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Audit of the Management of International Activities - AU1803

Presented to the Departmental Audit Committee (DAC)
April 10, 2019

Table of Contents

EXECUTIVE SUMMARY

INTRODUCTION

Rapid advances in technology and global developments are leading Natural Resources Canada (NRCan) to foster trade, collaboration, and research and development abroad. The Department manages bilateral and multilateral relations, as well as related collaboration instruments, that involve over 30 countries around the world. NRCan also cooperates with international partners through several multilateral fora across a range of priority files and plays an important role in supporting the Government of Canada’s international trade agenda given the significant role of natural resources in Canada’s trade profile. These activities contribute to the ongoing prosperity of Canada’s economy, since natural resources were valued at $201 billion in 2016Footnote 1, including energy, forestry, and mining exports. Through trade missions, Ministerial dialogues, and international engagements, NRCan has sought to promote greater access to new markets, attract investments, generate economic growth, build capacity, promote social responsibility, and protect the environment. Explanations of the Department’s main international instruments and activities are included in Appendix B.

In this context, the Department works closely with Global Affairs Canada (GAC) to ensure its international activities contribute to the broader Government of Canada (GOC) international policy, trade, investment, and development agendas. GAC provides overall GOC policy leadership on international issues, and NRCan contributes significantly to advancing these objectives. 

The International Affairs Division (IAD) of NRCan’s Strategic Policy and Results Sector (SPRS) plays a leadership and coordination role in establishing international engagement priorities and defining objectives; developing departmental approaches on and executing individual Ministerial missions, in collaboration with the Sectors; and providing advice and briefings to senior management on GOC priorities. SPRS works in collaboration with the other NRCan Sectors to provide advice to senior management, GAC and other federal departments on a broad range of international issues, predominantly related to supporting economic growth and fostering trade and investment. Approximately 10 Headquarters Full-Time Employees (FTEs) are dedicated to the IAD of SPRS.

SPRS, working with the Sectors, provides advice to GAC on high-level efforts, including on potential deliverables and engagement opportunities in the context of Prime Ministerial trips; policy input into DM meetings on international issues (such as the DM Committee on Global Trends, Foreign Affairs and Defence); advice on trade negotiations; and informing Memoranda to Cabinet with implications for the natural resources sectors. SPRS also develops strategic documents on international engagement and identifying priority countries as well as transition materials for new NRCan Ministers and Deputy Ministers on international issues. SPRS also leads and coordinates departmental input for multilateral fora. For example, SPRS develops integrated policy advice in support of Canada’s participation in multilateral forums such as the G7, G20, the Asia-Pacific Economic Cooperation (APEC), the Organisation for Economic Co-operation and Development (OECD), United Nations (UN) initiatives, and other multilateral institutions to position Canada as a global leader in the transition to a low-carbon economy, destination of choice for investment, and to unlock market access opportunities. 

In addition, each NRCan Sector also engages in its own activities abroad, based on where market access, commercial opportunities, and collaboration in science and technology (S&T) offer the most potential for Canada. NRCan Sectors pursue priorities in different regions to promote Sector-specific interests. These types of activities are led by the Canadian Forest Service (CFS), the Energy Sector (ES), the Innovation and Energy Technology Sector (IETS), and the Lands and Minerals Sector (LMS), with support from SPRS and the Communications and Portfolio Sector (CPS). Approximately 70 FTEs work within the program Sectors’ International Divisions in Headquarters to conduct international activities. Program Sectors may also employ temporary postings abroad to respond to occasional international activity demands.

Examples of the international activities carried out by the Sectors include: CFS promotes Canadian wood products internationally to help expand global market potential and provides support to GAC in trade disputes and market access issues related to the forest sector; ES engages with international energy partners at all levels to promote market access  and investments, through collaborative international  activities Ministerial dialogues on clean energy, oil and gas, renewables, and electricity; LMS supports the global competitiveness of the Canadian minerals and metals industry through targeted engagement, and promotion of sustainable development and corporate responsibility as part of the progressive trade agenda; and IETS leads Mission Innovation, which is a global partnership aimed at doubling government investment in clean energy innovation over five years.

Given the significance and extensive nature of NRCan’s international activities, an audit of this area was included in the 2017-2020 Risk-Based Audit Plan, approved by the Deputy Minister on March 30, 2017.

The objective of the audit was to assess the adequacy and effectiveness of the processes in place to manage NRCan’s international activities.

STRENGTHS

Elements of strategic planning for international activities, considering GOC and departmental priorities, are in place at the departmental and Sector-levels. SPRS also communicates upcoming international activities through departmental trackers and has developed appropriate guidance tools for Ministerial SPRS-led missions.

For SPRS-led horizontal international activities, reporting on results as well as against established performance indicators is occurring. Sectors are also measuring performance for their own international activities. In addition, there are positive information management practices in place for the central inventory of International Collaboration Instruments and within most Sectors.

AREAS FOR IMPROVEMENT

Although governance structures exist, they are not being used to their full potential to effectively support the management of international activities. Opportunities were identified to further reinforce the role of the Director General International Affairs Committee (DGIAC) to incorporate more strategic discussions, increase information-sharing, and enhance Sector participation. There are also opportunities to better define and communicate roles related to horizontal initiatives.

The departmental International Engagement Plan has not recently been reviewed or updated, and there is no annual forecast for upcoming Ministerial international missions. In addition, Sectors are not implementing departmental guidance tools or sharing internally developed tools, which could benefit the Department.

There are also opportunities to enhance logistical processes. In addition, guidance related to post-trip reporting has not been provided to the Sectors, and there could be more consistent storage and dissemination of post-trip reports. Targeted improvements to post-trip reporting could enhance information available for senior management for decision making.

INTERNAL AUDIT CONCLUSION AND OPINION

In my opinion, processes for the management of international activities are in place, but there are several opportunities to improve the adequacy and effectiveness of these processes. The increasing importance, complexity, and volume of international activities managed by the Department will require management’s attention in addressing the areas identified in the audit.

