Audit of the Seoul Immigration Program

Audit Report
Internal Audit and Accountability Branch
Citizenship and Immigration Canada
April 2007

Table of Contents

• 1.0 Introduction
  • 1.1 Background
  • 1.2 Audit Objectives
  • 1.3 Audit Scope
  • 1.4 Audit Methodology
• 2.0 Audit Conclusion
• 3.0 Observations and Recommendations
  • 3.1 Management Function
  • 3.2 Human Resources Management
  • 3.3 CAIPS Management
  • 3.4 Program Integrity Compliance and Admissibility
  • 3.5 Controlled Documents
  • 3.6 Cost Recovery
• Appendix A: Management Action Plan
• Appendix B: Management Action Plan

1.0 Introduction

The Citizenship and Immigration Canada (CIC) Risk-Based Audit Plan 2004–2006 includes the conduct of two mission audits per year. The selection of the Seoul Immigration Program was based on an operational assessment and done in consultation with the International Region at CIC National Headquarters. The dates for the on-site field work were March 27 to April 7, 2006.

1.1 Background

The Seoul visa office is a full service centre responsible for the delivery of immigration program services to South Korea. The Seoul mission processes immigrant (permanent resident) and non-immigrant (temporary resident) cases. The majority of permanent resident cases are in the economic class and the majority of the temporary resident cases are for student visas.

In 2005, the Seoul mission met its target and issued 3,780 permanent resident visas, mostly in the economic category: skilled workers, business immigrants and provincial nominees. In addition, the office issued 1,726 temporary resident visitor visas and 1,476 temporary worker visas (800 as part of the working holiday program). The visa office’s 2006 permanent resident visa target is 3,530.

The Seoul office issues more student permits than any other Canadian visa office and is the source of approximately one in five foreign students in Canada. In 2005, it issued 14,046 student permits—22 percent of the global student permits issued by the Department. The number of permits issued by the Seoul visa office has increased steadily since 2003. There is a significant demand in South Korea from people who wish to learn English or to send their children to elementary and secondary schools abroad.

1.2 Audit Objectives

The audit objectives were to assess the effectiveness of the management control framework and the degree of compliance with legislation, policies and procedures associated with the delivery of the immigration program at the Seoul mission.

1.3 Audit Scope

The audit scope covered all significant aspects of CIC operations at the Seoul mission. This included the full range of immigrant and non-immigrant program activities, with associated financial and administrative components typically found in a full service centre. Samples of immigrant and non-immigrant cases for the year 2005 were reviewed to assess compliance with legislation, regulations and policy requirements.

1.4 Audit Criteria

The criteria that were used in the audit are based on CIC legislation, policies and procedures. In undertaking the audit of the Seoul Immigration Program, we expected to find that:

• Roles and responsibilities facilitated the efficient and effective management of the immigration program at the mission;
• Immigrant and non-immigrant decisions and processing were in compliance with applicable legislation, regulations and policy requirements;
• An effective control framework was in place with respect to control documents, cost-recovery revenue and Computer-Assisted Immigration Processing System (CAIPS) management;  
• Risk management practices were applied at all appropriate levels and activities within the immigration program at the mission;
• Performance information, including client service data, was reported and used for decision making; and
• Staff were suitably trained to carry out their responsibilities.

1.5 Audit Methodology

In carrying out the audit, we performed audit tests for each line of enquiry by reviewing files and documentation, observing operational activities and interviewing Canada-based officers and locally engaged program officers and staff. We selected a random sample of immigrant and non-immigrant cases for the period January—December 2005 in order to review the program integrity of the case decisions and to verify the cost-recovery controls in place. The control document sample was taken from the mission’s last quarterly inventory report. We also met with the head of mission, the management consular officer and other embassy staff with links to immigration operations.

The audit was conducted in accordance with the Government of Canada’s Policy on Internal Audit as well as auditing standards set out by the Institute of Internal Auditors.

The audit only involved operations at the Seoul office. Any systemic issues beyond the mission-level control were brought to the attention of senior departmental management.

2.0 Audit Conclusion

Overall, we found that the Seoul immigration program was working well and there were good controls in place to ensure the effective and efficient delivery of services to those who apply to come to Canada. Immigrant and non-immigrant selection decisions complied with the applicable legislation, policies and procedures. However, we identified some areas for improvement which the mission, with the support of CIC’s National Headquarters, could implement to safeguard cost-recovery revenue and controlled documents and strengthen program integrity.

