following observations:

  • The Conservation and Protection governance framework is well established and operational plans are linked to Fisheries and Oceans Canada's strategic outcome for sustainable fisheries. However, the collaborative relationship between Conservation and Protection and Resource Management with regards to initiatives within Ecosystems and Fisheries Management needs improvement.
  • The selection and review of control activities for Commercial and Aboriginal Fisheries does not effectively include consideration of their relevance and appropriateness to the risk and related objective. The allocation of resources is not aligned to Conservation and Protection's enforcement strategy.
  • The intelligence-gathering systems and processes do not allow Conservation and Protection to share intelligence across regions nor do they assist in determining where to effectively focus enforcement efforts.
  • Performance measures have been identified; however, the performance indicators are largely output based and do not provide useful information in terms of results to allow the program to adjust course as needed to ensure compliance efforts are strategically focused.
  • Financial controls are appropriate to carry out operational plans. There is adequate monitoring of budgets, forecasts, and resource allocations. However, the manner with which funds are allocated to Major Case Management and special investigations does not adequately address the financial needs of this activity.
  • Conservation and Protection lacks a national training program for Major Case Management and Special Investigations.
  • Recruitment strategies are in place but do not consider the current and future needs of the intelligence program.

Implementation of the audit recommendations related to these observations will help Conservation and Protection strengthen control activities to promote and maintain compliance with the legislation, policies and fishing plans relating to conservation and sustainable use of the resource.

Management is in agreement with the audit findings and recommendations. Action plans have been developed by Management and have been included in the report to address the recommendations.

2.0 BACKGROUND

Commercial Fishing is an important industry across Canada, with a landed value of close to $1.7 billion in 2009. Fisheries and Oceans Canada’s Commercial Fisheries Program supports long-term sustainability of commercial fish stocks and industry efforts to improve economic prosperity. Fisheries and Oceans Canada leads the development of management plans to manage fisheries towards the common goals of sustainability and economic prosperity.

Aboriginal fishing policy in Canada is guided by a vision of supporting healthy and prosperous Aboriginal communities through building and supporting strong, stable relationships, facilitating Aboriginal participation in fisheries and associated economic opportunities, and in the management of aquatic resources.

The Conservation and Protection Program promotes and maintains compliance with legislation, regulations and management measures to achieve the conservation and sustainable use of Canada’s aquatic resources, and the protection of species at risk, fish habitat and oceans. The Conservation and Protection Directorate has approximately 645 Fishery Officers in over 150 offices located mainly in fishing communities and coastal areas of Canada.

The DFO National Compliance Framework outlines the activities Conservation and Protection should undertake to achieve and maintain compliance with the Fisheries Act and regulations made under this Act. The Aboriginal Communal Fishing Licences Regulations are the regulations respecting fishing carried on in accordance with Aboriginal Communal Fishing Licences, pursuant to section 43 of the Fisheries Act.

Conservation and Protection’s contribution is delivered through a balanced regulatory management and enforcement approach including: promotion of compliance through education and shared stewardship; monitoring, control and surveillance activities; and, management of major cases/special investigations in relation to complex compliance issues.

3.0 AUDIT OBJECTIVE

The audit objective was to provide assurance that the Conservation and Protection activities for Commercial and Aboriginal Fisheries are in place and effective to achieve and maintain compliance with relevant regulations and legislation.

4.0 AUDIT SCOPE

The scope of the audit included the Pacific and Maritimes regions and National Headquarters.
Documentation and reports were reviewed for fiscal years 2010-11 and 2011-12 as well as those for prior years as needed.

5.0 AUDIT APPROACH

The audit was conducted in accordance with the Treasury Board Policy on Internal Audit and in compliance with generally accepted auditing practices. The conduct phase commenced in September 2011 and concluded in December 2011. The conduct phase included a review and analysis of documentation and reports relating to Commercial and Aboriginal Fisheries, walkthroughs and on-site observations. Interviews were held with Conservation and Protection management and staff from headquarters and regions and other relevant stakeholders within Fisheries and Oceans Canada involved with Commercial and Aboriginal Fisheries.

The audit criteria selected for the engagement were based on the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors.

6.0 AUDIT FINDINGS

This section provides the observations and recommendations resulting from the audit work carried out. While the audit was conducted based on the lines of enquiry and audit criteria identified in the planning phase, this report is structured along the following main themes:

  • Governance and Accountability;
  • Risk Management and Control Activities;
  • Performance Measurement;
  • Financial Controls; and
  • Training, Tools, Resources and Information.

For conclusions by audit criterion, please refer to Appendix A.

Based on the audit work performed and our professional judgment, the risk associated with each observation was rated using a three-point scale. The risk ranking (high, moderate, low) is based on the level of potential risk exposure we feel may have an impact on the achievement of Fisheries and Oceans Canada objectives, and is indicative of the priority Management should give to the recommendations associated with that observation. The following criteria were used in determining the risk exposure level:

High

Controls are not in place or are inadequate.

Compliance with legislation and regulations is inadequate.

Important issues are identified that could negatively impact the achievement of program/operational objectives.

Moderate

Controls are in place but are not being sufficiently complied with.

