Audit of Performance Against Service Standards Reporting

2. Introduction

Authority for Audit

The mission of the Internal Audit function of Audit and Evaluation Services is to provide independent and objective assurance services designed to add value and improve the Canadian Grain Commission’s operations. Internal Audit helps the Canadian Grain Commission accomplish its objectives by bringing a systematic, disciplined approach to assess and improve the effectiveness of risk management, control and governance processes.

At the request of Canadian Grain Commission management, Audit and Evaluation Services added the Audit of Performance Against Service Standards Reporting to the 2014-2017 risk-based audit plan in November, 2014. Canadian Grain Commission management asked for the audit to take place before the end of the 2014-2015 fiscal year, after which time the Canadian Grain Commission would publish its first full year of Performance Against Service Standards results for its regulatory fees. Along with the regulatory Performance Against Service Standards results, the Canadian Grain Commission will also publish performance data for non-regulatory fees for the first time in the 2014-2015 Departmental Performance Report supplementary tables.

Background

When the Canadian Grain Commission’s new user fees came into effect on August 1, 2013, the commission committed to service standards for the performance of each of the related services. The User Fees Act requires that the services meet the established standard at least 90% of the time; otherwise, user fees may be reduced. Although the requirements and consequences under the User Fees Act only apply to 18 regulatory fees, the Canadian Grain Commission has also committed to reporting Performance Against Service Standards for 31 non-regulatory fees. The service standards for non-regulatory fees have been published on the Canadian Grain Commission’s website since the fees came into effect.

There are 32 service standards related to the regulatory fees, and an additional 34 related to the non-regulatory fees. Performance data for regulatory fees is gathered from a variety of sources largely within the Industry Services division. With the commencement of reporting Performance Against Service Standards for non-regulatory fees in the fourth quarter of 2014-2015, tracking mechanisms were also established within the Grain Research Laboratory (GRL). Nearly half of the service standards related to the non-regulatory fees involve work done in the Grain Research Laboratory. The majority of tracking methods for all service standards are manual (spreadsheets, for example) with only a few performance measurements being system-generated.

The Planning and Reporting unit of the Executive and Corporate Affairs division is responsible for compiling and reporting on Performance Against Service Standards. Individual Industry Services and Grain Research Laboratory units are responsible for ensuring that service standards are being met and correct performance data is gathered and submitted to Planning & Reporting on a quarterly basis.

Objectives

The objectives of the audit were to:

  1. Assess the appropriateness of data being tracked for reporting performance against service standards for both regulatory and non-regulatory fees;
  2. Assess the accuracy, integrity, and reliability of service standard reporting for regulatory fees;
  3. Review preliminary performance data for non-regulatory fees and advise on the effectiveness of the proposed reporting methods.

Scope

The scope of the audit included:

  • All Performance Against Service Standards reporting to the end of the third quarter 2014-2015 (December 31, 2014) for regulatory fees;
  • Pilot Performance Against Service Standards reporting for January and February 2015 for non-regulatory fees;
  • All data that supports Performance Against Service Standards reporting.

The audit excluded a review of the service standards themselves. The service standards can only be altered under conditions described in the User Fees Act, including a requirement for a consultation process. Canadian Grain Commission management will consider revisions to the existing service standards in conjunction with the next user fee review ending in 2018. Suggestions for improving service standards that arose through the course of the audit have been provided to management for consideration during a future consultation process but did not form part of the audit results.

Approach and Methodology

The audit methodology used by Audit and Evaluation Services is based on guidance provided by the Institute of Internal Auditors (IIA) and the Office of the Comptroller General of Canada. The standards for internal audit are articulated in the IIA’s International Professional Practices Framework and the Treasury Board Secretariat’s Policy on Internal Audit.

The audit focused on the data collected and reported in the first three quarters of the 2014-2015 fiscal year. The audit fieldwork was conducted from February to April, 2015. Procedures performed during the examination phase included:

  • Interviewing staff and management from the Corporate Affairs, Industry Services, and Grain Research Lab divisions.
  • Analyzing the regulatory fee service standards and determining where samples were required for further testing.
  • Obtaining source data and access to records in order to test selected samples against audit criteria 1.1, 2.1 and 2.2 (see Appendix B—Audit Criteria), and assessing the results.
  • Participating in various discussions regarding proposed methods for measuring and reporting performance against non-regulatory fee service standards.

At the conclusion of the examination phase, recommendations for management were developed in areas where opportunities for control improvements were identified. Recommendations in this report have been categorized to reflect their potential impact. The criteria established for determining the impact is outlined in Appendix C. The impact is indicated following the text of each recommendation. Management’s action plans are outlined in Appendix A.