Internal Audit Report
Audit of the Management of Laboratories
Date: December 7, 2017
Table of Contents
The objective of the audit was to provide reasonable assurance that sound management practices are in place to manage laboratories. The scope included an assessment of the management control framework for the management of laboratories, more specifically, the institutes and experimental centres managed by the Ecosystems and Oceans Science Sector (EOSS).
The audit was carried out in the Regions and Headquarters. Site visits of the Department of Fisheries and Oceans (DFO) institutes and laboratories were conducted in the Pacific, Maritimes, Central and Arctic, and Gulf regions as these regions accounted for the greatest number of laboratories and covered the most square footage of science laboratories. For the Quebec and Newfoundland regions, an electronic survey was sent to obtain additional information for increased coverage.
The audit focused on the following areas: governance and strategic direction, environmental stewardship, as well as financial and resource management. The audit did not look at occupational health, safety and security, real property or information management and information technology, as these were already covered in previous audits or will be covered as part of future audits. The audit excluded laboratories aboard vessels, science field stations and camps because they represent a small portion of DFO laboratory space. Laboratories from the National Aquatic Health Program were also excluded as these are monitored for compliance by external regulatory bodies.
Why this is Important
In Budget 2016, the government announced $197M over five years to increase the Department’s work in ocean and fresh water science, and an additional investment of $1.5B in the Oceans Protection Plan. This represents significant investments in DFO and the Canadian Coast Guard. As a science-based department, DFO relies on a vibrant Science program to provide qualitative and quantitative data and information combined with expert scientific analysis and advice to directly support decision-making as well as policy and program delivery for its operations across Canada and internationally.The work of DFO scientists directly supports the various sectors and programs of the department and is critical to the achievement of its mandate. The work performed by DFO scientists is conducted primarily in laboratories located in various areas across the country. Some activities undertaken within laboratories include, but are not limited to, various research activities such as physical sampling and testing of different species, stock assessments and monitoring, ecological sciences, aquatic invasive species research, habitat sciences, and science modelling.
Given the significant amount of investment dollars in the DFO Science programs and their complexity, as well as the nature of the work performed by DFO scientists and their reliance on the use of laboratories and laboratory assets, it is important to have a strong management control framework in place to manage laboratories in order to ensure that scientists continue to have the space and tools required to conduct their work.
Our assessment of the management control framework for the management of laboratories indicated that DFO generally has good governance structures and effective environmental stewardship practices in place to support the management of laboratories. However, some areas for improvement have been noted. While there were no significant issues found related to laboratory operating procedures, the audit found that there is an opportunity to standardize these operating procedures across DFO regions. In addition, there is an opportunity to ensure key performance information is captured and reported to senior management and relevant oversight committees to support-decision making. More specifically, we observed:
- Opportunities to identify key performance indicators (KPIs) with respect to the management of laboratories (e.g. usage, costs) and capturing and reporting results of the KPIs to senior management and the relevant oversight committees;
- Inconsistent regional practices due to a lack of national level policies, directives and procedures;
- A lack of consistent monitoring, reporting and comprehensive risk assessment processes; and,
- Inconsistent regional practices to verify assets.
Overall, we observed good governance and environmental stewardship practices over the management of laboratories. The laboratory activities are identified to meet program needs and align with the departmental objectives and are supported by appropriate oversight mechanisms. There are protocols, guidelines and procedures in place for the storage, handling and disposal of hazardous materials and waste water within the laboratories and these are communicated to the laboratory users to avoid adverse environmental effects. However, opportunities exist to further enhance the management control framework with respect to the management of laboratories. Specifically, the audit found improvements are needed with respect to reporting performance specific information to relevant stakeholders; monitoring and reporting processes; risk assessment process; and asset verification practices.
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.
The Internal Audit Report of the Audit of the Management of Laboratories was presented at the Departmental Audit Committee on December 7, 2017. The Report was recommended for approval by the Departmental Audit Committee on December 7, 2017 and approved by the Deputy Minister on January 15, 2018.
