Audit of Vessels of Concern Initiative

From: Transport Canada

Internal audit report outlining results of the assessment of the Audit of Vessels of Concern Initiative at Transport Canada.

On this page

Executive Summary

Introduction

Canada has the world's longest coastline, and water is one of the most important resources. In 2016, the federal government launched the $1.5 billion national Oceans Protection Plan (OPP), the largest investment the Government of Canada has made to protect coasts and waterways. The Vessels of Concern (VOC) initiative is a component of the OPP aiming to reduce abandonment of vessels and make progress towards addressing (i.e. removing, remediating or monitoring) vessels of concern.

Objective and scope

The objective of the Audit of Vessels of Concern was to examine the design and effectiveness of the management framework established to oversee and manage the OPP sub-initiatives related to VOC. The audit examined Transport Canada's (TC) design and management for the VOC initiative.

Background

The VOC initiative is jointly delivered by TC and by the Department of Fisheries and Oceans (DFO)/Canadian Coast Guard (CCG), with total funding of $107M from 2017-2018 to 2021-2022. TC is responsible for managing $62M of the fund, while DFO/CCG is responsible for managing $45M. The initiative is composed of six sub-initiatives; five are led by TC and one is led by CCG.

Overall conclusion

Processes and controls related to financial management and engagement are working effectively to mitigate risks to meeting VOC's objectives and fulfilling its mandate. The audit identified opportunities to strengthen VOC's governance and processes related to the reporting of results.

Opportunities to strengthen the initiative

The VOC initiative is complex and involves many stakeholders in two departments. As such, it is important to clearly document the roles and responsibilities of all key players. Although the audit found that the executives leading the initiative had a good understanding of their roles and responsibilities, they were not documented. Without formalized roles, there is a risk of unclear expectations. Both TC and DFO/CCG are currently working on a comprehensive Memorandum of Understanding which will clarify the roles and responsibilities of both departments.

The VOC initiative's key performance target is to address 275 vessels by 2022. The audit identified that the Department did not have consistent methods to measure the target, or documented guidelines on how the target should be measured. A lack of quality control also resulted in some instances of inaccurate reporting. The Department is currently working on developing guidelines to ensure vessels are accurately measured against the initiative's key performance target.

Statement of conformance

This Audit conforms with the Government of Canada's Policy on Internal Audit and the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing, as supported by the results of an external assessment of Internal Audit's Quality Assurance and Improvement Program.

Chantal Roy, Chief Audit and Evaluation Executive

1 Introduction

1.1 Purpose

In 2018, Internal Audit performed the Audit of the Ocean Protection Plan's (OPP) Governance and Oversight, which made specific recommendations relating to governance, information for decision making, engagement of stakeholders and Indigenous groups, project management and corporate support. The Audit of Vessels of Concern (VOC) was identified in the 2019-20 Risk-based Audit and Evaluation Plan as an opportunity to perform a deep-dive of one the OPP initiatives and further examine the management control framework.

1.2 Background

The OPP is a horizontal initiative that involves four federal government departments: Department of Fisheries and Oceans Canada (DFO)/Canadian Coast Guard (CCG), Natural Resources Canada, Environment and Climate Change Canada and Transport Canada (TC), with $1.5B in funding over five years, from 2017-2018 to 2021-22. It has a mandate to improve marine safety, protect the marine environment, and offer new opportunities for Indigenous and coastal communities. With 58 initiatives, OPP is the largest investment ever made to protect Canada's coasts and waterways.

The Vessels of Concern (VOC) initiative is a component of the OPP aiming to reduce abandonment of vessels and make progress towards addressing (i.e. removing, remediating or monitoring) vessels of concern. Vessels of concern are defined as any vessel that is wrecked, dilapidated, abandoned or hazardous. The VOC initiative is jointly delivered by TC and by the DFO/CCG, with total funding of $107M from 2017-2018 to 2021-2022.

In 2017, when the initiative was launched, over a thousand vessels of concern had been estimated as impacting marine habitats and species and disrupting local activities. The initiative identified a target of 275 vessels of concern to be addressed by 2022.

VOC is composed of six sub-initiatives summarized in the table below.

Sub-initiative (Lead Department) Objective(s)
Removal of Small Legacy Vessels (TC) Funding support for the assessment, removal and disposal of abandoned and/or wrecked vessels posing a hazard in Canadian waters.

