Fire Management Program Audit

Final Report

Prepared by
Office of Internal Audit and Evaluation
Parks Canada

Table of Contents

Summary

1.0 Overview

Background
Objectives and Scope
Methodology
Statement of Assurance
Conclusion

2.0 Observations and Recommendations

2.1 Management Control Framework
2.2 Existence of Functional Controls

Report approved by the Chief Executive Officer, Parks Canada on June 11, 2009

Summary

The Fire Management Program audit, noted in the submission to Treasury Board, was included in the Office of Internal Audit and Evaluation’s three-year plan for the 2008-2009 fiscal year and was conducted by a team from the Parks Canada Office of Internal Audit and Evaluation. The last internal audit of the program was in 2002.

The national parks network consists of 42 parks with a total area of 268,000 square kilometres. The Agency is the largest federal land manager responsible for the management of wildfires. Under the National Parks Act, the Parks Canada Agency (PCA) is required to provide fire fighting services for wildfires in national parks, choosing the most suitable intervention for ensuring public safety and protection of infrastructure while also minimizing costs and assuming responsibility for governance, operational intervention, surveillance and reporting. Due to climate change, the impact of wildfires has grown over the last ten years. In fact, they are more frequent and more destructive.

In 2005, the Parks Canada Agency developed a fire management strategy including the use of fire for achieving objectives specific to ecosystem conservation. The new strategy was also used for revision of management directive 2.4.4, Fire Management, completed in March 2005. The thrust of the program was to provide effective fire control measures and phased approach to fire use through the implementation of a resource-sharing program.

Field unit Superintendents are responsible for ensuring that their fire management plans are developed on the basis of approved ecological/cultural objectives and take into account the risk of fire recognized in the unit’s management plan.

Every year, the PCA budget allocates an amount for forest fire pre-suppression costs. This amount must be used solely for fire management program activities. If needed, a request for additional funds is made to Treasury Board to top up the difference between program allocation and actual needs. Over the last 25 forest fire seasons, the Agency has received additional funds 22 times.

The objectives of this audit were to ascertain that due diligence is being exercised in the main administrative procedures pertaining to the fire management program and that the processes and controls in place are appropriate and in compliance with Treasury Board Secretariat (TBS) and Parks Canada Agency policies and practices.

This exercise encompasses the examination of the management control framework as well as the main financial sectors of the fire management program. The audit of expenditures covered the period from April 1, 2007 to March 30, 2008.

The audit method included the examination of relevant supporting documents, interviews with National Office personnel involved in the fire management program and personnel at the sites visited, as well as a sampling of transactions in the main financial sectors. The visits to the various National Parks of Canada took place according to the following schedule:

Banff – June 9 to 13, 2008
Lake Louise/Yoho/Kootenay – June 16 to 20, 2008
Jasper – June 23 to 27, 2008
Prince Albert – August 4 to 8, 2008
Wood Buffalo – September 8 to 10, 2008
Waterton Lakes - September 22 to 24, 2008
La Mauricie – September 30 to October 2, 2008

In our opinion, the audit work performed and the evidence assembled support the findings in this report.

Overall, the expenses incurred were related to fire management. The audit showed that Field Units are managing their expenditures appropriately and only a few exceptions were noted. However, the control framework should be strengthened by increasing and improving the monitoring activities. Measures must be developed to reduce the risk of non-compliance with TBS and PCA policies. Procedures established and implemented must reinforce due diligence in the financial sector and allow greater assurance that the funds allocated to fires were received by the field units and that they were used solely for fire management program purposes.

Recommendations

The Director General, National Parks Directorate must:

1)
Ensure that documents such as the three-year plan and operating and financial procedures are formalized to ensure uniformity in financial practices and submissions.

2)
Ensure that documentation sent to employees is available in both official languages, where applicable, in order to comply with the Official Languages Act.

3)
Ensure that a description of specific and routine tasks is developed for the program manager in the field units in order to facilitate the integration of new employees while also providing continuity in activities and preserving corporate memory.

4)
Ensure that roles and responsibilities are defined and disseminated and that management directive 2.4.4, Fire Management reflects the changes made to the National Parks Directorate reporting structure.

5)
Ensure that appropriate measures are in place for protecting program management data to prevent loss of information and to preserve event history.

6)
Ensure that steps are taken to keep employee training records up to date and accessible through the Parks Canada fire information system [PFIS] to confirm the skill levels of employees deployed when a fire occurs.

7)
See to the development and implementation of a national inventory control system to keep equipment at an acceptable level and reduce purchasing costs.

8)
Ensure that an equipment replacement plan is developed to maintain a standard of quality and prevent excessive costs for a given period.

9)
Determine financial information needs in cooperation with the various stakeholders for the purpose of developing, with the Star team, appropriate training or a modification of the system allowing parallel systems to be eliminated.

10)
Ensure that financial practices correspond to financial directives.

11)
Ensure that the three-year plan is free of errors and aligned with the National Office financial documents (e.g. the Q) prior to submission.

12)
Ensure that the core budgets assigned to the field units correspond to the total of activities planned and approved in the three-year plan.

13)
Ensure that the amounts received from other sources, such as ecological integrity, are clearly identified and consistent in all documents used, in order to facilitate tracking.

14)
Ensure that the fire management program management structure in applicable field units respects the delegation of financial authority.

15)
Establish a system for corroborating financial data based on the 4 activity codes assigned to the fire management program.

16)
See to introducing a control of helicopter hours of flying time so that costs can be shared, if applicable.

17)
Ensure that applicable field units record the funds in the financial system as soon as expenditures are committed in order to comply with financial policies in effect.

18)
Institute a system for reconciling requests for emergency fund to the National Office and the actual costs, in order to confirm the accuracy of fund transfers.

19)
With the cooperation of the Human Resources Branch, establish hiring procedures for the fire fighters used in emergency situations in order to clarify their status and meet our obligations.