Compliance with central agency/departmental policies and established procedures is inadequate.

Issues are identified that could negatively impact the efficiency and effectiveness of operations.

Low

Controls are in place but the level of compliance varies.

Compliance with central agency/departmental policies and established procedures varies.

Issues identified are less significant but opportunities that could enhance operations exist.

6.1 GOVERNANCE AND ACCOUNTABILITY

As per the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors, a department’s governance-related objectives are enabled by the collective suite of management processes and controls that are in place to set strategic direction, operational plans, objectives and priorities and to provide clear direction on how resources should be allocated to achieve these plans. The presence of an oversight body is important to ensure that management’s direction, plans and actions are appropriate and responsible. Oversight bodies should be provided with timely and accurate financial and operating information in order to fulfil their oversight function.
 
An appropriate organizational structure that clarifies authorities, responsibilities, and the duty to report is a key control of accountability. The clear delineation of responsibilities, delegated authorities, segregation of duties and lines of communication support the effective coordination between all parts of the organization and ensure that all parties are aware of, and comply with, their responsibilities.

Observations
Moderate Risk

6.1.1 Governance Framework aligned to the organization’s outcomes

The Conservation and Protection program has in place a governance framework which is well established and operational plans that are linked to Fisheries and Oceans Canada’s strategic outcome for sustainable fisheries. However, the collaborative relationship between Conservation and Protection and Resource Management with regards to initiatives within Ecosystems and Fisheries Management needs improvement.

The Conservation and Protection program has implemented an operational planning process aimed at achieving its conservation and protection objectives. The Operational Planning and Budgeting Process is formally documented and tools and guidelines have been developed to assist regions in their planning and budgeting exercises. The Ecosystems and Fisheries Management sector has developed an Integrated Business and Human Resources Plan 2011-12 which outlines Conservation and Protection’s roles and responsibilities within the sector. In addition, the DFO National Compliance Framework provides a foundation for the activities the Department should undertake to achieve and maintain compliance.

The Conservation and Protection Directorate’s organizational structure is in place and the reporting lines are defined. The roles and responsibilities are documented, clear and communicated to employees. Interviews with Conservation and Protection Area Chiefs revealed there was effective communication between the Director General, Conservation and Protection and Conservation and Protection staff.

The committees providing oversight have a clearly communicated mandate that includes roles with respect to governance, risk management and control. There is ongoing, transparent communication between oversight bodies, management and the Deputy Minister for decision-making purposes. The main decision-making body is the Conservation and Protection Executive Committee (formerly the National Conservation and Protection Directors Committee) which is chaired by the Director General, Conservation and Protection and includes all Regional and National Headquarters Directors of Conservation and Protection. Matters that require a high level of approval will be brought up to the Fisheries Management Oversight Committee by the Director General, Conservation and Protection.

Conservation and Protection’s responsibilities within Ecosystems Fisheries Management include taking a lead role in the development of Compliance Plans which form part of the Integrated Fisheries Management Plans and working with Resource Management to help draft licence conditions. However, the audit team has learned through interviews and document review that this collaborative relationship is not formally created and there is inconsistency across the regions on the level of collaboration. Interviews with Conservation and Protection staff noted that it is not uncommon for elements to be included in the Compliance Plans despite Conservation and Protection stating that they will not be able to enforce certain elements. The audit team obtained examples of correspondence between Conservation and Protection and Resource Management documenting Conservation and Protection’s point of view on the challenges of enforceability of some licence conditions. In addition, the following examples of terms and conditions of licences that are difficult to enforce were provided by Conservation and Protection staff:

  • The "mortally wounded" clause, which allows fishers to keep certain species when they are either dead or mortally wounded. The definition was open to interpretation and impossible to enforce.
  • The time and quota condition for certain fisheries. The quota may be met but the time period was still within the open period and fishing continued. The correct wording should have specified either a time period or quota but not a time and quota.

Conservation and Protection has started to participate in pre- and post-season review meetings with Resource Management, Science, Policy and Economics, and Aboriginal Programs and Governance. This will enable Conservation and Protection to provide input from an enforceability perspective on the management of the fisheries. The audit team learned that the Director General of Conservation and Protection will be chairing the Fisheries Management Oversight Committee which may lead to more collaboration between Resource Management and Conservation and Protection. Currently the level of collaboration between Resource Management and Conservation and Protection varies amongst detachments, areas and regions.