STATEMENT OF CONFORMANCE

In my professional judgement as Chief Audit and Evaluation Executive, the audit conforms with the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing and the Government of Canada’s Policy on Internal Audit, as supported by the results of the Quality Assurance and Improvement Program.

Christian Asselin, CPA, CA, CMA, CFE
Chief Audit and Evaluation Executive
December 13, 2018

ACKNOWLEDGMENTS

The audit team would like to thank those individuals who contributed to this project and particularly employees who provided insights and comments as part of this audit.

INTRODUCTION

Rapid advances in technology and global developments are leading Natural Resources Canada (NRCan) to foster trade, collaboration, and research and development abroad. The Department manages bilateral and multilateral relations, as well as related collaboration instruments, that involve over 30 countries around the world. NRCan also cooperates with international partners through several multilateral fora across a range of priority files and plays an important role in supporting the Government of Canada’s international trade agenda given the significant role of natural resources in Canada’s trade profile. These activities contribute to the ongoing prosperity of Canada’s economy, since natural resources were valued at $201 billion in 2016Footnote 2, including energy, forestry, and mining exports. Through trade missions, Ministerial dialogues, and international engagements, NRCan has sought to promote greater access to new markets, attract investments, generate economic growth, build capacity, promote social responsibility, and protect the environment. Explanations of the Department’s main international instruments and activities are included in Appendix B.

In this context, the Department works closely with Global Affairs Canada (GAC) to ensure its international activities contribute to the broader Government of Canada (GOC) international policy, trade, investment, and development agendas. GAC provides overall GOC policy leadership on international issues, and NRCan contributes significantly to advancing these objectives. 

The International Affairs Division (IAD) of NRCan’s Strategic Policy and Results Sector (SPRS) plays a leadership and coordination role in establishing international engagement priorities and defining objectives; developing departmental approaches on and executing individual Ministerial missions, in collaboration with the Sectors; and providing advice and briefings to senior management on GOC priorities. SPRS works in collaboration with the other NRCan Sectors to provide advice to senior management, GAC and other federal departments on a broad range of international issues, predominantly related to supporting economic growth and fostering trade and investment. Approximately 10 Headquarters Full-Time Employees (FTEs) are dedicated to the IAD of SPRS.

SPRS, working with the Sectors, provides advice to GAC on high-level efforts, including on potential deliverables and engagement opportunities in the context of Prime Ministerial trips; policy input into DM meetings on international issues (such as the DM Committee on Global Trends, Foreign Affairs and Defence); advice on trade negotiations; and informing Memoranda to Cabinet with implications for the natural resources sectors. SPRS also develops strategic documents on international engagement and identifying priority countries as well as transition materials for new NRCan Ministers and Deputy Ministers on international issues. SPRS also leads and coordinates departmental input for multilateral fora. For example, SPRS develops integrated policy advice in support of Canada’s participation in multilateral forums such as the G7, G20, the Asia-Pacific Economic Cooperation (APEC), the Organisation for Economic Co-operation and Development (OECD), United Nations (UN) initiatives, and other multilateral institutions to position Canada as a global leader in the transition to a low-carbon economy, destination of choice for investment, and to unlock market access opportunities. 

In addition, each NRCan Sector also engages in its own activities abroad, based on where market access, commercial opportunities, and collaboration in science and technology (S&T) offer the most potential for Canada. NRCan Sectors pursue priorities in different regions to promote Sector-specific interests. These types of activities are led by the Canadian Forest Service (CFS), the Energy Sector (ES), the Innovation and Energy Technology Sector (IETS), and the Lands and Minerals Sector (LMS), with support from SPRS and the Communications and Portfolio Sector (CPS). Approximately 70 FTEs work within the program Sectors’ International Divisions in Headquarters to conduct international activities. Program Sectors may also employ temporary postings abroad to respond to occasional international activity demands.

Examples of the international activities carried out by the Sectors include: CFS promotes Canadian wood products internationally to help expand global market potential and provides support to GAC in trade disputes and market access issues related to the forest sector; ES engages with international energy partners at all levels to promote market access  and investments, through collaborative international activities and Ministerial dialogues on clean energy, oil and gas, renewables, and electricity; LMS supports the global competitiveness of the Canadian minerals and metals industry through targeted engagement, and promotion of sustainable development and corporate responsibility as part of the progressive trade agenda; and IETS leads Mission Innovation, which is a global partnership aimed at doubling government investment in clean energy innovation over five years.

Given the significance and extensive nature of NRCan’s international activities, an audit of this area was included in the 2017-2020 Risk-Based Audit Plan, approved by the Deputy Minister on March 30, 2017.

AUDIT PURPOSE AND OBJECTIVES

The objective of the audit was to assess the adequacy and effectiveness of the processes in place to manage NRCan’s international activities.

Specifically, the audit assessed whether:

  • The Department has established and is effectively using adequate governance processes to support the management of its international activities;
  • Appropriate processes, strategic objectives, and resource requirements have been established to support the planning of international activities, such as international policy development and mission planning; and
  • Adequate processes and mechanisms, including information management, have been established to ensure international activities and processes are measured and appropriately carried out, in a timely manner.

AUDIT CONSIDERATIONS

A risk-based approach was used in establishing the objectives, scope, and approach for this audit engagement. A summary of the key underlying potential risks that could impact the effective management of international activities include the following:

  • Governance structures may not adequately support the management of NRCan’s international activities;
  • Roles, responsibilities, and accountabilities for managing international activities may not be clearly defined or communicated;
  • The Department may not have established a coordinated and strategic planning process for its international activities that aligns with governmental and departmental priorities;
  • Processes and procedures may not be in place to appropriately define performance expectations, or measure and monitor the performance of international agreements; and
  • Senior management may not be provided with a comprehensive, integrated picture of the Department’s international activities.

