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5. Accountability

Audit of Passport Services at Missions

(June 2008)

(PDF version, 125 KB)^*

1. Executive Summary
2. Introduction
   • 2.1 Background
   • 2.2 Audit Objective
   • 2.3 Scope
   • 2.4 Audit Methodology
3. Audit Findings
   • 3.1 Governance
   • 3.1 3.2 Capability
   • 3.3 Monitoring and Continuous Improvement
4. Appendix A - Detailed Audit Criteria

1. Executive Summary

Under the Canadian Passport Order, Passport Canada (PPTC) is entrusted with the responsibility of issuing travel identity documents to Canadians and residents of Canada for the purpose of travelling abroad. PPTC works with the Consular Affairs Bureau (CND) of Foreign Affairs Canada (DFAIT) for the delivery of passport services to Canadians overseas through Canadian embassies and consulates. In light of significant increases in passport volumes since 9/11, the Departmental Audit and Evaluation Committee approved an audit of the management control framework in place at PPTC and DFAIT to manage the delivery of passport services abroad.

The objective of this audit was to provide reasonable assurance that the management control framework in place to manage the provision of passport services by the missions is adequate and effective. This audit included a review of the governance structure, accountability and control frameworks put in place by both PPTC and DFAIT to support the delivery of passport services at missions abroad. The scope of this audit focused on management controls established at Headquarters only. This assurance engagement was guided by the Treasury Board Secretariat (TBS) Policy on Internal Audit and the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Audit.

This audit was conducted between February and November 2006.

Results and Conclusions

It is clear that in recent months, considerable attention has been placed on the management controls within Passport Canada with a view to improving the delivery of passport services abroad. The creation of the Foreign Operations Bureau is a notable example of efforts to reinforce accountability, control and management of these services within PPTC. Similarly, PPTC-led efforts to enhance training reflect this as well. That being said, the audit team is concerned that there remains much work to be done to improve the overall governance and management control framework. While some issues relate to the management practices within PPTC, the issue of greatest concern stems from the absence and informality of the governance arrangements that exist between PPTC and DFAIT. The lack of joint governance bodies severely impedes the establishment of common objectives and priorities and in turn works against the effective, joint management of emerging issues and ongoing operations. Downstream, this creates risk in terms of the effectiveness and efficiency of operations which may lead to a lack of understanding of and adherence to compliance and service delivery requirements.

The inherent risks of the highly distributed nature of roles and responsibilities, combined with the newness of the Foreign Operations Division, could be reduced by clearly defining governance structures, lines of accountability, delegations of authority, and by defining and communicating a clear, formal path of escalation for passport-related issues originating abroad.

In our opinion, the management control framework in place to manage the provision of passport services by the missions is only somewhat effective⁽¹⁾, leaving PPTC and DFAIT exposed to several risks to the achievement of the passport objectives. Effort is being made to reinforce some aspects of the management control framework, although many important controls remain informal in nature or simply are not in place. In some important instances - particularly related to the governance framework - the controls are inadequate and ineffective. Significant management attention is needed to improve these practices.

Specifically,

• Governance and accountabilities between DFAIT and PPTC are not formally defined
• PPTC governance structure is not formally defined
• Formal joint planning and priority-setting is not regularly performed
• Annual funding model is not clearly defined
• Policies for missions are not up to date
• Communications and information sharing are informal
• Intranet site is not well organized
• Performance results are not fed back into operational planning at the mission level
• Risks are not formally identified or monitored

These issues and the risks that stem from them are further described in Section 3, along with recommendations for management action.

Summary of Recommendations

1. The DG, Consular Services, DFAIT and the CEO, Passport Canada should formalize the governance and accountabilities between PPTC and DFAIT at both the strategic and operational levels. Consideration should be given to developing formal governance bodies, communication mechanisms and definition of roles and responsibilities encompassed by each group through the establishment of an MOU, charter or terms of reference between DFAIT and PPTC. This activity should also include the clear definition of passport services at missions to establish a common understanding of services to be reimbursed to DFAIT and the associated costs.
2. Foreign Operations should clarify and formalize authorities delegated to all personnel at missions.
3. Foreign Operations should formalize the governance structure and roles and responsibilities within PPTC around policies and procedures, communications with missions, escalation paths and forecasting of passport activity abroad. This exercise should be conducted to ensure all parties at PPTC are aligned and understand their role in the delivery of passport services abroad.
4. The CEO, Passport Services, DG, Consular Affairs and the Area Management Offices should establish a joint planning and priority-setting approach to identify strategies and priorities, in alignment with the governance framework, as recommended earlier.
5. The CEO, Passport Services and the DG, Corporate Finance, Planning & Systems Bureau should formalize the funding model used to determine the annual funding provided by PPTC to DFAIT to ensure a common understanding of the types of costs being reimbursed and the frequency of the update. Costing should be based on a common understanding of the definition of passport services to be delivered and the associated costs among Passport Services, Consular Affairs and FAC Corporate Finance.
6. The CEO, Passport Services and the DG, Corporate Finance, Planning & Systems Bureau should ensure that the annual funding provided by PPTC to DFAIT is reviewed in accordance with an agreed to funding model, as recommended above.
7. The DG, Consular Affairs Bureau, together with the CEO, Passport Canada, should ensure that a process is established for releasing updated, consolidated policies, procedures and directives to missions in an organized, intuitive fashion and roles and responsibilities are assigned.
8. The CEO, Passport Canada, together with the DG, Consular Affairs Bureau, should ensure that the policy, procedures and directives, particularly the Manual of Consular Instructions, are updated and outdated references are removed. Contact information provided in old directives should also be updated.
9. The CEO, Passport Canada should ensure that efforts to enhance the training program are continued as planned and are aligned with strategic directions. The DG, Consular Affairs Bureau should ensure completion of the training by all appropriate staff is tracked and monitored.
10. As part of implementing the governance-related recommendations, Passport Canada and Consular Affairs Bureau should formalize the information sharing and communication mechanisms in place for the delivery of the passport program at missions abroad. This includes communication as it relates to day-to-day management, policy and directives, monitoring of operations including financial and operational.
11. The DG, Consular Affairs should continue efforts to re-organize the Intranet site, with a focus on consolidating relevant information in one area, and clarifying what is most accurate/supersedes. As part of this exercise, responsibility should be assigned for the regular update and maintenance of the passport information on the Consular Affairs Intranet site.
12. The CEO, Passport Canada, the DG, Consular Affairs and the DG, Strategy and Services Bureau, should ensure that responsibilities for measurement, reporting and follow-up of mission results are clearly assigned, with a view to sharing performance results between DFAIT and PPTC.
13. The CEO, Passport Canada, in partnership with the DG, Consular Affairs and DG, Strategy and Services Bureau, should ensure that performance results of individual missions is shared between the organizations, appropriately analyzed and systematically fed back into the planning process to help improve operations. Consideration should be given to sharing information across missions to help improve efficiencies.
14. The CEO, Passport Canada, in partnership with the DG, Consular Affairs, should establish a formal risk management framework to identify, track and manage risk over time such that they are formally assessed, actioned and monitored for the delivery of passport services abroad. This risk management process should involve appropriate stakeholders with knowledge pertaining to the objective being assessed.

