26.10 In order to reduce the risk that improper conduct will occur, management must control risk. Our September 1998 Report Chapter 15, Promoting Integrity in Revenue Canada, summarized what this entails. First, management must ensure that appropriate values are communicated to staff and accepted by them. At National Defence, the Defence Ethics Program is the main vehicle for communicating ethical values (see Exhibit 26.2).
26.11 Second, reducing risk requires effective internal controls and internal audit. Internal controls are the traditional methods and measures put into place by management to prevent and detect both error and misconduct. Internal audit provides management with an independent evaluation of how well those controls are working.
26.12 Third, appropriate corrective action must be taken when employee misconduct is suspected. It is important that such behaviour be investigated and discipline applied. Feedback from the monitoring and analysis of incidents of misconduct can be used by the responsible managers to improve controls and encourage conformance with corporate values.
26.15 As a result of their mandate, most military organizations develop a unique culture, such as the regimental system in the Army. The regiment becomes the family that influences all facets of military life. According to a 1996 departmental Board of Inquiry in its report Command Control and Leadership in Canbat 2:
It is a well accepted axiom that a soldier's regiment is his family. Many studies of battlefield stress and why soldiers fight have reinforced the notion that a soldier will risk his life for his comrades and for the honour and survival of his regiment. This issue is fraught with emotion. Many officers and soldiers spend their entire lives in a single regiment and they naturally become blind to many of its faults.26.16 Information that could tarnish the reputation of the regiment may be deliberately hidden and whistleblowers perceived as outside the military culture. The Board continued:
It is understandable that a soldier would want to keep any news of wrongdoing within his regiment ... in the military this concept of washing dirty linen entre nous can actually work against the chain of command if it is applied with too much rigour.26.17 The Department has experienced a moral crisis during the last few years. The turmoil originated primarily from the incidents in Somalia involving the killing of civilians and subsequent allegations of cover-up, but public complaints and departmental investigations into misuse of public funds have added to the problem. Alleged abuses of resources - in, for example, renovation of official residences, hospitality and entertainment, use of aircraft, travel claims, environmental allowances - have involved both senior officials and personnel at lower ranks. In response, the government and the Department launched several initiatives that affected all departmental and Canadian Forces activities and personnel. These resulted in:
26.19 Part of the departmental response has been the establishment of the office of the Ombudsman. The Ombudsman was appointed in June 1998 after a period of extensive consultations and negotiations, a working mandate put in place a year later, June 1999. The mandate will be reviewed after six months of operations.
26.20 The Ombudsman's mandate defines his role as "an independent, neutral and objective sounding board, mediator and reporter acting as a direct source of information, referral and education to help individuals access existing channels of assistance and redress within the Department and the Canadian Forces." The Ombudsman also reviews internal processes to ensure that individuals are treated fairly and equitably. The mandate provides the Ombudsman with the authority to conduct investigations where necessary.
26.21 The Office of the Auditor General has long taken an active interest in issues of ethical conduct in the public service. Our May 1995 Report Chapter 1, Ethics and Fraud Awareness in Government, proposed an ethical framework for government. The chapter identified the need for a continuous process that highlights ethics in decision-making, a multi-faceted approach to strengthen the government's ethical climate and a heightened awareness among senior managers. Our September 1998 Report Chapter 15, Promoting Integrity in Revenue Canada, considered the various means Revenue Canada uses to promote integrity among its employees.
26.22 Earlier audits also reflected our interest in the proper conduct of public business. Our May 1995 Report Chapter 7, Travel and Hospitality, identified government travel as a visible indicator of prudence and probity in the management of public funds; and Chapter 8, Travel Under Foreign Service Directives, reviewed action taken by Foreign Affairs and International Trade in response to irregularities in travel claims submitted by employees. Together, those audits looked at ethical awareness and stewardship of resources in travel by public servants.
26.24 The focus of our audit was on the three steps that management must take to control the risk of fraud and abuse: the active support of ethical conduct, the maintenance of effective internal controls and internal audit, and effective follow-up on complaints. Our audit examined the implementation of the Defence Ethics Program, the key means by which National Defence supports ethical values and conduct. We also reviewed the adequacy of internal financial controls and internal audit at selected locations. Finally, we examined how the central special examination and inquiry unit of the Department has investigated complaints, and what corrective action has been taken. Additional details can be found at the end of the chapter in About the Audit.
