May 4 to 6, 2009
The scope of the Inspection included a review of Mission Management and the Administration Program. The inspection objectives were to:
Assess management controls and systems, procedures and activities;
The focus and extent of on-site work was based on an assessment of materiality and related risk. This was done through communication with Headquarters (HQ) bureaux, including briefings by line management and the functional bureaux, review of relevant HQ and Mission documentation, past audit findings, and an analysis of recurring trends and systemic issues.
During the Inspection, inspection issues and lines of enquiry were further refined from information gathered through interviews with the Head of Mission, a meeting with the Locally-engaged staff Committee, individual interviews with staff, and results of other documentation reviewed. The level of inspection work was therefore based on issues and information identified and gathered at all levels, HQ, Mission management and Mission operations.
An inspection of Mission Management and the Administration Program was conducted in the Holy See from May 4 to 6, 2009. The previous audit of these programs took place in 2001. The Embassy is a micro-mission with one Canada based staff (CBS) and eight Locally engaged staff (LES).
Overall, the Mission is functioning well and planning documents reflect departmental and Government of Canada (GoC) priorities. Objectives cascade into staff performance management plans (PMPs) and internal communication supports program delivery. The Mission is able to provide services to the public in both official languages.
The Mission's two key challenges over the coming year will be to address the current organizational structure and improve its administrative procedures. At present, all office staff are classified at the LE-06 level and report directly to the EX-02 Head of Mission (HOM). The deletion of the FS-02 position in 2008 has required a greater focus by the HOM on internal management and complicated delegation of some tasks. Some staff are being asked to take on activities which could change the level of their position, while other position's responsibilities have been minimized due to funding cuts. A review of staff activities indicated that some positions may be over or under classified.
There is also a need to finalize the Memorandum of Understanding with the mission in Rome for the provision of administrative and security services. Interviews with staff at the Vatican and Rome missions indicated that further clarification is required. In particular, the Vatican Mission's Administrative Policies and Procedures document should be updated and expanded to include all key functions undertaken by the Office Manager.
A total of 15 recommendations are raised in the report; all are addressed to the Mission. Management has responded to each recommendation indicating action already taken or decisions made, as well as future action. Of the 15 recommendations, management has stated that seven have been implemented. For each of the remaining eight recommendations, management has indicated the initiatives in progress or the intended future action. This report was finalized on July 15, 2009 and approved by the Departmental Evaluation Committee on September 2, 2009.
1.1.1 An inspection of Mission Management and the Administration Program was conducted in the Holy See, herein referred to as the Vatican, from May 4 to 6, 2009. The previous audit of these programs took place in 2001. The Embassy is a micro-mission with one Canada based staff (CBS) and 8 Locally engaged staff (LES). A second CBS position was cut in the summer of 2008. The Mission receives support from the mission in Rome based on a Memorandum of Understanding (MOU). The MOU is currently under negotiation and is expected to be finalized following the arrival of the new HOM in Rome during summer 2009.
1.1.2 The HOM arrived in the fall of 2008. Since her arrival, she has made considerable efforts to engage with her staff and improve the working environment at the Mission. Efforts have included:
1.1.3 Consultations with the Geographic Bureau indicated satisfaction with the Mission's reporting activities, both in volume and quality. Notably the HOM has brought focus to the writing of reports and, through the empowerment of her political staff, has increased the potential of the Mission. The Inspection Team also conducted a review of reports and found them targeted and well written.
1.1.4 Employee performance management plans (PMPs) were up-to-date and had been completed for the 2008-2009 fiscal year. Employees should carry forward their responsibilities into PMP preparations for the 2009-2010 fiscal year, which will allow them, and their manager to review and modify objectives and performance indicators during the year. The HOM is supportive of professional development and is empowering staff. In particular, *** has been encouraged to increase *** reporting activities and cultivate a contact network. The Mission would, however, benefit from a formalized Mission-wide training plan to identify common needs, prioritize activities and allocate a budget.