20)
Clarify the current distribution of emergency funds between public safety and fire management at the field unit level to reflect current fire program, public safety and field unit priorities.

21)
Ensure that the program manager in applicable field units controls use of cheques from the departmental bank account in order to limit the inherent risks of this practice.

22)
Ensure that the field units abide by the timeline established for transferring costs by journal voucher in order to facilitate requests for emergency funds as well as reconciliations.

1.0 Overview

Background

The Fire Management Program audit, noted in the submission to Treasury Board, was included in the Office of Internal Audit and Evaluation’s three-year plan for the 2008-2009 fiscal year and was conducted by a team from the Parks Canada Office of Internal Audit and Evaluation. The last internal audit of the program was in 2002.

Pursuant to the National Parks Act, the Parks Canada Agency is required to provide services for managing wildfires in the national parks and national historic sites administered by Parks Canada, choosing the most suitable intervention to ensure the public’s safety and protect infrastructure while also minimizing costs. The national parks network consists of 42 parks with a total area of 268,000 square kilometres. The Agency is the largest federal land manager responsible for the management of wildfires.

Fire management has evolved a great deal, not only in Canada’s national parks and sites, but also throughout the world. In 2005, the Parks Canada Agency developed a fire management strategy as well as programs using fire to achieve specific ecosystem conservation objectives. The new strategy was also used for revision of management directive 2.4.4, Fire Management (pertaining to fire management on land managed by Parks Canada), completed in March 2005. The thrust of the program was to provide effective fire control and use measures by implementing a resource-sharing program.

The Fire Management Program manages wildfire intervention by taking charge of governance, operational intervention, surveillance and reporting. The objectives of the fire management program are to allow the ecological process of fire to maintain the health and diversity of park ecosystems and to minimize the chances for natural disaster and losses that can involve public infrastructure and private property.

Every year, the PCA budget allocates an amount for covering forest fire pre-suppression costs. This amount must be used solely for fire management program activities. Field units with specialized resources for fire management receive their core budget from fire management program moneys to cover the cost of goods and services related to the program. Field units at higher risk for fires also receive an amount for covering the salary costs of employees assigned to fire operations. Internal transfers between programs with common objectives are also made in order to allocate money to the Agency’s priority sectors. Thus, for several years, the fire management program has been receiving money from the ecological integrity program for projects corresponding to their objectives. In addition, every year the Agency places money in an emergency reserve fund that can be used for covering costs related to forest fire suppression, among other things. If needed, a request can be made for additional funds through a year-end submission to Treasury Board to make up the difference between the amount available for the program and the actual costs incurred. Over the last 25 forest fire seasons, the Agency has received additional funds 22 times. Due to climate change, the impact of wildfires has increased over the last 10 years. These fires are more frequent and more destructive.

Objectives and Scope

This audit’s objectives were to:

  1. Determine the effectiveness of the management control framework, and
  2. Ensure that the controls are in place and functioning.

This exercise included an examination of the management control framework as well as a sampling of transactions from the main financial sectors related to the fire management program.

The audit of expenditures covered the period from April 1, 2007 to March 30, 2008 and was performed by a team from the Parks Canada Office of Internal Audit and Evaluation.

Methodology

The audit method included:

  • Examination of the file from the 2002 audit
  • Examination of the pertinent supporting documents, in particular:
    • The National Fire Management Plan (2007-8 to 2009-10)
    • Parks Canada Agency National Fire Management Strategy
    • Management directive 2.4.4, Parks Canada fire management
    • Provisional fire management safety standards
    • Financial directives
    • The draft financial guide for standard operating procedures
    • The fire operations manual
  • Interviews with staff involved in the fire management program at the National Office and the sites visited
  • On-site examination of a sample of transactions made in the 2007-2008 fiscal year.

The sample of transactions was established on the basis of data selected using the STAR financial system according to the 4 types of activities related to the fire management program and of relatively significant amounts. In addition, a selection was made from among lesser expenditures to ensure that coverage of expenditures was balanced and representative.

The visits to the various National Parks of Canada took place according to the following schedule:

Banff – June 9 to 13, 2008
Lake Louise/Yoho/Kootenay – June 16 to 20, 2008
Jasper – June 23 to 27, 2008
Prince Albert – August 4 to 8, 2008
Wood Buffalo – September 8 to 10, 2008
Waterton Lakes - September 22 to 24, 2008
La Mauricie – September 30 to October 2, 2008

Once the on-site audit work had been completed, a meeting with the Field unit Superintendent or his representative took place to present and discuss the deficiencies observed during the audit and the anticipated recommendations that would be made.

Our observations and recommendations were made based on the audit report evaluation system shown below:

Audit reporting rating system

RED Unsatisfactory Controls are not functioning or are nonexistent. Immediate management actions need to be taken to correct the situation.
ORANGE Significant improvements required Controls in place are weak. Several major issues were noted that could jeopardize the achievement of program/operational objectives. Immediate management actions need to be taken to address the control deficiencies noted.
YELLOW Moderate improvements required Some controls are in place and functioning. However, major issues were noted and need to be addressed. These issues could have an impact on the achievement or not of program/operational objectives.
BLUE Minor improvements required Many of the controls are functioning as intended. However, some minor changes are necessary to make the control environment more effective and efficient.
GREEN Under control Controls are functioning as intended and no additional actions are necessary at this time.

Statement of Assurance

It is our opinion that the audit work done and the evidence gathered support the findings in this report.

Conclusion

Overall, the expenditures incurred were related to fire management. The audit showed that Field Units are managing their expenditures appropriately and only a few exceptions were noted. However, the control framework must be strengthened by increasing and improving the monitoring activities. Measures must be developed to reduce the risk of non-compliance with TBS and PCA policies. The procedures established and implemented must reinforce due diligence in the financial sector and allow increased assurance that funds allocated to fires have been received by field units and that they are used solely for fire management program purposes.