Improve Vessel Owner Identification and Create a Long-term, Owner-Financed Vessels Remediation Fund (TC)

  • Enhancement of the Vessel Registry and Negotiation of Possible Transfer of Pleasure Craft Licensing (PCL) with ProvincesFootnote 1

Improve the capacity to identify vessels and owners to support enforcement of the Wrecked, Abandoned or Hazardous Vessels Act, a key measure under the Oceans Protection Plan that aims to improve vessel owner responsibility and liability by allowing TC to enforce the Canada Shipping Act, 2001 and other federal marine legislation, with associated safety, environmental and security benefits.

New Legislation Development and Implementation (TC)

Introduce new legislation (Bill C-64), increasing owner responsibility and liability for vessels that reach end-of-life. This includes prohibiting vessel abandonment and other acts of irresponsible vessel management.

Strengthen federal powers to intervene in addressing wrecked, abandoned or hazardous vessels.
Research to Advance Vessels Recycling and Design for Environment (TC) Provide funding support for research on environmentally responsible boat design and recycling of end-of-life vessels (with priority on fibreglass boats).
Vessels of Concern Education and Outreach (TC) Provide funding support for vessel owner education and awareness concerning the end-of-life management of vessels (responsible disposal).
Development of a Risk Assessment Methodology and National VOC Inventory (CCG) Develop a national risk assessment methodology to rank and prioritize the vessels in the inventory, to inform remediation and monitoring plans.

TC is responsible for managing $62M related to the VOC initiative over the 5 years, while DFO and CCG are responsible for $45M.

The table below breaks down the departmental budget, by fiscal year:

Table 1. VOC budget by fiscal year
($000s) 2017-2018 2018-2019- 2019-2020 2020-2021 2021-2022 Five-Year Total Ongoing
Transport Canada 3,243 9,468 10,527 24,159 14,222 61,618
(58%)		 5,045
DFO 1,931 2,213 2,643 2,533 2,667 11,987
(11%)		 1,828
CCG 5,803 8,583 8,071 5,364 5,328 33,149
(31%)		 4,138
All Departments 10,977 20,264 21,241 32,056 22,216 106,754
(100%)		 11,011

Roles and responsibilities

Transport Canada

TC's Environmental Policy (EP) Directorate is responsible for developing an overarching policy and providing guidance to support the VOC initiative. EP led the development of the legislative framework, drafting the Wrecked, Abandoned or Hazardous Vessels Act and supporting its introduction (e.g., communications, development of operational policies, etc.).

EP also provides oversight on sub-initiatives that are launched and administered by other groups – notably the implementation of Wrecked, Abandoned or Hazardous Vessels Act, the Abandoned Boats Program (ABP), and enhancements to the Pleasure Craft Licensing and Vessel Registration systems. EP also provided support in the design and development of the "Risk Assessment Methodology and the National VOC Inventory' led by CCG. EP is responsible for developing options to establish the vessel remediation fund, and for certain elements of vessel recyclingFootnote 2. In order to fulfill its different roles and responsibilities, EP closely collaborates with different stakeholders such as TC's Marine Safety and Security (MSS), Navigation Protection Program (NPP), Abandoned Boats Program, CCG, Environment and Climate Change Canada, the Department of Justice and other departments and central agencies.

TC's Navigation Protection Program protects the public right to travel on all navigable waters in Canada and protects coastal and shoreline communities from vessels of concern. In delivering this mandate, the Navigation Protection Program administers the Canadian Navigable Waters Act (CNWA) and co-administers the Wrecked, Abandoned or Hazardous Vessels Act with the CCG. The Navigation Protection Program is responsible for managing the implementation of the New Legislation sub-initiative.

TC's Abandoned Boats Program, which is administered by the Transport and Infrastructure Programs group, provides grant and contribution funding to assist in the removal of abandoned and/or wrecked small boats posing a hazard in Canadian waters by funding boat removal assessments, and the permanent removal and disposal of abandoned and/or wrecked small boats. The program also helps to educate small boat owners on how to responsibly manage their boats and provides funding to recipientsFootnote 3 who research boat recycling and environmentally responsible boat design. The Abandoned Boats Program is responsible for managing the "Removal of Small Legacy Vessels', the "Research to Advance Vessels Recycling and Design for Environment', and the "Vessels of Concern Education and Outreach' sub-initiatives.