Recommandation Management Action Plan
R-1. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should ensure that the collaborative relationship between Conservation and Protection and Resource Management be formally defined and establish the conditions for obtaining Conservation and Protection’s sign-off on all Integrated Fisheries Management Plans and licence conditions.
  • Conservation and Protection to continue to participate at National Integrated Fisheries Management Plan Committee meetings
  • Develop and institutionalize new roles and responsibilities protocol regarding the input into the Integrated Fisheries Management Plans and changes to conservation measures (licence conditions), post-season reviews and development of management measures. Begin exercise by conducting a review of current practices in all regions. Bring back summary and recommendations to joint Conservation and Protection / Resource Management meeting or Fisheries Management Oversight Committee for decisions and to outline the path forward.
  • Improve communication between Conservation and Protection and Resource Management through regular meetings of Regional Directors, and on-going discussions at the Fisheries Management Oversight Committee, including at least one meeting annually of Conservation and Protection Directors and Regional Directors of Fisheries Management to discuss issues related to compliance and enforcement.
Office of Primary Interest: Director General, Conservation & Protection
Due Date: June 2012 

6.2 RISK MANAGEMENT AND CONTROL ACTIVITIES

As per the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors, in an environment with well-designed controls, management and staff will have a solid and up-to-date understanding of the internal and external factors that may expose their strategic and operational objectives to risk. Management must often make decisions that involve trade-offs due to limited resources; accordingly, an organization's control framework must include formal risk management practices to assist decision making. Well-managed organizations should have in place formal and institutionalized practices that permit them to monitor their environments for conditions - or changes to the conditions - that may result in risk or opportunity.

Observations
Moderate Risk

6.2.1 Effective and appropriate control activities

The Conservation and Protection program has in place controls to ensure compliance with the Fisheries Act and the regulations made under this Act. However, the selection and review of control activities for Commercial and Aboriginal Fisheries does not effectively include consideration of their relevance and appropriateness to the risk response and related objective. The allocation of resources is not aligned to the Conservation and Protection overall enforcement strategy.

The DFO National Compliance Framework identifies Conservation and Protection control activities under 3 “Pillars”:

  • Pillar 1 - Education and Shared Stewardship: These activities allow for the promotion of voluntary compliance through education and engagement of partners and stakeholders. Shared stewardship includes efforts related to the collaborative arrangements with external parties such as industry, harvest associations and Aboriginal organizations.
  • Pillar 2 – Monitoring, Control and Surveillance: These activities include arrests, stakeouts, prosecution/court cases, investigations, land, sea and air patrols and use of third-party service providers such as the dock-side monitors to detect and deter illegal activities.
  • Pillar 3 - Major Case/Special Investigations: Conservation and Protection has been moving to Major Case Management and Special Investigations to more effectively identify and prosecute offenders. These are large cases involving poaching, fraud, collusion, proceeds of crime, illegal sales and laundering.

Interviews with Conservation and Protection staff and document review indicate that the selection of control activities does not effectively consider relevance and appropriateness to risk. Through document review and interviews, the audit team learned that there are no standards to measure the success of Pillar 2 activities and Conservation and Protection has not determined how to measure the effectiveness of its controls. The performance measurement framework for Conservation and Protection targets is mostly output based. The audit team finds that this does not encourage improvement in the enforcement efforts or constitute an assessment of the effectiveness of the mix of controls selected and/or employed. Based on interviews, document review and walkthroughs, the audit team identified weaknesses related to Pillar 2 activities, including land and sea patrols and aerial surveillance operations. The audit team found the program was not being strategic in its enforcement activities, nor was it addressing weaknesses in the controls. The audit team also found that Conservation and Protection is not ensuring its efforts are focused on areas of high priority.

Although Conservation and Protection is enhancing focus on Pillar 3 activities, according to documents received only 1.96% of compliance effort was allocated to Pillar 3 activities in 2009-2010. The allocation of resources does not align with the overall program strategy nor does it consider the impact on other enforcement activities. For example, to conduct a major investigation, Fishery Officers are reassigned from their current general duties to the investigative team. The reassignment could have an impact on the detachment’s ability to continue Pillar 2 activities such as patrols depending on the number of Fishery Officers that are reassigned.

In addition, Conservation and Protection has adopted a national Major Case Management model to conduct and manage major cases and special investigations. The audit team learned through interviews that the roles and reporting relationships of the members of the investigative team were not always as prescribed in the Major Case Management model. Also, the detachments often worked in silos rendering the investigative efforts inefficient. The audit team obtained a copy of a self-assessment conducted by members of the investigative team in the Maritimes region pertaining to the process of regulatory inspections. The investigative team and the process deviated from the Major Case Management model. The process assessment highlighted the following issues:

  • Leadership was poorly defined and multiple line reporting resulted in inefficiencies with continual communication breakdown.
  • Costs were high due to investigative inefficiency.
  • Ability to develop and sustain effective partnerships with other agencies and the Public Prosecution Service of Canada was limited.
  • Development and dissemination of intelligence was limited beyond Detachment boundaries.

Commercial Fisheries

Control activities for commercial fisheries are well established. Commercial license conditions are in place and have evolved over time to address changing resource management needs. However, today's fishing industry is increasingly sophisticated, which augments the risks related to potential exploitation of weaknesses in legislation and gaps in management measures.

Aboriginal Fisheries

Aboriginal Fisheries present unique challenges for Conservation and Protection. According to the Aboriginal Fisheries Strategy Annual Report 2009-2010, Aboriginal Fisheries Strategy Agreements and Amendments were in place with 194 Aboriginal groups in British Columbia, the Yukon, Quebec, the Northwest Territories and Atlantic Canada. Agreements are negotiated at the area level and include licence conditions. The audit team learned through interviews and document review that there is no standard Aboriginal Fisheries Strategy agreement, but that each one is different. Communal licences have become very complex, some with over 400 different clauses.

