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Proactive Disclosure

Proactive Disclosure

Audit of Plant Health and Biosecurity

January 2011

1.0 Executive Summary
2.0 About the Audit
3.0 Findings and Recommendations
Appendix A: Detailed Audit Criteria
Appendix B: Plant Business Line Management Response And Action Plan (MRAP) To The Internal Audit Of Plant Health And Biosecurity By The Audit, Evaluation And Risk Oversight Directorate (AERO)

The Canadian Food Inspection Agency (CFIA or the Agency) is dedicated to safeguarding food, animals and plants to enhance the health and well-being of Canada's people, environment and economy. CFIA's plant protection authority comes from the Plant Protection Act which governs the protection of Canada's plants from pests and diseases while preventing the introduction of undesirable or dangerous substances.

Agency strategic objectives linked to Plant Health & Biosecurity (PHB) programming include:

Protecting the Canadian plant resource base by mitigating the risk of plant pests and diseases through regulation to ensure the safety and integrity of seeds and plant products and managing plant health emergencies; and
Sustaining marketability of plants and plant products including maintaining Canada's reputation for being free of certain pests and diseases and meeting international quality standards.

The Agency designs and delivers three types of PHB programs with the following objectives:

Domestic: To detect and control or eradicate designated plant pests in Canada and to certify plants and plant products for domestic trade;
Import: To prevent the introduction and spread of plant pests of quarantine significance within Canada; and
Export programs: To certify plants and plant products for export trade.

Domestic and import activities together contribute to Canadian plant health and biosecurity and Canada's Plant Health Status; helping to ensure confidence in our products and enhancing Canada's ability to export internationally.

This audit was approved in the Internal Audit Directorate (IAD) 2009-12 Multi-Year Risk-Based Audit Plan. Due in part to the OAG and CFIA evaluation work, an audit of Plant Health that was originally identified in CFIA's 2007-08 audit plan was re-scheduled to 2009-10. The OAG and CFIA Evaluation Directorate work helped IAD to narrow the focus of this audit.

The objective of this audit was to provide assurance that controls are designed and implemented to ensure that operational activities across the Agency are consistent with Plant Health & Biosecurity priorities. The original objective of the audit was to assess the overall management control framework for the program. During the planning phase this was changed to focus on areas of higher risk and on the consistency of operational activities with program priorities.

The scope of the audit included current activities and processes within the Plant Health & Biosecurity program management framework. These activities and processes reside across the three branches - Science, Operations, and Policy and Programs; and include import, export and domestic programs. This audit considered the policies, systems and activities that were in place during the 2009-10 fiscal year, including recent changes or new systems.

1.2 Findings and Recommendations

Governance

Finding 1: Operational Plans are not always aligned to National Standards and Guidance

Area operational work plans do not always reflect national standards and guidance, and national work plans are not developed and communicated in a timely manner.

Recommendation 1.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials develop national standards and work plans in a timely manner and effectively communicate same.

Recommendation 1.1:

The Chair of the Plant Business Line Committee should ensure that responsible officials undertake a reconciliation of Area Work Plans to National guidance, and make adjustments to work plans (Area / National) and/or national standards as required.

Finding 2.0: Limited Performance Information

Senior management in Operations, Science, and Policy and Programs Branches are not provided with reliable, consistent and useful performance information that provides an overview of progress towards planned program wide objectives and priorities.

Recommendation 2.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials put in place standards and processes for consistent reporting on program activities and results.

Controls

Finding 3.0: Resource Implications of Program Changes are not Systematically Addressed

Resource implications and impacts on delivery of other program commitments are not being addressed in a systematic way when program priorities shift.

Recommendation 3.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials put in place processes to identify and address the resource implications of changing program priorities and associated workload requirements.

Risk Management

Finding 4.0: An Incomplete Approach to Resource Allocation

PHB continues to strengthen its strategic approach to risk management. A risk-based approach to the allocation/re-allocation of resources at the operational levels is not in place.

