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Internal Audit Report

Audit of International Travel

Project - 6B246

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TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY
2.0 BACKGROUND
3.0 AUDIT OBJECTIVE
4.0 AUDIT SCOPE
5.0 AUDIT APPROACH
6.0 AUDIT FINDINGS
7.0 AUDIT OPINION
8.0 STATEMENT OF ASSURANCE
APPENDIX A — AUDIT CRITERIA

1.0  EXECUTIVE SUMMARY

Travel is an integral part of government operations and an important activity for program delivery. It represents a considerable investment of time and money for the government as a whole and requires that we demonstrate prudence and probity in its management.

International travel within Fisheries and Oceans Canada is guided by the Treasury Board Directive on the Management Expenditures on Travel, Hospitality, and Conferences, the National Joint Council Travel Directive, the Fisheries and Oceans Canada Travel Policy, and the Fisheries and Oceans Canada Conferences Policy. To further improve the management of international travel in the Department, the International Travel Integration Committee was created in 2010. This Committee aims to improve planning and provide greater transparency and consistency in departmental attendance at international meetings either held abroad, in the United States, or in Canada, and to provide regular reports to the Deputy Minister regarding international travel within the Department.

For the selected sectors, the audit assessed the adequacy and effectiveness of the international travel process within Fisheries and Oceans Canada, as well as compliance with central agencies directives, departmental policies and the departmental international travel process, for a targeted sample of international travel claims that combined personal and business travel.

Based on the audit findings, our opinion is that, overall, the departmental international travel process is working as intended to ensure that international travel is managed with prudence and probity, in a manner that maximizes effectiveness in meeting organizational objectives, minimizes costs and demonstrates value for money. Oversight and governance functions are established to ensure the sound management of international travel throughout the Department, results of international travel activities are captured and shared with key stakeholders and international travel claims combining personal and business travel generally comply with central agencies directives, departmental policies and the departmental international travel process. However, the audit team identified opportunities for improvement which, once implemented, will result in added effectiveness and efficiencies to the departmental international travel process. The improvements that should be made to the departmental international travel process are as follows:

  • Revise the roles, responsibilities and accountabilities of the International Travel Integration Committee and perhaps its mandate in light of the recent changes made to the Treasury Board Directive on the Management of Travel, Hospitality and Conferences.
  • Ensure that the information requested in the international travel proposals meets the requirements of the Deputy Minister.
  • Determine an optimal planning cycle to submit and review the international travel proposals through the departmental international travel process.
  • Revise the current definition of international travel and categorization of the three tiers and ensure that they are communicated and understood by key stakeholders.
  • Ensure that the system selected by the Ecosystems and Oceans Science sector to request and report on international travel, provides relevant, reliable, and complete information to support informed decision-making and reporting.
  • Inform Responsibility Centre Managers with delegated Section 34 authority of their responsibilities when approving international travel claims and approving personal leave for travel requests combining personal and business travel.

Management Response

Management is in agreement with the audit findings, has accepted the recommendations included in this report, and has developed a management action plan to address them.  The management action plan has been integrated in this report.

2.0  BACKGROUND

Travel is an integral part of government operations and an important activity for program delivery. It represents a considerable investment of time and money for the government as a whole and requires that we demonstrate prudence and probity in its management.

As part of its international priorities, Fisheries and Oceans Canada has taken a lead role in the world arena to help ensure the long-term health of the world’s shared oceans and fish stocks. International travel supports the Department in working with various organizations in the international community to commit to better and more sustainable fisheries and oceans management: participating in international symposiums and working groups; holding bilateral and multilateral engagements; and hosting or participating in international conferences and training. In these instances, international travel is essential to the delivery of the objectives and missions of sectors within Fisheries and Oceans Canada. In fiscal year 2011-12, Fisheries and Oceans Canada incurred $35 million in expenditures for domestic travel and $3 million in expenditures for travel outside of Canada1.

International travel within Fisheries and Oceans Canada is largely guided by the Treasury Board Directive on the Management Expenditures on Travel, Hospitality, and Conferences, the National Joint Council Travel Directive and the Fisheries and Oceans Canada Travel Policy and the Fisheries and Oceans Canada Conferences Policy. To further improve the management of international travel in the Department, the International Travel Integration Committee was created in 2010. This Committee aims to improve planning and provide greater transparency and consistency in departmental attendance at international meetings either held abroad, in the United States, or in Canada and to provide regular reports to the Deputy Minister regarding international travel within the Department. To streamline the departmental international travel process and assist in its management, the International Travel Integration Committee introduced a “content-based” definition of international travel categorized in three tiers2:

Tier 1: Key meetings/conferences within or outside Canada dealing with international issues which require prior Ministerial/Deputy Minister approval for negotiation/policy elements on outcomes and the delegation needed to achieve these outcomes.  Tier 1 will also include meetings which may have Ministerial attendance.

Tier 2: Meetings/conferences within or outside Canada dealing with international issues with multi-Sector/Region participation that do not require prior Ministerial/Deputy Minister approval of negotiation/policy elements, but that do require confirmation of delegation by Deputy Minister to achieve value for money.