When a First Nation group has not signed an Aboriginal Fisheries Strategy agreement, Communal Food, Social and Ceremonial licences are still issued to these groups. Typically, communal licence conditions flow from the fishing plan within the Aboriginal Fisheries Strategies Agreement. However, where Fisheries and Oceans Canada cannot reach an agreement with a First Nation, as per section 6(f) of the Policy for the Management of Aboriginal Fishing, the conditions of the communal licence will be minimal and will contain allocations based on the last offer made by Fisheries and Oceans Canada before termination of negotiation. Some Conservation and Protection staff stated that it is difficult to enforce Communal Food, Social and Ceremonial licences of Aboriginal groups who do not have signed Aboriginal Fisheries Strategy agreements. Based on interviews and a review of the variety of Aboriginal Fisheries Strategy agreements and communal licences, it appears to be challenging for Conservation and Protection to ensure compliance within the Aboriginal Fisheries due to the number and complexity of Aboriginal Fisheries Strategy agreements. As well, Conservation and Protection staff have a sense that there is a lack of capacity, controls and measures in place to monitor Aboriginal fisheries.

Another enforcement challenge for Fishery Officers is the illegal sale of Food Social and Ceremonial fish. In order for the case to be brought to court and to obtain a successful conviction, Fishery Officers must demonstrate that they have tracked the fish from its source to the final sale and have observed the exchange of money during the sales transaction. This requires a high level of effort and is cost prohibitive.

Conservation and Protection staff stated in interviews that in order to successfully prosecute illegal activities for commercial and aboriginal fisheries, they must move efforts towards Pillar 3 activities of Major Case Management and Special Investigations.

Moderate Risk

6.2.2 Intelligence and selection of control activities

Conservation and Protection lacks the intelligence gathering systems and processes to allow it to share intelligence across regions and assist in determining where to focus enforcement efforts to be more effective.

Each region has a variety of databases and information systems to enter and gather data. The databases used nationally to collect information on effort and violations are: the Fishery Officer Enforcement Activity Tracking System which captures Fishery Officers compliance efforts in hours, and the Departmental Violations System which captures occurrences and violations. Although Fishery Officers are using some of the same systems, they are not entering information in the same manner or at all. It was stated in some interviews with Conservation and Protection staff that Fishery Officers are sometimes rushed and don’t always input data properly into the databases. The audit team learned that the Crossfire (x-fire) database has been selected as the national software suite to electronically manage Major Case Management and the i2 software has been selected as the national intelligence database. It was learned, through interviews with Conservation and Protection staff and walkthroughs, that the Crossfire and i2 databases have not been fully implemented in all regions.

Conservation and Protection management stated that intelligence-led policing will allow Conservation and Protection to analyze information as it comes in and look for trends in order to determine where to devote resources. The audit team learned through interviews that Conservation and Protection is currently lacking in strategic use of information and intelligence. Conservation and Protection staff have expressed a need for a national framework, database and approach to intelligence gathering and sharing. In addition, there is no sharing of lessons learned from Major Case Investigations from one region to the next. Regions could benefit from more operational guidance. The audit team found that Conservation and Protection has not determined the combination of control activities that will allow it to have the greatest impact on the compliance level of the fisheries and focus compliance efforts where needed.

Recommandation Management Action Plan
R-2. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should conduct an assessment of the various control activities to determine their effectiveness with consideration of their relevance and appropriateness to the risk response and ensure that the allocation of resources is aligned with Conservation and Protection priorities.
  • Refine the program strategic planning process including all key elements (ie. Performance measurement, risk assessment, implementation of the operational planning and budgeting process) to enable the assessment of the various control activities and ensure resources are aligned with Conservation and Protection priorities.
  • Identify and assess potential for implementation of new technologies to meet Conservation and Protection's monitoring, control and surveillance requirements.
  • Facilitate alignment between the Catch Certificate Audit Office and the Pillar III activities.
    • Fill Chief of Catch Certification Audit Office position
    • Classify Catch Certification Audit Office Analyst positions
Office of Primary Interest: Director General, Conservation and Protection
Due Date: December 2012 
Recommandation Management Action Plan
R-3. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should establish a national Major Case Management model to define roles, responsibilities and accountabilities.
  • Establish National Governance for Major Case Management.
  • Establish a Major Case Management model adapted within the context of environmental monitoring and compliance.  This will include investigative standards, policies, procedures, practices, resources and tools.
  • Establish processes to ensure that Conservation and Protection has access to the knowledge, skills, and abilities to undertake large and complex investigations.
  • Establish appropriate, nationally integrated systems and structures, including secure environments, which will allow for collaboration, coordination, and common case management software.
Office of Primary Interest: Director General, Conservation and Protection
Due Date: March 2013 
Recommandation Management Action Plan
R-4. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should implement a national intelligence gathering and data system including a national framework to assist Conservation and Protection in evaluating its enforcement efforts and to more effectively and efficiently conduct its control activities.
  • Update the National Compliance Framework to reflect the role of intelligence services;
  • Establish National Governance for Intelligence Services;
  • Establish an intelligence model adapted within the context of environmental monitoring and compliance.
  • Establish the intelligence cycle as a core business practice of Conservation and protection;
  • Establish appropriate, nationally integrated systems and structures, including secure environments and practices that will allow for collaboration, collection, creation and dissemination of intelligence products;
  • Implement “Field Access to Intelligence” solution through mobile office technology pilots.
Office of Primary Interest: Director General, Conservation and Protection
Due Date: March 2013 