Department of Fisheries and Oceans and the Canadian Coast Guard

CCG is a special operating agency of DFO. CCG helps DFO meet its responsibility of ensuring safe and accessible waterways for Canadians, and plays a key role in ensuring the sustainable use and development of Canada's oceans and waterways. CCG is responsible for administering and enforcing certain sections of Wrecked, Abandoned or Hazardous Vessels Act, notably as the lead department for administering Part 1 on Removal of Wrecks resulting from maritime casualties, which integrates the Nairobi International Convention on the Removal of Wrecks, 2007 into Canadian law. CCG is also responsible for taking measures on vessels or wrecks posing a hazard, and for the "Development of Risk Assessment Methodology and National Vessels of Concern Inventory' sub-initiative.

Governance

There are several interdepartmental committees that oversee OPP, including the VOC initiative.

OPP Deputy Minister (DM) Executive Steering Committee

The OPP DM Executive Steering Committee is responsible for providing strategic direction and guidance and for overseeing the interdepartmental implementation of the OPP and Whales Initiative. It is also responsible for ensuring that initiatives are implemented on time and within the allotted spending envelope, unless the Committee agrees otherwise.

Interdepartmental Assistant Deputy Minister (ADM)/Director General (DG) OPP Implementation Committee

The Interdepartmental ADM/DG OPP Implementation Committee is a standing committee intended to provide whole-of-government coordination for the implementation of the OPP. The committee brings forward items to the OPP DM Interdepartmental Executive Steering Committee.

Interdepartmental OPP Secretariat

Both the DM and the ADM/DG committees are supported by the Interdepartmental OPP Secretariat (led by Transport Canada), which is responsible for managing and coordinating the reporting process, supporting the interdepartmental governance structure and promoting whole-of-government collaboration to help mitigate implementation risks. The reporting process includes the DM Strategic Dashboard that tracks progress of all OPP sub-initiatives. The DM Strategic Dashboard contains information on OPP financials, sub-initiative progress and health, emerging issues, accomplishments and results reporting.

Interdepartmental DG Steering Committee on VOC

The Interdepartmental DG Steering Committee on VOC is responsible for DG-level oversight and key decision-making to ensure the implementation of VOC sub-initiatives. It is co-chaired by the DGs accountable for the VOC initiative at TC and DFO/CCG.

Interdepartmental Director Steering Committee on VOC

The Interdepartmental Director Steering Committee on VOC is responsible for Director-level oversight and key decision-making to ensure the implementation of sub-initiatives. The Committee is co-chaired by the directors responsible for the VOC initiative at TC and DFO/CCG and reports into the Interdepartmental DG Committee on VOC.

1.3 Audit objective, scope, approach and criteria

1.3.1 Audit objective

The objective of the Audit of Vessels of Concern was to examine the design and effectiveness of the management framework established to oversee and manage the OPP sub-initiatives related to VOC.

1.3.2 Audit scope

The initial scope was to cover the period of April 2018 to March 2020. However, given some delays due to the COVID-19 pandemic, the period covered was extended to January 2021. The complete fiscal year of 2020-21 was covered for the financial management aspects of the VOC initiative. The audit examined governance, stakeholder engagement, performance measurement, information management, project and financial management.

The design and management of the "Development of a Risk Assessment Methodology and National VOC Inventory sub-initiative', which is lead solely by DFO/CCG, was not examined as part of this audit.

1.3.3 Audit approach

The audit was completed through a series of document reviews, interviews with program staff and management at headquarters and in the regions, and data analysis.

1.3.4 Audit criteria

The following criteria were used to examine the controls associated with the VOC initiative:

  1. An effective governance framework to facilitate and monitor the delivery of results.
    • We expected a governance and oversight structure established with appropriate authority to make decisions for the VOC initiative;
      • Roles, responsibilities and accountabilities are clearly defined, communicated and understood.
      • Documented processes and procedures for effectively overseeing VOC; and,
      • Risks that could impact the delivery of the initiative are defined, managed and reported.
  2. Information in the dashboards to support decisions is relevant, accurate, complete and timely.
    • We expected the Navigation Protection Program and the Abandoned Boats Program to have clear guidance and definitions on how to calculate the key target, which is to address at least 275 vessels by 2022. This would include clearly documented:
      • Definitions of what actions are considered to be "addressing" a vessel.
      • Procedures on where and how to retrieve this information.
      • Procedures on how to report this information.
      • Quality control procedures to validate the data reported.
  3. Project and financial management processes to monitor the cost, schedule and scope of the VOC initiative, as well as the reporting of results.
    • We expected sound financial management practices to manage VOC funds.
  4. Effective communication to engage stakeholders/Indigenous groups and manage their expectations.