Tier 3: Planned/unplanned operational meetings/conferences dealing with international issues occurring within or outside Canada with single Sector/Region participation - not reviewed by the Committee.

Since the implementation of the International Travel Integration Committee, the departmental process for requesting international travel has changed significantly; Tier 1 and Tier 2 international travel activities must undergo the peer review process of the Committee prior to their submission to the Deputy Minister for approval whereas Tier 3 can be approved by the corresponding sector or regional head. As the Committee is progressing towards its third year of implementation, concerns were raised by senior management about whether the departmental international travel process initiated by the International Travel Integration Committee has improved the overall management of international travel in the Department.


1 Information based on Fisheries and Oceans Canada financial system ABACUS.
2 Fisheries and Oceans Canada, International Travel Integration Committee, Categorizations of meetings, MECTS 2105420-v4-ITIC.

3.0  AUDIT OBJECTIVE

The audit objective was to provide assurance that the departmental international travel process is working as intended to ensure that international travel is managed with prudence and probity, in a manner that maximizes effectiveness in meeting organizational objectives, minimizes costs and demonstrates value for money.

It is important to note that the International Travel Integration Committee refers to international travel as “travel within or outside of Canada that has international content”. This definition is “content-based” and varies greatly from the “location-based” definition prescribed by central agencies in which international travel is defined as “travel overnight, outside Canada or the continental United States of America or when the point of departure is outside of Canada or the continental United States of America”. In the context of this engagement, the audit team used the same definition as the International Travel Integration Committee to ensure alignment between the audit and the departmental international travel process.

4.0  AUDIT SCOPE

Based on the results of the risk assessment carried out during the engagement planning phase, which encompassed all sectors as well as the Canadian Coast Guard, the audit team included the following sectors in the conduct phase: Strategic Policy, Ecosystems and Oceans Science, Ecosystems and Fisheries Management and the Office of the Chief Financial Officer.  Fieldwork took place in the National Capital Region exclusively.

The audit team performed a file review of Tier 1, Tier 2 and Tier 3 International Travel claims for the fiscal year 2011-12. 

The audit team identified controls in place to ensure that international travel expenditures comply with central agencies directives and departmental policies.  The audit team did not test the effectiveness of these controls as this was examined in the audit of Account Verification conducted in 2010-11 by the Internal Audit Directorate. There was, however, an examination of a sample of international travel claims that combined personal and business travel to ensure compliance with departmental policies and the departmental international travel process.

5.0  AUDIT APPROACH

This engagement was conducted in conformance with the Treasury Board’s Policy on Internal Audit, the Internal Auditing Standards for the Government of Canada, and the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing. These standards require that the engagement be planned and performed in such a way as to obtain reasonable assurance that the objectives of the engagement are achieved. As such, it relied on a risk-based sample and included document review, process mapping, data analysis, file review, and interviews of key personnel.

The engagement commenced in July 2012 following the acknowledgement of the objectives and scope by the client organizations.

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:

●   Oversight and Governance Functions
●   Departmental International Travel Process
●   Definition of International Travel
●   Reporting on International Travel Results
●   International Travel combining business and personal travel

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

Based 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  OVERSIGHT AND GOVERNANCE FUNCTIONS

As per the Treasury Board Directive on the Management of Travel, Hospitality and Conferences, departments are required to have effective oversight mechanisms and controls in place to ensure that travel, hospitality, conferences and the associated expenditures are managed in an effective, efficient and economical manner. In Fisheries and Oceans Canada, oversight and governance functions are essential to enable an integrated approach that provides the internal coherence and corporate discipline required in the sound management of international travel across the Department. These functions become particularly critical with the recent changes made to the Treasury Board Directive on the Management of Travel, Hospitality and Conferences which took effect on October 3, 2012.

The International Travel Integration Committee serves as the oversight body for the planning and coordination of Tier 1 and Tier 2 international meetings within the Department. Chaired by the Director General of the International Affairs Directorate, the Committee is composed of members who are the regional and sector heads of the Department. The objective of the Committee is to enhance the coordination and coherence of international travel across the Department by providing advice to the Deputy Minister on the participation at Tier 1 and Tier 2 international meetings by Fisheries and Oceans Canada and Canadian Coast Guard employees. As for Tier 3 international meetings, the oversight and governance functions vary by sectors and regions. These functions may be carried out by various levels of management including Responsibility Centre Managers with delegated authority, regional management committees or, in the case of Ecosystems and Oceans Science sector, an internal travel committee.

Observations
Low Risk 6.1.1 Oversight and governance functions are established to ensure the sound management of international travel throughout the Department. However, there is an opportunity for the International Travel Integration Committee to clarify its roles, responsibilities and accountabilities and perhaps, expand its mandate to include changes made to the Treasury Board Directive on the Management of Travel, Hospitality and Conferences.