2. Introduction

2.1 Background

Under the Canadian Passport Order, Passport Canada (PPTC) is entrusted with the responsibility of issuing travel identity documents to Canadians and residents of Canada for the purpose of travelling abroad. The Canadian Passport Order charges Passport Canada with the administration of all matters relating to the issuing, revoking, withholding, recovery and use of the Canadian passports.

PPTC works with the Consular Affairs Bureau (CND) of Foreign Affairs Canada (DFAIT) for the delivery of passport services to Canadians overseas through Canadian embassies and consulates. Both are committed to achieving PPTC's mandate of issuing internationally respected travel documents to Canadians. For its part, PPTC is responsible for the Passport Program and in this capacity maintains overall responsibility for the development of policies, procedures, and for providing guidance to locally engaged staff in the examination of applications for the issuance of passports. CND acts as PPTC's agent and is responsible for delivering passport services abroad, on behalf of PPTC.

For a variety of reasons, the delivery of passport services abroad is exposed to a high degree of inherent risk associated with this operation. These conditions, which are elaborated upon below, provided the main rationale for the conduct of this audit:

• Since 9/11, there has been a considerable increase in passport volumes, both in Canada and abroad. The number of passports issued abroad has increased from 61,147 in 2001/2002 to 112,895 in 2004/2005, adding pressure on already scarce resources. It is estimated that approximately 109 out of 329 Consular full-time equivalents (FTEs) worldwide are dedicated to passport services. As the numbers increase, the wide geographical dispersion of the department creates challenges to consistently and efficiently manage passport issuance abroad. In this fast changing environment, clearly defined roles, responsibilities, accountabilities, and authorities both at PPTC and DFAIT are of utmost importance in ensuring an effective delivery of passport services at missions abroad. As noted in the report, the recent creation of the Foreign Operations division within the Security Bureau at PPTC is a positive step in reinforcing management of Passport Services abroad, the audit was conducted to provide independent insight into manner in which DFAIT and PPTC are managing growth, emerging issues and new challenges.
• It is commonly known that the mandates, operations and cultures of DFAIT and PPTC differ. These differences increase the risk that the two organizations will diverge in their strategic and operational direction and approaches for the delivery of passport services abroad which may expose the delivery of passport services to risk. Moreover, not only are responsibilities for passport services shared across the two organizations, but within each organization, responsibilities are also highly distributed. Inherently, this exposes the organization to risk related to unclear direction, inconsistent operations and potential non-compliance with policies and procedures. In this context, the audit focused on those management controls and practices that should ensure a commonly understood and applied approach and direction to the service delivery and security as well as those practices that establish and communicate accountability and responsibility.

In recognition of this inherent risk, in October 2005, the Departmental Audit and Evaluation Committee approved an audit of the management control framework in place at PPTC and DFAIT to manage the delivery of passport services abroad.

2.2 Audit Objective

The objective of this audit was to provide reasonable assurance that the management control framework in place to manage the provision of passport services by the missions is adequate and effective.

2.3 Scope

This audit included a review of the governance structure, accountability and control frameworks put in place by both PPTC and DFAIT, to support the delivery of passport services at missions abroad. The scope of this audit focused on management controls established at Headquarters. Specific controls reviewed included those that related to the following:

Table 1 Control Areas Examined by the Audit

The internal controls within missions were not included in the scope of this audit. Rather, these controls are being examined separately through the established Mission Audit program.

2.4 Audit Methodology

This assurance engagement was guided by the Treasury Board Secretariat (TBS) Policy on Internal Audit and the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Audit.