SCOPE

The audit focused on the role of SPRS’ IAD, as the Office of Primary Interest, as well as the role of NRCan Sectors in managing significant international activities delivered by CFS, ES, IETS, and LMS, with the support of CPS.

The scope of this audit included relevant departmental and Sector processes, procedures, and tools used to plan, conduct, monitor, and report on international activities, including international agreements.

The audit focused on the period from April 1, 2016 to September 30, 2018, in order to examine the most recent international activity processes. In addition, since NRCan interfaces with other Departments and Agencies in the delivery of international activities and results, other government departments (OGDs) were consulted during the Conduct Phase of the audit to learn about best practices in the management of international activities; however, the activities of these departments were not audited. The OGDs consulted were Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, the Department of Fisheries and Oceans, Environment and Climate Change Canada, the Public Health Agency, and the National Research Council.

The audit did not examine travel expenditures, since this topic has been previously included in former Audit Branch’s continuous audit activities, and key controls were found to be effective.

The departmental Canada-U.S. Horizontal Task Group responsible for the Canada-US Strategy and engagement on natural resources and climate change issues was not included in the audit scope, due to its temporary nature.

APPROACH AND METHODOLOGY

The approach and methodology followed the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing and the Government of Canada’s Policy on Internal Audit. These standards require that the audit be planned and performed in such a way as to obtain reasonable assurance that audit objectives are achieved. The audit included tests considered necessary to provide such assurance. Internal auditors performed the audit with independence and objectivity as defined by the International Standards for the Professional Practice of Internal Auditing.

The audit approach included the following key tasks:

  • Interviews with key personnel and committee representatives;
  • Review of selected international activities documents, business processes, & case studies; and
  • Testing a sample of international agreements and activities.

The conduct phase of this audit was substantially completed in September 2018.

CRITERIA

The audit criteria were developed based on the key controls set out in the TB of Canada’s Core Management Controls as well as the TB Guidelines on Service Agreements and Project Management Principles (GOAL/QPC and MAF). Please refer to Appendix A for the detailed audit criteria. The criteria guided the audit fieldwork and formed the basis for the overall audit conclusion.

FINDINGS AND RECOMMENDATIONS

GOVERNANCE, ROLES AND RESPONSIBILITIES

Summary Finding

Governance structures for international activities exist, and there has been work undertaken to reinforce their role in supporting the management of international activities. Opportunities were identified to continue to enhance the Director General International Affairs Committee (DGIAC) by incorporating more strategic topics during its discussions, increasing information sharing with senior management, and ensuring participation from additional units that do not have distinct representation on the Committee.

Overall, international activity roles, responsibilities, and accountabilities for the Strategic Policy and Results Sector (SPRS) and for the other Sectors conducting international activities are clearly defined and communicated; however, there are opportunities to better define and communicate roles related to horizontal initiatives.

Supporting Observations

Governance bodies are expected to provide leadership and oversight for the management of international activities, including monitoring plans and follow-up activities, to enable the achievement of departmental objectives and priorities. It should be linked to decision making on strategic planning and priority setting by the Department. The audit team sought to determine whether the Department has established and is effectively implementing adequate governance processes to support the management of its international activities.

The audit team also examined whether roles, responsibilities, and accountabilities of parties involved in the management of international activities are clearly defined and communicated across the Sectors.

Governance

The coordination role of SPRS includes its leadership as the Secretariat of NRCan’s DGIAC. This Committee has the mandate to provide strategic direction and oversight of NRCan’s international portfolio, and to ensure coherence and coordination of international activities. As per the Committee’s Terms of Reference (TOR), the roles and responsibilities of the DGIAC include developing departmental positions and approaches on international policy; promoting consistency across Sectors between policy and programming frameworks; and identifying emerging policy issues and trends for the Department. The Committee is intended to encourage cross-sectoral discussion in order to provide a challenge function for policies, strategies, and approaches, as well as a forum for strategic decision making, ultimately leading to formal recommendations to senior management.

While several DGIAC members interviewed indicated they found value in attending the Committee meetings, the majority of members indicated that this forum has not been used for strategic discussions or decision making purposes, for example, to determine future areas of focus and priorities to achieve departmental objectives and align with the changing environment. This was confirmed through the audit team’s review of recent DGIAC agendas and Records of Decision. The audit also found limited evidence of a direct link between the international activities discussions taking place at DGIAC and the Policy Science Integration Committee (PSIC) meetings. SPRS has taken recent steps to enhance the role of DGIAC in facilitating the discussion of international issues impacting natural resources sectors and in the governance of international activities. In fall 2017, policy presentations were provided at DGIAC, following collaboration with the Sectors, and were subsequently discussed at PSIC.  

The DGIAC meets according to the frequency set by its TOR; however, Corporate Management and Services Sector (CMSS) and Communications and Portfolio Sector (CPS) participation on the Committee has been largely absent since January 2017. It was also unclear as to why there is no representative from the CMSS Planning and Operations Branch on DGIAC, since this Branch indicated that it could play a role in contributing to costing estimates of international activities.

In addition, the DGIAC does not incorporate membership from all groups with international activities, but instead limits participation to the International Division Director General (DG) representative for each program Sector. The audit noted that there are several international activities carried out under various DGs in ES and LMS; however, these DGs do not currently have representation on the DGIAC. The audit also found that programs that report to a DG that is not a member of the DGIAC have a lack of awareness of the topics being discussed at this forum, due to limited communication on international activities within the Sectors. In addition, despite the participation of International Division DGs from each program Sector, not all relevant program results are being consolidated and shared at DGIAC meetings.

Besides the DGIAC, SPRS is also leading a regular, informal international directors committee as well as ad-hoc working-level committees that focus on specific regions and events in order to provide updates and to consult with the Sectors. 