As a science-based department, DFO relies on a vibrant Science program to provide qualitative and quantitative data and information combined with expert scientific analysis and advice to directly support decision-making as well as policy and program delivery for its operations across Canada and internationally.The work of DFO scientists directly supports the various sectors and programs and is critical to the achievement of the department’s mandate. Their research and monitoring are essential for evidence-based policy development and decision-making and is also used by other levels of government, industry, communities, and international partners.
The work undertaken within the DFO Science program to provide information for decision-making is conducted primarily in laboratories. EOSS operates out of 13 institutes and experimental centres located in six regions (Newfoundland, Maritimes, Gulf, Quebec, Central and Arctic and Pacific). These facilities feature a range of special purpose spaces required for the EOSS program, including laboratories, workshops, hatcheries and equipment rooms. The laboratories can be classified in five different categories:
- Wet laboratories;
- Controlled environmental chambers and/or laboratories;
- Regular wet/dry laboratories with dedicated applications;
- Dry laboratories; and,
- Biocontainment laboratories.
Some activities undertaken within laboratories include, but are not limited to, various research activities such as physical sampling and testing of different species, stock assessments and monitoring, ecological sciences, aquatic invasive species research, habitat sciences, and modelling. The resulting products such as science papers, expert scientific analysis and advice support DFO’s mandate and priorities.
Over the past two years, the Government of Canada made significant investments in scientific excellence to ensure that decisions are supported by sound scientific advice. DFO recently announced the creation of two Science Enterprise Centres, one in the Pacific region at the West Vancouver Laboratory and the other in the Atlantic region at the Gulf Fisheries Centre. DFO also announced investments in the Institut Maurice-Lamontagne in Quebec and the Fresh Water Institute in Winnipeg.
The overall audit objective was to provide reasonable assurance that sound management practices are in place to manage laboratories. Specifically, the audit assessed whether:
- Adequate governance processes are in place to support the management of laboratories within the Department;
- Processes are established to mitigate potential adverse environmental effects when handling and storing hazardous materials within laboratories; and,
- DFO laboratory facilities and assets are being adequately managed and utilized.
The audit focused on the management control framework for the management of laboratories, more specifically on activities, utilization and science equipment within the laboratories. Based on the results of the risk assessment carried out during the planning phase, the audit team identified that further examination was required in the following areas:
- Governance and Strategic Direction;
- Environmental Stewardship; and,
- Financial and Resource Management.
The audit did not look at occupational health, safety and security, real property or information management and information technology as these were already covered in previous audits or will be covered as part of future audits. The audit excluded laboratories aboard vessels, science field stations and camps because they represent a small portion of DFO laboratory space. Laboratories from the National Aquatic Health Program were also excluded from the scope of this audit as they are monitored for compliance by external regulatory bodies.
The audit team carried out its mandate in accordance with Treasury Board’s Policy on Internal Audit 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 objective of the engagement is achieved. The audit employed various techniques including a risk assessment of the audit entity, interviews, as well as reviews and analysis of documentation and information.
The audit was carried out in the Regions and at Headquarters. Site visits of DFO institutes and laboratories were conducted in the Pacific, Maritimes, Central and Arctic, and Gulf regions as these accounted for the greatest number of laboratories and covered the most square footage for science laboratories. For the Quebec and Newfoundland regions, an electronic survey was sent to obtain additional information for increased coverage.
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:
- Standardization of Operational and Risk Management Practices;
- Information to Support Decision-making
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:
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.
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.
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.
Governance and Strategic Direction (LOW RISK)
Governance is the combination of processes and structures implemented to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives. Governance contributes to the strategic direction, oversight, decision-making, and accountability for an organization to successfully meet its objectives. Policies, procedures, and tools support effective program design and delivery when they are established, maintained and communicated effectively.
Overall, we observed good governance practices. However, establishing national level policies, directives and procedures over the management of laboratories would allow for consistent regional practices.
Oversight mechanisms exist over the management of DFO laboratories.
Because strong oversight mechanisms directly support the implementation of good corporate governance, we expected appropriate oversight mechanisms to be in place for the effective management of laboratories. Through our audit work, we found this was the case.
Indeed, oversight committees are established at the national and regional levels to support the coordination and planning among the regions. At the national level, the key oversight committees include the Science Executive Committee (SEC), the Science Executive Operations Committee (SECOps) and the newly created Sector Capital and Asset Management Committee. At the regional level, each region has their own governance structure which varies from one region to another. The key committees at the national level have formally documented mandates, and meeting minutes are kept to track action items.