The audit found that oversight bodies and governance functions are established to ensure the sound management of international travel throughout the Department. As the main oversight body for Tier 1 and Tier 2 events, the International Travel Integration Committee has brought rigor and discipline to the departmental international travel process. Overall, sectors and regions feel that the Committee has strengthened internal controls, increased accountability and improved coordination by providing more transparency and scrutiny in the departmental international travel process. The audit also found oversight bodies and governance functions for Tier 3 to be well established across the Department. Tier 3 international travel proposals are subject to many levels of review prior to their approval by Responsibility Centre Managers. For example, some regional management committees have added international travel requests as a regular agenda item for their meetings. Due to its high volume of travel, the Ecosystems and Oceans Science sector has established an internal travel committee to review all travel carried out by the sector.

While oversight bodies have documented mandates, the audit noted that key stakeholders did not always clearly understand the roles, responsibilities and accountabilities of the International Travel Integration Committee. As per its Terms of References, the Committee is focused on providing regular guidance to the Deputy Minister by:

  • Ensuring that the composition of multi-Sectoral/Regional delegations are balanced and the roles of each delegate well defined;
  • Identifying the Head of Delegation, as appropriate;
  • Ensuring that Fisheries and Oceans Canada delegations at international meetings where policy or negotiations occur are integrating broader departmental considerations into their preparations and receiving required approvals;
  • Ensuring that delegations report back to Fisheries and Oceans Canada senior management on outcomes and linkages to be considered;
  • Reviewing proposed Ministerial travel in order to ensure there is an integrated approach linked to the international agenda;
  • Addressing other issues as appropriate arising from international engagement.

On October 3, 2012, the Treasury Board Directive on the Management of Travel, Hospitality and Conferences was revised. As per the new directive, “the total departmental planned costs for any single event will now require the approval of the Minister where these costs exceed $25,000 or the approval of the Deputy Minister when these costs are between $5,000 and $25,000”. Though the International Travel Integration Committee does not track departmental costs per event as part of its current mandate, the governance structure of the Committee provides, to some extent, a good starting point to enable such activity. Consequently, the International Travel Integration Committee, in consultation with the Deputy Minister, may consider taking this opportunity to revise its mandate.

Recommendation Management Response

R-1.  The International Travel Integration Committee, in consultation with the Deputy Minister, should:

  • Revise the International Travel Integration  Committee's Terms of Reference to ensure that its mandate, roles, responsibilities and accountabilities are clearly defined, taking into consideration the new Treasury Board Directive on the Management of Travel, Hospitality and Conferences.
  • Upon approval of the revised Terms of Reference, ensure they are communicated throughout the Department.

The International Travel Integration Committee Secretariat will:

  • Coordinate a review of the Terms of Reference by seeking input from members on the committee’s mandate, roles, responsibilities, accountabilities and pre-approval authority; revise the Terms of Reference; and, circulate to committee members for final review.
  • Have the revised Terms of Reference approved by the Senior Assistant Deputy Minister, Strategic Policy and Deputy Minister.
  • Communicate the new International Travel Integration Committee’s Terms of Reference to Departmental staff. Communication methods could include: In the Loop, presentation at Strategic Outcomes Committees/Deputy Minister Policy Committee, directly when traveling to the regions, and/or an intranet page.

The new Treasury Board Directive on the Management of Travel, Hospitality and Conferences will likely have an impact on the existing review and approval process. The International Travel Integration Committee Secretariat will assess the new requirement and its impact.

Office of Primary Interest: International Travel Integration Committee
Due Date: June 30, 2013 (in advance of the next cycle of the International Travel Integration Committee process)

6.2  DEPARTMENTAL INTERNATIONAL TRAVEL PROCESS

As per the Treasury Board Directive on the Management of Travel, Hospitality and Conferences, departmental oversight bodies and governance functions are required to perform an assessment at the planning stage of events or activities to validate relevance, value for money, and the efficient and economical use of resources. In the context of international travel, this includes ensuring that individual proposals for travel are reasonable, appropriate and decisions support departmental objectives and priorities and that alternative means to avoid, reduce or minimize travel costs have been considered.

The departmental international travel process initiated by the International Travel Integration Committee has a formal review segment from February to March. In advance of these Committee discussions, the International Travel Integration Committee secretariat sends a call letter requesting that the sectors and regions submit all their planned international travel proposals for the entire year. From this, the International Travel Integration Committee secretariat identifies all Tier 1 and 2 international meetings/conferences and a second call for international travel proposals is sent. These proposals are submitted through a template requiring information such as purpose of meeting, alignment with departmental objectives and priorities, benefits to Canadians and specific roles and responsibilities of each delegate. The international travel proposals, prepared generally by the lead sector or region in collaboration with other participants, are reviewed by the corresponding sectors and regional heads prior to their submission to the International Travel Integration Committee. The International Travel Integration Committee then reviews the international travel proposals and subsequently recommends them to the Deputy Minister for approval.