6.3 PERFORMANCE MEASUREMENT

As per the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors, a sound performance measurement framework enables management to establish and review performance objectives, targets and indicators. The controls should encompass the processes that are in place to monitor financial and operational performance on an ongoing basis and the degree to which performance results are fed back into the planning process. The absence of appropriate managerial oversight can result in excessive risk-taking and insufficient detection of errors or potential errors, conditions that are likely to increase operational risk.

Observations
High Risk

6.3.1 Performance indicators measure the effectiveness of enforcement activities

Conservation and Protection has identified performance measures linked to planned results; however, the performance indicators are largely output based and are not measuring the outcomes of Conservation and Protection enforcement activities.

The Conservation and Protection Program has developed the Conservation and Protection Performance Measurement Strategy, dated November 2010, which outlines program objectives, expected results, the Conservation and Protection program logic model and links program outcomes to departmental strategic outcomes. The Performance Measurement Strategy is still in draft form. It has been shared with some of the Regional Chiefs of Program Planning and Analysis and Conservation and Protection Directors but has not yet been finalized or formally implemented.

Conservation and Protection has been gathering data on its outputs; however, this does not provide insight into enforcement outcomes to assess their effectiveness and enable the program to better focus its compliance efforts. The audit team has reviewed the Performance Measurement Strategy and determined that the performance measures are largely output based. The information used to prepare performance reports is taken from the Fishery Officer Enforcement Activity Tracking System and the Departmental Violations System. The Fishery Officer Enforcement Activity Tracking System will provide the level of effort in hours, and the Departmental Violations System will provide the results of those efforts in terms of the number of violations. The performance reports are reviewed and monitored by the Chiefs of Program Planning and Analysis and any variances greater than 10% from the previous year’s outputs are questioned. Variances may include differences in patrol hours or variances in the number of Vessel Monitoring System units deployed on commercial vessels. However, these outputs are only as reliable as the information entered into the Fishery Officer Enforcement Activity Tracking System and the Departmental Violations System and the audit team learned through interviews with Conservation and Protection staff that information entered into these systems by the Fishery Officers may be incomplete or inaccurate.

While Conservation and Protection management has acknowledged the challenge of measuring the performance of enforcement activities, it wants appropriate performance measures in place to position it so as to more effectively meet its objectives. National Headquarters has provided some direction with the Performance Measurement Strategy. The regions, with the support of their regional Chiefs of Program Planning and Analysis, have started working on analyzing their compliance efforts.

Observations
High Risk

6.3.2  Monitoring of actual performance against planned results

Conservation and Protection is monitoring performance against plans; however, this is partly based on performance indicators that do not provide useful information in terms of results to allow Conservation and Protection to adjust course as needed to ensure compliance efforts are strategically focused.

The Conservation and Protection’s Performance Measurement Strategy states that ongoing performance measurement requires the regular collection of information to help determine how the program is progressing at any point in time. Although the regions are monitoring their compliance efforts for detachment or area purposes, it appears that Conservation and Protection is not effectively ensuring that enforcement activities are targeting the riskiest areas in order to work efficiently, nationally and across regions. Both the Pacific and the Maritimes regions are monitoring planned versus actual results through the Operational Planning and Budgeting Process. The areas visited during the audit provided examples of quarterly and mid-year reports which show that outputs/deliverables are being monitored and variances are noted.

Another form of monitoring performed by Conservation and Protection is their participation in the post-season reviews of the Fisheries, alongside Resource Management, Science and Policy and Economics. The post-season review allows Conservation and Protection to evaluate compliance efforts for the Fisheries. In the past, Conservation and Protection was not included in the post-season review as it was a Fisheries Management exercise. As Conservation and Protection is responsible for implementing the Compliance Plan within the Integrated Fisheries Management Plan, it is beneficial for them to participate in post-season reviews to provide valuable feedback to Resource Management on the effectiveness of the management measures to conserve and protect the fishery. As shown in the “Preparing an Integrated Fisheries Management Plan (IFMP) Guidance Document,” the Compliance Plan should include a performance review and outputs and results for the specific fishery from the previous year, as well as any trend data that might be available. Resource Management and Science are developing an implementation plan for Integrated Fisheries Management Plans for all fisheries over the next three years and Conservation and Protection has started incorporating performance reviews into the Compliance Plans of the Integrated Fisheries Management Plans. The Pacific Region’s 2011-12 Integrated Fisheries Management Plan for Salmon and the Maritimes Region’s 2011 Inshore Lobster Integrated Fisheries Management Plan included post-season performance reviews. The post-season performance reviews should help guide management measures such as licence conditions and should feed into reviewing and updating performance measures as well.