2 Findings, conclusions and recommendations

Overall conclusion

Processes and controls related to financial management and engagement are working effectively to mitigate risks to meeting VOC's objectives and fulfilling its mandate. The audit identified opportunities to strengthen VOC's governance and processes related to the reporting of results.

2.1 The roles and responsibilities of the key players have not been formally finalized.

Context 

In 2018, Internal Audit conducted an Audit of OPP Governance and Oversight that examined the governance structure established to oversee the OPP. Specific to governance, the audit recommended that TC should collaborate with partner departments to clarify the responsibilities of the lead department and partner departments and define the roles of the committees, including decision-making authority. In 2019, a Follow-up Audit of OPP Governance and Oversight determined that the responsibilities of lead and partner departments were understood. Therefore, this audit did not revisit the interdepartmental governance structures in place to govern the OPP as a whole. Instead, governance and oversight specific to the VOC initiative was examined.

The VOC initiative has an interdepartmental DG Committee as well as an interdepartmental Director Committee.

What we expected   

  • A governance and oversight structure established with appropriate authority to make decisions for the VOC initiative;
  • Roles, responsibilities and accountabilities are clearly defined, communicated and understood;
  • Documented processes and procedures for effectively overseeing VOC; and,
  • Risks that could impact the delivery of the initiative are defined, managed and reported.

What we found

The Interdepartmental DG Committee does not have its own Terms of Reference (TOR). The audit team was informed a decision was made not to have a formal TOR to keep the committee flexible and responsive to emerging issues. This committee is also considered to be an informal forum to bring relevant DGs together when necessary. The TC and CCGNote de bas de page 4 DGs who had first set-up the committee informed the audit team that they understood their roles and responsibilities as accountable executives for the VOC initiatives.  

Internal Audit was also informed that the TOR for the Interdepartmental Director Steering Committee, which is composed of VOC Directors from TC and DFO/CCG, also serves informally as the basis for the Interdepartmental DG Committee. The Director Steering Committee's TOR describes the following roles and responsibilities:

  • Decision-making related to the implementation of the projects.
  • Facilitating interdepartmental coordination, collaboration and information sharing in pursuit of project objectives.
  • Providing guidance, and reviewing and approving documentation associated with the projects.
  • Providing oversight, advice and strategic guidance to the Interdepartmental VOC working group.
  • Monitoring and assessing the progress and results of the projects.

Although the TOR mentions that each department's roles and responsibilities are to be detailed in specific Project Charters for each sub-initiative, only one sub-initiative's project charter describes the departments' roles and responsibilities.

Work is currently underway to draft a comprehensive MOU between TC and DFO/CCG to clarify and document the roles and responsibilities of both departments, which will include an annex for the VOC initiative.

Why this matters

The VOC initiative is complex and involves many stakeholders. The range of work in the initiative varies from policy, to operations, to outreach. It is important to have clear documented roles and responsibilities to maintain continuity with changes in leadership.

The DGs of both departments are ultimately accountable for the design and implementation of the VOC initiative. They provide the direction, the leadership and have the authority to make decisions. Without formalized roles, there is an increased risk that the stakeholders involved in the initiative are not aware of their expectations or are unclear about their responsibilities. This risk is increased if there is turnover in either department.

Conclusion and recommendation

Although roles and responsibilities are implicitly understood, as a lesson learned, roles and responsibilities should always be defined and documented at the beginning of an initiative and revised as needed throughout the initiative's lifecycle. If implementation of the VOC initiative is extended beyond the current five-year OPP program, the ADM Programs, in collaboration with TC's partners, DFO and CCG, should formalize roles and responsibilities in operationalizing the Wrecked, Abandoned or Hazardous Vessels Act.

2.2 There is a lack of documented guidance on performance measurement that could lead to inaccurate reporting.

Context

The key target for the Vessels of Concern initiative is to address at least 275 vessels by 2022 and the key performance indicator is the number of vessels of concern assessed or addressed (i.e., removed, remediated or monitored).

Twice a year, the Interdepartmental OPP Secretariat reports to the OPP ADM/DG Interdepartmental Executive Steering Committee and the OPP DM Interdepartmental Executive Steering Committee on the status of all OPP initiatives, including the Vessels of Concern initiative, through the DM Strategic Dashboard. The Secretariat uses input sheets prepared by management responsible for each sub-initiative. The OPP input sheets include the latest data for the key performance indicator.