Summary of the audit report scores:

Ref. Management process Score Description
2.1 Management control framework ORANGE Significant improvements needed
2.2.1 The controls in place ensure that money is received as planned YELLOW Moderate improvements required
2.2.2 Expenditures meet the criteria established by Treasury Board and Parks Canada YELLOW Moderate improvements required

2.0 Observations and Recommendations

2.1 Management Control Framework

ORANGE Significant improvements required Controls in place are weak. Several major issues were noted that could jeopardize the achievement of program/operational objectives. Immediate management actions need to be taken to address the control deficiencies noted.

A management control framework must be put in place in all organizations, projects and programs to support operations and ensure that employees are able to effectively and efficiently perform their tasks. The key components of an effective management control framework are specifically: clear governance, well-defined roles and responsibilities, effective communication, control of assets, and regular control measures.

Governance

The fire management program is described in the national fire management strategy as well as in management directive 2.4.4, Parks Canada fire management, revised in March 2005. This directive stipulates that all of a field unit’s fire management activities must be fully described in a fire management plan covering a 10-year period and established in cooperation with the surrounding jurisdictions and the communities involved. Field units must produce a master plan to describe their operations for a 10 to 15 year period. Since the master plan groups together the entire unit’s programs and operations, it provides the thrust of the fire management program. The fire management plan and wild land management objectives must be aligned with the unit’s master plan. Because the fire management program includes control of fires and the use of fire for preventive and ecological purposes, the unit’s fire management plan must therefore include a 5-year schedule of prescribed fires and fuel management activities.

Fire management plans are examined by a local occupational health and safety committee as well as by members appointed by the National Fire Management Committee (NFMC), whose role is to provide strategic coordination, technical support and recommendations. The Field Unit Superintendent must approve his entity’s plans before they are submitted to the senior national fire management officer, who develops a 3-year national fire management plan, which must be reviewed and approved by the National Fire Management Committee. This committee consists of:

  • 2 Field Unit Superintendents (1 from Eastern Canada and the other from Western Canada)
  • Chief, Ecosystem Protection Division, National Parks Directorate
  • The senior national fire management officer
  • 1 fire management warden
  • 1 Service Centre manager, ecosystem service
  • 1 park ecologist
  • 1 communications officer
  • 1 resource conservation manager

The planning steps are clearly defined. The field units visited understand the process and enforce its application.

A training program is developed for all Parks Canada employees participating in fire management operations. Every year, before the start of the fire season, basic training is given to employees involved in the program and a medical/fitness examination is required to ensure that they meet the standards established by the Canadian Interagency Forest Fire Centre (CIFFC). More in-depth training may also be offered to some members of the team so that the unit is in compliance with its classification level.

Performance indicators are used at the local and national levels to evaluate the program’s effectiveness. Some objectives, such as area burned, intensity of the burn and costs can be observed in the short term. Over the medium term, instead, the area burned compared to the burn plan is observed. Ecological performance indicators have also been developed to verify whether or not established ecological objectives in the various sites have been achieved.

Elements of the governance are in place but need to be improved. The audit showed that a number of documents have been written and are accessible through the Parks Canada fire information system. The documents developed over the years for the fire management program are for the most part in draft stage but nevertheless implemented in all regions of the country. Moreover, most of these documents are available in English only. Therefore, these documents should first and foremost be formalized and made available in both official languages as set out in Section 36.1a of the Official Languages Act.

Roles and responsibilities

The various stakeholders’ roles and responsibilities in the Parks Canada fire management program, i.e. the field units, service centres, the National Office and the National Fire Management Committee, are described in management directive 2.4.4, Fire Management. Each of the stakeholders has a well-defined role and responsibility in each of the following categories:

  • Policies, standards, procedures and protocols
  • Organizational liaison
  • Program implementation
  • National Resource Deployment

Furthermore, as a member of the Canadian Interagency Forest Fire Centre, the Agency is required to provide data on fires, equipment and personnel. This is the responsibility of the senior national fire management officer at the National Office.

According to directive 2.4.4 on fire management, the Director General, National Parks Directorate is responsible for the overall management of the fire management program. The program comes under the responsibility of the National Parks Directorate Chief of Ecosystem Protection. He must ensure that the operating, administrative and financial practices meet the requirements. Under his authority, the senior national fire management officer at the National Office sees to the coordination of operations as well as the preparation of a national fire management plan and the annual report submitted to the NFMC. The National Fire Management Committee makes its recommendations to the Director General of National Parks Directorate, who in turn sees to obtaining Finance Committee approval.

The Field Unit Superintendents are responsible for ensuring that their fire management plans are developed on the basis of approved ecological/cultural objectives and take into account the wildfire risk recognized in the unit’s master plan. The conception, revision and approval of controlled burn plans and fuel management are field unit superintendent’s responsibility.

During the forest fire season, the role of the national fire duty officer will be assumed by fire management officers or national fire management wardens according to a schedule established at the start of the season and approved by the NFMC. The national fire duty officer acts as operational representative of the National Parks Directorate and reports to the Chief of Ecosystem Protection. Those in charge of the management unit programs report all situations requiring action or intervention to the national duty officer, who sees to taking the appropriate steps on the basis of the information received.

A generic description for the various program positions is available through the Parks Canada Fire Information System (PFIS). Operational tasks are described by position. However, specific and routine administrative tasks of program managers in the field units are not defined, which could have a negative impact on program continuity as well as on sound management. Due to the variability in each field unit operations a detailed description for this position would facilitate a new employee’s integration in an area as specific as fire management.