Recommandation Management Action Plan
R-5. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should revise performance measures to ensure they clearly measure the outcomes rather than the outputs of Conservation and Protection to help ensure enforcement activities are targeting areas of highest risk.
  • Revise the  Conservation and Protection Performance Measurement strategy to include new indicators and sources of information:
    • Refine the performance indicators for the Education and Shared Stewardship Sub-Activity, putting more focus on performance indicators for outcomes (rather than outputs) and on target audiences.
    • Develop and implement standards to measure the success of Pillar 2, and to measure the effectiveness of Conservation and Protection’s controls ensuring the program’s efforts are focused on areas of high priority.
    • Develop indicators associated with enhancing focus on Pillar 3 activities, and ensuring allocation of resources aligns with the overall program strategy.
  • Collaborate with European Community Fisheries Control Agency on establishment of internationally recognized and accepted performance measures for enforcement. 
Office of Primary Interest: Director General, Conservation and Protection
Due Date: December 2012

6.4 FINANCIAL CONTROLS

As per the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors, departmental stewardship objectives are enabled through controls. Control activities are established throughout the organization, at all levels and in all functions, and prescribe how activities should be performed and prohibit inappropriate action. In this way, they provide the limit of acceptable action that all staff should clearly understand. Controls include a range of activities as diverse as policies and procedures, financial, cost and transaction management practices and controls.

Observations
Low Risk

6.4.1 Financial controls for budgeting, forecasting, and reallocating resources

Conservation and Protection has appropriate financial controls for budgeting, forecasting and utilization to ensure the efficient use of program funds to achieve its strategic objectives and carry out its operational plans. Forecasts are monitored on a regular basis and significant variances from budget are identified and explained. However, the current budget structure for Major Case Management and special investigations does not adequately address the financial needs of this activity.

The audit found that National and Regional Operational Plans take into account the activities, schedules and resources needed to achieve objectives. The National level Operational Plan identifies the priorities for the sector. From these priorities, the Regions developed their regional operational plans through the Operational Planning and Budgeting Process. An analysis of the regional operational plans indicated that resources were generally being allocated to the highest priority areas. Operational Plans are reviewed at year-end and assessed for their achievement of the plan. Monitoring of the plans occurs throughout the year.

Both regions visited had different approaches to funding Major Case Management projects. With regards to their ability to request additional funding, both regions described a similar process starting with the Regional Director, Conservation and Protection, and elevated further if necessary. Major investigations are planned at the beginning of the year through the Operational Planning and Budgeting Process. Area/detachment offices propose a list of projects which are then ranked and the final selection/approval of projects is done at the regional level. The projects are funded based on the estimated cost of the project. The actual costs could be much greater than forecasted. Also, the current planning process does not allow for flexibility during the year, for example, to conduct other investigations if one is deemed to be warranted. In addition, the projects that were not approved are either dropped or presented again the following year which could impact the success of the investigation if Conservation and Protection does not act in a timely manner. If Conservation and Protection takes too long to act on a tip or intelligence information it has gathered, evidence could be lost resulting in a missed opportunity. 

The audit team learned that if an unplanned investigation is required, a request would be generated and sent to the Regional Director, Conservation and Protection who would then decide to reallocate resources internally or make a request to Headquarters or the Regional Director General. Through interviews, the audit team heard that projects have never been stopped for lack of funding, however, if funding is lacking, the project is postponed to the following year.

Recommandation Management Action Plan
R-6. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should set up a central investigative fund, controlled by the Director General, Conservation and Protection for the purpose of providing funds to regions based on need for major cases and special investigations.
  • Conservation and Protection Executive Committee to develop and bring forward a business plan for implementation of a central investigative fund for the purpose of providing funds to regions based on needs for major cases and special investigations.
Office of Primary Interest: Director General, Conservation and Protection
Due Date: December 2012 

6.5 TRAINING, TOOLS, RESOURCES AND INFORMATION

As per the Office of the Comptroller General’s Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors, the control elements describe a broad commitment to competence and the overall capability of government employees. In an environment with well-designed controls, people have the skills necessary to support the achievement of their organizational objectives. The organization should therefore have controls in place to support the training and development of staff, and a suitably comprehensive suite of human resources policies and practices aimed at attraction, recruitment, retention, and employee recognition. While some of these controls are specific to the organization’s human resources function, many extend beyond and encompass the culture, practices and operations of the broader organization.

Observations
Moderate Risk

6.5.1  Appropriate recruitment, hiring, promotion practices and training, tools, resources and information to support future needs of the program as they relate to Major Case Management

Conservation and Protection lacks a national training program to ensure that standardized training across the country is provided, particularly to those who are involved in investigative activities. Recruitment strategies do not consider the current and future needs of the Conservation and Protection program.

Training for Conservation and Protection Fishery Officers is managed through the Fishery Officer Career Progression Program. The program consists of eight weeks of training in the region followed by nine weeks of training at the RCMP training facility in Regina. The portion of training provided in Regina does not incorporate Major Case Management. There is one day dedicated to Major Case Management during the regional portions of the training in both the Maritimes and Pacific regions. Interviews indicated that there is a lack of training on Major Case Management in the Fishery Officer Career Progression Program, specifically as it relates to gathering and sharing evidence and intelligence. It was indicated that this would be added into the Fishery Officer Career Progression Program training curriculum in the future.