The Tier 3 international travel proposals are generally prepared by the proponent of the travel request. These travel proposals are then reviewed by multiple levels of authority and approved by either the Assistant Deputy Minister or Regional Director General. Ecosystems and Oceans Science has also established an Internal Travel Committee, similar to the International Travel Integration Committee, to review all travel carried out by the sector. Due to its high volume of travel, Ecosystems and Oceans Science uses the Conference and Foreign Travel System to request, track and report on information related to international travel. The Conference and Foreign Travel System was developed to keep track of every single travel request submitted within Ecosystem and Oceans Science across all regions and to generate reports to the Internal Travel Committee as applicable and to the Assistant Deputy Minister on a quarterly basis for the purposes of approving travel requests.

Moderate Risk 6.2.1 Approval decisions for Tier 1 and Tier 2 international travel are not always obtained in a timely manner which could potentially result in increased travel costs.

The departmental international travel process encompasses many levels of review carried out by the lead sector or region, the International Travel Integration Committee and the Deputy Minister. Through their review, these challenge functions ensure that the planned events or activities support the achievement of the department’s mandate. The audit also found that these functions generally considered alternative means to avoid, reduce or minimize travel costs, including teleconferencing or videoconferencing whenever possible and ensuring value for money when determining the location and the type and number of attendees.

Though sectors and regions concur that the International Travel Integration Committee has brought rigor and discipline to the departmental international travel process, many feel that it has also lengthened the approval period for international travel proposals. Despite the peer review carried out by the International Travel Integration Committee, a significant number of international travel proposals are returned to the Committee with questions from the Deputy Minister. As such, some sectors and regions believe that the one-page template may not provide sufficient information to give the Deputy Minister a satisfactory level of assurance to approve the proposals. The delays in the approval process mainly derive from the use of briefing memos to address the Deputy Minister's questions.

Many stakeholders also feel that the International Travel Integration Committee’s current review segment is inefficient for planning purposes as details such as conference agendas for some international events may not be available in time for sectors to submit their proposals for review and approval. The travel proposals for these events are sometimes submitted to the Committee for information purposes, and are not reviewed until later in the year when more information is available. Additional reviews and meetings are held throughout the year as needed to address new Tier 1 and 2 events and those events which did not initially have enough information to provide a recommendation. Consequently, these multiple reviews can create additional burden to the International Travel Integration Committee and lengthen the approval process.

The delays in the approval process result inadvertently in higher travel costs due to late booking of flights and hotels as well as missed fee discounts for early registration. Timely approval of attendance to these conferences is also important in order to have sufficient time to prepare, especially when a departmental employee is invited as a presenter at the conference.  In addition, the conference organizers need confirmation of attendance with sufficient advance notice for planning purposes including preparing conference materials and programs. If the employee must cancel participation as a presenter because the corresponding travel proposal is not approved in a timely manner, this can cause embarrassment for the individual and Fisheries and Oceans Canada.

Furthermore, the lack of timeliness in obtaining approvals discourages departmental employees from participating in international events. Many stakeholders feel that Fisheries and Oceans Canada may not be represented as it should be at international events, both in terms of delegation size and departmental presence. For example, an inadequate delegation size may prevent the Department from having adequate coverage of its international agenda, while the lack of departmental presence on the international scene may result in unfavourable decisions to Canada as Fisheries and Oceans Canada was not present to influence the decisions.

Recommendation Management Response

R-2.  The International Travel Integration Committee, in consultation with the Deputy Minister, should:

  • Ensure that the information requested in the international travel proposals meet the requirements of the Deputy Minister;
  • Determine an optimal planning cycle to submit and review the international travel proposals through the departmental international travel process; 
  • Upon approval of the revised departmental international travel process, ensure it is communicated throughout the Department.    

The International Travel Integration Committee Secretariat will:

  • Develop test international travel proposal formats based on consultations and obtain Deputy Minister concurrence on preferred option.
  • Determine options for an optimal cycle to submit and review the international travel proposals based on consultations and obtain Deputy Minister concurrence on preferred cycle option.
  • Communicate new International Travel Integration Committee procedures (i.e. approval cycle, revised rationale template) to Departmental staff. Communication methods could include: In the Loop, presentation at Strategic Outcomes Committees/Deputy Minister Policy Committee, directly when traveling to the regions, and/or an intranet page.

The new Treasury Board Directive on the Management of Travel, Hospitality and Conferences will likely have an impact on the existing review and approval process.  The International Travel Integration Committee Secretariat will assess the new requirement and its impact.

Office of Primary Interest: International Travel Integration Committee
Due Date: June 30, 2013 (in advance of the next cycle of the International Travel Integration Committee process)
Moderate Risk 6.2.2 International travel information from the Conference and Foreign Travel System of Ecosystems and Oceans Science Sector is not always reliable and complete to support informed decision-making and reporting.

Due to its high volume of travel, Ecosystems and Oceans Science uses the Conference and Foreign Travel System to request, track and report on information related to international travel. The Conference and Foreign Travel System was developed to keep track of every single travel request submitted within the sector including all regions and to generate reports to the Assistant Deputy Minister on a quarterly basis for the purposes of approving travel requests. The Conference and Foreign Travel System is the main system used by Ecosystems and Oceans Science for decision-making and reporting on international travel, therefore it is important that the information deriving from this system is relevant, reliable and complete.