Organizational structural changes have occurred in the National Parks Directorate due to ongoing re-organization. The chief of ecosystem protection position was removed without however clearly reassigning the positions responsibilities. For the time being, the senior national fire management officer is assuming more responsibilities and reports to the Executive Director, Ecological Integrity Branch. The National Parks Directorate’s new organizational structure, which had not been approved at the time of the audit, does not reflect the structure described in directive 2.4.4 Fire Management.

Communication

The cooperation and participation of neighbouring communities are essential for ensuring that program objectives are met. An effective communication and consultation system greatly contributes to sharing and fosters compliance with the program vision. In each of the field units visited, consultation had taken place with the neighbouring communities as well as with the various levels of government. Each field unit has created its network in order to properly inform its partners/stakeholders as well as the surrounding residents. Each field unit uses the method that seems most appropriate for communicating with its partners/stakeholders and employees. Posters, releases in local newspapers, as well as the radio stations and occasionally even telephone lists are used for communicating with the clientele. E-mail is the means used most for communicating with employees. Posters are also put up so that employees who do not have computer access are not neglected.

Effective communication, from the time a fire is planned until it is put out, is essential so that operational risks are limited. When events occur, the field unit must complete forms to document fires. The forms are used for updating a daily situation report, by indicating the nature of the fire and the material and human resources deployed. Inputting the data makes it easier to assess effects and thus make the necessary corrections in order to achieve the program objectives. The Parks Canada fire information system is used to gather various types of information concerning the program. It includes a great deal of information that is useful and necessary for operations such as financial policies, helicopter contracts, human resources movement, material resources movement, employee training records and reports on activity at the various sites. The system also uses the data gathered to create national reports that are sent to the CIFFC. It is therefore essential to have a reliable database. The information system used at this time is obsolete, having exceeded its life expectancy. Moreover, it is not compatible with the other automated systems at Parks Canada and is not supported by technical services. Some flaws have been discovered and noted by the field units including data input into the system’s memory not being saved. These situations are known to the National Office and steps have already been undertaken to correct the situation. One proposed solution now being evaluated is that various organizations and operations share software already in use in a number of the provinces. After modifications for meeting Parks Canada needs, various Agency programs and services could use this system. Trials for this new system are being considered for March 2009.

The incident commander is responsible for ensuring that employees deployed meet the training and experience requirements of their positions. Each field unit is responsible for maintaining its skill level and informing the National Office if a training deficiency is noted. Employees are responsible for updating their training records in the Parks Canada fire information system. The field units visited acknowledge doing little or no follow-up to ensure that employee records are up to date. In addition, one of the sites visited does not use any automated system for monitoring. Instead, certificate copies are kept at the Human Resources office. Any inaccurate or inaccessible information in the Parks Canada fire information system could have a negative impact on how operations are carried out and undermine safety. Steps should be taken to ensure that the incident commander has access to up-to-date employee training records for employees involved in the fire management program so he can confirm the skill levels of employees deployed during a fire.

Inventory

A national inventory of equipment under the responsibility of the Western and Northern service centre - Calgary office is kept in Banff. This national cache is used for the distribution of material resources in situations requiring more equipment for managing fires. In addition, trailers full of basic equipment have been created and placed in strategic locations across the country. Using trailers facilitates transportation and reduces preparation time. They belong to the national inventory but are the temporary responsibility of the host field unit. Furthermore, each of the field units involved in the program maintains an equipment and supply inventory that can support initial attack for a given period of time. Care and storage of the equipment are an obvious priority for the field units. They each have an inventory management system generally supported by Excel software. However, physical inventories are only taken sporadically. No consistent procedure or specific form exists for tracking or taking inventory. A regular inventory allows the numbers recorded in the management system to be ascertained and the equipment’s condition visually confirmed so that future needs can be better planned.

In 2005, a national equipment inventory took place, which allowed the identification of $5.4 million worth of equipment assigned to the Parks Canada fire management program at 39 sites across the country. Following this exercise, an automated system was supposed to be installed to maintain inventories at acceptable levels and centralize purchasing in order to reduce costs while also ensuring that quality standards are met. At the time of the audit, no national inventory system was in place. Moreover, no replacement plan had been developed; only an amount of money is allocated for purchasing equipment without, however, being supported by a long-term plan. Only one field unit visited had developed an equipment replacement plan. The equipment manager at the Western and Northern service centre - Calgary office should establish a national equipment replacement plan in order to maintain a quality standard and avoid excessive costs for a given period.

Control

In the 2002 audit, recommendations were made for the purpose of eliminating, if possible, parallel systems and facilitating the compilation of financial data. In order to maintain appropriate management of budget oversight, each field unit had to resort to even more elaborate systems, as they were unable to obtain the information they needed using the Star financial system. Each manipulation increases the amount of time spent as well as the risk of errors. Financial information needs should be determined in consultation with the field units’ finance personnel, the National Office and those in charge of the program. The ability to create reports meeting program needs using Star should be assessed.

Standardized procedures were to have been introduced for obtaining an operational and financial standard. The sites use a draft set of procedures that has not been formalized. Only a summary of provisional fire management safety standards has been approved. Emphasis should be placed on revising the procedures and seeing that they are approved so as to maintain uniformity and prevent confusion in practice.

The financial guide stipulates that emergency funds are not to be used for capital expenditures. In practice, for a number of years, amounts of money have been requested from the National Office as emergency funds for capital expenditures, including for equipment that has been damaged or destroyed during a fire. No amendment has been made to the financial directive to reflect the change of practice. The situation must therefore be clarified so that practices match the guidelines and comply with the rules governing emergency funds.

Conclusion

A number of modifications must be made to the management control framework in order to ensure the program’s effectiveness and compliance with existing laws, procedures and directives. The items raised may have a negative impact on operations as well as on achieving program objectives.

Recommendations:

The Director General, National Parks Directorate must:

1)
Ensure that documents such as the three-year plan and operating and financial procedures are formalized to ensure uniformity in financial practices and submissions.