Recommendation 4.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials provide tools at the Regional level that will provide a framework for resource allocation and reallocation.

1.3 Statement of Assurance

In my professional judgment as 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. The opinion is based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria. The opinion is applicable only to the entities examined and within the scope described herein.

1.4 Audit Opinion*

In my opinion, Plant Health and Biosecurity has notable weaknesses, with risk exposure related to planning, reporting and risk management of program activities and outcomes, which require management attention.

Peter Everson
Chief Audit Executive, Canadian Food Inspection Agency

* The audit opinion is based on overall materiality and risk as represented by the noteworthy findings and recommendations reported.

2.0 About the Audit

2.1 Background

Program Mandate and Management

The Canadian Food Inspection Agency (CFIA or the Agency) is dedicated to safeguarding food, animals and plants to enhance the health and well-being of Canada's people, environment and economy. CFIA's plant protection authority comes from the Plant Protection Act which governs the protection of Canada's plants from pests and diseases while preventing the introduction of undesirable or dangerous substances.

Agency strategic objectives linked to Plant Health & Biosecurity (PHB) programming include:

Protecting the Canadian plant resource base by mitigating the risk of plant pests and diseases through regulation to ensure the safety and integrity of seeds and plant products and managing plant health emergencies; and
Sustaining marketability of plants and plant products including maintaining Canada's reputation for being free of certain pests and diseases and meeting international quality standards.

The Agency designs and delivers three types of PHB programs with the following objectives:

Domestic: To detect and control or eradicate designated plant pests in Canada and to certify plants and plant products for domestic trade;
Import: To prevent the introduction and spread of plant pests of quarantine significance within Canada; and
Export programs: To certify plants and plant products for export trade.

Three branches of CFIA support PHB activities:

The Policies and Programs Branch is responsible for policy development and program design, corporate planning and performance management, financial processes, information management, and communication/coordination with stakeholders;
The Operations Branch focus is on operational work planning, conducting certifications, surveys, inspections, and emergency response activities; and
The Science Branch is responsible for testing and analysis, research and method development, as well as providing scientific advice.

PHB programming contributes to a safe and sustainable plant resource base by performing activities such as:

Regulating the import of plants and plant products, including grains and field crops, seeds, and forest and horticultural commodities;
Developing import policies and inspection standards;
Issuing import permits and performing import inspections;
Conducting on-site verifications of certification systems in countries of origin;
Monitoring pests and diseases; and
Certifying plants and plant products for export.

Planning for Plant Health & Biosecurity Activities

National Plant Health & Biosecurity guidance is communicated to the four CFIA Area offices. Within each Area, this plan is rolled out among the Regions, Districts and Sub-Districts. Within each Area, a performance reporting mechanism is used to consolidate information on the tasks performed and to provide feedback.

Nationally developed work plans and guidance reflect program priorities and lay out the requirements for inspection activities. Key steps in the work planning process are outlined in an MOU between the Operations and Policy and Programs Branches and include guidelines on the development of the work plans and guidance documents. Inspection Supervisors use the information provided in these documents to develop detailed inspection plans that are entered into the Management Resources and Results Structure (MRRS) system which is used to monitor and report on inspection activities. Final work plans are reflected in a roll-up of District/Sub-District and Regional Work Plans into Area Work Plans.

The National Standard Work Plan (NSWP) lists all of the PHB related inspection tasks and classifies these tasks into types. The NSWP provides the expected number of inspection activities to be carried out for some of the tasks while for others the level of inspection activity is decided by Inspection Supervisors based on historical demand, anticipated changes and trends.

In Operations Branch, Area Operations Coordinators and the Planning, Tracking and Reporting Officers provide advice and instructions on program planning priorities, clarify planning activities for inspectors, and communicate with operations early in the planning process to review changing requirements for the coming year. In addition to ensuring effective communication and implementation of the planning process; they also review the previous year's numbers early in the process, and validate the proposed numbers entered into MRRS by operations staff.