1.1.5 The deletion of the second CBS position has created challenges to providing a CBS back-up for the Mission and discharging the roles previously assigned to this position. The provision of CBS back-up during absences is complicated by the articles of the 1929 Lateran Treaty, which forbids cross-accreditation of diplomats to Italy. Therefore, any replacement would have to be drawn from other countries. While day-to-day management oversight could be provided by a CBS member of the neighbouring mission in Rome, coverage of the bilateral relationship would have to be provided through other means.
1.2.1 As shown below, the Mission's organization structure is unique in that, besides the EX-02 HOM position, all office staff are classified at the LE-06 level. This creates significant challenges when it comes to the delegation of select management responsibilities within the office.
1.2.2 Following the deletion of the second CBS position (FS-02), the majority of the day-to-day management responsibilities have been transferred to the HOM. Some of the officer level responsibilities, such as reporting and network development, have devolved to an LES. It appears as though the decision to cut the FS-02 CBS position was not accompanied by an analysis of the impact on operations, job descriptions and classifications.
1.2.3 The Inspection Team's review indicated that some staff may be classified at a level below or above that which they need to fill. A full review of job descriptions should be undertaken and should entail an on-site review and clarification of duties. While it may present some challenges in the short term, it is necessary in the long term to ensure expectations, authorities, responsibilities and compensation are in-line.
1.3.1 A Mission-wide training plan should be developed.
1.3.2 The Mission should conduct an on-site review and verification of job descriptions and subsequently carry out a classification review.
1.3.3 Subsequent to the implementation of recommendation 1.3.2, the Mission should review the organizational chart and establish hierarchy where appropriate.
1.3.1 The Mission wide Training Plan has been worked out with each employee and is reflected in the mission budget. It will be written up by June 22, 2009.
1.3.2 The flat hierarchy is unusual but it works. Given certain sensitivities, it deserves examination by an outside expert, not someone from the Mission or the Rome Embassy. The terms of reference of a review should include the following consideration, the office staff incumbents believe that the cohesion of the team derives from the fact that they are at the same level and have been together for several years. It could be impaired if a hierarchy were established among them. They fear this would outweigh any organizational benefit of establishing a hierarchy. The HOM has discussed this recommendation with Mission Client Services (ASM) to enlist the Locally Engaged Staff Services Bureau's (ALD) support for a review taking this factor in consideration.
1.3.3 Agree, see above response.
2.1.1 The Mission's administrative support is provided largely by the mission in Rome and governed by an MOU, currently in draft form. Day-to-day activities are the responsibility of the Office Manager. ***. This includes areas of planning, finance, budget, property maintenance, disposals and the official vehicle. ***.
2.1.2 The Office Manager's interactions with the mission in Rome are ad hoc and on an issue-by-issue basis. *** information sharing and awareness, share planning practices *** a broader understanding of Mission activities, the Office Manager should be included regularly in the Client Service Centre meetings held at the mission in Rome.
2.1.3 An administrative procedures document has been prepared, but does not incorporate key aspects of the Mission's responsibilities. In particular, finance, budget, property maintenance and human resources (HR) procedures are not included. A review of these internal processes indicated many weaknesses. In line with the MOU negotiations and the ongoing coaching provided by Rome, the Office Manager should expand the Mission Administrative Policies and Procedures document to reflect all key aspects of his job.
2.1.4 The mission in Rome was inspected in the fall of 2008 and the administrative procedures applied in the support of the Vatican Mission were not reviewed as a part of this Inspection.
2.1.5 Concerns were raised by the *** and the need to provide sufficient rest periods in conformity with Italian Labour Law. This matter was raised with both the HOM and the Management Consular Officer (MCO) at the bilateral mission in Rome to determine whether or not a solution could be found. There is the potential for the Vatican Mission to obtain contract *** services or access the *** at the mission in Rome. The use of the *** however, would be at the discretion of the mission in Rome and would have to be carefully managed and requested well in advance by the Vatican Mission.