3.0 Observations and Recommendations

3.1 Management Function

The audit objective was to assess the effectiveness of the management control framework in place at the mission and the degree of compliance with legislation, policies and procedures associated with the delivery of the immigration program. We expected to find that roles and responsibilities facilitated the efficient and effective management of the immigration program, that risk-management practices were applied, and that performance information, including client service data, was reported and used for decision making.

Overall, we found that the mission had a good management control framework in place to oversee operations at the Seoul visa office. The mission has undertaken operational assessments and quality assurance reviews, and it has taken action to enhance its internal control environment in order to strengthen the overall management of the program.

Roles and Responsibilities

We observed that staff roles and responsibilities in the immigration section were clearly defined and in accordance with departmental policy. Specifically, the roles and responsibilities of Canada-based officers in the key control areas of cost recovery, control documents and CAIPS management were updated in August 2005 to ensure consistency with departmental policies.

Canada-based and locally engaged staff were provided with updated operational instructions by the immigration program manager in a timely manner. The manager attends regular weekly meetings with the head of mission and other embassy program managers and holds weekly staff meetings with officers in the immigration section. Regular staff meetings are held to provide guidance and advice to all immigration staff. In addition, the immigration section of the mission has clearly outlined the roles and responsibilities of other embassy managers with respect to the handling of public enquiries related to the status of their immigration cases as required by departmental policy.

Client Service

Modernizing the departmental client service model was one of three corporate priorities for CIC in 2005—2006. To this end, the embassy has put in place a client feedback form and drop box in the reception area of the embassy and in the immigration section so that clients may provide feedback on the service they have received. Comments that specifically relate to immigration are collected from the drop box and given directly to the immigration program manager and head of mission. The immigration program manager is responsible for responding to all client comments in writing. This system has assisted the mission in improving client service in general and in the reception area in particular.

The departmental client communications policy changed in April 2005 to allow clients the opportunity to contact the mission directly through e-mail. The Seoul mission developed an e-mail system in September 2005 to provide clients with another avenue to contact the mission. Since then, client use of e-mail has increased every month.

The mission has a good framework in place to inform clients and immigration consultants of changes to Canadian immigration policy and local office policies and procedures, including form and fee changes. The mission posts bulletins on the Seoul embassy immigration website to provide updates on the immigration program. As well, immigration officers participate in immigration fairs and other immigration and trade forums to promote the Canadian immigration program and provide up-to-date information to prospective clients who want to immigrate to, work or study in Canada.

Quality Assurance

Risk management and quality assurance are very important aspects of the management of immigration program services delivered at missions abroad. The Seoul mission has some key elements in place to manage risks in the delivery of immigration services in South Korea. Staff duties have been segregated to ensure that the mission has a good internal control framework in place. The Seoul mission ensures that its decisions are based on a solid review of all the required documents provided by applicants.

The mission has undertaken several quality assurance reviews over the course of the last two years. Quality assurance refers to a set of ongoing, planned and systematic activities designed to provide adequate confidence that a particular system or program satisfies given requirements for quality. Quality assurance looks at a particular group of cases to gather information that validates or refines current knowledge. The Seoul immigration program has performed quality assurance reviews on the student program and the temporary resident program, and in the cost-recovery area specifically related to refunds. The mission’s focus on quality assurance has provided it with good management information to assess program integrity and performance, and is a good continuous improvement initiative to assure the immigration program manager that the program is meeting applicable legislation, policies and procedures.

Performance Information

The mission makes excellent use of command mode in CAIPS to develop key management reports to assess program performance throughout the year. Staff knowledge and understanding of CAIPS is an asset that facilitates the development of these reports. The mission uses this capacity to obtain regular operational reports on key activities at the mission in order to take action to improve performance in all areas of the operation.

3.2 Human Resources Management

The audit objective was to assess the management of human resources at the mission. We expected to find that the immigration program manager was well informed on human resources responsibilities, that staff training needs were identified and addressed so that staff could effectively carry out their responsibilities, that annual appraisals were conducted, and that local staff met the security requirements for their position and were informed about the Government of Canada’s Code of Conduct and Conflict of Interest guidelines.