Recent Audit and Evaluation Reports

In 2008, an Office of the Auditor General (OAG) audit focused on the Agency's management of the risk that invasive alien plants, pests, and diseases could enter or become established in Canada. The overall conclusion was that the Agency lacks an effective integrated risk-management approach to plant and plant product imports. The Government response to the Report of the Standing Committee on Public Accounts: "Chapter 4. Managing Risks to Canada's Plant Resources - Canadian Food Inspection Agency of the December 2008 Report of the Auditor General of Canada" charged the Agency with the development of a detailed action plan to address the OAG's recommendations.

In November 2008, CFIA's Evaluation Directorate completed a formative evaluation of the Invasive Alien Species Program. The evaluation covered the four-year period from 2004/2005 to 2008/2009 and noted an overall lack of integrated program management from the setting of corporate priorities through to the reallocation of resources at the operational level and monitoring of performance.

2.2 Objective

The objective of this audit was to provide assurance that controls are designed and implemented to ensure that operational activities across the Agency are consistent with Plant Health & Biosecurity priorities. The original objective of the audit was to assess the overall management control framework for the program. As a result of the planning phase, this was changed to focus on the consistency of operational activities with program priorities.

2.3 Scope

2.4 Methodology and Approach

Audit criteria and detailed sub-criteria (see Appendix A) were developed to serve as standards against which our assessment could be made, clarify the audit objectives and form a basis for the work plan and the conduct of the audit. For each of the criteria, the relationship to governance, internal control and risk management or a combination of the three were identified. For this audit, we determined the audit criteria to be as follows:

Governance

Plant Health and Biosecurity has operational plans and objectives in place that are aimed at achieving stated priorities.
Plant Health and Biosecurity monitors actual performance against planned results and adjusts course as needed.

Controls

Plant Health and Biosecurity has processes and practices to ensure that changes in priorities, operational plans and activities are properly implemented.
Plant Health and Biosecurity operational activities fully and accurately reflect operational plans and stated priorities.

Risk Management

Plant Health and Biosecurity priorities and operational planning and resource allocations consider risk information.
Plant Health and Biosecurity controls in place to manage risks are assessed and management formally responds to risks.

Our audit approach included identifying and collecting documents and data; data analysis; document/data evaluation and interpretation; recording of observations; and concluding on observations with regard to stated expectations. Methodologies included reviewing documents, observing processes and procedures, interviewing staff and analyzing data. Site visit walk-throughs of planning, monitoring, and reporting processes were made in all Area offices and eight District/Sub-District level offices across Canada.

3.0 Findings and Recommendations

3.1 Introduction

This section presents detailed findings from the audit of PHB at CFIA. Findings are based on the evidence and analysis from both our initial audit planning and risk analysis phase, and the detailed audit conduct.

3.2 Governance

Finding 1.0: Operational Plans are not always aligned to National Standards and Guidance

Area operational work plans do not always reflect national standards and guidance, and national work plans are not developed and communicated in a timely manner.

We would expect to find that PHB has operational plans and objectives in place that are aimed at achieving stated priorities and that they are documented, effectively communicated and reviewed at least annually.

Planning for the number of inspection activities is undertaken in an inconsistent manner across districts. In some cases planned District/Sub-District inspection activities are as expected in the National Standards and Guidance; yet there are instances in which planned delivery is based on the availability of resources and anticipated level of task completion. Therefore, the performance targets entered into activity work plans do not consistently reflect the level of inspection activity needed to meet National Standards. There are a number of factors that contribute to this inconsistency:

There are gaps in task definition and frequency of tasks; some task definitions are inconsistent when compared to the Plant Priorities document;
The National Standard Work Plan (NSWP) does not provide guidance regarding resource requirements/availability to meet recommended targets;
Not all national work plans are received at the District inspector level in a timely manner;
There are no national time standards for specific tasks;
Task codes have changed and increased in number year-over-year;
Resource requirements and work load demands are not linked to the budgeting process; and,
Financial budgets are received in June, making it is difficult to plan activities appropriately in January/February when operational/activity work plans are being prepared.