Many Ecosystems and Oceans Science stakeholders stated that working with the Conference and Foreign Travel System is somewhat complex and cumbersome and feel that the system could be improved. In 2012, Ecosystems and Oceans Science (Integrated Science Data Management) sponsored a Conference and Foreign Travel System assessment to investigate the problems encountered at various steps in the travel approval process and to seek improvement opportunities that could benefit the organization. The assessment noted weaknesses including, data duplication and integrity issues and inadequate querying and reporting functions. In addition, the lack of adequate system documentation resulted in an inconsistent use of the system, an increased level of effort required to support the system and widespread user frustration.

As the Conference and Foreign Travel System was established before the International Travel Integration Committee was formed, the format and information requirements of the international travel proposals differ from those of the International Travel Integration Committee. Though senior managers of Ecosystems and Oceans Science stated that they require the international travel proposals to include elements such as purpose of meeting, benefits to the individual or to the Department as well as the role of participants, the audit found that theConference and Foreign Travel System has only a “purpose” descriptive field to input all this information. As a result, the audit noted that information, such as linkages to departmental objectives and priorities are not always outlined in the international travel proposals of Ecosystems and Oceans Science. Furthermore, the benefits to the Department are not always outlined appropriately in the international travel proposals since employees are given the option to input either “benefits to the individual or to the Department”.

Without linking the international travel activity directly to departmental objectives and priorities, Ecosystems and Oceans Science may be unable to clearly demonstrate the relevance and justification of travel and resulting benefits to the department. Furthermore, maintaining a system that does not provide reliable and complete information is not only administratively burdensome in time and resources, but the inaccurate and incomplete information within the system can also potentially lead to poor decision-making and erroneous reporting.

Recommendation Management Response

R-3.  The Assistant Deputy Minister Ecosystems and Oceans Science, should ensure that the system selected to report and request international travel activities for the sector provides relevant, reliable, and complete information to support informed decision-making and reporting.

The Assistant Deputy Minister Ecosystems and Oceans Science will ensure that the sector continues to have necessary data to support effective decision-making on travel and that it continues to meet its reporting requirements.

In light of recent changes to Treasury Board directives effecting travel, the Assistant Deputy Minister Ecosystems and Oceans Science will not replace the Conference and Foreign Travel System this fiscal year and will instead clarify with users by December 2012 the data requirements for Conference and Foreign Travel System to support effective decision-making and reporting.  
By September 2013, the Assistant Deputy Minister Ecosystems and Oceans Science will make decisions about the future of the Conference and Foreign Travel System with a view to having implemented needed changes to, or replacement of, the system by December 2013.

Office of Primary Interest: Ecosystems and Oceans Science
Due Date: December 31, 2013

6.3  DEFINITION OF INTERNATIONAL TRAVEL

Prior to the establishment of the International Travel Integration Committee in 2010, international travel was managed independently across the Department. Consequently, as international travel was planned in silos by sectors and regions, Fisheries and Oceans Canada was unable to determine the reasonableness of the overall departmental attendance at international events and minimize travel costs from a departmental-wide perspective.

At the Deputy Minister’s request, the International Travel Integration Committee was created to coordinate international travel across the department. The definition of international travel was also revised to include all travel related to international events held in Canada.

Moderate Risk 6.3.1 The International Travel Integration Committee’s definition of international travel, particularly the categorization of the three tiers, is not well understood by key stakeholders, resulting in inefficiencies in the departmental international travel process as well as inconsistencies in Tier 3 reporting. Furthermore, the definition of international travel, which is content based, does not allow reliable and complete reporting on international travel trends for the Department.

International travel in Canada

As the International Travel Integration Committee’s definition of international event is based on the content rather than the location of the event, conferences or meetings held in Canada can sometimes be identified as international and as such, any related travel or costs to attend the event would require approval of the International Travel Integration Committee. Though the audit found that the majority of key stakeholders understand the rationale behind this definition, not all stakeholders are fully in agreement. To some stakeholders, international events held in Canada are minimal in terms of travel costs, while others believe that the travel costs may be as significant as those incurred for travel outside of Canada depending on the travel departure point and event location in Canada. Some stakeholders also noted that international events held in Canada were often identified as “international” merely based on the title of the event without having any international content; therefore these events should not undergo the review process set out by the International Travel Integration Committee.

Categorization of Tier 2 and Tier 3  

Tier 2 international travel, which involves two or more sectors or regions attending the same international event, has been especially problematic since the participating sectors or regions are sometimes unaware if any of their counterparts from other sectors or regions are also attending the same international event. The audit found an instance in which a Tier 2 international event was mistakenly categorized as Tier 3 by two sectors. As both sectors participated in the same international event, this event should have been categorized as Tier 2, reviewed by the International Travel Integration Committee and submitted to the Deputy Minister for approval.
Some stakeholders believe that some Tier 3 events may be more significant in terms of impact to the Department than Tier 2 events. For example, a Tier 3 international meeting may only involve one sector but the results deriving from the meeting may have major policy implications for the Department. On the other hand, some international events attended mainly by one sector, may have been categorized as Tier 2 only because one additional employee from another sector is proposed to participate in the event. As the tier level of an international event determines whether it should undergo the International Travel Integration Committee review process, a clear and functional categorization of international events is essential to improve the coordination and efficiency of the departmental international travel review process.