Overall, the mission has taken the necessary steps to ensure that a good framework is in place for human resources management at the mission. Performance appraisals and security clearances for locally engaged staff and Canada-based officers are up to date. Staff have learning and development plans that form part of their annual performance appraisals, and areas for learning and development are identified throughout the year. Staff were also given training opportunities to ensure that they had the knowledge required to perform their duties.

The embassy’s training committee is chaired by the immigration program manager. The committee has a training plan for the embassy that emphasizes two major aspects of training: official languages and professional development. The plan demonstrates the mission’s management priority of continued development of staff to ensure that Canadian interests in South Korea are served with the maximum of skill and effectiveness. The training committee provides a general forum for embassy staff training needs to be assessed in order to ensure that appropriate training is available to staff to further their learning and development.

Code of Conduct and Values and Ethics

The mission took a proactive step in April 2005 to ensure that all staff received, read and signed the Government of Canada Code of Conduct. This is a good internal control measure to inform staff of their roles and responsibilities as employees of the Government of Canada, and a good way to reinforce and promote values and ethics at the mission.

Staffing

Overall, there are relatively few permanent staffing actions that must be undertaken at the Seoul mission each year due to the low turnover of locally engaged staff. In 2005, there was only one permanent staffing action required at the mission in the immigration section.

The mission has identified a requirement for an additional program assistant to improve operational delivery with respect to the mission’s last two submissions for the International Region Immigration Management Plan. This issue is examined in more detail in the sections of this report on program integrity and non-immigrant program.

3.3 CAIPS Management

The audit objective was to assess the management control framework in place for CAIPS. We analysed decision-making statistics for cases finalized in the period January 1 to December 31, 2005, as part of our audit. We expected to find that an effective control framework was in place over the CAIPS function, that user profiles and accounts were in accordance with delegated authorities, that CAIPS features were used appropriately to process and manage the workload, that staff were trained on the work tool, that CAIPS management functions complied with the CAIPS manager user guide, and that risk management practices were applied at appropriate levels and activities.

Overall, we observed that the mission had taken the appropriate steps to safeguard the integrity of the immigration program by assessing CAIPS user profiles and amending certain profiles to ensure that delegated authorities were in compliance with departmental standards. However, we observed one weakness in CAIPS delegated authorities for the time period February to August 2005. This is noted below under “Integrity of Case Decisions.”

CAIPS Physical Access and User Knowledge

Our audit concluded that the controls in place for CAIPS inventory control and day-to-day use and oversight complied with departmental policy and ensured that CAIPS assets were safeguarded and protected from loss or theft.

Integrity of Case Decisions—Designated Authorities

We found that from February to August 2005, non-immigrant decision-making authority was granted to an employee that was not in compliance with departmental designated authorities. Departmental policy states that only a non-immigrant officer, a designated immigration officer or a Canada-based officer can make final decisions in non-immigrant cases. The employee was not given the opportunity to attend the mandatory training in order to assume the duties of the position. The decision to grant decision-making authority to the employee was based on operational requirements and an overall risk assessment. Under normal circumstances, in the absence of a non-immigrant officer, a designated immigration officer or a Canada-based officer should have been making the final decisions in non-immigrant cases.

Although a Canada-based officer supervised the local employee who was not authorized to make refusal decisions, the employee making the final decisions during this six-month period did not have the appropriate decision-making authority and therefore was not in compliance with departmental policy. In August 2005, the employee’s decision-making authority was removed from CAIPS.

In 2005, one-third of all final temporary resident visa decisions—6,050 out of 18,000—were made by the employee who exceeded his level of authority. The remaining decisions were made by either a Canada-based officer, a non-immigrant officer or a designated immigration officer with the appropriate decision-making authority.

Recommendation 1
It is recommended that the mission, in consultation with the International Region, take the necessary steps to ensure that managers do not grant decision-making authority to an employee who does not have the required ministerial delegated authority. These steps should include, where appropriate, disciplinary measures to those granting such authorities.

Management Response

In response to the audit recommendation, the International Region will take appropriate disciplinary action when necessary. The Region has also ensured that only authorized staff would be given the proper delegated authorities. In addition, the International Region will include adherence to ministerial delegated authority in managers’ performance agreement.