The audit was conducted using a formal audit program that encompassed a series of criteria that collectively define an adequate, effective and efficient management control framework. The audit criteria, based on the Canadian Institute of Chartered Accountants' Criteria of Control (CoCo) model, are provided in Appendix A. The criteria are also aligned with the TBS Management Accountability Framework (MAF) and were agreed to by PPTC and DFAIT management.

In administering the audit program, the audit team:

• reviewed the organizational structure and governance to support the delivery of passport services at missions, both at PPTC and DFAIT.
• conducted interviews with key stakeholders including management and staff at DFAIT and PPTC.
• examined selected documents at both DFAIT and PPTC, including corporate and business plans, performance information, select performance management accords, select job descriptions, policies, directives, guidelines and standards, and information sharing MOUs.
• reviewed and analyzed the funding model between PPTC and DFAIT.

Based on the results of the conduct phase, this report has been produced, detailing the adequacy and effectiveness of the current management practices. Where gaps exist, recommendations for improvement have been provided within this report.

Each of the control areas were reviewed and assessed using the following rating scale:

3. Audit Findings

The audit findings provided below have been categorized according to the three key control areas, as outlined in Table 1, Section 2.3 above.

3.1 Governance

Governance controls have as their objective the provision of sufficient strategic direction and oversight of operations. This includes ensuring all stakeholders share a common understanding of roles and responsibilities, that plans and priorities are clearly identified and consistently understood and that operations are appropriately overseen.

The following audit findings related to governance are discussed below:

• Governance and accountabilities between DFAIT and PPTC are not formally defined.
• PPTC Governance Structure is not formally defined.
• Formal joint planning and priority-setting is not regularly performed.
• Annual Funding Model is not clearly defined.

Governance and Accountabilities between DFAIT and PPTC are not formally defined

The delivery of passport services abroad is highly decentralized, particularly within DFAIT. The many participants contributing to the delivery of passport services abroad are shown in the organization chart below.

The groups with key responsibilities for the delivery of passport services are:

• Foreign Operations (PPSP) - is the first point of contact for resolution of non-case specific passport matters with missions and DFAIT and responsible for managing passport inventory at all missions. This division was recently formed to address the need for coordinated communications with the missions, brought about by the MPPS implementation.
• Program Services Division, Consular Affairs, DFAIT (CNP) - is responsible for passport services in the missions, as part of the overall consular services mandate.
• Missions - deliver the passport services directly to the client.
• Resource Managers (AMAs) - allocate resources to the missions.
• Entitlement Policy (PPPE) - is responsible for the management and development of the passport entitlement policy program.
• Operational Training and Development (PPHT) - is responsible for the development and delivery of the passport training program.
• Financial Services, PPCF - monitors the revenues collected by mission.

The inherent complexities of the decentralized environment, paired with the rotational nature of assignments at DFAIT as well as the CEO, PPTC highlight the need for strong governance and accountability to ensure both organizations share a common understanding of roles and responsibilities.

There is a need for formal governance and accountabilities between PPTC and DFAIT at both the strategic and operational levels. There is no Memorandum of Understanding or other formal agreement in place to establish the governance framework between PPTC and CND. As a result, there is a need for a common understanding of the governance and accountabilities for the following elements:

• performance expectations;
• accountability for process and results;
• cost recovery; and,
• governance practices such as planning, delivery and monitoring of PPTC services delivered at missions.

Currently, governance and communications are largely dependent on the personal relationships between the organizations. While informal working relationships have improved somewhat in the past few years, any informal arrangements established could be lost when staff, particularly the two senior executives at CND and PPTC, end their rotational assignments. Moreover, there are no operational level governance bodies.

Accountabilities for the delivery of passport services abroad are not clearly documented. The draft⁽²⁾ PPTC Framework document identifies the Director General of Consular Affairs Bureau (CND) as accountable for the delivery of passport services abroad. This represents a change from the accountabilities defined in the Head of Mission Accountability Accord which makes the Head of Mission accountable for the provision of citizen-centred consular and passport services to Canadians. Beyond this, the accountability for passport services at missions has not been clearly and explicitly defined. Similarly, responsibilities for overseeing the performance of all missions in the delivery of passport services have not been formally assigned.

Delegations of authority have not been formalized. PPTC expects that Canada based staff approve all passports, but in fact, many locally engaged staff are approving passports.

The inherent risks of the highly distributed nature of roles and responsibilities, combined with the newness of the Foreign Operations Division, could be reduced by clearly defining governance structures, lines of accountability, delegations of authority, and by defining and communicating a clear, formal path of escalation for passport-related issues originating abroad.

PPTC Governance Structure is not formally defined

The PPTC governance structure is evolving with the creation of the Foreign Operations Division to centralize accountability for the delivery of passport services abroad. This is a positive step to address known concerns around accountability and governance. However, several activities supporting the delivery of passport services at missions abroad are still being managed disjointedly at PPTC, such as policies and procedures, communications with missions, escalation paths and forecasting of passport activity abroad.