While these planning challenges have been discussed nationally, inconsistencies continue.

The Work Planning Process for year 2010-11 required an analysis, negotiation and updating of planning numbers with Policy and Programs Branch based on numbers in the final Area Work Plans. This step in the process of finalizing the Area Work Plans was not carried out as expected, resulting in operational work plans that are not aligned to national standards and national work plans.

Incomplete and unclear program standards and guidance can result in a level of planned activities that do not meet National Standards and contributes to inconsistent task planning and program delivery from Area to Area, Region to Region and District to District.

Recommendation 1.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials develop national standards and work plans in a timely manner and effectively communicate same.

Recommendation 1.1:

Finding 2.0: Limited Performance Information

We would expect that PHB monitors performance against planned results and adjusts course as needed. Responsibility for monitoring and updating performance measures should be clear, and the results of performance measurement should be documented and reported to appropriate level(s) of accountability and factored into decision-making. We would expect that PHB monitors the implementation of operational work plans, and takes appropriate action in areas where significant deficiencies or areas for improvements are identified.

There is no formal performance reporting process in place to report on overall progress against national program objectives and no responsibility for preparing such reports assigned. There is no systematic assessment and reporting on overall program achievements.

Data is entered into MRRS in the Regions and the system can generate task reports at the Area, Regional, District and Sub-district levels. This information is most useful at the Inspector, Inspection Supervisor, and Inspection Manager levels. Inspection Managers and Supervisors review these reports to determine if they are on target for planned inspection levels.

Variance reports on inspection performance are produced quarterly or semi-annually in the Areas and at District levels with Area offices. Variance reports are limited in distribution and the analysis of tasks is narrow; reports typically focus on a few (typically four, depending on the Area) high level variances.

Some weaknesses were identified in the reliability of the MRRS data, including how inspectors allocate activities to Tasks. There are limited checks or controls to validate the data input into the system or to authenticate the MRRS variance analysis reports.

Reports differ in terms of the frequency, form and content across the Areas and rolled-up reports are not comparable between the Regions and Areas. Data roll ups in the MRRS reports at the Area and National levels include an aggregation of numerous tracking level activities, making it difficult to determine from the reports what specific inspection activities are contributing to observed variances. Inconsistent or incomplete performance data and reporting may not provide management with sufficient information to support decision making on such items as adjusting resources to meet emerging priorities. Performance information that does not provide information on progress towards program wide objectives and priorities does not allow senior management to consider implications for overall program priorities and objectives.

Recommendation 2.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials put in place standards and processes for consistent reporting on program activities and results.

3.3 Controls

Finding 3.0: Resource Implications of Program Changes are not Systematically Addressed

Resource implications and impacts on delivery of other program commitments are not being addressed in a systematic way when program priorities shift.

We would expect that management has appropriate processes and practices in place to ensure that changes in priorities, operational plans and activities are properly implemented. These processes should support operations in implementing the operational work plans, including both annual planning related decisions and addressing emergencies or new issues as they arise.

Changes in priorities that arise during the year are addressed at the District level. When a new plant pest related issue is identified, staff at the District level attempt to deal with changing priorities by assigning needed resources to emergencies, while continuing to provide priority services (e.g. Export Certificates). If needed, discretionary activities are re-scheduled as appropriate, with must-do activities completed at a later date if possible.

Changes in operational activities could also affect the need for laboratory resources, increasing the resources needed to process samples, the timing of the availability of lab resources, and/or the costs of implementing new or modified testing procedures.