Tier 3 Reporting

The International Travel Integration Committee does not review Tier 3 international travel but is responsible for providing the Deputy Minister with reports summarizing Tier 3 international travel carried out by the sectors for information purposes. These reports are provided to the Deputy Minister three times a year. The audit found that Tier 3 is reported inconsistently across the Department; some sectors and regions report operationally linked international travel as Tier 3, some do not, while others report Tier 3 as anything that is not Tier 1 and 2, including training. While performing a file review, the audit also found some misreporting of Tier 3 information:

  • Ecosystems and Fisheries Management reported a total of 36 Tier 3 events for FY 2011-2012. Of the judgmental sample of 8 selected by the audit team, 2 of the events sampled were incorrectly identified as Tier 3.
  • Ecosystems and Oceans Science reported a total of 557 Tier 3 events for FY 2011-2012. Of the judgmental sample of 15 selected by the audit team, 3 samples were incorrectly identified as Tier 3.

As Tier 3 is reported inconsistently across the Department, the reports submitted to the DM may not be complete, accurate and reliable.

Reporting departmental international travel key highlights and trends

As part of its mandate, the International Travel Integration Committee is also responsible to provide an annual report on departmental international travel to the Deputy Minister. The Committee currently uses data from the financial system (ABACUS) and the Expense Management Tool to report on overall international travel costs, key highlights and trends. However, only travel outside Canada is coded as international travel in both ABACUS and the Expense Management Tool. Therefore, the International Travel Integration Committee is unable to report on the travel expenditures related to international travel within Canada. Although there is a built-in field in the Expense Management Tool that allows the traveler to record the international travel as Tier 1, 2, or 3, this field is not mandatory and the International Travel Integration Committee has not enforced its use. As a result, the Committee does not have complete and reliable information to produce the annual report on departmental international travel for the Deputy Minister.

Recommendation Management Response
R-4.  The International Travel Integration Committee, in consultation with the Deputy Minister, should revise its current definition of international travel and categorization of tiers and ensure they are communicated and understood by key stakeholders. The International Travel Integration Committee Secretariat will review the current definition of Tiers with particular attention to international travel within Canada and consider potential implications of the new Treasury Board Directive on the Management of Travel, Hospitality and Conferences. The International Travel Integration Committee will seek input, revise the definitions and circulate to committee members for final review and have the revised categorization definitions approved by the Senior Assistant Deputy Minister, Strategic Policy and Deputy Minister.
Office of Primary Interest: International Travel Integration Committee
Due Date: June 30, 2013 (in advance of the next cycle of the International Travel Integration Committee process)
Recommendation Management Response

R-5.  The International Travel Integration Committee should take measures to ensure that the built-in field in the Expense Management Tool to identify the international travel tier is being used appropriately.

The International Travel Integration Committee Secretariat will coordinate with the Chief Financial Officer to re-send the In The Loop message on use of the Tier field in the Expense Management Tool.
Office of Primary Interest: International Travel Integration Committee
Due Date: June 30, 2013 (in advance of the next cycle of the International Travel Integration Committee process)

6.4  REPORTING ON INTERNATIONAL TRAVEL RESULTS

The Treasury Board Directive on the Management of Expenditures on Travel, Hospitality and Conferences requires that the federal government be well managed with the prudent stewardship of public funds, and the effective, efficient and economical use of public resources. In doing so, it is expected that the government acts at all times with the highest standards of integrity, fiscal prudence, accountability, transparency and values and ethics. As such, in the context of international travel, it is important for the Department to be able to demonstrate that travel expenditures incurred are necessary to achieve its mandate and priorities.

Observations
Low  Risk 6.4.1 Results of international travel activities are generally captured and shared with key stakeholders. Furthermore, some regions and sectors have implemented a requirement for documenting results of Tier 3 international travel activities which is considered a best practice.

As part of its mandate, the International Travel Integration Committee is responsible to ensure that delegations report back to departmental senior management on outcomes and linkages to be considered. The audit found that post-event reports outlining the results of the international travel activities were, for the most part, prepared for Tier 1 and Tier 2 international travel activities. These post-event reports, generally done in a briefing memo format, are prepared by the lead sector, shared with participants and submitted to the Deputy Minister for information.  

With respect to Tier 3 international travel, sectors and regions do not have a formal process to ensure that the results of Tier 3 international travel activities are documented; this is done inconsistently and informally across all the regions as it is not a requirement. However, the audit found that the International Affairs Directorate, the Regional Ecosystem Management Branch in the Quebec region, the Canadian Hydrographic Service Branch in the National Capital Region and the Regional Science Branch in the Pacific region have put in place a formal reporting process for reporting on the results of Tier 3 international travel activities.