At Transport Canada, the Abandoned Boats Program and the Navigation Protection Program are responsible for reporting progress against the VOC initiative. The Abandoned Boats Program maintains an Excel database (ABP database) to track and monitor the vessels addressed through its program. The Navigation Protection Program uses an application called NAVINFO, which is an internal system used for the Navigation Protection Program's business operations under the Wrecked, Abandoned or Hazardous Vessels Act and the Canadian Navigable Waters Act. NAVINFO allows TC to collect information on vessels of concern and the related actions taken.

TC's Navigation Protection Program officers in the regions are responsible for entering data in NAVINFO. To guide them, the Navigation Protection Program has prepared a technical User Guide which describes how Navigation Protection Program officers, administrative assistants and regional managers are to use NAVINFO to record information. Although data fields are identified in the User Guide, clear definitions are not provided.

An Abandoned Boats Program employee at HQ is responsible to enter the vessels information in the ABP database. The information comes from funding application forms for the removal of abandoned and/or wrecked small boats posing hazard in Canadian waters, which are filled out and submitted via email to the program. The same vessel information is also found on the Navigation Protection Program authorization letters/Owner Consent Form that are mandatory supporting documents for each application. Vessel information is entered into the database once an application is approved for funding, either for an assessment, or a removal and disposal project.

What we expected   

To accurately report on the VOC initiative's key target, which is to address at least 275 vessels by 2022, we expected the Navigation Protection Program and the Abandoned Boats Program to have clearly defined terms and guidance on how to calculate this measure. This would include clearly documented:

  1. Definitions of what actions are considered addressing a vessel.
    • Procedures on where and how to retrieve this information.
    • Procedures on how to report this information.
    • Quality control procedures to validate the data reported. 

Documented guidance with clear definitions reduces the risk of inaccurately reporting progress towards the initiative's objective.

What we found

Initially, the key performance indicator for the VOC initiative included counting vessel assessments as part of the definition of the target. Subsequently however, TC decided to clarify the definition. Vessels that were assessed with no further action taken would no longer be counted towards the key target. This definition would ensure that the activities counted towards the key target are in line with the objectives of the initiative.

Navigation protection program

The Navigation Protection Program does not have documented instructions on how to record and retrieve the necessary data to report on the key target. NAVINFO, the system used to collect vessel-related data, includes a data field titled "submission outcomes" associated with each vessel entered into the system. However, at the time of our testing the "submission outcomes" field had not been defined. There was no clear link between the NAVINFO submission outcomes and the initiative's key performance indicator; the officer assigned to retrieve and report on the initiative's key performance indicator is performing this task based on their understanding and their manager's interpretation of "assessed or addressed" vessels.

In the December 2020 OPP input sheet, the Navigation Protection Program reported 205 vessels of concern remediated. Internal Audit conducted an analysis of the 205 vessels to determine how each vessel was categorized in terms of "submission outcomes". Since submission outcomes were not defined, Internal Audit was unable to follow how the Navigation Protection Program categorized the vessels entered in NAVINFO. NAVINFO users also have the capability of creating their own submission outcomes in the database without prior approval from the Navigation Protection Program. We noted user-created submission outcomes accounted for 16% of total vessels reported in the December 2020 OPP input sheets.

Once these findings were shared with the Navigation Protection Program, the Program began working with the regions to define submission outcomes and identify which submission outcomes relate to the VOC initiative's key target. The Navigation Protection Program has also removed the regions' capability to define and enter into the system their own submission outcomes. We were informed that the Navigation Protection Program intends to document standard reporting procedures to accurately report on the initiative's key target.

Abandoned boats program

The Abandoned Boats Program also did not have documented guidance on what type of data should be captured and extracted from the ABP database. In January 2021, when Internal Audit identified missing information in the ABP database (e.g., status of the projects), it was identified that this information was kept in a separate ABP Program Tracker. After sharing these observations with the Abandoned Boats Program, to simplify and clarify tracking, the Abandoned Boats Program added a column in their ABP database to identify the status of the projects. The Abandoned Boats Program has also taken measures to classify projects using the same key performance indicator terminology used for the VOC initiative to better align projects to the initiative's key target.