Management response

Agree: The Director General National Parks Directorate (DG-NPD) will ensure that the three year National Fire Management Plan is completed and approved following Management Directive 2.4.4: Fire Management for the next submission by May 1, 2009. The DG-NPD will work with the Deputy Chief Financial Officer (DCFO) and operational Director Generals East and West to revise the Fire Finance Standard Procedures and to provide Operating uniformity in financial practices and submissions by the end of fiscal year 2009-2010. The DG-NPD will ensure that Standard Operating Procedures will be revised, approved and translated on an ongoing basis with priority given to those that deal with staff occupational health and safety in fiscal year 2009-2010.

2)
Ensure that documentation sent to employees is available in both official languages, where applicable, in order to be in compliance with the Official Languages Act.

Management response

Agree: The DG-NPD will ensure that the National Fire Management Plan and Report will be translated after approval for fiscal year 2009-2010. Other documents of national scope, which include the Standard Operating Procedures and Operations Manual, will also be translated on a priority basis as they are revised and approved.

3)
Ensure that a description of specific routine tasks is developed for the program manager in the field units in order to facilitate the integration of new employees by providing continuity in activities and preserving corporate memory.

Management response

Partially Agree: As described in the audit report, generic job descriptions and tasks are listed for fire positions for all network members. Individual job descriptions and tasks at the field level are the responsibility of the field unit, which are tailored to meet the unit’s needs. All resource conservation positions are in a state of change with the current renewal exercise. Similar to other agency programs the DG NPD will ensure National Fire Management Program will work in collaboration with field units to help them meet their fire management and resource conservation needs.

4)
Ensure that roles and responsibilities are defined and disseminated and that Management Directive 2.4.4, Fire Management reflects the changes made to the National Parks Directorate reporting structure.

Management response

Partial Agreement: Interim reporting relationships were implemented after the removal of the Chief of Ecosystem Protection Division. The Senior National Fire Management Officer took on additional duties and reports directly to the Executive Director, Ecological Integrity. The interim changes to the reporting relationship of the National Fire Management program is a product of the establishment of the Law Enforcement Branch and the ongoing restructuring of the National Parks Directorate. The DG-NPD will make final changes to the reporting relationship within the operations manual of the fire management program and then revise the directive only if significant changes are made by the end of fiscal year 2009-2010.

5)
Ensure that appropriate measures are in place for protecting program management data in order to prevent loss of information and to preserve event history.

Management response

Agree: The DG-NPD will ensure that the next version of the Parks Fire Information System will address this issue. The work is currently underway with trials in 2009 with full implementation scheduled for the 2010 operating season consistent with CIO policies on information management.

6)
Ensure that steps are taken to keep employee-training records up to date and accessible through the Parks Canada fire information system to confirm the skill levels of employees deployed when a fire occurs.

Management response

Agree: The DG-NPD will meet the basic needs of monitoring employee skill level using the current Fire Training and Certification database. Spot audits will be undertaken in fiscal year 2009-2010 to ensure compliance. The DG-NPD in collaboration with HRNO will work toward replacing this system with a more integrated PC-wide system estimated to be complete by the end of fiscal year 2010-2011.

7)
See to the development and implementation of a national inventory control system in order to keep equipment at an acceptable level and reduce purchasing costs.

Management response

Agree: The DG-NPD will collaborate with the Director of Asset Management (for assets greater than $10,000) and the DCFO (for assets less than $10,000) to meet the requirements of fire management assets tracking through the national asset-tracking project by the end of fiscal year 2010-2011.

8)
Ensure that an equipment replacement plan is developed to maintain a standard of quality and prevent excessive costs for a given period.

Management response

Agree: The DG-NPD will ensure that national stocking levels are established and a capital replacement plan is in place for fiscal year 2009-2010

9)
Determine financial information needs in cooperation with the various stakeholders for the purpose of developing, with the Star team, appropriate training or a modification of the system allowing parallel systems to be eliminated.

Management response

Agree: The DG-NPD will work with the DCFO and operational DGs to revise the Fire Finance Standard Operating Procedures and to provide uniformity in financial practices and submissions including modifications necessary to reduce the reliance on parallel systems by the end of fiscal year 2009-2010.

10)
Ensure that financial practices correspond to financial directives.

Management response

Agree: See management response to recommendation number one (1).

2.2 Existence of Functional Controls

The controls in place must support the various components of a good management control framework. They ensure operational integrity and transparency and reinforce decision-making. With regard to the fire management program, the purpose of the audit was to ensure that the controls in place allowed confirmation that approved funds are received as planned, that they are only used for fire management program purposes, and that the amounts spent meet Treasury Board and Agency criteria.

2.2.1 The controls in place ensure that moneys are received as prescribed.

YELLOW Moderate improvements required Some controls are in place and functioning. However, major issues were noted and need to be addressed. These issues could have an impact on the achievement of program/operational objectives.

The overall fire management program budget comes from various sources. Calculation of the program’s core budget comes from amounts recorded under the heading “Emergency Funds” in the Brick report plus the amounts converted into salaries for fire fighters. All amounts are transferred to the field units under goods and services and/or salaries. However, the reserve is kept at the National Office under the finance group’s responsibility. Transfers of funds from the ecological integrity program are also used to fund fire management program activities. A claim through a submission for forest fire suppression is made to Treasury Board to cover over-expenditures incurred on the funds available internally. Over the last twenty-five forest fire seasons, the Agency has requested and received additional funds twenty-two times. It should be noted that there is no guarantee that requests will be approved. The Agency must provide for internal transfers in the event that Treasury Board refuses to reimburse over-expenditures.

National Office:

The senior national fire management officer is responsible for submitting the three-year plan. The program manager and the finance group must work closely together in order to ascertain the amounts entered in the plan. This collaboration allows corroboration and confirmation of the provenance of the amounts transferred to the program budget.