At the Sector-level, Sector representatives provide regular updates on their planned international engagements to senior management through the Executive Committee and departmental Weekly Planning Meetings. However, these governance structures allow limited time for detailed discussions around strategic priorities and decision making related to international activities.

Roles & Responsibilities

NRCan manages its international activities through a decentralized structure; each program Sector involved with international activities has a dedicated unit to manage these initiatives. When international activities are horizontal in nature, SPRS’s IAD normally carries out a coordinating and integrating function, incorporating departmental perspectives. All program Sectors also engage in multilateral initiatives. In some instances, international activities involving multiple Sectors are led by a Sector other than SPRS, in collaboration with the appropriate program representatives.

A summary of the international roles and responsibilities of each of the program Sectors is  provided below:

  • CFS has a Trade and International Affairs Division that is responsible for delivering an international market development program and working with GAC to address market access and trade policy issues (such as illegal logging) affecting Canada’s forest sector. The Division is also responsible for managing international conventions, agreements, and other multi- lateral mechanisms that reflect Canada’s forest interests and international forest obligations. The Division convenes regular meetings with senior management across the CFS to share information regarding international activities. As well, CFS is engaged in international climate change, particularly with respect to reducing emissions from deforestation and forest degradation in developing countries.
  • ES has an International Energy Branch (IEB) that carries out strategic direction setting, policy integration, and engagement functions on international energy issues (e.g., trade and investment, energy security, clean growth and climate change, and the global transition to a low-carbon economy). Several other ES branches are also involved with Sector international activities, coordinate with the IEB and each other, and report results to their Assistant Deputy Minister (ADM). ES plays a significant role by leading and/or supporting NRCan’s international engagement on energy issues through bilateral and multilateral mechanisms (e.g., energy discussions at the G7 and G20, International Energy Agency, Canada-China Dialogue on Clean Energy). In 2017, ES led five international ministerial missions and worked closely with the Canada-US Horizontal Task Group in the negotiation of the North American Free Trade Agreement (NAFTA) energy chapter.
  • LMS has an International Affairs and Trade Division (IATD). Following the merger of the Minerals and Metals Sector (MMS) and Earth Sciences Sector (ESS) into LMS, this Division which had existed within MMS, became part of LMS. Prior to the merger, IATD led MMS Sector-related activities on international objectives and activities, and with the merger, IATD is now working on building capacity and ways of providing management with a more integrated view of LMS’ international activities. According to LMS, there are plans to implement an integrating forum at the DG-level to advance this work.
  • IETS has an International Collaboration Division (ICD), which has established communication within the different Branches in IETS as well as in ES, due to their shared focus on energy matters, to address specific files such as Mission Innovation and clean technology. The ICD has established mechanisms to support the governance of international files, which include regular DG and ADM-level meetings.
  • The CPS works to support Sector leads in developing communications products for international engagements. The Sector’s roles and responsibilities include supporting senior management with communications materials and playing a liaison function with other government departments on a variety of external communications products.

Through consultations with other science-based departments, the audit found that the majority of their international activities are carried out in a centralized manner through a single management office, while others have a more decentralized approach to managing these activities. Centralization has merits when common activities can be managed centrally to achieve efficiencies, while decentralization is appropriate when more specialized subject-matter expertise is required. In attempting to identify the rationale for NRCan’s decentralized approach to managing its international activities, the audit team was informed that this model is used given the different priorities and varied nature of international activities conducted by NRCan’s Sectors.

For International Collaboration Instruments (see Appendix B for definitions of the instruments) and Sector-specific international activities, individual roles and responsibilities within the respective Sectors are clearly defined and communicated.

For horizontal activities, the audit found that departmental tracking tools clearly identify the Sector lead(s) early on in the process. However, detailed roles and responsibilities for lead Sectors compared to those of supporting Sectors, as well for cases of co-led horizontal initiatives, are not always clearly defined or communicated.

Risk and Impact

There is a risk that achieving the Department’s strategic international priorities will be more challenging through the current governance structure due to limited strategic discussions, lack of communication between senior management committees, and insufficient participation from Sectors on the DGIAC.

There is a risk that inefficiencies and duplication of efforts will arise if Sectors do not have a clear understanding of their roles relating to horizontal international activities.

RECOMMENDATIONS

Recommendation 1: It is recommended that the Assistant Deputy Minister SPRS, in collaboration with the Sectors, ensure that strategic items are regularly included on the DGIAC’s agenda; material discussion items are communicated upwards to PSIC; and representatives on the DGIAC are appropriate given their role in international activities.

Recommendation 2: It is recommended that the Assistant Deputy Minister SPRS, in collaboration with the Sectors, clearly define and communicate the accountabilities, roles, and responsibilities related to the management of horizontal international activities.

Management Response and Action Plan

Management agrees with Recommendation 1.

  • The ADM SPRS, in collaboration with other Sector ADMs, will ensure that international files are advanced at DGIAC to maximize strategic discussions and communications between NRCan Sectors on key departmental international policy/engagement and/or input into the broader Government of Canada international and trade agenda. Strategic issues, recommendations and decisions made at DGIAC will be recorded in DGIAC’s Record of Decision (RoD) and required follow-up will be identified, including liaison to other NRCan’s governance committees.
    Timing: February 28, 2019
  • The ADM SPRS will ensure that key strategic items are communicated upwards for ADM discussion/decision (i.e. PSIC) in order to ensure alignment and support with overall Departmental objectives. Key discussions and decisions will be recorded, and as appropriate, referred to EXCOM for additional discussion/decision.
  • In addition, ADM SPRS will provide to both PSIC and EXCOM a quarterly update on NRCan’s international activities and plans for the upcoming period, as reflected in the International Activities Outlook (IAO).
    Timing: Starting January 30, 2019
  • DGIAC will also review its representation and make recommendations to Sector ADMs on expanding the composition of the committee to ensure adequate representation of NRCan’s Sectors and groups involved in international activities. This review for the current DGIAC governance model has been completed; however, in the context of a new international framework, recommendations will be made on whether a revised model is needed for the DGIAC.
    Timing: June 15, 2019

Management agrees with Recommendation 2.