• Procedures are being developed and approved by a working group, led by Training and Development (PPHT). Until February 2006, no one within PPTC has had the responsibility for the development of procedures. PPPE has only recently assumed this responsibility, and has yet to resource the function. In the absence of a procedural development process or owner, PPHT established a working group to address procedural gaps identified in the course of developing an enhanced training package for missions.
• Communications with missions has been inconsistent. There is the need for a clear message being communicated to missions on who is to be contacted for support. Policies posted on the Consular Affairs Internet site include PPPE as the contact, not Foreign Operations. Older directives posted on the site still identify a DFAIT individual (who was previously responsible for passport-related enquiries prior to the shift to PPTC Foreign Operations as the liaison with missions related to passport matters). In addition, missions were provided with a list of contacts from the Security Bureau (PPSD) for assistance in different situations.
• Escalation paths and processes within PPTC for passport-related issues originating abroad are not clear. There is a need for a defined communication process within PPTC to ensure that issues or concerns are addressed at the appropriate times by the various levels of senior management.
• Forecasting is done separately in two groups in PPTC - Finance and Economic Analysis and Performance Measurement (EAPM). Finance produces forecasts of passport revenues based on a fixed annual increase of 2.5%. EAPM produces forecasts based on statistical analysis of the monthly production of passports in the missions, which EAPM then provides to Finance. Forecasting information produced by EAPM is not provided to Foreign Operations, nor is such information shared with DFAIT.

Without a coordinated effort between PPTC and CND to deal with the missions, inconsistent messages may be communicated, resulting in inefficiencies or errors in delivering passport services. While we understand that the role of the Foreign Operations in PPTC is still evolving, we would expect that a PPTC governance structure be established where Foreign Operations assumes a leadership and coordination role for all other groups within PPTC contributing to passport services being delivered abroad.

Formal joint planning and priority-setting is not regularly performed

There is a need for regular, formal, joint planning and priority-setting mechanisms or activities between PPTC and DFAIT for the delivery of passport services abroad, either at the strategic or operational levels, to ensure that common objectives are established and consistently understood among both organizations.

Regular planning meetings are not conducted between PPTC and DFAIT. In the past, PPTC and DFAIT had regular Operations Meetings, but these no longer take place. Joint planning activities are initiated on an ad-hoc basis and are issue-driven, ***

There are no joint planning discussions to strategically allocate resources for the delivery of passport services in the missions. Resources are allocated to the missions by the Resource Managers in DFAIT, based on historical levels and adjusted to reflect technical changes (such as inflation and foreign exchange) and discretionary changes (such as additional FTEs or additional resources to hire Locally Engaged Staff (LES)). There is no division of the resources allocated for passport services, separate from consular services. Initiatives coming out of PPTC, such as MPPS, are not analyzed for impact on mission resources.

Within PPTC, strategic and operational directions are defined, communicated and understood through documents such as Towards 2010 which explicitly defines the high-level PPTC vision and objectives. PPTC's vision includes repatriating entitlement by 2008, which has been communicated to DFAIT at the mission level. However, the level of buy-in and feedback from DFAIT in support of PPTC's vision and objectives (and vice versa) is inconsistent across DFAIT. Moreover, PPTC believes as part of its long-term vision that the need for extensive governance and communication with DFAIT will be reduced. In fact, more governance and better alignment will be needed in the interim, through transition and beyond repatriation to ease the transition. In the interim, operations will remain exposed to risk unless effective governance is put in place. In the long term, the repatriation exercise will lead to new risks that must be managed explicitly and jointly by DFAIT and PPTC.

Communications and coordination will continue to be necessary since repatriation will not completely eliminate passport services in the missions, since missions will continue to provide temporary and emergency passports. In this context, effective communications and good governance will be more critical than ever.

The lack of joint planning and decision-making bodies precludes the effective and efficient management and monitoring of operations and may lead to inconsistent objectives (including performance expectations) for delivery of passport services abroad. Consular Affairs Bureau acts as the agent of PPTC and is responsible for delivering services in a way that conforms to the PPTC strategic and operational direction. An absence of common objectives, compounded by the cultural differences between DFAIT and PPTC, greatly increases the risk that the two organizations will diverge in their strategic and operational approaches to the delivery of passport services, directly impacting the consistency and effectiveness of service delivery.

Annual Funding Model is not clearly defined

PPTC has paid an annual levy of $4.4M to reimburse DFAIT for the costs incurred to deliver passport services abroad. The funding model that underpins the annual levy is not clear. Moreover, an authoritative document that describes the annual levy or the funding model could not be found. As a result, there is uncertainty around the calculation of the amount and the frequency of the update.

It is our understanding that the annual levy amount was negotiated in 1988 and not revised since. However, the amount was reviewed last year by DFAIT in the hopes of gaining access to revenue generated from consular fees, which is controlled by Treasury Board. The direct and indirect costs associated with the delivery of passport services abroad were estimated to be $22.6M, a significant increase to the annual levy paid in the last 17 years. This resulted in disputes over the amount of the levy, the types of costs to be reimbursed and more fundamentally, the definition of passport services for which costs are being reimbursed. The request for an increase to the annual levy was withdrawn by DFAIT, but it served to highlight the uncertainty around the annual funding paid by PPTC to DFAIT.

The recently implemented Mission Print Passport Solution (MPPS) is changing the work processes and may possibly change the overall work effort in the missions, thus affecting related costs. Yet, in the absence of a formal funding model, the cost implications of MPPS are not apparent.

Recommendations - Governance:

1. The DG, Consular Services, DFAIT and the CEO, Passport Canada should formalize the governance and accountabilities between PPTC and DFAIT at both the strategic and operational levels. Consider formal governance bodies, communication mechanisms and definition of roles and responsibilities encompassed by each group through the establishment of an MOU, charter or terms of reference between DFAIT and PPTC. This activity should also include the clear definition of passport services at missions to establish a common understanding of services to be reimbursed to DFAIT and the associated costs.