Interdepartmental OPP secretariat

During the audit's timeframe, the Interdepartmental OPP Secretariat prepared DM Strategic Dashboards in September 2019, June 2020 and December 2020. We validated the sub-initiatives' health statuses presented in these dashboards with the OPP input sheets and determined that, with the exception of one inconsistency, all sub-initiatives' health statuses were accurately reported. The inconsistency related to the "Development of a Risk Assessment Methodology and National Vessels of Concern Inventory' sub-initiative; although CCG reported the health of the sub-initiative as "attention required" in their September 2019 OPP input sheet, the September 2019 DM Strategic Dashboard reported that the sub-initiative was "on track". The TC-led Interdepartmental OPP Secretariat informed the internal audit team that sub-initiatives that required the OPP DM Interdepartmental Executive Steering Committee intervention were flagged in the DM Strategic Dashboard as "attention required'. Since Interdepartmental OPP Secretariat concluded that this sub-initiative did not require DM Committee intervention, its status was changed to "on track' in the DM Strategic Dashboard.

At the January 2021 OPP ADM/DG Interdepartmental Executive Steering Committee meeting, the Interdepartmental OPP Secretariat presented the December 2020 DM Dashboard, a November 2020 OPP Accomplishment Placemat and a December 2020 OPP Initiative Health Detailed Report. For each sub-initiative, the OPP Initiative Health Detailed Report identified results achieved to date, remaining deliverables, implementation changes, overall health status and whether or not the sub-initiative would require an extension to be completed. The DM Dashboard and the OPP Initiative Health Detailed Report did not identify how many vessels of concern were addressed out of the 275, but reported whether or not the initiative was progressing as planned. The Interdepartmental OPP Secretariat does, however, report on the key target when reporting externally to central agencies and to the Canadian public. In the November 2020 OPP Accomplishment Placemat, 282 vessels were identified as addressed. This number could not be confirmed by Internal Audit, considering that the definition of addressed vessels had not been clarified at that time (i.e. of the reported 282 vessels noted as being "addressed", 109 vessels had only been assessed and at the time had not been remediated or removed).

We were informed that due to the different methods used to measuring the key performance indicators, the Abandoned Boats Program and the Navigation Protection Program were inconsistently reporting on the number of vessels addressed. Both programs are now working to ensure that the number of vessels counted towards the key target is clearly defined and measured consistently.

Quality control

Interviews with the Navigation Protection Program identified that once the data is entered into the database, there is limited quality control performed. The regional inspectors are responsible for entering the data into NAVINFO and their manager may or may not review the information as there is no requirement for them to do so. Similarly, the Navigation Protection Program does not have a formal process to review the quality of the data entered by the regions.

There is also limited quality control of the information entered in the ABP database. One employee is responsible to enter the data and there is only ad-hoc review performed by peers or program management.

However, once the OPP input sheets are prepared using the data from the databases, the Abandoned Boats Program and the Navigation Protection Program executives review the input sheets based on the updates provided by their managers.

Our analysis of the data identified vessels that were entered into the ABP and NAVINFO databases that were possibly double-counted. Once our observation was shared with the Abandoned Boats Program and the Navigation Protection Program, they began working together to correct any vessels that may have been double-counted towards the initiative's key target.

Why this matters

The lack of standardized definitions and documented guidance describing the data to be collected and reported to measure progress towards the key target increases the risk of inaccurate reporting.

Sufficient quality control to verify the data entered into both databases would help reduce this risk.

Recommendations

  1. The ADM of Programs should:
    • Collaborate with the ADM of Policy and with partner departments to confirm a common definition of the VOC initiative's key performance target and indicators;
    • Develop and provide sufficient guidance for:
      • recording VOC data to support accurate measurement of the initiative's key target; and
      • quality control of the data collected and reporting results.

2.3 Financial management

Context

The Vessels of Concern initiative was provided with $107M to design and deliver the six sub-initiatives over a period of five years. TC was allocated $62M, and DFO/CCG was allocated $45M ($12M to DFO Small Craft Harbour and $33M to CCG). The table below provides a yearly breakdown.

Table 3. Vessels of Concern funds over the period of 5 fiscal years
Cash
($000s)		 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Five-Year Total Ongoing Funding
Transport Canada 3,243 9,468 10,527 24,159 14,222 61,618 5,045
DFO/CCG 7,734 10,796 10,714 7,897 7,995 45,136 5,966

During the 2018 Audit of OPP Governance and Oversight and the subsequent 2020 Follow-up Audit of OPP Governance and Oversight, Internal Audit concluded that TC's practice, through its Initial Budget Delegation process, is to reallocate funds to risk manage marine-related financial pressures. As such, not all OPP initiatives were provided with the exact amount of funding originally forecasted. OPP funds were managed according to policies and guidelines, and the rationale for reallocations and any surpluses were documented.    

What we expected   

  • Sound financial management practices to manage VOC funds.