3.4 Program Integrity Compliance and Admissibility

The audit objective was to assess the program integrity of application processing and whether statutory and policy requirements were met. We expected to find that decisions were transparent, consistent and well documented, with adequate verification of information. We also expected to find appropriate management oversight and guidance of staff and a commitment to client service.

Overall, we found that the immigrant and non-immigrant programs at the mission were working well and that all staff had a good knowledge of policies, procedures and legislation in the processing of applications. We found that in general, decisions complied with statutory and policy requirements.

Immigrant Program—Permanent Residents

The immigrant program at the Seoul mission consists of family class and economic immigrant cases: skilled workers, business class, provincial nominees and permanent resident determinations. We reviewed a sample of 32 permanent resident cases: 16 skilled worker cases, seven business class cases, four family class cases, three provincial nominee program cases and two permanent resident determination cases.

Overall, we found that the immigrant program at the Seoul mission was working well and all staff had good knowledge of the policies, procedures and legislation within which they assessed and processed cases. This was demonstrated by the fact that half of the cases in our economic class (skilled workers, business class and provincial nominees) sample—13 out of 26—were Immigration and Refugee Protection Act (IRPA) transition cases. IRPA transition cases are applications that were received prior to January 1, 2002. Staff demonstrated through their processes and decisions that they had a good working knowledge of all aspects of the immigration program, including the former and current immigration law and regulations. This was confirmed by the quality of the officers’ case notes in CAIPS, which explained their decision-making process at each stage of processing the applications.

The Seoul mission displays some best practices in the area of Field Operations Support System (FOSS) checks. FOSS checks provide an in-Canada case history of the applicant’s transactions and are an important step in the processing of a file as they provide assurance to the decision maker with regard to the applicant’s history. In our sample, FOSS checks were very consistent and the mission’s regular use of back-end FOSS checks, prior to the issuance of a visa, demonstrated an additional internal control to assure the decision maker that the final decision was appropriate.

Non-Immigrant Program—Temporary Residents

The non-immigrant program at the Seoul mission is comprised of student, temporary worker and temporary resident visitor processing. While South Korean nationals do not require a visa to visit Canada, third country nationals may require visitor visas to travel from South Korea to Canada. In addition, the Seoul mission provides facilitation visitor visas to parents accompanying minor students (under the age of 18) who apply to study in Canada. Minors represent approximately 33 percent of all study permits issued by the Seoul mission. We reviewed a sample of 30 non-immigrant cases as part of our case file review: 20 study permits, and six visitor and four temporary worker visa applications.

Overall, we found that the Seoul office maintained good controls over all non-immigrant processing. The visitor and temporary worker visa decision files were assessed in a timely manner. However, confirming our CAIPS management observations, we found that between March and August 2005, the employee who did not have appropriate delegated authority made 10 out of 30 temporary resident final decisions in our sample file review.

The greatest challenge to the non-immigrant program is the processing time for student applications. While the Seoul office processed 92 percent of student cases within 28 days, the average number of days to process student cases was 17, with one percent of cases finalized within two days, 11 percent of cases finalized within seven days, and 42 percent of cases finalized within 14 days.

We observed that there was a significant delay in processing student cases at the file creation stage (i.e., from receipt of an application to the creation of the application in CAIPS). Overall in 2005, the time from application receipt to file creation was eight days. Approximately 40 percent of applications received by the mission took more than 11 days for file creation. This means that on average, almost 50 percent of the student processing time was in the creation of the file. The main file creation backlogs occur in the summer and winter peak student application periods. In the peak periods, the average file creation time is 10 days, while in non-peak periods, the average is six days.

As stated earlier, the mission has identified a requirement for an additional locally engaged program assistant to assist with case file creation and processing. The Seoul mission’s high level of non-immigrant processing in the student and working holiday programs during three peak periods of the year requires the immigration program manager to hire temporary local workers at a cost of about $65,000 a year. The peak periods for student processing are from May to August and from November to January. The peak period for the working holiday program is from February to March. The rules for temporary local staff stipulate that a person employed for emergency work can only be hired for a maximum of 92 continuous calendar days or a maximum of 125 working days in any year without the approval of the deputy head. After that maximum period of six months, a person can only be hired the subsequent year.