Management Action Plan

The Strategic and Planning Division (PPPS) and Program Services (CNP) will establish a working group to examine the variety of existing programs, practices and procedures already in place that need to be formalized, i.e. the Passport Examiner TD Abroad Program, etc.; and those that need to be established, i.e. communications and information sharing, etc. An Umbrella Agreement (either MOU or Framework Document) will be drafted to provide overall governance and framework for more specific operational practices and procedures, with emphasis on the interim and transition phases of PPTC's proposed plan to repatriate passport entitlement in 2008.

The working group will be in place in the third quarter of 2008-2009 with a view to signing an umbrella MOU by the third quarter of 2009-2010.

2. Foreign Operations should clarify and formalize authorities delegated to all personnel at missions.

Management Action Plan

Foreign Operations (PPSP) and CNP (Program Services) will establish a working group to develop "mission models" for each type of mission (Honcon, Full Service Mission, etc). Each mission with then engage in a Terms of Reference agreement with PPTC based on their specific mission model which will establish mandatory prerequisites for passport issuance on mission type. HOM (Head of Mission) and MCO (Management Consular Officer) mandate letters will be incorporated into this process in line with overall governance structure per recommendation #1.

3. Foreign Operations should formalize the governance structure and roles and responsibilities within PPTC around policies and procedures, communications with missions, escalation paths and forecasting of passport activity abroad. This exercise should be conducted to ensure all parties at PPTC are aligned and understand their role in the delivery of passport services abroad.

Management Action Plan

An internal PPTC working group will be established to document clear roles and responsibilities. PPTC will then engage DFAIT stakeholders (CNE, CNO, CNC) to communicate realignment and ensure no duplication exists between departments.

4. The CEO, Passport Services, DG, Consular Affairs and the AMAs should establish a joint planning and priority-setting approach to identify strategies and priorities, in alignment with the governance framework, as recommended earlier.

Management Action Plan

CNP (Program Services), Strategic and Planning Division,, PPSP (Foreign Operations)and AMA's established a planning and priority-setting approach specific to the delivery of passport services abroad to coincide with the annual Country Strategy exercise. This will coincide with the next planning cycle for 2009-2010, which will likely begin in the third quarter of 2008-2009.

5. The CEO, Passport Services and the DG, Corporate Finance, Planning & Systems Bureau should formalize the funding model used to determine the annual funding provided by PPTC to DFAIT to ensure a common understanding of the types of costs being reimbursed and the frequency of the update. Costing should be based on a common understanding of the definition of passport services to be delivered and the associated costs among Passport Services, Consular Affairs and FAC Corporate Finance.

Management Action Plan

Costing for Passport Services abroad was provided by Finance (SMD) to PPTC. Costing was based on full cost instead of incremental cost and will be revised by SMD. PPTC is to receive a revised costing and proposed funding model from SMD.

6. The CEO, Passport Services and the DG, Corporate Finance, Planning & Systems Bureau should ensure that the annual funding provided by PPTC to DFAIT is reviewed in accordance with an agreed to funding model, as recommended above.

Management Action Plan

Action to be taken when the funding model is agreed upon.

3.2 Capability

Capability controls have as their objective the support of individuals in the discharge of their responsibilities related to the provision of passport services in missions. Included here are practices such as policy and procedures, training and capacity building, and, information and communication, all of which collectively help to enable people in the achievement of their objectives.

The following audit findings related to capability are discussed below:

• Policies for missions are not up to date;
• Training Program is being improved;
• Communications and information sharing are informal; and,
• Intranet site is not well organized.

Policies for missions are not up to date

The overall suite of policies and procedures provided to missions are extremely out of date and are ineffective in providing a single source for referencing policy information. Policies that govern the delivery of passport service abroad are consolidated in the Consular Policy Manual which is quite outdated. Similarly, procedures are consolidated in the Manual of Consular Instructions (MCI) Volume 2 and are equally out of date (1994). In addition to these old policies and procedures still in circulation, new directives are issued by PPTC and posted on the Consular website. Neither the Consular Policy Manual nor the MCI is updated to reflect the new directives. Older directives posted on the Consular Affairs Intranet site have not been updated with new PPTC contact information.

To compensate for the outdated policy direction available to missions, the domestic policy suite (PPM) was posted on the Consular Affairs Intranet site. Still, there are limitations with the PPM. The PPM is intended for domestic passport service delivery and may not address mission specific issues. It was also noted that the version of the PPM provided on the Consular Affairs Intranet site is an older version of the PPM used domestically.

No plans exist to update the MCI or the Policy Manual. There is a view within PPTC that updating such manuals is a costly exercise to undertake, considering the intent to repatriate passport entitlement by 2008. At the same time, PPHT has established a working group to develop and approve new procedures to meet an immediate need for procedural direction to trainees. While PPPE is a member of the working group, they are not leading the process. While we recognize that the PPPE group responsible for procedures was only recently formed, we expect that PPPE would take a leadership role in procedure development going forward.

Without current and understandable policies and procedures that are easily referenced, policies and procedures may be inconsistently or incorrectly applied in the missions resulting in improper entitlement.