Laboratory activities are identified to meet program needs and align with departmental objectives.
Because it is important for an organization to have clearly defined and communicated strategic directions and strategic objectives, aligned with its mandate, we expected laboratory activities to be identified to meet program needs and to align with overall departmental objectives.
The laboratory activities are identified to meet program needs and align with the overall departmental objectives. The audit found that program needs and departmental objectives are identified through the Science Executive Committee chaired by the Assistant Deputy Minister EOSS which sets priority objectives and assigns budgets for the sector across the department. The Regional Director General, through the Regional Management Committee, integrates the work objectives of the various sectors to ensure delivery of program priorities at a Regional level.
The lack of national level policies, directives and procedures over the management of laboratories has resulted in inconsistent regional practices.
Policies, directives and procedures are important to the efficient and effective operation of the organisation and outline the department’s requirements, roles and responsibilities, processes and procedures to guide employees in their daily working activities. These instruments establish and strengthen a consistent management approach across government and provide clear direction to departments on how to orient their activities toward the achievement of results. As a result, we expected policies, directives and procedures to exist for the general management of laboratories and to be communicated to laboratory employees.
A review of existing guidance documentation revealed that while protocols, guidelines and procedures exist to address some specific health and safety risks such as the handling of hazardous materials and waste water within the laboratories, national level guidance with respect to good laboratory safety practices is out of date. The DFO Laboratory Safety Manual was last updated in 1999. Regions have created their own policies, directives and procedures to supplement for the lack of up-to-date national DFO guidance and this has resulted in inconsistent regional practices. For example, the controls and procedures for working alone in a laboratory, for accessing the chemical storage rooms and transporting chemicals vary from one region to another. A lack of national guidance could lead to inconsistency with respect to operational procedures that could result in inefficiencies or failure to follow safety procedures to maintain safe and healthy working conditions.
The DFO Directive on the Management of Moveable Assets outlines DFO's requirements, roles and responsibilities with respect to the management of moveable assets. The DFO Directive is supported by DFO Guidelines on the Management of Moveable Assets. These guidelines establish the minimum national standards and document the department’s requirements, processes and procedures for moveable assets. We observed that the DFO Guidelines for managing moveable assets do not provide coverage of procedures and established processes to allow for baseline maintenance standards to be implemented at the branch level. This has resulted in inconsistent regional practices. For example, there is no requirement to have service level agreements in place for maintaining high value capital assets. As such, repairs to equipment are often being performed by laboratory staff; and asset replacements are being completed on an “as required” basis and often well beyond the asset’s useful life. When preventive maintenance on assets is not performed consistently, this could lead to business disruptions and project delays.
Risk Management Practices (LOW RISK)
Risk management, which involves a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, making decisions on, and communicating risk issues, is an integral component of good management. Risk management equips organizations to make decisions that are informed by an understanding of their risks, and ultimately to respond proactively to change by mitigating the threats, and capitalizing on the opportunities, that uncertainty presents to an organization's objectives. Sound risk management is about supporting strategic decision-making that contributes to the achievement of an organization's overall objectives. 
We observed that health and safety risks are identified and monitored by committees and as part of the Occupational Health and Safety practices. However, opportunities exist for decisions related to the management of the laboratories to be supported by a comprehensive risk assessment process, to identify, assess and prioritize risks, and to consistently apply and integrate risk into key practices across the DFO regions.
There is a lack of a comprehensive risk assessment process to identify, assess and prioritize risk with respect to the laboratory activities.
Because strong risk management practices directly support strategic decision-making, we expected laboratory activities to consider risks and for these risks to be assessed, prioritized and a mitigation strategy developed to ensure program objectives are met.
However, we observed that not all regions have a comprehensive risk assessment process in place to identify, assess and prioritize risks with respect to laboratory activities.