Fishery Officers from both regions interviewed stated that little training is provided beyond what is offered in the Fishery Officer Career Progression Program. In addition, they believe that they do not have proper training for Major Case Management. It was indicated that there is a lack of guidelines, strategies and procedures for Major Case Management. Also, hiring individuals with more specialized skills in information technology and data analytics is a challenge. Currently, efforts to produce training material have been done in parallel in both regions. Both the Pacific and Maritimes regions currently have separate training arrangements for Major Case Management. Pacific uses another Government agency which provides a 23 day course for intelligence analysts while the Maritimes region provides a 2-year training program to train their forensic experts.

Many of these issues will be addressed through Conservation and Protection 2012, a change initiative currently being implemented that was launched by the Conservation and Protection Executive Committee. A lead for Major Case Management training has been assigned, a need for standardized Major Case Management training has been identified, and a Memorandum of Understanding has been signed with the Privy Council Office’s Intelligence Analysts Learning Program. Conservation and Protection 2012 will also address the training needs of all Fishery Officers through the development of a National Training and Development program beyond the Fishery Officer Career Progression Program.

While the long-term strategy for Conservation and Protection is to move to Major Case Management / special investigations, the Human Resources strategy does not reflect this. The Pacific Region’s Human Resources Plan for each area does not reflect the current need to move to Major Case Management as it does not mention the need to hire individuals with specific analytical, information technology and other specialized skills related to Major Case Management. The Human Resources Plan for the Maritimes Region identified the need for Information Technology skills, however, a Major Case Management presentation given in 2011 indicated that the region does not have a Human Resources model for Pillar 3 activities. Major Case Management/intelligence activities currently rely on deploying Fishery Officers to work on investigations. There is a lack of interest from Fishery Officers to work in Major Case Management because they prefer their traditional General Duty work instead of investigative work that would entail them spending their day behind a desk. In addition, Fishery Officers stated in interviews that because they do not receive adequate training with Major Case Management, they do not feel comfortable working on Major Cases and Special Investigations. It was reported that there was only one volunteer for the last Major Case Management project in the Maritimes region.

The Conservation and Protection Human Resources strategy will also need to address succession planning as regions like Maritimes will have 48 of 112 Fishery Officers eligible to retire in the next 5 years.

Recommandation Management Action Plan
R-7. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should establish a national training program for Fishery Officers that includes Major Case Management and Special Investigations training.

Enhance the current Conservation and Protection (Conservation and Protection) training program, ensuring that it will:

  • Provide equitable training opportunities to all fishery officers, in both official languages, throughout their careers.
  • Improve the planning, coordination, delivery and cost effectiveness of training activities. 
  • Key elements of the program are to include:
    • Training and development framework
    • National training standards
    • An electronic portal for all training with an on-line training catalogue
    • Diversified delivery mechanisms (e.g.: e-learning)
    • National training tracking system
    • Training for Trainers
Office of Primary Interest: Director General, Conservation and Protection
Due Date: March 2013 
Recommandation Management Action Plan
R-8. The Senior Assistant Deputy Minister, Ecosystems and Fisheries Management should ensure that recruitment, hiring and promotion strategies are aligned with human resource needs and long-term goals of Conservation and Protection.
  • Human Resources and Budgets added as standing agenda items for Conservation and Protection Executive Committee face-to-face meetings.
  • Review and revise the Fishery Officer Career Progression Program course curriculum and training delivery to align with human resources needs and long-term goals of Conservation and Protection.
  • Revise the human resource plan to reflect the long term goals and needs of Conservation and Protection.
Office of Primary Interest: Director General, Conservation and Protection
Due Date: June 2012

7.0 AUDIT OPINION

Based on the audit findings, overall the Conservation and Protection governance framework and control activities for Commercial and Aboriginal Fisheries are well established; however, the program is currently not assessing the effectiveness of the controls to ensure that compliance with relevant regulations and legislation is maintained and achieved. The audit team identified the following observations:

  • The Conservation and Protection governance framework is well established and operational plans are linked to Fisheries and Oceans Canada’s strategic outcome for sustainable fisheries. However, the collaborative relationship between Conservation and Protection and Resource Management with regards to initiatives within Ecosystems and Fisheries Management needs improvement.
  • The selection and review of control activities for Commercial and Aboriginal Fisheries does not effectively include consideration of their relevance and appropriateness to the risk and related objective. The allocation of resources is not aligned to Conservation and Protection’s enforcement strategy.
  • The intelligence-gathering systems and processes do not allow Conservation and Protection to share intelligence across regions nor do they assist in determining where to effectively focus enforcement efforts.
  • Performance measures have been identified; however, the performance indicators are largely output based and do not provide useful information in terms of results to allow the program to adjust course as needed to ensure compliance efforts are strategically focused.
  • Financial controls are appropriate to carry out operational plans. There is adequate monitoring of budgets, forecasts, and resource allocations. However, the manner with which funds are allocated to Major Case Management and special investigations does not adequately address the financial needs of this activity.
  • Conservation and Protection lacks a national training program for Major Case Management and Special Investigations.
  • Recruitment strategies are in place but do not consider the current and future needs of the intelligence program.