Training Program is being improved

Several efforts are being made to improve the training provided to CBS and LES in the missions for the delivery of passport services. PPTC is developing a phased approach to enhancing the training offered to missions that appears to be comprehensive in its focus. Phase 1 (to be piloted with four missions in May 2006) involves an updated training package with a set of 10 modules focusing on entitlement policy, and will be available on the Consular Affairs Internet site. The training will be supplemented by testing and possibly tied to certification, although no final decision on certification has yet been made. Further, DFAIT has provided assurance that new employees will not have access to PMP until they have successfully completed the training, which is considered to be a strong control against the risk of error. It is important, however, to note that existing staff who have not yet completed the training modules will still retain their PMP access, making it crucial to monitor completion of training by all staff. Phase 2 of the training will involve a fully interactive internet-based course based on the material developed in Phase 1. Phase 2 will make use of multimedia and offer instant test results. It is expected that Phase 2 will be launched in 2007/08.

PPTC trainers are kept informed of new policies by PPPE to ensure that training material can be updated. In addition, PPTC trainers receive information from the Data Quality Analysts on the most common problems encountered in their audits, to guide the development of new training material.

Although efforts are being made to improve the training for CBS and LES who are involved in the provision of passport services abroad, there remains the risk that inappropriate entitlement decisions will be made or inconsistent processing of passport applications will result, given the disproportionate level of training that is currently provided, compared to their domestic counterparts. CBSs and LESs presently receive two days of PPTC delivered training compared to four weeks of full-time training provided to Canadian PPTC staff. If the efforts currently underway to strengthen training continue, we feel that this risk will be appropriately managed over time. PPTC must also ensure that training activities and plans are sufficiently aligned with longer term strategies, such as entitlement repatriation, to ensure there is a clearly understood path toward achieving the strategic objectives.

Communications and information sharing are informal

Information sharing between DFAIT and PPTC relies heavily on a few informal relationships that are working effectively. The CEO, PPTC and the DG, CND meet weekly through departmental forward planning meetings, although these meetings do not specifically deal with issues related to the delivery of passport services abroad. Communications at the strategic level has improved considerably, owing to the relationship between the two executives. Communications at the operational level are also improving, primarily due to the initiation of MPPS and the creation of Foreign Operations Division. Although joint operations meetings no longer take place, the Directors of Foreign Operations Division, PPTC and Program Services, CND communicate regularly, both formally and informally. The four key stakeholders in the delivery of passport services (PPTC, CND, missions, AMAs) do not communicate as a group. Instead, they are all consulted through a relay approach, and also through email distribution, which can be difficult given that PPTC and DFAIT are on separate email systems. The sharing of COSMOS data with PPTC was formalized through an MOU signed in December 2004 that describes the authorities and requirements for PPTC to access COSMOS data.

Some information on performance is shared between PPTC and DFAIT, including the Weekly Report on service standards achieved domestically, and now abroad for MPPS missions. However, some performance reporting on service standards done by DFAIT is not shared with PPTC. Consular Affairs in DFAIT measures performance against service standards and calculates efficiency ratings by mission twice a year, for inclusion in the annual Departmental Performance Report. Some qualitative information is also sporadically gathered through informal surveys. Neither the quantitative or qualitative information is shared with PPTC, although the raw data can be accessed through COSMOS.

Informal communications are less effective when dealing with missions, due to the high volume and geographical dispersion of missions. There is a need for formal mechanisms to identify or communicate problems at missions that may require a change in policy or procedures.

In the absence of a formal communication forum between the organizations at either the executive or operations levels, effective communications and, more broadly, the effectiveness of governance, are at risk should individuals and their relationships change. With little sharing of performance information, there is the risk of duplication of efforts or more importantly, that inconsistent messages will be sent and inappropriate conclusions will be made on the overall performance of the missions in delivering passport services. This, coupled with the already noted deficiencies in the joint management practices between DFAIT and PPTC, hampers significantly the ability of PPTC/DFAIT to monitor operations and continually improve them over time.

Intranet site is not well organized

The Consular Affairs Intranet site is not well-organized in providing information relating to passport services abroad. There are numerous references (training material, regulations, policies, directives, forms, manuals, technical information, etc.) on several different pages on the Consular Affairs Intranet site. The references are not consolidated in one area. As a result, an individual wishing to access passport related information must know exactly where to look to locate the information easily. Furthermore, the passport directives web page provides all directives that have been added since 2001 in chronological order with the most recent directives appearing first. This structure may be less helpful than organizing directives into categories by process or topic. We understand that there is currently a joint effort underway between DFAIT and PPTC to restructure the web site with a view to enhancing user-friendliness.

Without easily accessible reference material, there is a risk that users may abandon their search for guidance and make incorrect interpretations of policy or procedure. The effectiveness of the reference material is severely restricted if the users do not know where to find it.

Recommendations - Capability:

7. The DG, Consular Affairs Bureau, together with the CEO, Passport Canada, should ensure that a process is established for releasing updated, consolidated policies, procedures and directives to missions in an organized, intuitive fashion and roles and responsibilities are assigned.

Management Action Plan

PPSP will document passport-related communication protocols in consultation with CND and Area Management Offices. This process will define the information communicated, and the distribution lists and methods.

8. The DG, Consular Affairs Bureau should ensure that the policy, procedures and directives, particularly the MCI, are updated and outdated references are removed. Contact information provided in old directives should also be updated.

Management Action Plan

CNP will review the MCI, Volume 1 for all references to the delivery of passport services at missions and update as required.

PPSP will engage PPTC stakeholders to determine overall ownership of passport procedures at missions abroad with a view to updating the existing MCI, Volume 2 to reflect new operational reality of mission passport issuance.

9. The CEO, Passport Canada should ensure that efforts to enhance the training program are continued as planned and are aligned with strategic directions. The DG, Consular Affairs Bureau should ensure completion of the training by all appropriate staff is tracked and monitored.