Indeed, the audit found that Health and safety risks are identified and monitored as part of the Occupational Health and Safety (OHS) program. As part of this program, each laboratory is required to perform a Task Hazard Analysis to identify foreseeable hazards associated with laboratory activities. In addition, risks related to individual science projects are assessed and managed by the project officer. However, not all regions have a comprehensive risk assessment process in place to identify, assess and prioritize all risks with respect to laboratory activities, (not limited to health and safety risk or risks to individual science projects).
Further, the audit found that risks related to laboratory space or equipment availability were not considered. For example, when a break-down of high value equipment occurs, the activities that require the equipment are either delayed until laboratory staff repairs the equipment, or other alternatives are found. Responses from regional laboratory personnel indicated that high value equipment in some facilities have broken down several times due to the age of the equipment. Fifty four percent of moveable capital assets that are categorized as scientific or laboratory equipment exceeds their useful life span in DFO. Whereas, 61% of the total moveable capital assets are identified as exceeding their useful life span with an original acquisition cost totalling $521M. While a formal planning process is in place for the acquisition of new or replacement of capital assets, some regions have developed business contingency plans in case of a lack of laboratory space or equipment breakdown or have agreements with external providers for the use of their laboratories. A comprehensive risk assessment process would capture and identify such instances and assign a risk rating and a mitigation strategy which would consider the need for service level agreements and/or plans for replacement or an upgrade as part of the formal planning process.
A good practice with respect to the identification, assessment and prioritization of risk would entail having a risk register in place. A risk register would allow managers to identify, prioritize and mitigate key risks.
In the absence of a comprehensive risk assessment process, the risk information and risk principles may not be applied or integrated with other key decisions related to strategic and operational planning, resource allocation/reallocation, etc.
Environmental Stewardship (LOW RISK)
We observed that the DFO laboratories across the regions have good environmental stewardship practices in place and this is supported by the fact that there have been no hazardous or waste water incidents in the past two years across the DFO regions.
DFO laboratories across the regions have good environmental stewardship practices in place.
We expected, the storage, handling and disposal of hazardous materials and waste water within laboratories to be adequately managed to avoid adverse environmental effects.
The audit found that laboratories are guided by numerous national and international regulations such as, the Canadian Labour Code Part II, Canada Occupational Health and Safety Regulation and the Hazardous Products Acts and Regulations. Regions have also put in place policies and guidelines for example, at St-Andrews Biological Station (SABS), management has put in place the Chemical Management Policy to ensure the safe and efficient handling of chemicals used in the laboratories. The disposal of hazardous materials/waste is conducted according to the regulations and appropriate measures are in place to manage waste water from laboratories before it enters the city’s water system and/or the environment to prevent contamination.
The OHS committee does quarterly inspections of the laboratories to ensure that users are respecting the amount of chemicals allowed as per regulations and policies. Both the laboratories and the chemical storage rooms are equipped with personal protection equipment and spill cleanup kits. In addition, training in the transportation and handling of dangerous goods or hazardous materials and environmental response is given to laboratory personnel. For example, new employees have to complete mandatory training on Workplace Hazardous Materials Information System, first aid and spill response. Training is tracked by laboratory supervisors and the OHS committee.
Financial and Resources Management (MODERATE RISK)
The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization. An integrated departmental control framework that includes assets, money, people, and services should be established at all levels within the organization and should define how activities should be performed while ensuring its underlying principles are clear to employees.
We observed that procedures and controls exist to protect the use of assets and, record, safeguard, monitor and verify the capital assets used in laboratories. However, the audit found improvements are needed related to regional monitoring practices with respect to the verification of assets. In addition, we found there is a lack of a formal process and system to ensure a complete inventory list and to identify equipment that is considered as surplus or is available for transfer to other regions.
The maintenance and review of inventory is being performed on an inconsistent basis and, in some cases, the current practices do not comply with DFO policy requirements.
Because the objective of materiel management activities is to ensure that materiel assets are managed by departments and agencies in a sustainable and financially responsible manner in order to support the delivery of government programs, we expected processes to be in place to record, safeguard, monitor and periodically verify the capital assets used in laboratories for asset lifecycle management.
