Audit of The Administration of Settlement Programs

1.0 Introduction

The CIC risk-based audit plan is prepared annually to coordinate the internal audit work on a multi-year basis and is designed to support the assessment of the state of governance, risk management and internal controls within the Department. The 2008–2009 risk-based audit plan identified the need for audit engagements in the areas of:

• the Integration program – Administration of Grants and Contributions; and
• the Immigration Contribution Accountability Measurement System (iCAMS) – Phase II.

The two engagements have been combined under the Audit of the Administration of Settlement Programs because of an overlap in subject matter and for resource efficiency.

1.1 Background

In collaboration with its partners, CIC’s mission is to build a stronger Canada by:

• Developing and implementing policies, programs and services that:
  • facilitate the arrival, settlement and integration of newcomers to Canada in a way that maximizes their contribution to the country;
  • maintain Canada’s humanitarian tradition by protecting refugees and people in need of protection;
  • enhance the values and promotes the rights and responsibilities of Canadian citizenship; and
  • reach out to all Canadians and foster increased intercultural understanding and an integrated society with equal opportunity for all, regardless of race, ethnicity and religion; and
• Advancing global migration policies in a way that supports Canada’s immigration and humanitarian objectives.

CIC is responsible for the selection and processing of applications from people wishing to come to Canada on a temporary or permanent basis, and for helping newcomers adapt to Canadian society and become citizens. Key legislation empowering the Department includes the Department of Citizenship and Immigration Act (1994), the Immigration and Refugee Protection Act (2002), the Citizenship Act (1977) and the Canadian Multiculturalism Act (1988).

1.1.1 Settlement Programs—Background

The settlement programs[Note 2] provide funding to SPOs through contribution agreements to deliver settlement services on behalf of CIC. These services are provided to eligible clients to facilitate their successful integration into Canadian society. Eligible clients include permanent residents, Convention refugees and protected persons, permanent residence applicants who have been informed that they have been selected, and live-in caregivers.

At the time of our audit, settlement programs funded by CIC were established under three distinct programs: LINC, ISAP and the Host program. Initiatives that fall under ISAP but have separate funding authorities include Enhanced Language Training (ELT), the Welcoming Communities Initiative (WCI), the Going to Canada Immigration Portal, and the Strategic Plan to Foster Immigration to Francophone Minority Communities.

CIC renewed its terms and conditions and adjusted its settlement programs in 2008. The new terms and conditions took into consideration the findings of the Blue Ribbon Panel, a panel of experts tasked with the responsibility of reviewing the management of grants and contributions throughout the government. The new approach to settlement programs was intended to better correspond to newcomers’ needs by enabling SPOs to provide more flexible, coordinated and responsive programs in order to:

• enhance flexibility, coordination and responsiveness in programs to better meet newcomer needs;
• strengthen and more clearly demonstrate the link between settlement activities and improved newcomer outcomes; and
• improve planning and assessment activities.

At the time of our audit, the new program had not yet been fully implemented and was expected to be phased in. Total contribution funding available to SPOs and provinces for settlement programs (outside of Quebec) has grown from approximately $175 million in 2003–2004 to approximately $678.4 million in 2009–2010 (see Table 1 below for additional details). In 2005–2006, CIC committed to the Government of Canada’s agenda to improve outcomes for immigrants. CIC restated its commitment to the successful integration of newcomers in its plans and priorities for 2007–2008. At the same time, substantial increases in investments in CIC by the Government of Canada reinforced the importance of settlement programs to newcomer settlement success. The additional funding provided new resources for CIC to develop and enhance its settlement programs and improve program accountability.

Table 1 – Planned spending for 2008–2009 to 2010–2011

Source: Integrated Corporate Business Plan and Report on Plans and Priorities

Settlement services are administered by the Department in all provinces and territories across Canada except Quebec, British Columbia and Manitoba where the provinces are responsible for the delivery of these services. Settlement services in Quebec are governed by the Canada-Quebec Accord (1991), under which Quebec receives an annual federal grant and has sole responsibility for selecting immigrants and providing settlement services to newcomers. British Columbia and Manitoba receive funding from CIC through Alternative Funding Arrangements (AFAs) for settlement programs. Under these AFAs, the provinces are responsible for the design, administration and delivery of settlement services to newcomers within their respective jurisdictions. While agreements on settlement services do exist with two other provinces (Ontario and Alberta), CIC retains responsibility for program delivery. Appendix A provides further details of the program delivery approach across the country.