As efforts to reduce travel costs have resulted in fewer employees participating in international events, capturing and sharing the outcomes deriving from the international travel activities is particularly beneficial to the Department as it enables the sharing of knowledge by those who attended international events. Sectors and regions that have established this best practice as a requirement are good examples that demonstrate accountability, transparency and stewardship.

6.5  INTERNATIONAL TRAVEL COMBINING BUSINESS AND PERSONAL TRAVEL

Stewardship of international travel is enabled through an adequate departmental policy framework and controls that prescribe how activities should be performed and prohibit inappropriate action. In Fisheries and Oceans Canada, international travel is mainly governed by central agency directives and departmental policies. Furthermore, ensuing international travel expenditures are subject to the departmental account verification process.

The Fisheries and Oceans Canada Travel Policy is intended to explain, clarify and confirm the departmental travel policy to maximize each traveler’s safety, comfort and convenience while ensuring fair treatment of all employees required to travel and appropriate stewardship over the departmental travel program. The policy requires that an approved Travel and Authority Advance and the supporting documentation (e.g. itinerary quotes, conference agendas, employee’s work agenda, etc.) be attached to the travel expense claim. The Travel and Authority Advance and the supporting documentation are essential for planning and monitoring travel expenses as it contains information relevant to travel: length of trip, location, mode of transportation, class, accommodation, meals and incidentals, as well as all other planned expenses involved in the trip. This information makes it possible for management to verify and approve travel arrangements, monitor the financial commitments and ensure that the expenses being claimed are eligible for reimbursement.

The Fisheries and Oceans Canada Travel Policy also has specific requirements for travelers when combining personal travel with a business trip. As per Section 4.3 of the policy, on a rare occasion, an employee may request permission to combine personal travel with a business trip. Personal travel must not be the principal reason for the business trip and the entire trip must pass the test of public scrutiny”. The policy also requires that the Travel and Authority Advance clearly indicates the dates and locations of any time spent on personal travel prior to approval. In these rare circumstances, Responsibility Centre Managers may approve a trip involving personal travel though they are expected to always apply good judgment and common sense.

As individuals with delegated authority to approve leave, Responsibility Centre Managers are also responsible to ensure that requests for leave are approved in accordance with the applicable authority, in other words, the relevant collective agreement or terms and conditions of employment. Therefore, Responsibility Centre Managers at Fisheries and Oceans Canada must ensure that personal leave requested while travelling for international travel is recorded appropriately in PeopleSoft, the departmental system for the management of leave.

Observations
Low Risk 6.5.1 The majority of the international travel claims did not have sufficient supporting documentation, such as conference agendas or employee’s work agenda, to provide evidence in support of travel claims.

In the fiscal year 2011-12, the Department processed a total of 219 international travel claims for the National Capital Region, of which 11 indicated in the “comments” section of their Travel and Authority Advance, that personal travel would be included in the trip. As the audit scope included an examination of international travel claims that combined personal and business travel, the targeted audit sample consisted of these 11 international travel claims.

It is important to note that the “comments” section of the Travel and Authority Advance is a non-mandatory descriptive field for the traveler to enter additional information about the trip. Currently, information such as dates and locations of any time spent on personal travel during the trip would be entered in this section. Therefore, the audit also reviewed an additional random sample of 11 international travel claims that did not have personal travel indicated in the “comments” section of their Travel and Authority Advance, to ensure that no personal travel was carried out without approval.

Overall, the audit found that international travel claims combining personal and business travel comply with central agencies directives, departmental policies and the departmental international travel process. Nonetheless, the audit noted that the majority of international travel claims reviewed did not have a conference agenda or employee’s work agenda. Of the 22 international travel claims reviewed, only two had attached a work agenda outlining the dates of travel, business meetings and personal leave, if applicable, to provide evidence in support of their travel claims. The audit considered that such information facilitates the account verification process and moreover, supports the Responsibility Centre Managers in the discharge of their delegated Section 34 responsibilities.

As per the Fisheries and Oceans Canada Travel Policy, conference agendas or employee’s work agenda are not mandatory supporting documentation. Other types of supporting documentation such as flight itineraries and original receipts are also accepted to support the travel claims. As conference agendas or employee’s work agenda are not required by the departmental travel policy, Responsibility Centre Managers seldom request their employees to include such information in their travel claims.

The Responsibility Centre Managers are ultimately accountable for ensuring the accuracy and completeness of the travel claims they approve, therefore they must demonstrate due diligence in carrying out their delegated Section 34 authority by requesting adequate supporting documentation from their employees to support the travel claims. Though conference agendas or employee’s work agenda are not required from a departmental policy standpoint, the audit considered that they provide evidence to support the eligibility of the international travel claims, particularly travel claims that have combined personal and business travel.

Recommendation Management Response
R-6. The Chief Financial Officer should remind Responsibility Centre Managers with delegated Section 34 authority of their responsibilities when approving international travel claims.

The Chief Financial Officer will issue a bulletin to remind Responsibility Centre Managers with delegated Section 34 authority of their responsibilities as per the Fisheries and Oceans Canada travel policy and the Fisheries and Oceans Canada Guidelines for Section 34 of the Financial Administration Act Account Verification, when approving international travel claims.