When program priorities shift resource implications and impacts on delivery of other program commitments are not systematically addressed. Inspection resources are not linked to planned activities at the program level, and changes in program priorities and activities do not consider shifting resources. This could lead to an incremental reduction in some inspection activities, procedural short cuts in conducting some types of inspection activity, and a reduction in discretionary inspection activities.

The continued risk and impact of not systematically making adjustments to resource levels in response to addressing emerging priorities is that the number of completed inspection activities may not be consistent with national policy, standards or technical guidance.

Recommendation 3.0:

3.4 Risk Management

Finding 4.0: An Incomplete Approach to Resource Allocation

PHB continues to strengthen its strategic approach to risk management. A risk-based approach to the allocation/re-allocation of resources at the operational levels is not in place.

We would expect that PHB management would integrate risk management into its program design, delivery and reporting frameworks and that risks that might keep PHB from achieving its objectives are managed. We further expected that a risk based approach to decision making would support timely decisions on the allocation and/or re-allocation of resources as needed.

The OAG's 2008 audit focused on CFIA's management of the risk that invasive alien plants, pests, and diseases could enter or become established in Canada. The conclusion was that CFIA lacks an effective integrated risk-management approach to plant and plant product imports, and recommended that CFIA develop and implement a formal risk-based approach to pest surveys. CFIA has committed to strengthening the application of risk-based decision support tools and processes, as outlined in the Action Plan prepared in response the Invasive Alien Species Program Evaluation report (2008).

PHB is finalizing a Strategic Action Plan (SAP) to identify program issues and priorities for action. SAP includes a commitment to a risk-based planning process (Prioritization and Risk Management Model or PRAM). In draft form, PRAM is designed to provide a framework for allocation of resources to the plant program. Responsibility and accountability for the SAP initiative is shared across Operations, Science, and Policy and Programs Branches.

PHB has developed risk-based assessment and management tools to support design and delivery of the program. These include:

A process for developing a Risk Management Document to support risk-based decision making on plant or plant product import related issues that may affect one or more stakeholders.
Emerging Plant Programs Resource Allocation Process that includes a Priority and Risk Ranking Process used to setting priorities.
Pest risk assessments are carried out by the Plant Health Risk Assessment Unit in Science Branch, to provide a risk-based scientific analysis to support measures to reduce the potential impact of plant pests on the Canadian economy or environment.

While PHB has made strides at the strategic level, risk based decision support tools are not available at the Regional level, where decisions on resource allocations/re-allocations are made.

Recommendation 4.0:

The Chair of the Plant Business Line Committee should ensure that responsible officials provide tools at the Regional level that will provide a framework for resource allocation and reallocation.

Appendix A: Detailed Audit Criteria

Governance

1. Plant Health and Biosecurity has operational plans and objectives in place that are aimed at achieving stated priorities.

Operating plans and objectives exist for all key activities, are documented and linked to PH&B priorities.
Operating plans and objectives are effectively communicated to all appropriate stakeholders.
Operating plans and objectives are reviewed from time to time (at least annually).

2. Plant Health and Biosecurity monitors actual performance against planned results and adjusts course as needed.

Responsibility for monitoring and updated performance measures is clear and communicated.
Results of performance measurement are documented, reported to appropriate level(s) of accountability (according to established reporting requirements) and factor into decision-making.

Controls

3. Plant Health and Biosecurity has processes and practices to ensure that changes in priorities, operational plans and activities are properly implemented.

Standard systems and practices related to changes in PH&B priorities, operational plans and activities are defined, communicated and implemented; including: tools and guidance related to changes and reacting to changes are available to managers and employees.

4. Plant Health and Biosecurity operational activities fully and accurately reflect operational plans and stated priorities.

Planned operational activities are effectively communicated to all appropriate stakeholders.
Operational activities are documented and reflect operational plans and PH&B priorities.
Achievement against planned operational activities is monitored and reported appropriately on a timely and accurate basis. Variances are identified and explained.