A three-year plan (2007-2008 to 2009-2010) for the fire management program was submitted to the National Fire Management Committee as well as to the Finance Committee using data on the core budget including the reserve, projections of emergency fund requirements based on the history of the last 5 years, and an amount for internal reallocation. Examination of the three-year plan submission revealed various inaccuracies. Here are some examples:

  • The reserve is an amount available for all emergency situations within the Agency, not solely fire management. Therefore, the amount should not be included in the program’s core budget but rather as funds accessible. The amounts charged to the reserve by the program are generally requested from Treasury Board at the end of the year through a submission for forest fire suppression.

  • Amounts entered in the various fund allocation tables do not always correspond to the total of proposed activities. Some are unknown or incorrect. For example, two sections of the plan refer to the possible hiring of 8 technicians working equal amounts of time (50% of their time) in 2 areas of activity but the amounts entered as estimates differ by more than 35%, i.e. $344,000 in one table and $251,000 in the other.

  • In the original NFMP a $231,000 helicopter contract was attributed to the unit’s core budget; however, this unit has only received an historical amount of $169,000 as a goods and services budget, which is not adequate to pay the current contract costs. Therefore the unit requested the difference through the TB submission as a reclaimable expense instead of showing it as a supplement to the A-Base. This is one example of how the various NO financial documents are not aligned, making final reporting difficult.

  • The appendix submitted for the allocation of pre-suppression expenses also contains some errors. An extension of the period for which fire fighters are hired for operational purposes was recommended and approved. The costs related to the extension were estimated on the basis of teams in each of the field units involved. Only the estimated over-expenditure on the amount received initially by the field units in their core budget is to be distributed. Once again the lack of alignment in the financial documents made it impossible to assess the reasonableness of the allocations. The amounts assigned to field units could not be reconciled, since the history of amounts received is not traceable.

Although these are estimates for budget submission purposes, the risk of budget overruns is obvious if all activities were to be accepted as submitted. An audit of the compilations is essential in order to provide a realistic and consistent picture of projected fire management program costs and to provide budgetary balance to the field units involved.

Transfers between programs

Fire plays a dominant and recognized role in many of Canada’s natural ecosystems. In addition to emergency funds, since 2003, the program has been receiving moneys from the ecological integrity program. The National Office allocates these amounts based on the fire management plan in accordance with project proposals submitted by the units. According to the three-year plan, $2.1M from the ecological integrity program was to be distributed in 2007-2008. This amount was intended for various ecological activities related to fire management, including $500,000 allocated to fuel management and the remainder to various studies and hiring additional personnel assigned to the fire management program.

The examination of NO financial documents reveals differences in the amounts transferred from the ecological integrity program to the fire management program. At the end of each fiscal year the Agency has traditionally prepared a Treasury Board submission seeking reimbursement of program costs minus the program A-base resources and amounts reallocated internally by the Agency. The submission for 2007-2008 shows an amount of $1.9M as internal reallocation of the Agency’s funds. However, the financial system only shows an amount of 1.4M$ clearly linked to the fire management program. The difference ($500 000) is presumably coded under accounts related to ecological integrity program activities. The uncertainty of the amount transferred from the ecological integrity program to the fire management program increases the risk of underestimating the amount claimed to Treasury Board as overruns.

Field Units:

Every year Parks Canada allocates an amount of money in its budget for emergency funds, including a large portion for the fire management program. The funds are distributed among the field units according to their classification, which ranges from Level I to Level IV on the basis of the fire risk identified in the master plan. An amount is transferred from these moneys to salaries in order to maintain staff in certain parks that are deemed higher risk. Both amounts, namely that for goods and services and the amount for salaries, are included in the unit’s core budget.

Each field unit is able to establish its own management structure, and is responsible for allocating the budget in the cost centre(s) identified for the fire management program. Some of the field units have chosen to keep salaries in the resource protection cost centre and to separate only expenses for goods and services. This practice has caused a deviation from policies when the program manager who has delegation of authority for the goods and services cost centre has authorized time sheets and journal entries concerning the salaries for a cost centre for which he does not have delegation of authority. Particular attention is required in this type of structure. Other units have opted to create separate cost centres for goods and services, and salaries related to the program’s core budget and separate cost centres for expenditures related to emergency measures in order to facilitate budget control and the reconciliation of emergency fund requests. The program manager thus has delegation of authority for all cost centres related to the fire management program. This is a good management practice, which simplifies financial data auditing.

Conclusion

Expenditures were made appropriately, however the audit did not allow confirmation that the fire management program has all the amounts that were intended for it. Significant modifications must be made to the National Office financial documents to facilitate the tracking of fund transfers and to prevent budgetary imbalance. Furthermore, the field unit financial structures must ensure that delegations of authority are respected when authorizing expenditures.

Recommendations:

The Director General, National Parks Directorate must:

11)
Ensure that the three-year plan is free of errors and aligned with the National Office financial documents (e.g. the Q) prior to submission.

Management response

Agree: See management response to recommendation number one (1).

12)
Ensure that the core budgets assigned to the field units correspond to the total of activities planned and approved in the three-year plan.

Management response

Agree: The DG NPD in collaboration with the DCFO and operational DGs will ensure that core budgets assigned to the field units will be verified and will match the total of activities prescribed in the three year National Fire Management Plan. This submission will be completed by May 1, 2009 and approved in accordance with the Management Directive 2.4.4:Fire Management.

13)
Ensure that the amounts received from other sources, such as the ecological integrity program, are clearly identified and consistent in all documents used, in order to facilitate tracking.

Management response

Reservation: The funds will be allocated as part of the Agency’s Integrated Funding process with responsibility resting with the operational DGs. Protocols developed by the finance community will be followed to track the source of funding for fiscal year 2009-2010.