The Treasury Board’s Guide to Management of Materiel describes lifecycle management as the effective and efficient management of assets from the identification of program requirements through to the eventual disposal of the assets. The Treasury Board’s Policy on Management of Materiel requires the deputy heads to ensure that the risk of loss or damage to federal materiel assets is minimized. Under this Policy, the deputy heads are responsible for monitoring and reporting on the management of materiel in their departments. More specifically, they are responsible for ensuring that a control and oversight regime is in place to monitor adherence of this policy and its associated directives.
The DFO Directives and Guidelines on the Management of Moveable Assets, in general, outline the same requirements and guidance as stipulated in the TBS Policy on the Management of Materiel. As per the DFO Directives and Guidelines on the Management of Moveable Assets, Responsibility Centre Managers (RCMs) are responsible for ensuring the safe use, proper maintenance, storage and physical security of the RCM’s moveable assets; in conducting a physical verification of the RCM’s moveable assets; and for identifying when a moveable asset requires disposal or deciding to declare an asset as surplus.
We observed that procedures and controls exist to protect the use of assets from waste, abuse or fraud. For example, there are procedures to restrict access to laboratory facilities and storage areas to authorized personnel only and this practice is enforced through tethering the equipment and/ or providing direct keyed or card swipe (electronic) access. In addition, there are processes in place to ensure that only trained and authorized personnel are allowed to operate equipment. Good practices such as mandatory orientation to workspaces, hazard awareness and training sessions were observed by the audit team.
However, the maintenance and review of inventory is being performed on an inconsistent basis and in some cases, the current practices do not comply with the DFO policy requirement. Previous audits have identified weaknesses in controls over inventory management that are currently being addressed by the CFO Sector. The following demonstrates our observations as they relate to the responsibilities of the RCMs across DFO regions:
- As per the DFO Directive on the Management of Moveable Assets, the RCMs are required to conduct, on an annual basis, a physical verification of the moveable assets under their responsibility. We observed inconsistencies with respect to the annual physical asset verifications. While some asset holders complete physical asset verifications on an annual basis and provide an update of their inventory to the Regional Asset Managers (RAM), for other asset holders, the inventory reviews are either not being performed at all or are done on an ad-hoc basis.
- In addition, there is no documented verification process to ensure standardization of review practices across the regions. Review of the national listing of asset verifications obtained from Materiel and Procurement Services indicated that for the fiscal year 2016-2017 only 14.4% of the assets were verified as part of the annual verification exercise.
The lack of consistent monitoring practices at the regional level may result in assets being lost or misappropriated. In addition incomplete or inaccurate inventory of equipment could result in an inability of the RCMs to properly manage the assets’ lifecycle as per DFO directive and guidelines.
Asset acquisition planning and disposal processes are in place; however, there is an opportunity to improve regional practices with respect to the sharing and disposal of surplus equipment.
The Science sector has implemented an annual capital acquisition planning process that informs investment decisions based on program priorities. The planning process is integrated at the regional and national levels and takes place annually as part of the capital planning and allocation exercise.
In addition, some regions have established a process to facilitate the exchange of laboratory equipment. While this is a good practice that could be implemented nationally, this would require that a formal process and tracking system be in place to identify surplus or available equipment that could be transferred to other regions or shared. The Asset and Infrastructure group at NHQ indicated that the Sector Capital and Asset Management Committee has decided that the reallocation of equipment across regions will be included in the in-year reallocation of funding request and a monthly process will be established for identifying available equipment in other regions to be transferred, either on a temporary or permanent basis. These requests would then be approved by the Science Executive Operations Committee. The committee would also ensure that assets are recorded in the inventory.
Furthermore, we observed that, while there is a formal process established with respect to the disposal of assets, it is not always consistently followed by the regions. When an asset has reached the end of its useful life or is deemed as surplus, the RCM identifies the moveable asset to be disposed and declares it a surplus to the Regional Asset Manager who then coordinates the disposal of moveable assets on behalf of the RCM. As part of the disposal process, the RCM is required to complete and sign a Disposal of Moveable Asset form and then submit it to the Regional Asset Manager. Moveable assets declared surplus must be removed from the premises and disposed of as soon as possible after they become surplus. The examination performed by the audit team indicated that while the signed disposal forms were provided upon request, the removal of assets from the premises and disposal was not always completed. For example, in one instance, the asset was retired in the Abacus financial system in January 2000; however, it was not removed from the premises at the time and was not disposed using appropriate methods of materiel management. The region was unable to provide a record of this transaction.