What we found

Financial Management

The Navigation Protection Program and the Abandoned Boats Program manage the budgets related to the five TC sub-initiatives. DFO/CCG is responsible for managing the funds related to the sixth sub-initiative, the Development of a Risk Assessment Methodology and National VOC Inventory sub-initiative.

To examine the VOC's financial management practices, Internal Audit performed several analyses to determine how each sub-initiative's budget was managed.

  1. For each of the sub-initiatives, we examined how the budgets fluctuated throughout the year.

    An analysis of budget fluctuations by fiscal year for each sub-initiative indicates that the most significant budget fluctuations occurred in 2019-2020, during the third year of the VOC implementation, for four out of the five TC-led sub-initiatives. With the exception of the TC-led New Legislation sub-initiative, which had a reduction in its budget in Period 12 of fiscal year 2019-2020, the remainder of the sub-initiatives had budget adjustments earlier in the fiscal year, indicating early identification of potential impacts to budgets and active financial management.

  2. Internal Audit also examined the surplus/deficits associated with each sub-initiative.

    Due to the different groups managing the VOC funds within TC, and the differences in the types of VOC sub-initiatives (from contribution programs to outreach activities), the explanations behind surpluses and deficits cannot be generalized. Each sub-initiative faced a unique situation, especially due to the pandemic. As shown in table 4, the analysis indicates that the Department has spent 83% of the funds allocated for the past 4-years.

Table 4. Summary of budget vs. actuals for TC's VOC initiative
  2017-2018 2018-2019 2019-2020 2020-2021 4-Year Total
TC VOC Budget ($) 2,510,300 6,207,747 8,230,276 9,180,341 26,128,664
TC VOC Actuals ($) 3,230,612 5,877,667 5,877,614 6,615,626 21,601,518
% of TC VOC Budget Spent 129% 95% 71% 72% 83%

Conclusion

There is evidence of active financial planning and management of the VOC initiative funds despite the challenges to implementing the initiative during the 2019-2020 and 2020-2021 fiscal years. Budgets were adjusted throughout each fiscal year to ensure availability of financial resources, and explanations for surpluses/deficits were provided. The Wrecked, Abandoned or Hazardous Vessels Act, which provides TC the authority to carry out many of the VOC-related activities, came into force four months into the 2019-20 fiscal year, which impacted implementation. The COVID-19 pandemic created additional delays to the progress of the initiative, especially for 2020-2021.    

2.4 The Department is progressing in its engagement and communication efforts.

Context

Since the launch of the OPP in 2017, outreach and engagement activities have been essential. Engagement with the marine industry, coastal communities, Canadians and Indigenous groups has been vital for the 58 OPP sub-initiatives, including the six VOC sub-initiatives. The achievement of objectives depends in large part on good communication and successful engagements with stakeholders and Indigenous groups.

To identify, assess and address the wrecked, abandoned or hazardous vessels, the Federal Government is expected to engage and develop agreements with stakeholders and Indigenous groups. Communicating the existence of the Wrecked, Abandoned or Hazardous Vessels Act, especially to boat owners, is vital for Canadians to understand their roles and responsibilities vis-a-vis the Act. Promoting the Wrecked, Abandoned or Hazardous Vessels Act helps boat owners appreciate the options offered by the VOC initiative to protect coastal and shoreline communities, the environment and infrastructure.

What we expected   

  • Effective communication to engage stakeholders and Indigenous groups and manage their expectations.

What we found

Environmental Policy completed most of the departmental engagement and communication activities during the first two years of the VOC initiative. Two consultation plans were developed to describe the engagement context, approach, planned activities, objectives, outcomes, alignment with other initiatives and timelines. Both plans have a list of stakeholders and Indigenous groups. In addition, a specific communications plan was developed, which helped organize the communication approach before and after the Wrecked, Abandoned or Hazardous Vessels Act came into force.

In the fall of 2019, the Navigation Protection Program developed the Wrecked, Abandoned or Hazardous Vessels Act Outreach & Engagement Plan 2020-2022. In response to the COVID-19 pandemic, a second shorter term plan was developed to adapt the engagement and outreach strategy to the new reality.

As of December 2020, 75 planned engagement and outreach activities were reported by TC. Out of the 75, 18 (24%) were organized with Indigenous groups across Canada while the other 57 (76%) were organized with stakeholders such as municipalities, provinces, northern territories, boating industry, recycling industry, boat associations, marinas, port/harbor authorities, etc. Most of the 75 engagement activities were completed without significant issues. Three events were cancelled due to lack of interest, and seven activities were in progress to be completed with three delayed due to the COVID-19 pandemic.