The timing of the three peak processing periods does not allow the mission to hire the same temporary employee to address operational requirements throughout the year. This means that more than one person must be hired to assist in case processing during the peak periods. This brings additional costs because there is a training and development period for temporary employees, but once they obtain a good working knowledge of the program, their contract expires and they cannot be re-hired for six months. This efficiency cost adds an additional burden to the program during peak processing periods.

In 2006, the mission had the opportunity to keep one temporary local staff for the January and February peak processing period. The result of keeping the trained and effective employee for an additional two months has been promising. Processing times for the student program have improved significantly compared to the same period in 2005 (see table 1). Overall, the average student processing time from file creation to final decision has decreased by approximately six days, even though the mission processed more applications in January and February 2006.

However, while the mission kept the temporary staff on for two months to determine the impact that an additional employee would have on processing times, no formal review was undertaken to assess all the factors related to the long processing time for student applications at the mission from application receipt to file creation.

We observed that based on the performance information available, having an additional program assistant may provide the necessary, year-round assistance to address peak processing requirements and to recover from the peak periods during other times of the year. The Seoul student program and the working holiday programs are important components of the Seoul mission and have the potential to increase in the coming years with increased promotion and success.

Recommendation 2
It is recommended that the mission undertake a review to determine the factors that have an impact on the delays at the file creation stage in order to decrease processing times and improve the operational delivery of the student program. The results of the review should be communicated to the International Region at CIC National Headquarters for a decision as to whether hiring an additional employee is an appropriate measure to improve student application processing times.

Management Response

The immigration program manager has already conducted a review to determine the factors that have an impact on the delays at the file creation stage and has included the results in his International Region Immigration Management Plan (IRIMP), an internal mechanism through which all immigration missions abroad may request resources. The reconfiguration exercise considers all requests for additional resources within the overall requirements for delivery of the immigration program. Allocation is linked to need and the availability of resources. The results of the review and the request for resources, included in the mission’s IRIMP for 2005–2006, will also be included in the 2006–2007 IRIMP review process.

Admissibility

The audit objective was to assess the management control framework for the admissibility decisions carried out by the mission. Immigration legislation stipulates that applicants must meet security, criminality and medical requirements in order to come to Canada. The missions should have an admissibility framework in place that is in compliance with authorities and that provides staff with the information required to discharge their responsibilities. We expected to find practices and procedures in place to ensure that adequate admissibility information was available, that it was used at the mission level, and that admissibility decisions were made by authorized personnel and documented.

Overall, the roles and responsibilities for admissibility screening were clear and effective. Each Canada-based officer made admissibility decisions in 2005. All delegated authorities for security and criminality decisions and temporary resident permits were appropriate over the review period. In addition, the mission provided information on admissibility requirements to clients on its website, through local form letters and in application kits. We concluded that an appropriate admissibility framework was in place to ensure the availability, use and integrity of admissibility information at the visa office.

The Seoul mission has a migration integrity officer who works closely with the immigration program manager to manage all aspects of the admissibility program at the mission. The migration integrity officer routinely assesses case files for admissibility requirements and complements the immigration program manager’s role in working with strategic partners in South Korea, including the local authorities and other embassies. The Seoul office maintains a list of local doctors who perform medical checks on applicants and final medical decisions are reviewed by the medical officer at the Canadian mission in Manila.

3.5 Controlled Documents

The audit objective was to assess the management control framework in place for the handling of control documents (visa counterfoils and seals). We expected to find that the control framework for the controlled document program was adequate to ensure the safeguarding of controlled assets, and that duties and procedures were in compliance with the Department’s policies for controlled documents.

Overall, we found that the mission was maintaining good control over control documents and that it had been diligent in performing daily reconciliations of the controlled document forms used. We also observed that the mission’s quarterly controlled document inventory reports were submitted to National Headquarters on time. However, we also noted some weaknesses in the practices and procedures of the mission with respect to cancelled counterfoils and seals and deep storage controls.