With the exception of Quebec and Ontario, where the funding amount is determined through agreements with the provinces (Canada-Quebec Accord and Canada-Ontario Immigration Agreement, respectively), the funding allocated to jurisdictions is based on a model developed in consultation with the provinces and territories. The model allocates settlement funding and funding for ELT, WCI and the Going to Canada Immigration Portal based on the following factors:

• Parity among provinces and territories;
• Rolling average three-year intake of immigrants;
• Special consideration for some groups at risk (e.g., youth, women, etc.);
• Capacity building to support infrastructure development; and
• A national fund to support overseas and national initiatives (administered by CIC NHQ).

1.1.2 CIC Organization with Respect to Settlement

The Strategic and Program Policy (SPP) sector within CIC, is responsible for developing programs and policies to support CIC’s mandate. In the SPP sector, the Integration Branch is responsible for the development of programs to increase immigrants’ social and economic outcomes and is consequently responsible for the design of the settlement programs. The Operations sector is responsible for delivering departmental programs and is divided into regional and centralized delivery units. For settlement programs, the Operational Management and Coordination (OMC) Branch within the Operations sector establishes operational guidelines and standards to support national implementation of settlement programming. The Branch also manages national and international projects. Domestic regions manage the regional delivery of settlement programs (except Quebec). Each domestic region is comprised of a regional headquarters and a series of local offices that offer services to the communities they serve and manage contribution agreements with SPOs at the local level. This process is described below and depicted in Appendix B.

In general, the Department solicits proposals from eligible SPOs to deliver settlement services. Eligible SPOs include provincial, territorial and municipal governments, not-for-profit organizations, businesses, educational institutions and individuals. Following a review process carried out by CIC staff, qualified proposals received are submitted for approval in line with delegated authorities. Once approved, a contribution agreement is developed that outlines the terms of agreement between CIC and the SPO.

SPOs delivering services on the Department’s behalf are required to periodically report on their activities through activity and financial updates. In most cases, SPOs are also required to provide activity reports through the iCAMS system, an online electronic repository designed to facilitate departmental reporting. Local CIC officers are responsible for the monitoring of SPO progress on delivering services agreed to in their contribution agreements. They are also responsible for the verification of expenditure claims. Once the claims are approved, SPOs are reimbursed for the eligible expenses incurred. At the end of an agreement, CIC officers are required to review the results to determine if a satisfactory performance was achieved with a view to using this information to renew, expand or close existing agreements.

Departmental guidelines require that full records be maintained throughout the agreement process and be made available for departmental review as needed.

In past years, the Department decided to lapse some funding related to its settlement programs. One reason for this decision was to ensure that sufficient capacity was developed within the SPO community to properly deliver on commitments required under the CIC contribution agreements with SPOs. Also, over the past two years, the Department has been closely monitoring some SPOs who did not comply with the requirements of their contribution agreements with CIC. As a result, the Department decided to terminate or not renew the contribution agreements with a number of these SPOs.

1.1.3 Previous Audits

In 2001, the Office of the Auditor General (OAG) reported that CIC’s financial and management controls for its settlement contributions program were adequate, but that on-site monitoring of SPOs and financial training for program officers required improvement. The audit also noted that while the Department had not been measuring the results of the program, it had started to make progress in capturing data for this purpose. At this time, the OAG also recommended moving to multi-year agreements.

The Internal Audit and Accountability Branch had conducted audits of the settlement programs as follows:

• Audit of the LINC contribution program in 2005;
• Audit of the ISAP and Host contribution programs in 2006; and
• Audit of iCAMS in 2007.

These audits made eight recommendations in total. Regular follow-up on the status of the recommendations has occurred as part of our follow-up process.

1.1.4 Environmental Context

This section of the report highlights some of the environmental risks and issues facing the program. They are presented here for information purposes only and are in no particular order.