26.26 The essence of the Department's strategy is an organization-wide ethics statement, a centrally designed program and delegated responsibility for its implementation. The Chief Review Services, who heads the Department's internal audit function, acts as the program authority in the Department. Headquarters group principals and navy, army and air force chiefs of staff are responsible for implementing the program in their respective services. An Ethics Advisory Board establishes a network of ethics co-ordinators appointed from each headquarters group and military service. Subordinate co-ordinators, or other implementation structures, are to be set up throughout the chain of command. The program's challenge is to ensure that all departmental activities with an ethical dimension are consistent with the fundamental expression of defence values in the Statement of Defence Ethics.
26.27 The Department has chosen an approach intended to nurture understanding and fundamental changes in behaviour, rather than a more mechanistic approach aimed at cycling large numbers of people through short training sessions.
26.28 The keystone document that serves as the program's foundation is the Statement of Defence Ethics (Exhibit 26.4). This consists of two main parts: three ethical principles related to respect, service and obedience to lawful authority; and a core of six ethical obligations. The principles are intended to be universally valid aids for establishing priorities when ethical obligations conflict or when circumstances do not present choices that are clear and ethically unambiguous. Ethical obligations are intended to be standards of conduct with equal weight that members of the Department should strive to meet in performing their professional roles and duties.
26.29 The Department's ethics strategy requires that the policy, expectations and guidance be clearly communicated and leadership commitment be clearly seen. The strategy involves raising awareness, providing ethics training, promoting individual self-learning, and providing opportunities for discussion and open dialogue on ethics issues. Risk assessment is to be used to identify potential ethical problems.
26.30 All members of the Canadian Forces are to be exposed to a graduated program of ethics training, taking every advantage of existing programs and opportunities. At a minimum, the Department aims to provide basic, intermediate and advanced courses at appropriate career points. Training courses are to be linked with specifications of knowledge and skills required of officers and non-commissioned members. Communication activities at the workplace are to supplement formal training courses. Training in ethics is to be developed for civilian employees and the Department plans to introduce ethics training for them in core courses.
26.31 According to guidance provided in the Defence Ethics Program Implementation Handbook, ethics co-ordinators at the rank of colonel or the civilian equivalent are to be appointed within headquarters groups and military services to implement the Defence Ethics Program in their areas of responsibility. Ethics co-ordinators are responsible for providing guidance, advice and assistance in the program's implementation, providing referrals for advice on ethics issues, and participating as members of the Ethics Advisory Board.
26.32 Ethics co-ordinators are also responsible for monitoring and reporting on the accomplishment of the program's objectives in their own organizations. With the 1999-2000 business planning exercise, reporting responsibilities have been removed from the various headquarters groups and the military services and only the Chief Review Services now reports on the progress of the Defence Ethics Program.
26.34 Moreover, the Handbook has been issued only informally to departmental staff. Of the 10 headquarters groups and military service headquarters with an ethics co-ordinator, two had not received a copy of the Implementation Handbook. Seven had copies that were outdated.
26.35 The terms of reference for the Defence Ethics Program do not include the clear reporting mechanisms that are provided for in the Department's other mandated programs such as the Standards for Harassment and Racism Prevention (SHARP) program. Although the Chief Review Services has been responsible since April 1999 for reporting on the Defence Ethics Program in departmental business plans, he has sent no reporting instructions to headquarters groups and the military services. Consequently, business plans do not report on the Defence Ethics Program. Officials told us that in their view the program is at a highly developmental stage, making it difficult to plan precisely or develop monitoring tools. We agree that at the program's inception there were few models to guide the Department. At this juncture, however, plans with clear goals and a monitoring system similar to other change programs appear both feasible and appropriate.
26.36 We found, moreover, that the lack of a departmental plan with specific goals has led to uneven levels of commitment in the three military services. We were told by senior military officials from all three services that they did not believe they had ever been ordered to implement the Defence Ethics Program. This is in spite of the approval of terms of reference for the program by the Defence Management Committee - of which the Environmental Chiefs of Staff are members. Officials told us that they believed their services had always subscribed to appropriate ethical values and that their unique approaches were sufficient means to achieve departmental objectives. It is not surprising in these circumstances that implementation is slow. Moreover, a host of local value statements continue to form the basis of ethics instruction. (See photograph)
26.37 During the course of our audit, the Chief Review Services took a number of steps to improve program management. The Defence Ethics Program 1999 Program Report, published in August 1999, provides a comprehensive statement of the central component of the ethics program. It contains concrete goals and objectives for some program elements. Officials told us a similar plan had been developed for the army. In addition, the Chief Review Services was conducting a baseline survey of employee attitudes and beliefs, although it had not yet been completed. What remains is to complete goals and objectives for the rest of the program and to incorporate the parts of program delegated to the military services and headquarters groups into departmental reporting.
26.39 Departmental officials acknowledge that the existence of two similar statements has been problematic and that their discussion inside the Department has been unclear at times. However, they believe that both statements are authoritative and do not conflict.
26.40 The Minister's Monitoring Committee on Change in the Department of National Defence and the Canadian Forces noted in its 1999 Interim Report that it was difficult to gauge progress in the development and application of leadership standards because there appeared to be no master implementation plan. Similarly, we found that the choice by staff between the ethics and ethos statements as a basis for implementing the program has followed no consistent pattern. For example, nearly 90 percent of the courses we reviewed had ethics content of some sort but it was based on the Statement of Defence Ethics in only about 60 percent of them.
26.41 We also identified a plethora of statements and values used in addition to the Statement of Defence Ethics. In more than 30 different source documents we identified around 100 different values intended to guide the conduct of operations and activities in the Department and the Canadian Forces (Exhibit 26.5). The source documents ranged from the officer's commission to army doctrine and referred to values such as a sense of humour, veracity and willingness to admit mistakes. According to departmental officials, this is a sign that the individual services and branches are implementing the overall program. Nevertheless, the range of the various statements means their focus is inconsistent, even if they do not actually conflict with each other.
26.43 The appraisal process. We found that criteria for promotions vary from one promotion board to another. It was not possible, therefore, to assess the impact of the Defence Ethics Program on the promotion process. However, we were able to assess the place of ethics in the performance appraisal process. New systems are still in draft form, but we note that the new system for appraisal of non-commissioned members and officers up to lieutenant-colonel does not include ethics as a specific element. The old system had such provisions for officers up to the rank of brigadier-general. Moreover, guidance issued by the Chief of the Defence Staff for senior officer appraisals refers to ethical factors taken from La Relève (published by the Privy Council Office) instead of from the Statement of Defence Ethics. There are no ethics provisions in the civilian appraisal system which is a public-service wide system and not specific to National Defence.
26.44 Training. Training is the major formal vehicle for communicating values and developing judgment. We looked at the content of 80 career courses identified by the Department as requiring an ethics module under the Defence Ethics Program (see Exhibit 26.6). Only 24 percent of the courses contained an ethics module detailing the full training standards and plans required by the Canadian Forces Training System or equivalent standards for professional development courses. Another 18 percent had ethics modules that met standards in part. This situation could be explained by the fact, as noted in paragraph 26.36, that the military services do not feel obliged to implement the program.
26.45 Ethics training is now focussed on entry-level military members and officers and is making some progress. Of 5,700 officer and non-commissioned member recruits, about 3,900 were taught the Statement of Defence Ethics in their entry course. In the Canadian Forces as a whole, about 13,000 members have attended a course with an ethics component since 1997, but only about 8,600 of these have attended a course whose ethics component was based on the approved Statement of Defence Ethics. The Department has not identified the number of military members who still require formal ethics training or how long it will be before they are all trained.
26.46 General Officer Ethics Focus Group Sessions. Executive leadership is considered an area of particular importance in the Defence Ethics Program. The Department has therefore held General Officer Ethics Focus Group Sessions to promote discussion of the ethical dimension of generalship, continue enhancing ethics dialogue, and further contribute to ethics awareness at the strategic level. All general officers were invited to participate in the three sessions held between June 1998 and May 1999 and to submit short examples of ethical dilemmas. We found that only about 25 percent of individuals appointed during this period to rank of general or flag officer had attended a focus group session. However, the Chief Review Services staff have included all general officers by sending them preliminary questionnaires and informing them about the results of the sessions.
26.48 Of the 10 headquarters groups, four have developed an implementation strategy for the program in at least draft form. However, there has been no significant progress in developing implementation plans.
26.50 National Defence should implement the Defence Ethics Program as quickly as possible, clarifying responsibilities, and approving plans with defined goals. It should also monitor the program.
Department's response: This Department is fully committed to the importance of ethics and values. To capitalize on the significant accomplishments made to date, we will continue to progress with timely implementation of the Defence Ethics Program consistent with its vision and strategy. Recognizing the unique nature and implementation requirements of a value-based ethics program, the Department will re-emphasize responsibilities and assist managers to formalize plans. We will continue to assist and work closely with the Treasury Board Secretariat Office of Values and Ethics in the recently announced government-wide initiative.
26.52 Resource reductions, increased financial delegation and the adoption of operating budgets have significantly affected the extent to which managers at all levels can be involved in the management of defence resources. At the same time, some control mechanisms have been eliminated. Responsibilities and associated resources have been delegated to the managers who directly control specific activities. This decentralization has meant that more people have financial responsibilities, and this increases the need for new tools and support to assess internal controls.
26.53 While the timing, nature and location of controls can change, they will continue to be important and necessary. Our audit looked at key departmental control systems, including management of internal controls and military police services.
26.55 Each military service is responsible for its own review staff. Except for the Chief Review Services, who has not yet had to do major staffing, all units/bases/formations in our sample had been unable to fill vacant audit positions. Because these are now classified as junior to mid-level civilian positions, the Department seems unable to attract and keep good candidates.
26.56 In response to the increasing and changing demands for review services, the Department has decided to modify its audit approach and focus more on broad-based audits than on audits of compliance. While compliance issues continue to be covered in every audit, they are now just one component of a comprehensive review process. This represents a move from relying solely on compliance auditing to reviewing management systems and measuring performance. Officials told us that they believe that traditional, compliance-based approaches are unaffordable and that new methods can do a better job.
26.57 While corporate review is still considered important, review services have had to reallocate resources in response to the significantly increased responsibilities of line commanders and managers. Resources have been transferred from audit teams to provide "review assistance" to managers and leaders. This type of support activity represents roughly 20 percent of auditors' work. Although it is not unusual for internal audit to devote this much time to support, it leaves a smaller portion of already scarce audit resources for independent audit work based on assessed risks.
26.58 In the case of the Chief Review Services, the proportion of resources allocated to assistance is forecast to decline to 6 percent in 1999-2000, making a greater proportion available for audit. In addition, 4 of 16 assistance projects undertaken by the Chief Review Services since 1997-98 were in response to complaints of abuse of resources.
26.59 These changes mean that internal audit units at the military service level are conducting fewer audits. However, control self-assessment sessions have been initiated to complement traditional approaches to review and audit. Control self-assessment is a process that assists managers in identifying their areas of potential risk and assessing the strengths and weaknesses of their controls.
26.60 The Chief Review Services, who co-ordinates and monitors the control self-assessment process, informed us that 59 sessions were held from September 1997 to May 1999, with 10 to 15 participants at each session. This means that the process has covered only a very small percentage of the Department's responsibility centres. This first assessment of risks is very important, but it is only a preliminary step in the audit cycle and no substitute for independent audit. The Chief Review Services Branch told us it hopes to use the results of these assessments along with audit work to develop a control assessment of the entire Department. However, it did not provide us with a date for its expected completion or any other targets for this undertaking.
26.61 The Department has made some initial efforts to address the risk of fraud and abuse directly. The Chief Review Services, in partnership with the Canadian Forces Provost Marshal and other Headquarters staff, held a one-day conference in May 1999 to discuss developing a strategy for protecting resources. The Land Force Central Area has also developed a fraud prevention policy and handbook. The development of a national fraud and abuse policy is now under way.
26.63 We found that audit units belonging to the military services themselves did not use adequate risk assessment techniques. Very few audit units at the sites we visited could provide us with risk assessments and annual audit plans, although most were in the process of preparing their annual plan for 1999-2000. Apart from one completed by Maritime Command Pacific, risk assessments were essentially based on personal experience or on a "gut feeling". Only one of the units we visited used formal risk assessment in its audit planning.
26.65 Most managers identified the lack of dedicated local audit capability as a major impediment to their willingness to assume more risk. Managers are generally uncomfortable with the low level of assurance now provided by local review services, and several indicated that they would prefer to see more audits of their financial transactions.
26.66 The air force has carried out very few audits in the last five years. There was no audit function in most wings while 1 Canadian Air Division's audit capability was in an embryonic phase. The capability of the air force to conduct reviews, audits and examinations has been weakened to an unprecedented degree. In the opinion of the Commander of 1 Canadian Air Division, the air force is no longer meeting the intent of Treasury Board policy or the expectations of the Deputy Minister. The air force has recognized this deficiency and is now hiring auditors.
26.68 In general, we found that local internal audit resources have declined. Systematic risk analysis is not being used to apply the remaining resources to the highest priorities. Managers are becoming concerned that the risks they are taking are too high. This key element in the prevention of abuse is therefore weak. Without adequate internal controls and internal audit, management creates an environment in which some employees may be tempted to violate ethical standards.
26.69 The Department should ensure that risk assessments are conducted and that audit resources are assigned commensurate with the risk identified.
Department's response: Chief Review Services, the central review group within the Department, will extend its risk analysis in support of audit planning to include and assist the plans of the audit resources working within the individual military services. This will ensure that total audit activity is appropriately applied in accordance with assessed risk. The central audit group has a strong automated data analysis capability and is developing techniques to periodically analyze transaction trends and patterns in order to identify irregularities. This will be particularly critical as e-commerce progresses. Pertinent training in these techniques, including those aimed at fraud awareness, will also be provided to local audit resources.
26.70 Environmental Chiefs of Staff should ensure that their internal audit activities are co-ordinated with those of the Chief Review Services at headquarters.
Department's response: As indicated, the Chief Review Services will take the lead in co-ordinating audit plans within the Department. This is consistent with the Chief Review Services' responsibility for corporate-level review and for advising the Deputy Minister and Chief of the Defence Staff on all review matters. The DND/CF Intranet will be used as a vehicle for the sharing of audit information, reports and work plans. This, combined with direct interaction, will increase the degree of co-ordination. Such co-ordination has already been achieved in a principal element of review work at the local level, that being the workshops conducted by audit staff to assist managers in self assessing and remediating their controls.
26.72 The Deputy Minister of National Defence has stated certain expectations of financial managers in the Department's Financial Management Accountability Framework document. This is a significant step in raising line managers' awareness of financial responsibility. Senior managers are now required to sign an annual letter of Financial Management Attestation. The letter attests that financial management responsibilities have been fully satisfied and that systems and processes in place meet the needs of the command or headquarters group.
26.73 In all locations we visited, officials told us that the shortage of personnel has caused extensive delay - if not abandonment - of most types of compliance inspection schedules. The navy has maintained as a priority the inspection of ships that are considered at higher risk, but it has postponed or changed the cycle of shore inspections. Neither the army nor the air force has been able to complete its 18-month cycle of financial inspections. (See photograph)
26.74 In addition, the new responsibility framework means that standard checklists are no longer accurate; this hampers the examination process. Directives need to be modified to reflect operational realities. There have been discussions at army headquarters about issuing new directives for service-level inspections, but at June 1999 no changes had yet been made.
26.75 Inspection responsibilities have been delegated in many cases to the unit level, so that individuals are virtually exercising control over themselves. Yet a departmental policy requires that officers who conduct inspections of a function not have direct responsibility for managing the function.
26.76 There is evidence that financial controls have weakened in some areas. Our audit did not establish whether the situation is worsening overall, or exactly how widespread the violation of control has been. We did find, however, that some types of breakdown were mentioned frequently in departmental reports and by managers we interviewed. Some examples follow:
26.78 Central financial managers told us they believe that the Comptrollership Reviews and the attestation letters are a step forward in creating awareness and in identifying problems. We agree. Nevertheless, the financial control problem appears to be significant and concerted effort is needed to resolve it.
26.80 Other Chief Review Services audits of base support and management of operational budgets indicate a probable similar situation in other functions. A draft audit report of base support pointed to the effects of downsizing and reorganization of Canadian Forces bases as leaving managers without the tools and resources to manage risk effectively. It called for a formal risk management process at both the base and national headquarters levels. The draft audit report of the management of operational budgets found that there were few consequences for those who broke rules and guidances unless they crossed the boundary into criminal activity.
26.82 The Department should reinstate its management checks of compliance, consistent with assessed risk, to reduce the likelihood of fraud and abuse of resources.
Department's response: Departmental internal audits have emphasized particular control risks associated with devolution and affecting the current period of transition to the delivery and full utilization of new technologies. Risk analysis will be undertaken under the leadership of the central internal audit group, in conjunction with the introduction of a DND/CF Fraud Awareness initiative, and will take advantage of automated data retrieval and analysis to guide and assist increased compliance review at the local level.
26.84 In response to these reports, the Director General Security and the military police were restructured to form the Canadian Forces Provost Marshal, who is accountable to the Vice Chief of the Defence Staff for maintaining police standards. The Provost Marshal is responsible for developing policies and plans common to the three services and for providing specialized and investigative services to the Canadian Forces. The National Investigation Service is independent of the operational chain of command and investigates matters of a "serious or sensitive nature". These may be broadly defined as allegations involving individuals at the rank of major or above, involving $10,000 or more in losses or indictable offences under a federal statute or the National Defence Act.
26.85 The Provost Marshal's investigative and crime prevention responsibilities are aimed at preventing and detecting abuse and misuse of resources. Complaints about significant misuse or abuse of resources are to be brought to the attention of the National Investigation Service by the complainants or by the local military police. The investigators are to be independent from the normal military chain of command.
26.86 For other than "serious and sensitive" matters, the investigation process is relatively unchanged and investigations are usually performed at the unit level by local military police. Boards of inquiry and summary investigations are commonly used to investigate incidents of an administrative nature. Cases of unusual significance or complexity are brought to a board of inquiry. In both cases, the process is used to determine the facts; and the convening authority evaluates the findings and determines whether administrative or disciplinary action is indicated.
26.87 The National Investigation Service has the authority to lay charges if its investigations show that they are warranted. Commanding officers may decide to proceed or stay those charges. Similarly, commanding officers may choose to take no action on reports of boards of inquiry and summary investigations. Any party not satisfied with the result has recourse to grievance procedures.
26.88 This process is meant to give the chain of command the ability to use administrative and disciplinary action as necessary in order to maintain good order and discipline within units. It is used at each level of command and can always be moved to higher levels when more independence is required.
26.89 Changes to the National Defence Act, in December 1998, created a Military Police Complaints Commission with the power to investigate and report publicly on not only complaints of police abuse but also police complaints of improper interference in their investigations. At the time of our audit, members of the Complaints Commission had been appointed and were establishing their office. The Commission is scheduled to begin work in December 1999.
26.92 In summary, we believe the Department needs to resolve two emerging problems as it implements improvements to its police forces. First, it needs to ensure that its commanding officers understand how the system is intended to work and their role in it. Second, the Military Police Complaints Commission needs to be brought into operation rapidly to ensure that the system functions as designed.
26.93 To ensure the independence of the military police, the Department should strengthen its training of commanders so that they better understand their role in the military justice system.
Department's response: The Department will reinforce the role of commanders in the military justice system by distributing communication packages on the reforms stemming from Bill C-25 (under way), completing Certification Training for all delegated officers (under way) and activating the Military Police Complaints Commission (expected December 1999). (See photograph)
26.95 We reviewed complaints that our Office had received and had referred to the Department since 1995, and also complaints that the Deputy Minister and the Chief of the Defence Staff had assigned to the Directorate since its inception. Of the cases we reviewed, 45 had been dealt with by the Directorate of Special Examinations and Inquiries, 17 were complaints made to the Chief Review Services and the remaining 12 were complaints made to the Minister's Office, the Deputy Minister, the Chief of the Defence Staff, the Assistant Deputy Minister (Personnel) or the Assistant Deputy Minister (Finance and Corporate Services). We focussed on the process for assessing the validity of allegations and on the corrective and remedial actions taken by the Department. We expected that any such actions would be timely.
26.96 We identified three general categories of behaviour (other than waste) that diverged from the proper conduct of public business:
26.100 On two complaints we had referred to the Department, officials informed us that corrective action had been taken. However, we found that this was not the case.
26.102 We noted that in many cases the Department's remedial action consisted of amending its current regulations - most often those pertaining to travel and relocation and to the delegation of travel authority. The Department found in several cases that its regulations or policies had been unclear, not understood, or inconsistent with government regulations. In many instances, the Department undertook interim measures to resolve the issue temporarily, but the measures remained in effect for long periods of time. Interim measures included issuing memoranda to either clarify or temporarily amend a regulation. Such methods are ineffective, as staff tend to forget or lose the memoranda.
26.105 The Department should ensure that all complaints are tracked with the objective of completing them within one year of their receipt.
26.106 The Chief Review Services should follow up on corrective and remedial actions to determine whether they have been completed and have resolved the problems, and report his findings to the Deputy Minister.
Department's response: The Department agrees that complaints directed to the highest management levels of the Department should be followed up promptly and assessed in a timely manner. Complaints that warrant criminal investigation will continue to be addressed by the Canadian Forces Provost Marshal. Those complaints not warranting criminal investigation will be referred to the Chief Review Services. Complaints referred to the Chief Review Services are now being tracked and the Department is confident that assessments will generally be completed within one year. The Department will follow up on corrective and remedial actions to determine when they have been completed. These findings will be reported regularly to the Deputy Minister and to the Chief of the Defence Staff. The Auditor General can assist by ensuring that the Chief Review Services is made aware of all complaints that are passed to the Department for resolution.
26.108 The Defence Ethics Program is the supportive, proactive element of the Department's measures to support ethical conduct. The design of the program is appropriate for that purpose and the Department has achieved significant progress in training new entrants into the Canadian Forces at all ranks. However, headquarters groups and the three military commands do not believe that a uniform program is appropriate. Staff have confused the Minister's Ethos Statement with the Statement of Defence Ethics , and the latter has been formally implemented only sporadically in training and human resource management systems. Nominal budgets, a failure to appoint senior-level ethics co-ordinators and an absence of plans indicate that the level of commitment to a formal ethics program across the organization is low.
26.109 The effectiveness of internal financial controls and internal audit, two standard deterrents and detectors of fraud and abuse, has been severely limited by budget cuts. Reductions have not been planned on the basis of adequate risk assessment, so the Department is unable to say what levels are actually needed. It appears that resources devoted to internal audit are below productive levels. There are troubling signs that financial and other controls have weakened; chief among them is commanders' reluctance to attest to their effective control of resources.
26.110 Finally, complaints referred to the senior management of the Department have not all been handled adequately. Almost one fifth of the cases we reviewed had not been assessed or were assessed inadequately. In over one fifth of the cases where the Department judged that corrective action was warranted, it did not take satisfactory action. Actions needed to remedy systemic problems were completed in over three quarters of the cases we reviewed. While the cases do not statistically represent all complaints throughout the Department, the fact that they were handled by senior officials at headquarters makes these results disappointing.
26.111 Most of the basic elements the Department needs to move forward are in some stage of development. Senior management now needs to assess risks systematically, develop a plan and exercise strong leadership in implementing it throughout the Department.
Our audit examined the extent to which the keystone departmental values program - the Defence Ethics Program - had been implemented throughout the Department.
We examined internal financial controls at selected Canadian Forces bases. We assessed internal audit at headquarters, within the three military services, and at selected Canadian Forces bases. We did not audit other types of internal controls, such as those governing materiel.
Our audit reviewed the assessment and follow-up on 74 cases assigned to the headquarters Directorate of Special Examinations and Inquiries since 1992, and complaints received by us from the public and referred to the Department for action since 1995. We did not audit allegations that complainants had referred to the military police or to management directly.
Our audit was conducted at National Defence headquarters and at major formations in each service: Maritime Forces Atlantic, Maritime Forces Pacific, Secteur du Québec de la Force Terrestre, Land Force Central Area, and 1 Canadian Air Division. At the base level we audited Canadian Forces Bases Halifax, Esquimalt, Valcartier, Petawawa, Winnipeg and Trenton.
Andrée Bélair
Sylvie Blais
Lori Buck
Anne Hardy
Jean-Michel Langlois
Haleem Mughal
Darlene Mulligan
Denise Rita
Stéphane Rousseau
For more information, please contact Peter Kasurak.