Recommendation 1: In order to further enhance the standardization of operational and risk management practices to support the management control framework over the management of laboratories, the Assistant Deputy Minister, Ecosystems and Oceans Science should ensure that:
- National level guidance is established with respect to good laboratory safety practices to replace or update the 1999 DFO Laboratory Safety Manual;
- An assessment is completed on how best to implement a comprehensive risk assessment process that assesses all risks related to laboratory activities, usage, etc.;
- A formal process is established to facilitate the relocation or sharing of equipment across regions, when a need has been identified; and,
- Annual asset verifications are performed by the regions in a consistent and timely manner.
- 1.1: The Science Asset Community will work with Regional Management to assess safety practices against the 1999 DFO laboratory safety manual with a goal to update this manual and apply the new standards consistently across DFO facilities. Expected date: October 2018.
- 1.2: An evaluation will be conducted to implement a comprehensive laboratory activity risk assessment process for DFO facilities. Expected date: March 2019.
- 1.3: A process has been established to identify in-year opportunities to transfer equipment between Regions. This process will be expanded and incorporated into the annual capital planning process for the sector. Expected date: January-February 2018, in alignment with the annual capital planning activities of the sector.
- 1.4: The Science Asset Committee has recently begun work on developing a comprehensive inventory and validation of science assets across the country, which will then be maintained and updated annually. This activity is currently in the work plan development stage. Expected date: March 2019, to be updated annually.
Information to Support Decision-making
Information reporting (MODERATE RISK)
Information is necessary for the entity to carry out internal control responsibilities to support the achievement of its objectives. Management obtains or generates and uses relevant and quality information from both internal and external sources to support the functioning of internal control.
We observed that laboratory specific project level results are monitored and reported upon for decision-making purposes. There are KPIs established for the National Science Programs and these are reported to senior management as part of the Departmental Results Report and the Departmental Plan. However, opportunities exist to capture, monitor and report on laboratory specific performance information to facilitate decision-making with respect to the management of laboratory facilities.
Project level results are reported; however laboratory specific performance indicators are not captured, monitored or reported to the oversight committees.
Since 2015, EOSS took part in two assessments of its laboratory space. The first was the Laboratory Asset Class Strategy (ACS)  under the Real Property Portfolio and the second was the Science 2016 Initiative. For the ACS, the objective was to provide information on the future direction of the program for laboratory requirements, while a component of the Science 2016 Initiative included reviewing the laboratory and equipment utilization.
Laboratory Asset Class Strategy
As part of the ACS, EOSS was tasked to prepare an ACS for laboratories under the Real Property Portfolio Strategy. EOSS assessed its laboratory usage by developing a formula that includes the frequency of utilization as well as its occupancy rate. The formula was defined as follows: (% Frequency x % Occupancy) / 100 = Space Utilization Rate and considered annual and seasonal periods. Real Property integrated the ACS with the Geographic Area Plans and Site Management Plans; resulting in cost effective real property solutions, to best support the demand as well as to reduce the size and costs of its portfolio.
Science 2016 Initiative
In January 2015, the Science Executive Committee launched the Science 2016 Initiative. The Initiative was designed to position the Science Sector to ensure that it:
- Focusses on mission critical research and monitoring priorities;
- Provides the best possible professional science-based advice to the Minister;
- Fosters and maintains a culture dedicated to scientific excellence;
- Governs its work in a clear, efficient and effective manner;
- Is, and is seen to be, a valued and effective member of domestic and international aquatic science communities; and,
- Derives the maximum benefit from every dollar, every building, and every piece of equipment under the Sector’s purview.
The Initiative was structured in nine separate but inter-connected streams: Prioritization Framework, Partnerships and Collaboration, Culture of Scientific Excellence, Utilization of Assets, Information Technology, Science Data Management, Governance, Science Communications and the At-Sea Science program. Each of the streams were led by a member of the Science Executive Committee and engaged as many sector members as possible from both a regional and national perspective. Under stream 4 – Utilization of Assets, the objective was to improve the ability of the Sector to maximize the efficiency and effectiveness of its portfolio and tangible assets. It included the following: a review of the laboratory asset class strategy, utilization rates and surplus capacity at the regional science institutes, as well as, a review of the inventory of equipment. The review recommended that a Science Sector committee be established to verify and maintain the laboratory database created under the Laboratory ACS, as well as, to establish a process to examine optimization of laboratories and equipment and to verify purchases of high value laboratory equipment greater than $50,000, at least annually.