14)
Ensure that the fire management program structure in applicable field units respects the delegation of financial authority.

Management response

Agree: See management response to recommendation number one (1).

2.2.2 Amounts spent meet Treasury Board and Parks Canada criteria.

YELLOW Moderate improvements required Some controls are in place and functioning. However, major issues were noted and need to be addressed. These issues could have an impact on the achievement of program/operational objectives.

The core budget received by the field units for fire management must be used solely for purposes of that program. It must cover the fixed costs of pre-suppression as well as the various activities necessary for ensuring the program’s effectiveness. The core budget may be used for developing plans and projects, verification of fire indicators, fixed helicopter contracts, fire fighter salaries and training, purchase of equipment and supplies, and inventory maintenance. Amounts requested through submissions to Treasury Board must come from core budget over-expenditures incurred for fluctuating pre-suppression and suppression costs, and controlled burns.

All expenditures incurred related to the fire management program must be entered in one of the four financial activity codes that have been assigned to the program in the Star financial system in order to facilitate the matching of costs with the various activities. The four activity categories are:

Forest fires – Fixed pre-suppressions

Activities related to maintaining a state of pre-suppression preparedness that does not take into account the daily risks of fire nor incidents. This is primarily for pre-suppression and suppression contracts that are signed prior to the fire season in order to have rapid access to the desired services.

Forest fires – Varying pre-suppression

Activities related to pre-suppression which fluctuate on the basis of expected risks and actual fires. These are used for pre-deployment of fire fighting resources.

Forest fires – Emergency – Suppression

Activities related to direct suppression and recovery resulting from wildfire suppression measures. Expenses are governed by wildfire analysis.

Forest fires – Controlled burns

Activities related to controlled burns planned and approved at the start of the fire season.

The audit aimed to ascertain that the expenditures reported as related to fires were supported by documentation and meet the definition of authorized expenditure. The Star system was used to sample transactions by selecting data entries in the designated activity codes.

Financial coding

Coding is of crucial importance for financial evaluation of the program. The appropriate use of activity codes allows the valuing of costs related to each of the activities for a given site as well as for the program as a whole. These codes are also used for compiling total program expenditures for financial submission purposes, including the submission to Treasury Board for forest fire suppression. Those in charge of the program are not sufficiently aware of the importance of the activity codes, their priority being primarily focussed on the budget. None of the field units visited, nor the National Office performs audits of activity codes. Activity code audits would allow expenditures charged to the program from another activity unrelated to fires to be limited and ensure that program expenditures are coded properly. Units equipped with a suitable structure could easily introduce a control for this purpose. The Star system allows users to create various reports using various filters. Regular use of these reports could trace coding errors.

The audit identified a field unit that had under-estimated program costs by more than $460,000 by using an activity code that was not associated with the fire management program. The expenditures were legitimate and assigned to the correct cost centre, however they were not charged to the fire management program.

The following table indicates total expenditures entered in Star for the 2007-2008 fiscal year, by field unit visited, under the 4 activity codes assigned to fire management representing the net value and the percentage of transactions audited as well as the expenditure in helicopter costs which is the recurring item (with the exception of salaries) and the fire management program’s greatest expenditure.

Sites Visited Total expenditures
Fire activity codes
Total audited expenditures % of expenditures audited Total helicopter costs % of helicopter costs vs total expenditures
Banff 1,451,331 600,106 41.3 752,390 51.8
LLYK 1,178,146 571,287 48.5 540,738 45.9
Jasper 1,009,132 273,904 27.1 381,981 37.9
Prince Albert 594,645 36,204 6.1 33,921 5.7
Wood Buffalo 5,727,892 2,598,138 45.4 2,627,077 45.9
Waterton Lakes 782,978 531,948 67.9 480,080 61.3
La Mauricie 409,012 196,812 48.1 40,900 10.0
Helicopter costs

It should be noted that helicopter costs are high because some regions in certain parks’ interiors are difficult to reach and helicopter is often the only means to get there or at least the fastest and safest. For practical reasons, some field units have entered into fixed helicopter contracts that are paid for from the fire management program’s core budget. Contracts guarantee a certain number of flight hours at a set rate. Occasionally certain groups within the field units use the helicopters available for projects that are unrelated to fire management within the contract limitations. The individual in charge of the field unit’s fire management program must keep track of flight hours in order to be able to claim the costs from the other cost centres that use the helicopter in a slow period that resulted in exceeding the hours guaranteed by the contract. A good tracking system is implemented in 2 of the 7 units visited. The lack of discipline regarding the monitoring of flight hours results in higher costs for the program.

Furthermore, when fire danger is high, the field unit prepares a request for authorization for access to emergency funds and submits it to the national duty officer who forwards it to the senior national fire management officer. The senior national fire management officer sees to requests for transfers of funds to the field units with the National Office finance group, which controls the emergency fund reserve. The request is based on an estimate of operating needs for monitoring activities that could start a fire. For safety reasons and to ensure the availability of a helicopter, a 3-day contract with a guaranteed minimum of flight hours is provided for in the request. The varying pre-suppression costs, including helicopter and fuel costs, are generally requested from Treasury Board as emergency funds. The lack of control with regard to number of flight hours increases the likelihood of claiming costs that do not meet the established criteria.

Reconciliation

Financial procedures stipulate that the estimate submitted by the field unit for emergency funds and the actual operating costs must be reconciled. This step confirms that the funds were spent as prescribed and justifies a new request if the expenditure exceeds the estimate. However, if the estimate is greater than actual costs and the field unit has received a transfer of funds, the field unit is required to return the credit to the National Office.

To perform the reconciliation, the units must ensure that all expenditures are recorded in the system. Most of the units visited acknowledge that they do not enter committed funds. Inputting is not done until the invoice is paid. The point raised by the field units to this effect is the uncertainty regarding the duration of the event and thus of the related costs. Some invoices could remain unpaid for a number of months if the individual in charge of the program does not carry out strict monitoring, and thus have a negative impact on the reconciliation. This practice also goes against financial policies.