Visa Printing—Photocopy of Cancelled Counterfoil and Seal in Passport

We observed that the mission did not maintain a record of photocopies of visas (counterfoils or seals) that are cancelled after being placed in an applicant’s passport. Departmental policy requires that a photocopy be taken in such instances to retain evidence that the controlled document was actually cancelled and that a Canada-based officer witnessed the cancellation prior to reprinting a new visa. If a photocopy of the cancelled counterfoil or seal is not retained, there is insufficient documentation of the cancelled visa on record.

Recommendation 3
It is recommended that whenever a visa is cancelled in an applicant’s passport, a photocopy be taken of the cancelled visa and inserted in the daily counterfoil register. An indication that the visa was cancelled in the applicant’s passport should also be made on the corresponding “peel-off” label in the daily register.

Management Response

Since April 2006, the mission has been making photocopies of cancelled visas in passports and placing the photocopies in the daily register.

Control Log—Deep Storage Log

We observed that the mission did not maintain a control log for the quantity of controlled forms kept in deep storage. Departmental policy requires that when controlled forms are first placed in deep storage, the mission record each series of documents in a deep storage log. Subsequent withdrawals of documents from deep storage into working storage should be recorded in this log as well. The use of a deep storage log enhances control over the unused forms and facilitates the completion of the quarterly inventory.

Recommendation 4
It is recommended that the mission create and maintain a deep storage log for all controlled forms kept in deep storage. An example of an appropriate deep storage log is provided in Appendix G of the Single Officer Mission Manual.

Management Response

The International Region agrees with this recommendation. A deep storage log, as per the instructions found in Appendix G of the Single Officer Mission Manual, was created by the Seoul office in April 2006.

3.6 Cost Recovery

The audit objective was to assess the management of cost recovery and the degree of compliance with departmental policies and procedures. We expected to find that the control framework for the cost-recovery program was adequate to ensure the proper recovery of immigration fees for services, and that duties and procedures were in compliance with the Department’s policies on cost recovery.

Overall, we found that the cost-recovery function at the mission could be improved to safeguard cost-recovery revenues received by the mission. While applicants do not pay for services in cash, the mission has an opportunity to strengthen internal controls over the revenues received.

The Seoul mission does not accept cash as payment for services. Therefore, 89 percent of applicants pay by direct deposit at a local bank in Korean won. The remaining 11 percent of applicant fees are paid by certified cheque or money order in Korean won or Canadian dollars. Cost-recovery revenue at the mission totalled approximately $6 million in fiscal year 2005–2006.

Monitoring of the Cost-Recovery function

The cost-recovery officer is responsible for performing monitoring procedures in the area of cost recovery, including sampling applications to ensure that procedures were performed correctly and in accordance with departmental policies and procedures.

We observed that the mission did not maintain a monitoring file or conduct monitoring of the cost-recovery function in a systematic manner. The only monitoring that takes place is when immigration cases are processed. When immigrant cases are processed, spot checks are performed on the POS+ receipts in the file to ensure that the correct fees were paid by the applicants. This oversight function was not conducted on non-immigrant cases. Performing the required monitoring ensures that areas of risk are identified and that compliance with departmental policies and procedures is adhered to. While there was no evidence of loss of funds or errors detected during the audit, the mission should adhere to departmental policy and undertake quarterly monitoring of POS+ and actively monitor cost-recovery activities.

Recommendation 5
It is recommended that the mission perform the required monitoring procedures as per the Single Officer Mission Manual and maintain a cost-recovery monitoring file to ensure that the cost-recovery function complies with departmental policies and procedures.

Management Response

The International Region agrees with this recommendation. The cost-recovery officer updated the procedures in April 2006 and now performs the required monitoring as per the Single Officer Mission Manual. The cost-recovery officer has further developed the existing cost-recovery file so that it now complies with departmental policies and procedures.

Handling of Public Money—Negotiable Instruments

The mission receives certified cheques or money orders as payment from approximately 11 percent of applicants. Treasury Board policy on deposits states that all cheques and other negotiable instruments received must be promptly endorsed with the words “For deposit to the account of the Receiver General for Canada.” This is an internal control to ensure the safeguarding of funds received by the Department for deposit. The mission is currently not stamping cheques in accordance with Treasury Board policy. This is important at missions abroad as once received, cheques and other negotiable instruments are provided to Foreign Affairs Canada, who makes deposits on behalf of Citizenship and Immigration Canada. Stamping the cheques provides assurance that the negotiable instrument can’t be used for any purpose other than for deposit into the account of the Receiver General.

