Audit of CIHR's Management, Resources and Results Structures

Table of Contents

• Executive Summary
  • Introduction
  • Risk Addressed by the Audit
  • Objective
  • Scope
  • Overall Audit Opinion
  • Statement of Assurance
  • Summary of Internal Control Strengths
  • Summary of Internal Control Weaknesses
• Detailed Report
  • Methodology and Criteria
  • Observations, Recommendations, and Management Action Plan
• Appendix
  • Audit Criteria and Conclusions

Executive Summary

Introduction

The Internal Audit of CIHR's Management, Resource and Results Structure (MRRS) is part of the 2012–13 Risk-Based Annual Internal Audit Plan, which has been approved by the Canadian Institutes of Health Research's (CIHR) Governing Council (GC).  A horizontal audit of MRRS is currently being completed by the Office of the Comptroller General.  The results of their work are expected to be available in December 2012.

The Canadian Institutes of Health Research

The Canadian Institutes of Health Research is the Government of Canada's agency responsible for funding health research in Canada.  CIHR was created in June 2000 under the authority of the CIHR Act and reports to Parliament through the Minister of Health.  CIHR's mandate is to "excel, according to internationally accepted standards of scientific excellence, in the creation of new knowledge and its translation into improved health for Canadians, more effective health services and products and a strengthened Canadian health–care system."  CIHR comprises 13 "virtual" institutes – each headed by a Scientific Director, who is assisted by an Institute Advisory Board - which bring together all partners in the research process – the people who fund research, those who carry it out, and those who use its results – to share ideas and focus on what Canadians need: good health and the means to prevent and fight disease.  Each Institute supports a broad spectrum of research in its topic areas and, in consultation with its stakeholders, sets priorities for research in those areas.  CIHR funds over 13,000 researchers and trainees in universities, teaching hospitals, and other health organizations and research centres in Canada and abroad.

Management, Resources and Results Structure

The Policy on Management, Resources and Results Structures (MRRS¹) supports the development of a common government–wide approach to the identification of a department's programming activities and to the collection, management, and reporting of financial and non–financial information relative to those programs. The policy provides departments with the flexibility and discretion they need to design and manage their programs in a manner that best achieves results for Canadians.

The policy, issued pursuant to section 7 of the Financial Administration Act, reinforces the government's commitment to strengthen public sector management and accountability, consistent with the Management Accountability Framework, by providing a standard basis for reporting to citizens and Parliament on the alignment of resources, programs and results.  The objective of the MRRS policy is to ensure that the government and Parliament receive integrated financial and non–financial program performance information for use to support improved allocation and reallocation decisions in individual departments and across the government.

The establishment of a MRRS in each department is a key element of the Expenditure Management System because it provides a common framework within which financial and non–financial information is linked across government.

The deputy head is accountable to his or her Minister and to the Treasury Board for the establishment of an appropriate MRRS, for the management of the department and for public performance reporting using the MRRS.

The main components of a MRRS include:

Strategic Outcomes: measurable long–term and enduring benefits to Canadians that stem from a department or agency's mandate, vision and core functions;

Program Alignment Architecture: a structured inventory of all programs being delivered by a department or agency that are linked to its Strategic Outcomes, including a supporting Performance Measurement Framework, which sets out the expected results to be achieved and the specific outputs to be produced by a program; and

Governance Structure: the decision–making mechanisms, responsibilities and accountabilities within a department or agency.

CIHR's latest MRRS structure was submitted and approved by Treasury Board in 2009.  Based on this document, the Program Alignment Architecture (PAA) codes were also finalized and are used in both the financial and non–financial reporting carried out by the agency.

Risk Addressed by the Audit

In accordance with the Treasury Board of Canada (TB) Policy on Internal Audit, this audit addressed the risks, controls, and governance processes associated with CIHR's compliance to the MRRS Policy.  The risk addressed is that CIHR is not providing the government and Parliament with accurate and informative program performance information.  This risk is related to the following TBS Management Accountability Framework (MAF) elements:

• Policy and Programs – "Departmental research and analytic capacity is developed and sustained to assure high quality policy options, program design and advice to ministers";
• Governance and Strategic Directions – "The essential conditions – internal coherence, corporate discipline and alignment to outcomes – are in place for providing effective strategic direction, support to the minister and Parliament and the delivery of results" and;
• Results and Performance – "Relevant information on results is gathered and used to make departmental decisions, and public reporting is balanced, transparent, and easy to understand."

Objective

The audit objective was to assess CIHR's compliance to the Treasury Board Policy on Management, Resources and Results Structures.  The audit provided assurance that Treasury Board and Parliament are receiving integrated financial and non–financial program performance information to support funding allocation and reallocation decisions from CIHR.

Scope

The audit focused on the Policy on Management, Resources and Results Structures and its implementation and application at CIHR in terms of integrated financial and non–financial program performance information.  It is management's intention to revise CIHR's current MRRS and PAA structure in fiscal year 2013–2014.  At that time management's intention is to align the strategic plan, MRRS, performance measurement, and the reporting framework.  Therefore, the audit relied on the present MRRS and PAA structure with the expectation that it can provide some "lessons learned" to assist with the development and implementation of the new structure.

Overall Audit Opinion

The audit has concluded that there are moderate issues with CIHR's adherence to the MRRS policy and the information contained in the MRRS, however exposure is limited because either the likelihood or the impact of the risk is not high.

Statement of Conformance

In my professional judgement as Chief Audit Executive, sufficient and appropriate audit procedures have been conducted and evidence gathered to support the accuracy of the opinion provided in this report.  The audit of MRRS was conducted in accordance with the Federal Government's Policy on Internal Audit and related professional standards.  It conforms with the Internal Auditing Standards for the Government of Canada, as supported by the results of a quality assurance and improvement program.

Summary of Strengths

Through the course of the audit, the following MRRS strengths were observed:

• CIHR has a single Strategic Outcome that correlates to its vision, mission, and mandate.
• CIHR's Strategic Outcome provides a basis for establishing a linkage between other government funding organizations and the Federal Government's Science and Technology strategy and Health Canada's science and research strategies.
• In the 2009 MAF assessment, CIHR received a "strong" rating in the quality of its performance reporting in part based on the MRRS.  The MAF noted that CIHR had demonstrated strong links between its performance and plans.

Summary of Improvement Opportunities

The following aspects of CIHR's MRRS require management's attention, should be considered when the MRRS is refreshed, as planned during the 2013–2014 fiscal year:

• Management needs to adopt a governance process around CIHR's MRRS that ensures regular and timely updates of its appropriateness.
• When updating MRRS, management needs to ensure all data sources are available in the frequency required and the cost and effort required to attain this information is reasonable in terms of the information it provides.
• CIHR does not clearly link the outcomes and outputs identified in the MRRS document to the performance plans of the organization's senior executives.

Internal Audit thanks management and staff for their assistance and cooperation throughout the audit.

Martin Rubenstein
Chief Audit Executive
Canadian Institutes of Health Research

Detailed Report

Methodology and Criteria

The internal audit of CIHR's MRRS was conducted in accordance with the Federal Government Policy on Internal Audit. The principal audit techniques used included:

• interviews with management and staff at the Canadian Institutes of Health Research; and,
• examination of relevant documentation, policies, and reports that utilize MRRS information.

Controls were assessed as adequate if they were sufficient to minimize the risks that threaten the achievement of objectives. Detailed criteria and conclusions are contained in the Appendix to this report.

The audit was conducted between June 2012 and September 2012.

Appendix

The overall conclusion considers the cumulative risk exposure related to the audit observations in the context of the above criteria.

Date modified:

2013-04-02