• Introduction of the updated Treasury Board Secretariat (TBS) Policy on Transfer Payments (effective October 1, 2008) following the report of the Independent Blue Ribbon Panel Review, which called for greater flexibility, a risk-based approach and a reduction of the administrative burden;
• Establishment of new terms and conditions for the Department’s settlement program, which sought to combine the Department’s existing settlement programs and expand them into new settlement themes;
• Substantial  increases in overall funding levels for settlement services in recent years so that actual settlement grants and contributions spending for 2008–2009 was $729.6 million, which was roughly 55% of the Department’s total spending and represented a 54% growth over 2006–2007;
• Evolving roles and responsibilities from departmental reorganizations that add complexity to roles and responsibilities in terms of program design, delivery and ownership;
• Mixture of delivery models in place for settlement services across the country that results in CIC direct delivery in certain parts of the country, shared responsibility with provinces in certain parts, and devolved responsibility to provinces in the remainder (see Appendix A);
• Increased interest from the provinces and other non-traditional stakeholders (e.g., municipalities) in areas related to immigration, creating a more complex operating environment;
• SPOs delivering services to meet the needs of not only clients of CIC programs but also those of other departments and agencies, which are not necessarily the same people;
• Increased public scrutiny as there are larger and more vocal community and stakeholder advocacy groups; and
• Stand-alone information systems that are used to manage the programs do not share information and, in some instances, duplicate or contradict information in other systems. These systems were designed to serve individual purposes and face limitations when used to manage at the program level.

1.1.5 Audit Risk Assessment

The audit risk assessment was based on reviews and analysis during the planning phase and took into account applicable elements of the TBS Management Accountability Framework (MAF) and the CIC Core Management Controls Framework. This assessment identified the following key risks:

• Governance, accountability and risk management: There is a risk that governance structures and accountabilities may not be clearly defined, and that risk management practices may not be fully in place for the management of these programs.
• Performance management: There is a risk that performance information for the settlement programs may not be complete and available to inform managerial decision making.
• Internal control: There is a risk associated with the control framework as these programs have grown substantially since our last review.

1.2 Audit Objectives

The objective of the current audit was to assess the adequacy of:

• the governance framework over settlement programs;
• the performance measurement framework over settlement programs; and
• internal controls over the administration of transfer payment programs to ensure compliance with applicable policies.

1.3 Audit Criteria

Criteria are the benchmarks against which the subject matter of the audit engagement was assessed. The source of the criteria for the governance framework and performance framework lines of enquiry was the MAF, while the criteria used to determine the adequacy of internal controls were derived from the following sources:

• Financial Administration Act;
• TBS Policy on Transfer Payments;
• TBS policies on financial management;
• CIC policies and manuals on settlement and resettlement; and
• CIC financial policy manuals.

The detailed criteria for the audit are presented in Appendix C and were provided to management at the outset of this engagement.

1.4 Audit Scope

The audit scope was comprised of settlement activity, including iCAMS, during fiscal year 2008–2009 at NHQ and in the regions responsible for the delivery of these programs.

We did not examine alternative funding arrangements with British Columbia and Manitoba, or the federal grant provided to Quebec for these services. Agreements with the provinces will be examined as part of our audits of the management of relations with provinces and territories.

1.5 Audit Methodology

The audit included three lines of enquiry: governance framework, performance measurement framework and internal controls.

The audit of the governance and performance measurement frameworks involved interviews with senior management and a review of relevant documents primarily at NHQ and in the Ontario Region. The file review (described below) was also used to gather information to support our findings on performance measurement.

We reviewed a sample of contribution agreement files to verify controls in place over the administration of settlement programs, and to assess compliance with the TBS Policy on Transfer Payments and departmental policy. The actual sample was selected using a judgmental approach. We reviewed the largest agreements, which accounted for 60% of the funds committed for all active agreements during 2008–2009. In total, we looked at 121 agreements managed by 10 offices across the country in all the regions responsible for the delivery of these programs.

Notes

² Under the new terms and conditions approved in May 2008, the suite of CIC settlement programs is now referred to as the Settlement Program.

<< Previous | Contents | Next >>