In addition, once cheques are received as payment, they should be stored in a secure area to ensure that adequate controls are in place to safeguard the negotiable instrument. At the time of our audit, cheques received as payment at the mission were stored in an unlocked box.

Recommendation 6
It is recommended that when the mission receives negotiable instruments such as cheques as payment for services, the cost-recovery clerk stamp “for deposit to the account of the Receiver General for Canada” on them. The cheques should also be secured in a locked safe or a locked desk drawer until they are transferred to Foreign Affairs Canada for deposit.

Management Response

The International Region agrees with this recommendation. The mission’s Administration–Finance section has supplied a stamp for the cost-recovery clerk to stamp the incoming cheques “for deposit to the account of the Receiver General for Canada.”

The cost-recovery section now ensures that the stamped cheques are kept in a locked cabinet until they are turned over to the mission’s Administration–Finance section.

Applicant Bank Receipt Validation with the Mission Bank Account

Overall, 89 percent of applicants in fiscal year 2005–2006 paid their fees through direct deposit at local financial institutions in South Korea. At the time of application, an applicant must submit payment for the application to be accepted. For missions with banking arrangements in place, applicants submit a bank deposit receipt with their application form as proof of payment. Once processed, applicant deposit receipts are kept by the cost-recovery clerk and filed weekly. However, during the processing of the application, the cost-recovery clerk does not verify and validate the applicant’s direct deposit receipt against the mission’s immigration bank account, which is available to the clerk online. In the absence of this, the mission has no internal control in place to determine whether the receipt is valid and the funds have indeed been received. To accomplish this, the cost-recovery clerk should verify the applicant’s receipt against the mission’s bank account to ensure that payment has been made for the services that will be rendered.  

In our 2005 audit of the Bucharest office, we also found that the mission was not validating 100 percent of applicants’ direct deposit receipts when processing client files. We also noted that the International Region at National Headquarters had no clear guidelines on how the validation of direct deposit receipts should be handled at the mission. The audit recommended that the International Region initiate a review of the adequacy of guidance on verification of direct deposit receipts so that missions are informed of their roles and responsibilities. Management agreed to establish clearer guidelines for missions reconciling deposits against services provided.

Cost-Recovery Refunds

Applicants pay for services prior to submitting their application to come to Canada. In some instances, people who prepay for services do not submit an application. In other instances, exchange rate fluctuations during the intervening period between the payment of fees and the application submission have resulted in fee changes. This has led to a situation where from 2003 to the present, the mission has been issuing approximately $20,000 to $30,000 a month in refunds to applicants. This was a source of concern to the immigration program manager and the management consular officer, and a quality assurance review on a random sample of 50 files was undertaken in 2005. The review examined refund applicants’ direct deposit receipts with the immigration bank account to ensure that initial payment had been received prior to issuing a refund. The review found no fraud in the 50 files sampled and concluded that proper procedures were followed when providing refunds to clients. The mission has since instituted an internal policy to verify large dollar refunds by comparing applicants’ bank receipts to the immigration bank account. This is a good internal control to safeguard public funds.

General Recommendation

Weaknesses related to the management of controlled documents (visa counterfoils and seals) and cost recovery in CIC missions abroad have been reported in this audit report as well as in previous internal audit reports issued in the last three years. The Director General of the International Region should initiate a review of procedures and controls related to controlled documents and cost recovery in CIC missions in order to reinforce them and ensure their proper and complete adherence. Where necessary, revised guidance should be issued to missions abroad.

Management Response

The Director General of the International Region will initiate a full review of the procedures and controls within the context of the mission’s operating environment to identify the issues and pressures contributing to this ongoing problem. In addition to reviewing and updating existing manuals and training materials, we will investigate the development of new tools to assist staff in properly carrying out these functions. The results of our review of the stewardship issues and contributing network pressures will be tabled with senior management.

Appendix A: Management Action Plan

Appendix B: Audit Time Line

Audit planning: February 2006

Site visit to Seoul mission: March 27–April 7, 2006

Clearance draft to IPM and IR for comments: May 11, 2006

Management action plan finalized: September 11, 2006

Report approved by Audit Committee: _______________