Management Action Plan

A decision will be reached through the umbrella MOU suggested in recommendation #1 with respect to which organization and division is formally responsible for developing and delivering passport related training to staff at missions abroad.

Two components to compliance with the new training modules exist: ensuring all parties involved in the passport program abroad have taken the mandatory training, and monitoring the effectiveness of the new program.

As a result of concerns raised by the OAG, Training and Development Division (PPHT) will implement an online "Foreign Operations Training" module to all passport staff at missions abroad in the fall of 2006. The online training will vastly expand passport-specific training provided to mission staff. CNP and PPHT will ensure all employees have taken the online training via a mandatory exam. CNP is developing a "Rejection Code" report, which monitors the number and types of errors made processing passport applications at each mission. This report will assist in monitoring training effectiveness post-implementation.

Once standardized training has been delivered to all mission staff, PPSP will be in a position to determine outstanding training needs requiring further program development in light of strategic initiatives such as Entitlement Repatriation. As an example, PPSP is examining the introduction of regional centres of passport excellence as an interim measure in anticipation of the proposed entitlement repatriation plan.

10. As part of implementing the governance-related recommendations, Passport Canada and Consular Affairs Bureau should formalize the information sharing and communication mechanisms in place for the delivery of the passport program at missions abroad. This includes communication as it relates to day-to-day management, policy and directives, monitoring of operations including financial and operational.

Management Action Plan

PPSP and CND will address information sharing and communication processes and respective roles and responsibilities via the MOU process.

11. The DG, Consular Affairs should continue efforts to re-organize the Intranet site, with a focus on consolidating relevant information in one area, and clarifying what is most accurate/supersedes. As part of this exercise, responsibility should be assigned for the regular update and maintenance of the passport information on the Consular Affairs Intranet site.

Management Action Plan

PPSP has become the official point of contact for passport content on DFAIT inter and intranet sites. PPSP, CNC and CNS have met extensively since May 2006 to revise and streamline passport content on DFAIT sites and have decided on a multi-phase approach to updating and reorganizing content.

Internet: The first phase of the intranet restructuring will add missing content, reorganize existing content and streamline appearance for ease of use. The second phase will involve investigating the feasibility of moving all passport content to a Passport Canada hosted intranet site designed for mission.

Internet: PPSP will establish a standard template for global and local passport information for individual mission web sites, as well as DFAIT's public intranet site. CNS, RSS and NAL will adapt existing content to meet PPTC specifications.

3.3 Monitoring and Continuous Improvement

Controls that support the proactive monitoring of operations, risks and external environment are necessary to ensure that PPTC and DFAIT can address problems or changes proactively, in advance of them materializing as risk.

The following audit findings related to monitoring and continuous improvement are discussed below:

• Performance is being measured and monitored;
• Performance Results are not fed back into operational planning at the mission level; and
• Risks are neither formally identified nor monitored.

Performance is being measured and monitored

Performance against pre-established service standards that are both quantitative (time to produce) and qualitative (client feedback / satisfaction) is being measured for the missions.

Consular Affairs in DFAIT measures performance against service standards and calculates efficiency ratings by mission twice a year. Performance against the service standard is measured weekly for missions that have migrated to MPPS and is shared with the Passport Canada for their Weekly Report. Some qualitative information is also sporadically gathered through informal surveys. Efficiencies can be gained, however, in the measurement and calculation of performance, since there are no standard monitoring reports available from COSMOS. Performance measures are manually calculated for each mission, based on data in COSMOS. Moreover, there is widespread concern over the reliability of the COSMOS data used for performance monitoring, particularly the data that reflects case information and time spent on consular files. Because of a lack of clarity on service definition, cases involving both passport services and consular assistance are often recorded in COSMOS as passport services alone. This is further support for the need for a clear definition of passport services provided by DFAIT.

PPTC measures performance on entitlement decisions through observation reports prepared by the Data Quality Analysts in PPTC. The efficiency and effectiveness of this process has improved significantly with MPPS. Prior to MPPS, passport files were copied and sent to PPTC for review of the overall quality of the decision and supporting documentation. Significant time lags occurred between issuing the passport and providing feedback to the missions, limiting its usefulness. With MPPS, the Data Quality Analysts have immediate access to the entitlement decision and scanned documentation supporting the application through COSMOS/PMP and can provide much more timely feedback to the missions. PPTC Foreign Operations also monitor book inventories, including spoiled books, in the missions. Efforts are being made by PPTC and DFAIT to further automate the control and monitoring of book inventories. Financial Services (PPCF) monitors the revenues collected by mission.

In addition to the regular performance measurement occurring at PPTC, a Mission Baseline Report was prepared and issued in February 2006 to provide an easily accessible, central repository of information related to the passport program operating in Canadian missions abroad. The report was prepared partly in response to concerns raised by the Auditor General of Canada in 2005 but also in recognition of the wealth of information available at both PPTC and DFAIT that is scattered and not readily accessible. The report identifies various volumes and performance measurements across the missions.

Performance results are not fed back into operational planning at the mission level

Performance results are factored into the development of strategies and plans for the portfolio of missions, but not at the individual mission level to improve operations.

Within PPTC, performance information informs strategic planning. High-level results in the missions have been considered in the vision for 2010, i.e., repatriation of entitlement. Improvements in the delivery of passport services at missions have also been made through the MPPS project, creation of the Foreign Operations Bureau and the development of training modules for mission staff. As well, operational monitoring performed by the Data Quality Analysts through preparation of observation reports based on daily alerts by mission is used to improve training materials. This information is shared with the missions as well as with Passport trainers for further development of the training materials.