  • In response to Recommendation #2, the ADM SPRS will work with the Executive Committee to ensure that roles and responsibilities are clear and embedded, as relevant, within the Departmental Strategic Framework and the Departmental Engagement Plan.
    Timing: September 30, 2019
  • In general, the ADM SPRS will continue to have a leadership role on files that focus on Ministerial or Deputy Minister’s international engagement, span interests of multiple NRCan Sectors and support a whole-of-department approach.  Sector ADMs are responsible for sector-specific international meetings, undertaking appropriate consultation with other sectors to ensure an integrated departmental approach. 
  • To support the Departmental strategic Framework, DGIAC will review its Terms of Reference to ensure that it supports the proposed governance, allows strategic discussions on key departmental and government of Canada international policy/trade/engagement and promotes information-sharing, including through departmental international activity trackers and planning tools. The review of the existing DGIAC TOR has been completed; however, in the context of implementing the Departmental Strategic Framework, consideration will be given on the need for a new DG-level model and, if adopted, the ToR will be amended to reflect the new model.
    July 15, 2019
  • DGIAC will also develop a protocol to be used to confirm roles and responsibilities and pilot it for 3 months before finalisation. The Pilot will begin in June 2019, and a review and finalization will occur in September 2019.
    Timing: September 30, 2019

STRATEGIC PLANNING, TOOLS, AND RESOURCES

Summary Finding

Elements of strategic planning related to international activities are in place at the departmental and Sector levels, considering Government of Canada (GOC) and departmental priorities; however, NRCan’s International Engagement Plan has not recently been reviewed or updated to consider environmental changes, and there is no annual forecast for upcoming international missions.

Tools are provided to the Sectors to communicate upcoming international activities and appropriate tools have been developed for SPRS-led missions. SPRS also provides guidance tools for International Collaboration Instruments and trip planning; however, Sectors are not implementing all of the available tools. Sectors are also not sharing internally developed tools, which could benefit the Department.

Resource planning for international activities is completed through the current departmental process; however, resource capacity is a concern in some Sectors that is being addressed through organizational restructuring.

Supporting Observations

The audit team expected that departmental strategic plans for international activities would be in place and reviewed at least annually to reflect both the GOC’s and the Department’s changes in priorities and to align with the current environment.

The audit team also sought to determine whether project management tools, such as templates and standard processes, were implemented to improve the consistency and clarity of international activities across the Department. This is especially important given the significant movement of staff with international responsibilities in the federal government.

In addition, in order to have the appropriate employees representing the Department at international engagements, the audit team expected that the planning process for international activities would include an assessment of required resources. 

Strategic Planning

In January 2016, SPRS created an International Engagement Plan, which outlines international strategic objectives by Sector and by region as well as future opportunities with key markets and multilateral organizations. In addition, SPRS, in collaboration with the Sectors, leads the development of departmental country profiles that contain strategic priorities. SPRS is also in the process of mapping an inventory of international activities throughout the Department.

The International Engagement Plan, along with the country profiles, are clearly linked to the GOC and departmental strategic priorities. While the country profiles are updated on an as needed basis, the International Engagement Plan has not been reviewed or updated since its development.

While the Department closely monitors the developments in specific regions, it does not have annual plans in place for upcoming missions. Missions are trips intended to present Canada as a viable trade and investment partner, and to represent Canadian interests abroad. From September 2016 until June 2017, SPRS, in cooperation with CFS, ES, IETS, LMS, and CPS, led three international missions to India, Mexico, and China aimed to expand two-way trade and investment, and build government-to-government relationships.

At the Sector-level, Sectors provide SPRS with input to develop country profiles and provide information to address other policy-related requests; they are also expected to develop their own strategic priorities. The audit found three out of the four program Sectors working on international activities have developed and implemented their own international strategies on their files. These strategic plans incorporate both departmental and Government priorities. The audit found, however, that two of the Sector strategic plans have not been updated in the past year.

Based on the audit team’s consultation with other government departments (OGDs), it was observed that their plans for international activities are not always updated every year, as they may still be relevant and long-term/forward looking. While the plans may not require annual updates and long-term planning may be challenging, these representatives believe that these plans should at least be reviewed annually to identify whether the information is still relevant or requires updating. Given the significance of NRCan’s international activities and their importance for the natural resources sectors, regular environmental scanning and consideration of environmental changes are essential in developing relevant strategic plans.

Tools and Resources

Standard protocols and instructions have been established by SPRS to assist in tracking and communicating upcoming key international activities, including soliciting regular input from the Sectors. SPRS manages three departmental international activity trackers that are updated on a regular basis: the International Activities Outlook (IAO), the Ministerial Events Tracker (MET), and the International Collaboration Instruments (ICIs) Inventory. The purpose of the IAO is to inform senior management and share information across the Department on key international engagements. The IAO is updated regularly and contains input from all Sectors. The purpose of the MET is to convey upcoming international events with a Ministerial presence. The ICIs Inventory contains a list of all active and expired Memoranda of Understanding; Letters of Intent; High-Level Joint Statements and Declarations; and Implementing Arrangements (see Appendix B for definitions of these instruments).

SPRS has also assembled tools to assist with the management of horizontal international activities, in the form of a Trip Planning Protocol; an Enabling Framework for Developing and Managing NRCan’s International Collaboration Instruments; and a Toolkit for Managing International Collaboration Instruments; however, the audit did not find evidence that Sectors have knowledge of or are implementing these guidance tools.

The audit also examined the tools developed by SPRS related to three recent international Ministerial missions, including itineraries, background notes, and critical paths, which are completed in collaboration with the Sectors. The audit team observed that while planning procedures were adequate to support the planning of the three missions, the planning process was not standardized.

At the Sector-level, programs managing international activities have developed their own tools and templates, which are generally not shared with SPRS or other Sectors. The audit identified positive management practices in ES’s Nuclear Energy Division (NED), including consistent and well-documented processes for planning, approving, and reporting on international activities. Other Sectors may benefit from learning about these processes to enhance the management of their own international activities. 

Departmental resource planning for individual international activities is completed through the current departmental process of completing Event Approval Forms. Sectors are using this form to identify and allocate resources for their international activities plans. In addition, Sectors are tracking their international expenditures through travel budget spreadsheets.

The audit also found that SPRS has developed a Resource Allocation Template for International Collaboration Instruments; however, the audit did not find evidence that it is being used within the Sectors.

Sectors indicated that they require additional capacity, given demands to increase trade, collaboration, and research and development abroad. All Sectors expressed concerns surrounding the resource capacity of their international activities units, as there has been an increasing demand on them that is expected to continue. Reorganizations are taking place within certain Sectors to increase their capacity to manage international activities. The audit team acknowledges that the significant increase in international activities may warrant additional resources to address demands; however, the team would expect that Sectors would properly analyze their resource needs and consider opportunities to share resources across Sectors to accommodate temporary increases in workload.

To address resource capacity issues and support market diversification efforts, NRCan is considering funding a limited number of positions in existing and emerging markets. This pilot initiative would be for a duration of three years and is intended to maximize the potential of these markets by promoting sustained engagement through dedicated resources with natural resources expertise. It would also be expected to strengthen Canada’s capacity to capitalize on investment opportunities, while supporting relationships between respective national line departments. The audit noted that NRCan is currently developing potential priorities, work objectives, and oversight mechanisms for the pilot initiative and plans to develop performance measures and results reporting to measure success. For the last three fiscal years, NRCan’s annual travel costs to two existing/emerging markets have averaged close to $200,000 per market. The cost of travel should be one of the factors that are considered in making the decision on whether to fund dedicated positions abroad, considering that the reduction in travel costs could defray a significant amount of the estimated annual salary costs in each market.

RISK AND IMPACT

If the Department does not review its international Strategic Plan annually, develop annual forecasts for mission planning, and establish adequate oversight mechanisms for international postings, international activities may not align with the changing environment, or departmental and Government of Canada international objectives, and resources and priorities may be misaligned.

A lack of awareness surrounding existing guidance tools and limited sharing of tools for managing international activities may result in inconsistencies and inappropriate decisions regarding how activities are planned across the Department, including forecasting future requirements. This may also lead to duplication of activities and other inefficiencies.

RECOMMENDATIONS

Recommendation 3: It is recommended that the Assistant Deputy Minister SPRS, in collaboration with the Sectors:

  1. Annually review the International Engagement Plan and resource requirements;
  2. Produce annual forecasts for future missions; and
  3. Ensure that international postings have adequate oversight mechanisms, including the resources allocated for the pilot initiative.

Recommendation 4: It is recommended that the Assistant Deputy Minister SPRS, in collaboration with the Sectors, promote existing guidance for planning international activities and solicit available guidance from the Sectors that could be shared departmentally.  

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation 3.

  1. In order to be able to develop a robust strategic plan, and recognizing the breadth of activities and horizontal nature of the international function, the ADM of SPRS will work with members of the Executive Committee to establish a strategic Departmental Framework to identify the Department’s key international priorities and objectives. A Draft Strategic Departmental Framework has been prepared and will be submitted to senior management for endorsement.
    Timing: July 15, 2019
  2. In the first quarter of each calendar year, the DGIAC will develop an annual International Departmental Plan for the year in accordance to the departmental Framework.  The plan will take into consideration: GOC international priorities and trade considerations; NRCan international goals and objectives; and, Sector’s specific international plans and priorities. Planning of international activities will be done with a view to prioritize strategic outcomes.

    3. The International Departmental Plan will be evergreen and reviewed by DGIAC at the mid-year point. The plan will include forecasts for future missions; identify key international meetings being proposed at home or abroad, leads (i.e., Office of Primary Interest) for international activities, as well as high-level considerations of potential resource implications and desired outcomes.

    The plan will be presented to PSIC and EXCOM in the first and third quarters of each calendar years for comments and concurrence. In advance of completing the plan, regional strategies have been completed.
    Timing: September 30, 2019

    To support effective and strategic planning of international activities, the ADM SPRS will examine, in consultation with NRCan Sectors, existing international collaboration instruments (e.g., MOUS, multilateral and bilateral agreements, activities under multilateral fora, follow-up on missions) to assess alignment of international activities with the Departmental Framework.
    Timing: January 31, 2019 & May 30, 2019

  3. The ADM of SPRS will work with member of the Executive Committee to put in place a pilot of 2 NRCan international postings (including a governance structure, a work plan and a cost-benefit analysis after 12 months). The selection process for these postings is underway.
    Timing: September 30, 2019

Management agrees with Recommendation 4.
The ADM SPRS will share the international guidance documents for NRCan Sectors’ use.  In addition, DGIAC will undertake a review of these guidance documents to identify gaps, overlaps with other internal tools solicited from the Sectors and recommend improvements to adopt consistent planning, service standards and processes for the management of international activities across the Department.

This review will also be done with the aim of strengthening governance and coordination to ensure a feedback loop to more systematically track and identify follow-up actions for international engagements and commitments.
Timing: June 30, 2019

Delivering and Reporting on International Activities

Summary Finding

There are opportunities to enhance logistical processes for horizontal international activities to better support the Department’s global engagements.

SPRS has reported on the results of its horizontal activities, including follow-up actions and lessons learned, as well against established performance indicators. SPRS, however, has not provided guidance in post-trip reporting to the Sectors; as such, there are inconsistencies in communicating the results of international trips amongst the Sectors.

SPRS manages and updates a central inventory of International Collaboration Instruments on behalf of the Department. Most Sectors are also using GCDOCS to support their international activities; however, not all units are aware of the GCDOCS repository of post-trip reports, and there is no accessible repository for trips taken by senior officials. Broader awareness and use of such tools would enhance reporting to senior management for decision making.

Supporting Observations

The audit team expected that adequate processes would be in place to carry out international activities; that performance was being measured; that results would be reported and followed-up; that lessons learned would be documented and accountabilities would be assigned; and that action items would be implemented and tracked in a consistent and timely manner.

The audit team also sought to determine whether senior management receives a comprehensive integrated picture of the Department’s international activities, as well as whether information management supports departmental international activities. 

Delivering on International Activities

In order for NRCan to deliver on departmental priorities for international activities, the Department works closely with Global Affairs Canada (GAC), provinces and territories, industry associations, and other stakeholders. In managing large, horizontal initiatives including missions, SPRS often assembles teams from the different Sectors to represent the Department.

During the course of the audit, management identified weaknesses in logistical planning and support related to previous departmental missions, including duplication of efforts and inefficient uses of internal resources. During the course of the audit, the Energy Sector also identified a challenge relating to handling multiple logistical support functions and has plans to develop a team solely dedicated to this function.

In consulting with OGDs, the audit team noted that a common approach to managing mission logistics is to create a central departmental office with the necessary skillset to plan and deliver on all official international visits. These offices often allow for a more consistent approach to supporting senior management. A more thorough analysis would need to be performed to determine if NRCan could realize benefits from a central logistical office.

Reporting and Follow-Up on Activities

When horizontal missions are completed, SPRS reports internally on its planned follow-up activities and lessons learned. The Trip Planning Protocol calls for SPRS to develop a standard template for post-trip reporting for use by the Sectors; however, this has not yet been implemented. For Sector-specific activities, post-trip reporting is not always performed and information-sharing responsibilities in this area are not defined. When one Sector leads a significant trip, SPRS expects to receive a report/update, but the audit did not find evidence that this is always completed.

Given limited post-trip reporting, senior management is not being provided with a regular, comprehensive picture of the Department’s international activities. They are receiving reporting on Departmental travel plans as well periodic presentations on Sector activities for information purposes made to the Executive Committee. While adequate planning processes have been established to inform senior management of upcoming international activities, there are limited mechanisms used to report on the results of recent international engagements.

However, Sectors are using different methods to inform senior management of the results of certain international activities. Positive reporting practices include CFS’ 2016-2107 Annual Report on trade and international affairs, which includes key results by geographic region, and ES’ Nuclear Energy Division’s reporting templates that are completed and shared with management in a timely manner for each international event. The audit also found that Sector representatives are either formally and informally debriefing their ADMs on the results of international activities; however, the results are not always shared outside the participating Sectors. Other Sectors may benefit from learning about program reporting practices to enhance their own processes. 

Through documentation review, the audit found evidence that certain Sectors are tracking action items and accountabilities for follow-up activities resulting from their international engagements. IETS, for example, has developed its own follow-up tracker. When reviewing post-trip reports, the audit found that some Sectors have follow-up items embedded in their post-trip reporting.

Based on the audit team’s examination of recent SPRS-led departmental missions, the audit team’s expectations for results reporting were met. All follow-up items from these missions were documented, accountabilities were assigned, and action items were implemented and tracked appropriately.

Performance Indicators

The audit found that SPRS has established clearly defined and comprehensive performance indicators when they are leading international missions, and strategic objectives are defined for each mission. SPRS also reports against performance indicators under the Departmental Results Framework related to global competition and access to trading markets. In addition, SPRS has developed draft performance indicators for International Collaboration Instruments.

The audit found that all four program Sectors have developed and implemented international performance objectives and indicators. Performance measurement for these Sectors is conducted through their respective programs’ Performance Information Profiles (PIPs). Program outcomes and key performance indicators are described in the PIPs, considering the priorities of the Department and the Government of Canada as a whole.

Beyond developing PIPs, the Program Sector International Units have not established processes for assessing performance for Sector-specific international activities. During audit interviews, Sector representatives acknowledged that performance objectives of international engagements are often difficult to measure quantitatively. For example, performance related to building relationships internationally cannot be objectively measured with an indicator, but has a positive impact on the Department in achieving its international priorities.

Information Management

The audit found that SPRS manages and updates a central inventory of International Collaboration Instruments on behalf of the Department. This process involves the Sectors updating the Department’s inventory twice a year in order to have consolidated documentation on ICI data. SPRS recently completed, in collaboration with the Sectors, its annual update of the Department’s international agreement inventory.

In addition, information management systems to support the management of international activities have been established within four of the five Sectors examined. In general, Sector documentation is available across the Department through GCDOCS, the Department’s information management tool, and Sectors have well-organized files. These repositories are regularly updated and are accessible to the Sectors.

Information stored in GCDOCS is generally not being accessed across Sectors working with similar regions or on related activities. Audit interviewees also identified potential benefits from creating a central repository of post-trip reports across the Sectors that would be accessible on a Department-wide basis. This would be a positive practice for management consideration to improve information-sharing and assist in international activity planning, so long as security considerations are respected.

RISK AND IMPACT

If appropriate logistical planning is not in place, missions may not be conducted efficiently. There is also a risk that senior management may face challenges in decision making without appropriate and accessible post-trip reporting.

RECOMMENDATIONS

Recommendation 5: It is recommended that the Assistant Deputy Minister SPRS, in collaboration with the Sectors:

  1. Assess whether benefits could be realized from centralizing logistical activities related to mission planning;
  2. Develop and implement the planned template for drafting post-trip reports; and
  3. Create an accessible repository of Sector post-trip reports, for use by international units, to enhance reporting to senior management for decision making.