The audit revealed that the reconciliation between the estimates and actual expenditures varies from one field unit to the next. Some field units have detailed records with reports produced by the Star system to support requests. Deviations are flagged and efforts made to trace them. Other field units have a list of expenditures without supporting documentation and two field units acknowledge that they have not done reconciliation for the targeted period. It is therefore obvious that this procedure has not been uniformly implemented. Steps should be taken so that all field units comply with this procedure, the goal being to ascertain the legitimacy of requests for emergency funds and ensure that funds are not used for any purpose other than the fire management program.

Journal entries

Another difficulty noted is the timeline observed for journal vouchers. When a work team is exported to another site, the field unit must invoice the host site for expenditures incurred other than the employees’ regular salary. According to financial procedures, a journal entry accompanied by duly authorized supporting documents must be forwarded within 2 months of the team’s return to the home site. At the time of the audit of journal entries, some exceeded a 4-month period. These situations negatively affect budget oversight and being able to quickly compile the data necessary for reconciliation. A reminder of the procedure is necessary so that there is a reasonable timeline respected for transfers of expenditures between field units, thus facilitating budget oversight.

Temporary workers

At the operating level, it is current practice to have recourse to professional services for fire management, in addition to the employees at the various Parks Canada sites. This means duly executed contracts that comply with the policies in effect. In addition, the contract stipulates the responsibilities and obligations of the parties involved.

The audit showed that one field unit regularly used the services of temporary fire fighters outside the above-mentioned practices. These temporary fire fighters receive basic training in order to ensure that they meet training standards. They are called to work at the home site or at other Agency sites in emergencies. These individuals sign a document confirming the hourly rate of pay. At-source deductions are done manually for Canada Pension, Employment Insurance and income tax by the field unit. The individuals receive a cheque issued on a departmental bank account for the total number of hours worked net of said deductions. Payment in the financial system showed as “other professional costs”.

This practice has resulted in ambiguity with regard to the status of these individuals as either employees or contractors in the system. Therefore, it is essential to clarify, with the assistance of human resources directorate, the status of temporary fire fighters in order to comply with all policies, obligations and responsibilities related to this type of service. Hiring procedures for temporary fire fighters must be developed in order to standardize practices in the field units and manage risks for the Agency.

Sharing of funds

For a number of years, 2 of the 7 sites visited have been sharing the core budget of the fire management program with the search and rescue service. This situation had been noted in the past and clarification was to have been requested from the finance committee. During the audit, the finance group was unable to confirm the existence of a decision and no documentation could be found confirming management’s position. For one of the units, this practice has led to a greater request for emergency funds to make up the equivalent of the funds allocated to the search and rescue service. The need for a search and rescue service is not disputed but rather the provenance of its funding. Clarification is needed regarding the use of fire management program funds for funding the search and rescue service.

Cheques from the departmental bank account

Some units use cheques from the departmental bank account to pay travel claims, the objective being to reduce the reimbursement time. This practice goes against the government’s and the Agency’s desire to limit the use of these cheques to emergency situations. The goal is to reduce the risks related to this type of transaction and facilitate the tracking of financial operations.

Conclusion

Overall, expenditures audited were related to the fire management program. However, the absence of certain controls prevents us from confirming that the expenditures meet all established criteria and that the funds are used solely for the program. Some steps will have to be taken in order to clarify the practices in place and to introduce the necessary controls for correcting the items.

Recommendations:

The Director General, National Parks Directorate must:

15)
Establish a system that allows corroboration of financial data on the basis of the 4 activity codes assigned to the fire management program.

Management response

Agree: See management response to recommendation number one (1).

16)
See to introducing a control of helicopter flight hours so that costs can be shared, where applicable.

Management response

Agree: The DG NPD will ensure that the next version of the Parks Fire Information System will provide the ability to track helicopter usage and aid the FUS who are responsible for cost sharing where applicable. Updates are currently underway with trials in 2009-10 with full implementation scheduled for the 2010 operating season.

17)
Ensure that applicable field units record the funds in the financial system when expenditures are committed in order to comply with financial policies in effect.

Management response

Agree: See management response to recommendation number one (1).

18)
Institute a system for reconciling requests for emergency funds to the National Office and the actual costs, in order to confirm the accuracy of fund transfers.

Management response

Agree: See management response to recommendation number one (1).

19)
With the cooperation of Human Resources Branch, establish hiring procedures for fire fighters used in emergency situations in order to clarify their status and meet our obligations.

Management response

Agree: Although the policy for contract and employee hiring is clear, it’s application in the field requires clarification. The DG NPD will work with HRNO to reinforce hiring procedures for fire fighters used in emergency situations in order to clarify their status and meet our obligations by the beginning of fiscal year 2009-2010.

20)
Clarify the current distribution of emergency funds between public safety and fire management at the field unit level to reflect current fire program, public safety and field unit priorities.

Management response

Agree: The DG NPD in collaboration with the DCFO and operational DGs will ensure that core budgets assigned to the field units will be verified and revised to reflect the current fire program, public safety program and field unit priorities by the end of fiscal year 2009-2010.

21)
Ensure that the program manager in applicable field units controls the use of cheques from the departmental bank account in order to limit the inherent risks of this practice.

Management response

Agree: The DG NPD will work with the DCFO to ensure the appropriate use of departmental cheques and fire management program managers at the field level use more appropriate financial tools. The DG-NPD with the assistance of the DCFO office’s will communicate this requirement to the field units in fiscal year 2009-2010.

22)
Ensure that the field units abide by the time line established for transferring costs by journal voucher in order to facilitate requests for emergency funds as well as reconciliations.

Management response

Agree: See management response to recommendation number one (1).