2.2.1 The Mission to the Vatican carries out its own contracting activities for minor purchasing activities. It has an acquisition card and uses a petty cash of 500 Euros. The petty cash was reconciled and is utilized in an appropriate manner.
2.2.2 A review of financial documents pointed out a procedural issue with the exercising of Section 33 Financial Administration Act (FAA). Both the Deputy MCO and the MCO at Rome were signing Section 33 on the same document. This reduces accountability and should be ceased. The Mission to Rome was advised of this separately.
2.2.3 During the review of hospitality diaries, the Inspection team found that the completion of the forms did not always clearly demonstrate value-for-money. The completion of the fields related to program objectives and the evaluations of events must be improved. Objectives stated should provide a clear linkage to the Country Strategy, and the evaluation of the event should indicate the results achieved and the follow-up activity that may result. The HOM's wine inventory was maintained at the Official Residence (OR) and is drawn down when used, solely for official events. Usage is recorded at the OR and should be recorded on the hospitality diary for individual events. As per section 9.9.4 ABulk Purchases of Alcoholic Beverages@ of the Official Hospitality Outside Canada Policy, the cost and quantity of alcohol consumed from inventory for each official hospitality event must be noted on the hospitality diary. The initial inventory at the start of the year and the closing inventory should also be on file.
2.3.1 Overall, there is a need to improve the Mission's planning activities related to Chancery and OR maintenance, and capital acquisitions. The Mission's Property Management Plan (MPMP) and the Mission Maintenance Work Plan (MMWP) are completed by the mission in Rome with input from Vatican Mission staff. The requirements of the MPMP and the MMWP are basic and the Vatican Mission should be responsible for completing these plans. As Rome plays a large role in the provision of physical resource services, they should be consulted during the planning process.
2.3.2 The Mission has two Chancery projects currently planned or in progress; interior design and the addition of an airlock. The airlock installation is scheduled to take place this summer. As the airlock project may require some structural changes, the interior design project is scheduled to be finished following its completion.
2.3.3 The Mission has a small capital budget of approximately $15,000 for the 2009-2010 fiscal year. Expenditures are not planned and are generally addressed on an ad hoc basis. Capital expenditures should be planned at the beginning of the fiscal year taking into consideration new requirements and cyclical replacement needs. Failure to do so could lead to non-priority spending and less than optimal use of funds towards the end of the fiscal year.
2.3.4 Internal controls governing the use of the official vehicle need to be improved. At present, the trip/vehicle logs are not maintained and, therefore no monthly reconciliation of vehicle usage to fuel purchased is being performed.
2.3.5 Mission inventories were up-to-date, but not properly completed or signed off by the employee and the departmental representative. The OR occupancy agreement was signed by HOM, but not countersigned by a Mission employee on behalf of the Department. The OR inventory was up-to-date, but the condition of goods was not completed consistently, nor has the inventory been signed by HOM and a Mission employee. The Fine Art inventory was updated and sent to the Physical Resources Bureau (ARD) in fall 2008.
2.3.6 The disposal of assets is generally undertaken in cooperation with the mission in Rome. The Mission was recording the transfer of assets using the Asset Disposal form and having it signed by the HOM. This procedure is not appropriate as no assets had been disposed of at that time. Instead, the Mission should prepare materiel transfer vouchers and attach them to the inventory to record the transfer of possession. The mission in Rome would be responsible for completion of proper disposal documents and providing copies to the Vatican Mission upon completion. This will allow the Vatican Mission to ensure that the appropriate percentage of proceeds resulting from the disposal are credited to their operational account.
2.3.7 The Mission is in possession of several works of art that have been donated or were part of the Official Residence when it was purchased in 1983. These artworks are not a part of the official fine art inventory, which is overseen by ARD. The Mission does maintain an inventory of these non official works of art, but there is no plan or process in place to ensure that they are properly maintained and controlled.
2.4.1 The Mission should consult with the mission in Rome regarding the inclusion of the Office Manager in the regular meetings of the Client Service Centre.
2.4.2 The Mission should revise its administrative policies and procedures document to incorporate all key functions of the Office Manager.
2.4.3 The Office Manager should conduct outreach to the mission in Rome to review its file structures, obtain an understanding of its file retention procedures, and subsequently implement them at the Vatican Mission.
2.4.4 The Mission should identify a workable solution to the issue of *** that would respect Italian Labour Code while meeting the needs of the Mission.
2.4.5 Hospitality diaries should clearly demonstrate a linkage to Country Strategy objectives and the evaluation of events should detail results achieved and any follow-up activities that should result.
2.4.6 The Mission should ensure that the cost and quantity of bulk purchased alcohol consumed from inventory for each official hospitality event is noted on hospitality diaries. The initial inventory of alcohol at the start of the year and the closing inventory should also be on file.
2.4.7 The Occupancy Agreement should be signed by the occupant and a departmental representative.
2.4.8 The OR inventory should contain condition details for all assets and be signed by both the occupant and the departmental staff member who conducted the review.
2.4.9 A multi-year capital acquisition plan should be developed based upon consultation with all staff and submitted to the HOM for approval annually.
2.4.10 Vehicle Logs (EXT 1447) and the Vehicle Operating and Maintenance Report (EXT159) should be maintained for all usage of the official vehicle and be signed by the staff member using the service. Fuel purchases and mileage driven should be reconciled on a monthly basis.
2.4.11 The transfer of assets to the mission in Rome for disposal should be recorded with a material transfer voucher and attached to the inventory. Records of disposal should be completed by the mission in Rome and provided to the Vatican Mission once the process is complete.
2.4.12 The Mission should seek guidance from ARD regarding the maintenance and custodial responsibilities of non official works of art.
2.4.1 Agree. Follow up with HOM-Rome in June 2009 for implementation as soon as feasible.
2.4.2 Agree. Discussions with Rome and the Geographic Area Management Advisor (GLA) since the Inspection lead to a request for advice from HQ on what should be the responsibilities of an Office Manager LE 06 regarding budget preparation, given the Hub and Spoke relationship. The opening of the Regional European Centre which will take on some finance and human resources functions also has to be factored in the delineation of responsibilities. These were raised with ASM on June 2, 2009.
2.4.3 Agree. Will discuss issue with Rome to set up a meeting after the July 2009 G8 Summit.
2.4.4 The Mission asked ALD to raise the issue in their study for the Rome/Vatican LES Handbook and was advised on June 15, 2009 that it confirmed that the Italian regulation must be adhered to. There could be cost implications for the Vatican budget and these will need to be discussed with HQ.
2.4.5 All HOM hospitality activities are solely linked to Canadian government objectives and are now described in lengthier terms.
2.4.6 The documents were consolidated in one hospitality file. The original purchase document of Canadian wine is on file.
2.4.7 The Occupancy Agreement has been signed by the departmental representative the Office Manager.
2.4.8 Regarding condition of furniture, carpets, curtains: all were photographed after HOM's arrival and file is held at the Mission. Paper documentation will be filled out.
2.4.10 Implemented as of April 2009.
2.4.11 Implemented during the visit of the Inspection Team.
2.4.12 Implemented. A full description and photographing of non Canadian Heritage assets at the OR was done in October 2008 and is held in ARD. The Mission was advised that HQ is in the process of setting up an inventory process for non Canadian Heritage assets. By July 2009, the Mission will send photos of all non Canadian paintings found in OR to ARD who can assess whether or not they qualify for this programme. The list will be added to the Mission's inventory.
Comment by ARD:
Architecture and Interior Design Services (ARBC) is in the process of developing an inventory for heritage/valued assets in our missions abroad (Canadian or otherwise).
|Assets||Crown Leased||Crown Owned|
|Financial Information 2008-09|
|Operating Budget (N001)||$526,000|
|Capital Budget (N005)||$18,700|
|CBS Salaries Budget (N011)||$195,700|
|LES Salaries Budget (N012)||$471,000|