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation 5.

  1. The ADM SPRS, in collaboration with NRCan Sectors, will assess whether benefits could be realized from additional centralization of coordination of horizontal international activities.
    Timing: March 31, 2019 & May 30, 2019

    2. In the meantime, ADM SPRS will seek incremental resources to support the establishment of a small dedicated team to provide internal logistical support related to horizontal international activities. DGIAC will develop a proposal to be presented for discussion and decision to PSIC and EXCOM.
    Timing: March 31, 2019 Completed – Team in operation since September

  2. The DGIAC, in consultation with NRCan Sectors, will review available templates for post-trip reports, exploring government models and best practices, and will make a recommendation to PSIC about the most appropriate approaches and processes that enable effective tracking of commitments and outcomes of international trips.
    Timing: June 30, 2019

  3. The ADM SPRS, in collaboration with ADM of Communication and Portfolio Sector (CPS) and in consultation with other NRCan Sectors, will examine whether the repository of post-Minister trip reports maintained by CPS could be expanded to include Sector trip results, accessible to senior management. ADM SPRS and ADM CPS will develop a proposal for discussion and concurrence at PSIC, including to further enhance reporting to senior management on significant international activities undertaken by all Sectors. If it is not feasible to expand the current repository of Minister-trip reports, other options will be identified for solution.
    Timing: June 30, 2019

APPENDIX A – Audit Criteria for the Audit of the Management of International Activities

The objective of the audit was to assess the adequacy and effectiveness of the processes in place to manage NRCan’s international activities.

The criteria were developed primarily from on the key controls set out in the Treasury Board of Canada’s (TB’s) Core Management Controls as well as the TB Guidelines on Service Agreements and Project Management Principles (GOAL/QPC and MAF). The criteria guided the fieldwork and formed the basis for the overall audit conclusion.

The following audit criteria were used to conduct the audit:

Audit Sub-Objectives Audit Criteria
Audit Sub-Objective 1:
To determine whether the Department has established and is effectively using adequate governance processes to support the management of its international activities.		 1.1 An adequate governance structure exists and is being effectively used to support the management of international activities.

1.2 Roles, responsibilities, and accountabilities of parties involved in the management of international activities are clearly defined and communicated.
Audit Sub-Objective 2:
To determine whether appropriate processes, strategic objectives, and resource requirements have been established to support the planning of international activities.		 2.1 The Department has established and implemented appropriate strategic objectives to support the planning of international activities, and align with governmental and departmental priorities.

2.2 Appropriate guidance tools, templates, and processes have been developed and applied consistently to support the planning of international activities.

2.3 Resource requirements are identified and allocated as part of the planning process for international activities. Resource requirements are identified and allocated as part of the planning process for international activities.
Audit Sub-Objective 3: To determine whether adequate processes and mechanisms, including information management, have been established to ensure international activities and agreements are measured and appropriately carried out, in a timely manner. 3.1 Processes and procedures are in place to ensure international activities are appropriately carried out.

3.2 Performance and progress of international activities are assessed against expected results using clearly defined and comprehensive performance indicators.

3.3 Follow-up items and lessons learned from international activities are documented, accountabilities are assigned, and action items are implemented and tracked.

3.4 Senior management is provided with a comprehensive, integrated picture of the Department’s international activities on a regular basis.

3.5 Information management systems are established and are regularly updated to support the management of international activities.

APPENDIX B – NRCan’s MAIN International INSTRUMENTS AND ACTIVITIES

NRCan is involved with many different types of international activities. The table below provides explanations of the various departmental international instruments and activities.

Table 1: International Collaboration Instruments

International Collaboration Instruments Explanation
Memoranda of Understanding Approved written instruments of a non-contractual, non-legally binding nature between two or more parties that typically document intent by all parties to cooperate in areas of mutual interest.
High Level Joint Statements and Declarations A declaration by two or more states (or departments) expressing a policy and/or intent to cooperate on common interest areas.
Letters of Intent Used to establish the conditions under which negotiations for a future formal relationship will continue.
Treaties International agreements concluded between states in written form and governed by international law.
Multilateral and Bilateral agreements Agreements among two (Bilateral) or more (Multilateral) parties, agencies, or national governments for the mutual benefit of the members involved.

Table 2: Other International Instruments and Activities

Other International Instruments and Activities Explanation
International Relations Policy Advice Refers to providing leadership in establishing international engagement priorities, defining objectives, and developing departmental approaches to international engagements.
Trade and Investment
Advice		 Refers to providing advice to the Minister and NRCan senior management and other government departments (OGDs) on a broad range of trade and investment issues, including in the context of trade negotiations.
Conferences/
Summits/Multilateral Fora		 Refers to a congress, convention, seminar, symposium, summit, multilateral meeting (e.g., G7, G20, APEC), or other formal gathering of two or more countries, where participants discuss issues and share best practices.
Hosting International Delegations A means to display Canadian resources, research, and technology, to discuss issues of common interest, and to strengthen relationships with international partners.
Missions Trips conducted to present Canada as a viable trade and investment partner, and to represent Canadian interests abroad. The Canadian Embassy plays a major role in these types of large missions. Government missions include meeting with other government officials as well as investors and industry stakeholders abroad. 
Global Partnerships Global partnerships are international initiatives undertaken by several countries to advance goals of common interest, but under non-binding, more flexible arrangements, and often without entailing the creating of a dedicated international organization.

Sources: NRCan Intranet and SPRS-provided documentation.

 
Text version

Types of Collaboration Instruments:

59% MOU
21% Joint Statement/Declaration
3% Letter of Intent
3% Treaty
14% Arrangement/Agreement

 

 

Source: SPRS-provided documentation as at November 2017.

Text version

International Collaboration Agreements by Sector

17 IETS
14 CFS
31 LMS
27 ES
9 SPRS

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