As such, we observed that there are processes in place for the monitoring and reporting of Science programs and projects. Program performance and results are rolled up to the regional and national level for decision-making. Project reports are produced for certain funding allocations and for performance monitoring, and there are KPIs established for the National Science Programs and these are reported in the Departmental Results Report and the Departmental Plan.
However, the audit found that the Science sector could benefit further from the capturing, monitoring and reporting of laboratory specific performance information such as laboratory utilization, and capital asset and equipment costs. While the laboratory utilization rate was captured as part of the Asset Class Strategy and reviewed under the Science 2016 Initiative, it has not being tracked since then. The audit found that:
- The laboratory usage is monitored in the regions for allocating laboratory space to users; however these are not reported to National Headquarters. With the increase in Science funding combined with the arrival of new scientists, the monitoring and reporting of laboratory usage will become important to ensure that there is a proper mix of laboratories in the regions to deliver existing and new Science program priorities and to ensure there is sufficient laboratory space.
- There is a lack of national guidance or defined measuring tools provided to the regions by National Headquarters to capture the laboratory usage rate in order to ensure that space is maximized.
This finding is important because the monitoring of laboratory utilization could help to inform current and future laboratory needs and capacity requirements.
Recommendation 2: In order to further enhance the information to support decision-making over the management of laboratories, the Assistant Deputy Minister, Ecosystems and Oceans Science should ensure that:
- An assessment is completed to identify the need for additional key performance indicators (KPIs) related to laboratories and ensure that such information is captured, tracked and cascaded up to the relevant oversight committees for reporting purposes; and,
- For identified key performance indicators, national guidance and clearly defined measuring tools are provided to the regions to capture the KPIs.
- 2.1: An assessment to identify the need for additional key performance indicators will be carried out by the Science Asset Committee, in conjunction with regional management and science planning staff. This assessment will include identification of how best to capture and disseminate this performance information. Expected date: September 2018.
Overall, the audit found good governance and environmental stewardship practices over the management of laboratories. The laboratory activities are identified to meet program needs and align with the departmental objectives and are supported by appropriate oversight mechanisms. There are protocols, guidelines and procedures in place for the storage, handling and disposal of hazardous materials and waste water within the laboratories and these are communicated to the laboratory users to avoid adverse environmental effects. However, opportunities exist to standardize operational practices and processes across DFO regions and to ensure key information is captured and reported to senior management and relevant oversight committees to support decision-making.
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.
The audit criteria are presented in the table below, by audit line of enquiry.
Line of Enquiry 1 – Governance and Strategic Direction
Criterion 1.1: Appropriate oversight mechanisms are in place for the effective management of laboratories
Criterion 1.2: Policies, directives and procedures exist and are communicated to laboratory employees
Criterion 1.3: Laboratory activities are identified to meet program needs and align with the overall departmental objectives and risk managements
Criterion 1.4: Processes are in place for monitoring and reporting on laboratory activities
Line of Enquiry 2 – Environmental Stewardship
Criterion 2.1: The storage, handling and disposal of hazardous materials and waste water within laboratories are being adequately managed to avoid adverse environment effects
Line of Enquiry 3 – Financial and Resources Management
Criterion 3.1: Processes are in place to ensure effective utilization of laboratory facilities that meet the needs of laboratory DFO personnel
Criterion 3.2: Processes are in place to record, safeguard and periodically verify the capital assets used in laboratories for asset life-cycle management
 Source: 2015-16 Q4 Asset Reporting
 2015-16 Q4 Asset Reporting
 Laboratory Asset Class Strategy – June 1, 2015
 The Science 2016 Initiative – Project Closeout Report
 The Science 2016 Initiative – Project Closeout Report
 The Science Executive Committee is mandated to provide leadership and strategic vision for EOS.
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