Implementation of the audit recommendations related to these observations will help Conservation and Protection strengthen control activities to promote and maintain compliance with the legislation, policies and fishing plans relating to conservation and sustainable use of the resource.

8.0 STATEMENT OF ASSURANCE

In my professional judgment as Chief Audit Executive, sufficient and appropriate audit procedures have been conducted and evidence gathered to support the accuracy of the opinion provided and contained in this report. The extent of the examination was planned to provide a reasonable level of assurance with respect to the audit criteria. The opinion is based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed on with Management. The opinion is applicable only to the entity examined and within the scope described herein. The evidence was gathered in compliance with Treasury Board policy, directives and standards on internal audit and the procedures used meet the professional standards of the Institute of Internal Auditors. The evidence gathered was sufficient to provide Senior Management with proof of the opinion derived from the internal audit.

APPENDIX A – AUDIT CRITERIA

Based on a combination of the evidence gathered through documentation examination, analysis and interviews, each of the audit criteria listed below was assessed and a conclusion for the audit criteria was determined using the following definitions:

Conclusion on Audit Criteria Definition of Opinion

1

Criteria Met – Well Controlled

Well managed or no material weaknesses noted, controls are effective.

2

Criteria Met with Exceptions – Controlled

Requires minor improvements.

3 Criteria Met with Exceptions – Moderate Issues Requires improvements in the areas of material financial adjustments, some risk exposure.
4 Criteria Not Met – High Impact – Significant Improvements Requires significant improvements in the area of material financial adjustments, serious risk exposure.

The following are the audit criteria and examples of key evidence and/or observations noted which were analyzed and against which conclusions were drawn. In cases where significant improvements and/or moderate issues were observed, these were reported in the audit report.

Audit Criteria Conclusion on Audit Criteria Examples of Key Evidence/ Observation

Line of Enquiry 1 – Governance and Accountability

The Conservation and Protection program has in place a governance framework which is well established, aligned with Fisheries and Oceans Canada’s outcome for sustainable fisheries and provides a solid foundation to achieve and maintain compliance with the Fisheries Act and the regulations made under this Act.

Criterion 1.1: The program has in place operational plans aimed at achieving its conservation and protection objectives.

1

6.1.1

Criterion 1.2: The program has in place a clear and effective organizational structure that is established, documented and permits effective communication and reporting.

1

6.1.1

Criterion 1.3: The program’s accountability(ies) in support of collaborative initiatives within Ecosystems and Fisheries Management are formally defined. 4 6.1.1
Criterion 1.4: The committees providing oversight have a clearly communicated mandate that includes roles with respect to governance, risk management and control. 1 6.1.1
Criterion 1.5: The oversight bodies request and receive sufficient, complete, timely and accurate information and there is ongoing, transparent communication between the oversight bodies, management and the Deputy Minister for decision-making purposes. 1 6.1.1

Line of Enquiry 2 – Risk Management and Effective Controls

The Conservation and Protection program has in place well-defined and effective controls to ensure compliance with the Fisheries Act and the regulations made under this Act.

Criterion 2.1: Management assesses the risk it has identified. 1 6.2.1
Criterion 2.2: Management identifies control activities needed to help ensure that risk responses are carried out properly and in a timely manner. 2 6.2.1
Criterion 2.3: Selection or review of control activities includes consideration of their relevance and appropriateness to the risk response and related objective. 3 6.2.1
Criterion 2.4: Management selects from a variety of types of control activities, including preventive, detective, manual, computer, and management controls and considers how they interrelate. 3 6.2.2

Line of Enquiry 3 – Performance Measurement

The Conservation and Protection program has in place performance indicators to demonstrate the effectiveness of enforcement activities.

Criterion 3.1: 1 Management has identified appropriate performance measures, linked to planned results, which are reviewed and updated as required. 4 6.3.1
Criterion 3.2: Management monitors actual performance against planned results and adjusts course as needed to ensure compliance efforts are focused where needed. 3 6.3.2

Line of Enquiry 4: Financial Controls

The Conservation and Protection program has in place the appropriate financial controls for budgeting, forecasting and utilization to ensure the efficient use of program funds to achieve its strategic objectives and carry out its operational plans.

Criterion 4.1: The activities, schedules and resources needed to achieve objectives have been reflected into the budget. 1 6.4.1
Criterion 4.2: Forecasts are monitored on a regular basis and significant variances from budget are identified and explained. 1 6.4.1
Criterion 4.3: Management reallocates resources to facilitate the achievement of objectives/results. 2 6.4.1

Line of Enquiry 5: Training, Tools, Resources and Information

The program provides employees with the necessary training, tools, resources and information to support their roles and responsibilities in terms of investigations.

Criterion 5.1: The program provides employees with the necessary training, tools, resources and information to support their roles and responsibilities in terms of investigations. 3 6.5.1
Criterion 5.2: There are recruitment, hiring and promotion practices in place which consider the current and future needs of the program. 3 6.5.1

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