Nevertheless, improvements can be made to the sharing and monitoring of performance results to improve operations.

• Monitoring of performance against service standards by Consular Affairs Bureau is largely done to comply with Treasury Board reporting requirements and not to improve processes. Measurements on service standards are provided to the missions, but not tracked for improvement over time.
• Performance and productivity is considered somewhat when resources are allocated by the AMAs. Subsequent to the audit, AMAs have created a mission "dashboard" that includes financial and passport performance. This information has not been shared with Passport Canada.
• Country strategies are finalized by Strategy and Services Bureau that consider financial and operational performance, but these have yet to be shared with Passport Canada.
• Costs to deliver passport services in missions are not tracked or compared to the volume of outputs. Productivity in individual missions has not been formally assessed to identify where specific improvements can be made.
• Workloads and backlogs also are not monitored for the portfolio of missions. COSMOS does not provide for tracking of unopened envelopes to monitor the timeliness of processing for applications received by mail, which can provide an indication of workload issues. Typically, workloads are informally discussed between the missions and Consular Affairs Bureau, but usually after the backlogs have increased to an unmanageable level and HQ must react to the problem.

Without effective information sharing between the two organizations to identify and correct systemic issues (such as those affecting specific missions or regions or those arising at certain peak times of the year), operational decisions on priorities, resource allocation and improved work practices will not be fully informed.

Risks are neither formally identified nor monitored

Risks in the delivery of passport services at missions are not formally identified or monitored, either within PPTC or between PPTC and DFAIT. This may also be a consequence of the lack of common management or governance bodies. Although some risk information is measured and monitored within DFAIT, such as corruption indices, the impact of the risks on passport services are not identified, consolidated or mitigated.

It is important to note that the CEO, Passport Canada acknowledges the importance of risk management. Her Management Accord includes an objective related to responding to the OAG's report, which included better risk management. PPTC also is currently conducting a risk assessment of the issuance of domestic passports; however, this scope is limited and does not provide PPTC with a framework for the ongoing and consistent management of risks to all its objectives.

Proactive risk management is an important element of the organization's overall governance and management regime. Without a proactive approach to identifying and mitigating risks the ability of PPTC to understand and manage potential concerns before they materialize will be impeded.

Recommendations - Monitoring and Continuous Improvement:

12. The CEO, Passport Canada, the DG, Consular Affairs and the DG, Strategy and Services Bureau, should ensure that responsibilities for measurement, reporting and follow-up of mission results are clearly assigned, with a view to sharing performance results between DFAIT and PPTC.

Management Action Plan

PPTC and Consular divisions responsible for measurement will review current statistical information generated by both Passport Canada and Consular Bureau on performance, service standards, workloads, etc. to ensure there is no overlap and to determine what information can be usefully shared and how. Standardized, transparent measurement and analysis methodologies will be developed and will be made available for missions to examine. A process for sharing analyzed information on passport services between PPTC, CND and missions will be developed, along will appropriate escalation protocols for missions who consistently do not perform to standard.

13. The CEO, Passport Canada, in partnership with the DG, Consular Affairs and DG, Strategy and Services Bureau, should ensure that performance results of individual missions is shared between the organizations, appropriately analyzed and systematically fed back into the planning process to help improve operations. Consideration should be given to sharing information across missions to help improve efficiencies.

Management Action Plan

See planned action under Recommendation 12. Performance information will be fed back into the planning process via PPTC participation in DFAIT's Country Strategy planning process. In addition, CND will begin sharing information from client feedback with PPTC on a monthly basis.

14. The CEO, Passport Canada, in partnership with the DG, Consular Affairs, should establish a formal risk management framework to identify, track and manage risk over time such that they are formally assessed, actioned and monitored for the delivery of passport services abroad. This risk management process should involve appropriate stakeholders with knowledge pertaining to the objective being assessed.

Management Action Plan

PPSP will establish a formal risk management framework and implementation strategy for the delivery of passport services at missions abroad.

Appendix A - Detailed Audit Criteria

Acronyms

PPTC - Passport Canada
CND - Consular Affairs Bureau
FTE - Full time equivalent (human resource)
TBS - Treasury Board Secretariat
MOU - Memorandum of Understanding
PPSP - Foreign Operations
MPPS - Mission Passport Print Solution
CNP - Program Services Division, Consular Affairs
AMA - Resource Managers
PPPE - Entitlement Policy
PPHT - Operational Training and Development
PPCF - Financial Services
EAPM - Finance and Economic Analysis and Performance Measurement , PPTC
LES - Locally Engaged Staff
SMD - Corporate Finance
MCI - Manual of Consular Instruction
PPM - Passport Policy Manual
CBS - Canada Base Staff
PPCF - Financial Services
COSMOS - Consular Management System

¹ See Effectiveness Rating, pg. 8 (Somewhat Effective - Some parts are working well, but many deficiencies exist.)

² The finalization of the PPTC Framework is long overdue. The TBS MAF evaluation of 2004-2005 stated as a major concern that TBS was expecting to receive an amended Framework document for approval in the fall of 2002 and needs closure on the issue. This was an outstanding condition of the 2002 TBS decision to support PPTC's 2002-2007 Business Plan.

Office of the Chief Audit Executive

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Date Modified:

2012-12-21