Audit of the Eastern Regional Office

1.0 Executive summary

1.1 From January to March, 2014, Audit and Evaluation Services conducted an audit of the Eastern regional office in Montreal, Quebec. The regional office performs a number of key functions for the Industry Services division of the Canadian Grain Commission, particularly weighing oversight, inspection of outward grain movement and related processing of samples and documentation.

1.2 The objectives of the audit included a review of invoicing processes, overtime, management controls, and overall data security. Audit and Evaluation Services performed various interviews and testing procedures to determine if controls in these areas were functioning efficiently and effectively.

Conclusion

1.3 The Eastern regional office is led by a regional management team which includes the managers of Administration, Inspection, Operations, and Weighing Oversight. The regional management team has worked together to ensure Canadian Grain Commission operations continued to function effectively during a time of significant change and multiple challenges encountered in the past year. However, Audit and Evaluation Services noted several opportunities for improvement that management should address. This report contains recommendations to help improve the overall controls within the regional office, as well as to correct errors that were identified.

1.4 Of the two “high” impact recommendations, only one is directly related to the Eastern regional office itself. The other addresses a larger Industry Services concern over the controls in a key computer application. The recommendations are:

  • Future application upgrades include integration of Weighing Oversight requirements to reduce re-entry of data and improve overall controls (ref 3.7).
  • Recoverable overtime hours be reconciled to actual attendance records to ensure invoiced amounts are correct (ref 3.30).

Other notable recommendations include refunding over-billed recoverable overtime amounts (ref 3.31), ensuring implementation of the new Performance Management directive (ref 3.37), and improving the tracking of certificates final (ref 3.41).

1.5 Management action plans have been provided for all but one of the recommendations, and, in most cases, implementation of these plans is already underway. Industry Services management has decided not to implement one medium impact recommendation to create a sign-off checklist for certificates final (ref 3.8).

Statement of Assurance

1.6 In the professional judgment of the 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. This opinion is based on a comparison of the conditions as they existed at the time, as described in the Audit Scope, against pre-established audit criteria. This opinion is applicable only to the entity examined. This audit engagement was planned and conducted to be in accordance with the Internal Auditing Standards for the Government of Canada.

Summary of Recommendations and Management Action Plans

1.7 The following is a summary of recommendations contained in this report with management’s action plans to address the topics identified:

Summary of Recommendations and Management Action Plans
High Impact
Reference Recommendations Management action plans
3.7 We recommend that future OSCAR (Online Shipping Certification and Recording) system upgrades include integration of Weighing Oversight and Certification Program requirements in order to reduce manual re-entry of data, decrease chance of error, and facilitate elimination of additional computer applications and spreadsheet programs. This should include logging capabilities and improved access controls. Recommendation to upgrade to OSCAR to include Weighing Oversight and Certification Program data has been conveyed to the National Management/Director, of Industry Services for submission to EMC for approval for Information Management and Information Technology to proceed with upgrade (by the end of the first quarter in 2014-15). We anticipate upgrade will begin in the second quarter of 2014-15 and will be completed within the 2014-15 fiscal year.
3.30 We recommend that recoverable overtime hours be reconciled to the daily attendance records and approved prior to invoicing. Non-recoverable time should be indicated as such and explained on the daily attendance records. As of April 28, 2014 we are using the carbon copy IW385 in conjunction with the electronic one in East Vessel. At the end of each vessel, the lead inspector will fill in the IW385, sign it and get the elevator official to sign it as well. One copy will be given to the elevator, one will stay with the vessel file, and two will go to the operations supervisor. The oOperations supervisor will reconcile the IW385 with the daily attendance records before approving extra duty pay (EDP) requests. The operations supervisor will initial the approved IW385 and give the two copies to administration to reconcile when the Canadian Grain Commission bills the company. One copy will be attached with the invoice to the client and the other one will be filed with the Canadian Grain Commission’s invoice.
Summary of Recommendations and Management Action Plans
Medium Impact
Reference Recommendations Management action plans
3.8 We recommend that a checklist be added to the documentation package that circulates with the certificate final during the review and sign-off process. The checklist should have a section for each of administration, inspection and weighing oversight with a list of the key steps that must be performed by each representative before authorizing the certificate. These steps will then be checked off and each section signed and dated by the representative who performed the work. This work is inherent in the sign off of the SOAs/LOAs /Certificate Final(s) by the three program managers. The backup documentation is provided and reviewed before the signatures are obtained on all the documents by the managers so there is a review of the information. We feel a check list is redundant and that no checklist is required. This suggestion was brought up at a past Industry Services Quality Management System audit in Central region – Thunder Bay and at that time the same response was determined as unnecessary.
3.16 We recommend that the EastVessel Excel-based application be decommissioned once improvements to the OSCAR system are implemented. Any remaining functionality that is not addressed by the OSCAR implementation should be addressed through national Industry Services procedures rather than through regional solutions. On completion of upgrades to OSCAR to accept Weighing Oversight and Certification Program data, EastVessels will be phased out. This will take place within six months of OSCAR being upgraded to meet Weighing Oversight and Certification program requirements.
At this point Oscar is not ready to support all our needs. There is a lot to consider prior to eliminate East Vessel info.
3.31 We recommend that the Eastern Region stop billing for non-recoverable overtime hours, and that amount of recoverable overtime overpaid by the affected terminal elevators be calculated based on comparison of hours billed to employees’ daily attendance records, and the terminals be refunded as appropriate. Finance has calculated the amount of overtime overbilled since August 1, 2013. Overbilling will likely be dealt with as a credit memo and applied against future invoices. Credit memos will be processed by May 31, 2014.
The practice of recovering OT while on scheduled shifts will cease immediately (as of May 1, 2014).
3.37 We recommend that the upon roll out of the new Directive on Performance Management, Eastern Regional Office implement the program for all staff, including completion of the Public Service Performance Agreement and all required performance reviews. Objectives to be established by May 31, 2014 and all required reviews will be completed by the end of the 2014-15 fiscal year.
3.41 We recommend that the tracking of Certificates Final be improved to ensure traceability and accountability for all certificate final documents, including regular (weekly or monthly) verification by another member of the administration unit. Eastern administration has reviewed the form that is used in the Western region and the documentation unit has started to use the new form to track and account for certificates, as of April 1, 2014. The certificates will be locked up and there will be regular reviews by the unit to ensure accountability and traceability. For the first 6 months, the manager of, Administration will review certificatesthe tracking form, monthly and will review quarterly thereafter.
Summary of Recommendations and Management Action Plans
Low Impact
Reference Recommendations Management action plans
3.12 We recommend that Industry Services and Finance establish service standards for invoicing and the timing be measured and reported with other activities. Industry Services’ administration and Finance have agreed that the invoicing of a boat should take no longer than 10 days upon the completion of the vessel and the entry into SUN and the invoicing to be done and sent out to clients. This process will be started for May 1, 2014.
3.32 We recommend that Canadian Grain Commission inspection staff obtain a signature from a terminal elevator official on the “requisition for overtime—invoice to follow” form before it is submitted to the Regional Office for invoicing. Use of the carbon copy IW385 in conjunction with the electronic one in East Vessel implemented April 28, 2014. At the end of each vessel, the lead inspector will fill in the IW385, sign it and get the elevator official to sign it as well.