The pandemic has affected the manner in which TC can reach Canadians and engage with stakeholders and Indigenous groups. The pandemic caused some delays in implementing the Outreach and Engagement sub-initiative, especially during the first few months. Boat shows to promote the VOC initiative had to be cancelled. However, efforts are being made to continue engaging virtually with stakeholders, including with the communities who are in remote locations and wish to engage virtually.

The OPP National Engagement Hub, which is responsible for the interdepartmental coordination of engagement activities, and the regional engagement hubs have supported OPP engagement and communication strategies by monitoring and coordinating all engagement activities. Once the OPP National Engagement Hub became fully functional they supported the OPP initiatives by ensuring a national and coherent engagement approach as well as minimizing the engagement burden on stakeholders/Indigenous groups.

Conclusion

The Department continues its efforts to ensure all stakeholders and Indigenous groups are engaged through various methods, despite the impact of the pandemic

3 Recommendations and Management action plan

The following summarizes the audit recommendations and management's plan to address them.

  Recommendation Management Response Action Plan Completion Date ADM Responsible
1. If implementation of the VOC initiative is extended beyond the current five-year OPP program, the ADM Programs, in collaboration with TC's partners, DFO and CCG, should formalize roles and responsibilities in operationalizing the Wrecked, Abandoned or Hazardous Vessels Act. TC, in collaboration with DFO, and CCG will provide a detailed breakdown of their respective roles and responsibilities consistent with authorities outlined under the Wrecked, Abandoned or Hazardous Vessels Act.

1.1 – Finalize, document and get approval of a breakdown of the roles and responsibilities between TC, DFO/CCG

1.2 Share the approved documented roles and responsibilities with all partners.

 March 31, 2022 ADM, Programs
2.

The ADM of Programs should:

  1. Collaborate with the ADM of Policy and with partner departments to confirm a common definition of the VOC initiative's key performance target and indicators;
  2. Develop and provide sufficient guidance for:
    1. recording VOC data to support accurate measurement of the initiative's key target; and
    2. quality control of the data collected and reporting results.

a) NPP and Abandoned Boats Program (ABP), in consultation with Environmental Policy (EP), and counterparts in DFO and CCG, will reaffirm and formalize a standardized definition and list of submission outcomesNote de bas de page 5 and appropriate measurement strategy for the VOC initiative's key performance target and indicator.

i. NPP and ABP, in collaboration with DFO and CCG, will provide sufficient guidance for recording VOC data that supports the standardized measurement of the initiatives key target and indicator.

ii – NPP and ABP will maintain adequate quality control and assurance of the data collected, and manage how the data is used in reporting results internally and publically.

2a.1 – NAVINFO's submission outcomes under WAHVA VOC initiative have been reviewed and have identified the submission outcomes (vessels that are addressed) that are reported through the public performance indicator. (December 31, 2020 Completed)

2a.2 – Following the circulation of the updated submission outcomes, all VOC initiative stakeholders will meet and come to an agreement of the updated submission outcomes (document). (December 31, 2021)

2a.3 – Implement the updated submission outcomes into the NAVINFO system. (March 31, 2022)

2a.4 – Implement the approved submission outcomes into the ABP Database. (March 31, 2022)

2a.5 – Implement the updated the indicator methodology (based on the revised submission outcomes) that are collected and tracked within OPP Secretariat reporting dashboards for OPP future dashboard reports. (March 31, 2022)

2a.6 – Update the key/public performance indicator methodology (based on updated submission outcomes) in the Performance Information Profile (PIP), and public facing performance measurement processes (Departmental Results Framework, Departmental Results Report, and Departmental Plan). (December 31, 2022)

2b.i.1a – Modify and update the data entry flow for VOCs in the NAVINFO system, and update guidance and procedures for recording VOC data related to submission outcomes for officers when entering VOC data, which will be documented in the NAVINFO manual.  

2b.i.1b – Modify and update the data entry flow for VOC initiative data in the ABP database, which will be documented in the NAVINFO manual and ABP guidance document.

2b.ii.1 – Update the roles and responsibilities related to VOC data collection to prevent double counting and the duplication of information entered by NPP/ABP officers responding to VOC requests in the NAVINFO Manual and ABP Guidance. Share update with NPP/ABP officers.

2b.ii.2 – Develop and establish new procedures and guidelines to support quality control of the VOC data entry into NAVINFO system/ABP database.

 December 31, 2022 ADM, Programs

Report a problem with this page

Date modified: