Audit of the Management of Building Systems
— Communications Research Centre Canada

Audit and Evaluation Branch
Industry Canada

April 2006

Executive Summary

1.0 Executive Summary

The Communications Research Centre (CRC) is an agency of Industry Canada (IC). The CRC is one of the country's leading laboratories for research and development in advanced telecommunications, broadcasting, and information technologies. It is located in Ottawa's west end, at the Shirleys Bay Research Centre Campus — a set of facilities and test ranges, including 157 permanent and temporary buildings, that covers 600 hectares of land connected by 13 kilometres of road. The President of CRC is the designated custodian of the Shirleys Bay Campus. Within the CRC, responsibility for the management and operations of real property falls to the Campus Operations Branch.

The objective of this audit was to determine whether existing management and operational processes related to real property at the CRC effectively support organizational objectives, as well as the health and safety of employees, in compliance with existing authorities. In conducting this audit the adequacy of the real property Management Accountability Framework (MAF) established for CRC was assessed, versus assessing risks to the agency's real property assets (e.g., by conducting inspections of buildings at Shirleys Bay facilities).

The MAF for the Treasury Board of Canada Secretariat (TBS) was used as a benchmark for this audit.

Key Findings

The management and staff of the Campus Operations Branch are highly regarded for their abilities, expertise and work ethic. Employees execute responsibilities in an atmosphere that supports core public service values and ethical behaviour. Nonetheless, employees often face difficult issues in dealing with longstanding challenges in managing CRC's real property assets at Shirleys Bay.

For example, systematic recapitalization of the asset base has not been carried out, and the operations and maintenance (O&M) budget has been increasingly consumed by unavoidable expenditures such as water and energy, and maintenance and repair of occupational health and life-safety systems. This has resulted in the need to defer other maintenance requirements. The backlog of deferred recapitalization requirements continues to grow. The Campus Operations Branch estimated that there is now an annual real property funding shortfall of between $1.5 and $3.8 million, and a recapitalization backlog of about $26 million.

At the same time the CRC incurs unnecessary costs in operating and maintaining real property assets. Breakdowns (e.g., in heating and electrical systems) are occurring with increasing frequency, and the costs of heating and cooling aging buildings, that were not designed to be energy-efficient, continue to rise. Auditors concluded that expenditures for real property at the CRC are unsustainably low, and that, at present, real property requirements are not being met at the lowest cost possible.

Conclusions

CRC managers are of the view that the current situation is the direct result of prolonged funding pressures. Auditors agreed that with more funds, more could have been and could be done with respect to the upgrading of CRC assets. However, auditors concluded that the absence of an overarching management framework for real property has also contributed to current deficiencies and needs to be addressed.

Specifically, auditors noted the need for improvement with respect to several elements of the CRC's MAF for real property, including Governance and Strategic Directions and Risk Management. For example, the Governance and Strategic Directions section of the TBS MAF refers to the need for alignment between organizational objectives, outcomes and the way the organization is actually managed. At the CRC, the strategic allocation/reallocation of resources between science functions and the real property function is not based on performance, but rather is based on maintaining historical funding levels for science branches and programs. Real property is viewed as costly overhead rather than as an essential requirement for fulfilling the CRC's research mandate.

In 2004, during an audit of comptrollership CRC managers noted that principles and fundamentals of risk management are applied. A CRC Preliminary Risk Profile and Action Plan as well as the real property sections of the draft Long Term Capital Plan identifies risk management practices. In practice, however, with respect to managing risks related to real property CRC generally waits until problems arise before taking action.

It is the auditors opinion that an overall management framework for real property should be established in order to ensure that resources and data needed to manage real property in a more efficient, effective manner are readily available for management decision-making purposes.

Final Report (PDF - 116  KB - 31 pages)

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