Office of Primary Interest: Office of the Chief Financial Officer
Due Date: March 31, 2013
Observations
Moderate Risk 6.5.2 Personal leave was not always appropriately recorded in PeopleSoft for international travel combining personal and business travel.

As part of the examination of international travel claims that have combined personal and business travel, the audit also verified if personal leave was appropriately recorded in PeopleSoft for the targeted sample of 11 international travel claims. The audit used leave data provided by the Office of the Chief Human Resources Officer for the fiscal year 2011-12 and corroborated the data with the PeopleSoft data provided by the Compensation Branch in the National Capital Region.

Of the 11 international travel claims that indicated in their Travel and Authority Advance that personal travel would be included in the trip, only 6 involved personal leave during business days. As such, personal leave needed to be recorded in PeopleSoft for these 6 files. However, the audit found that personal leave was not recorded in PeopleSoft for 2 of these 6 files. Hence, there may be a lack of rigor from Responsibility Centre Managers in ensuring that personal leave is appropriately recorded in PeopleSoft for international travel combining personal and business travel.

Instances where personal leave is not appropriately recorded in PeopleSoft for international travel that includes personal travel can result in Fisheries and Oceans Canada incurring extra salary costs because the leave was not reported. There is also a loss of departmental credibility as these instances are perceived as offering unfair benefits to certain employees. With the extra scrutiny by the public and media for international travel in general, the reputation of Fisheries and Oceans Canada can be affected if travelers are allowed to take personal paid leave beyond what they are entitled to, as per their collective agreements, while away on international travel.

Recommendation Management Response
R-7.  The Assistant Deputy Minister, Human Resources and Corporate Services and the Chief Financial Officer should collaboratively inform Responsibility Centre Managers of their responsibilities for ensuring that personal leave for travel requests combining personal and business travel are appropriately recorded in PeopleSoft. The Assistant Deputy Minister, Human Resources and Corporate Services, in collaboration with the Chief Financial Officer, will develop a message to the Departmental Board and all managers and supervisors reminding them of the necessity of adhering to governmental policies regulating leave requests (and authorizations), involving proper entry into PeopleSoft. More specifically, the message will focus on matters related to personal leave taken in tandem with business travel.
Office of Primary Interest: Human Resources and Corporate Services
Office of the Chief Financial Officer
Due Date: December 31, 2012

7.0  AUDIT OPINION

Based on the audit findings, the conclusion against the audit objective is that overall, the departmental international travel process is working as intended to ensure that international travel is managed with prudence and probity, in a manner that maximizes effectiveness in meeting organizational objectives, minimizes costs and demonstrates value for money. However, the improvements that should be made to the departmental international travel process are as follows:

  • Revise the roles, responsibilities and accountabilities of the International Travel Integration Committee and perhaps its mandate in light of the changes made to the Treasury Board Directive on the Management of Travel, Hospitality and Conferences.
  • Ensure that the information requested in the international travel proposals meet the requirements of the Deputy Minister.
  • Determine an optimal planning cycle to submit and review the international travel proposals through the departmental international travel process.
  • Revise the current definition of international travel and categorization of the three tiers and ensure that they are communicated and understood by key stakeholders.
  • Ensure that the system selected by the Ecosystems and Oceans Science sector to request and report on international travel, provides relevant, reliable, and complete information to support informed decision-making and reporting.
  • Inform Responsibility Centre Managers with delegated Section 34 authority of their responsibilities when approving international travel claims and approving personal leave for travel requests combining personal and business travel.

8.0  STATEMENT OF CONFORMANCE

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 the Treasury Board Policy and Directive on Internal Audit.  The audit conforms with the Internal Auditing Standards for the Government of Canada, as supported by the results of the Quality Assurance and Improvement Program (QAIP). 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/ Observations
Line of Enquiry 1 – Governance and Accountability
Criterion 1.1: Departmental oversight and governance functions are in place to ensure the sound management of international travel throughout the department. 1 6.1.1
Criterion 1.2: Authority, responsibility and accountability of oversight bodies are clearly defined and communicated throughout the department and understood by key stakeholders.  2 6.1.1
Line of Enquiry 2 – Policy and Stewardship
Criterion 2.1: Adequate departmental policies and procedures are in place to support sound management of international travel throughout the Department. 2 6.5.1
6.5.2
Criterion 2.2: Financial controls are in place to ensure international travel expenditures comply with central agencies’ directives and DFO policies. 1 6.5.1
6.5.2
Criterion 2.3:  International travel requests combining personal and business travel are appropriately approved and ensuing expenditures comply with central agencies’ directives and departmental policies and procedures. 3 6.5.1
6.5.2
Line of Enquiry 3 – Results and Performance
Criterion 3.1: Effective planning for international travel activities is in place to demonstrate value for money and minimize costs. 2 6.2.1
Criterion 3.2: Outcomes of international travel activities are captured and shared with key stakeholders. 2 6.4.1
Criterion 3.3: International travel information is relevant, reliable and complete to support decision-making and reporting. 3 6.3.1
6.3.2