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Audit of the Management of Building Systems — Communications Research Centre Canada

Appendix A

Audit Criteria

A. Management Framework and Accountability

  • The CRC's real property management framework provides the resources and data to ensure that the real property held for program delivery is managed efficiently and effectively
  • The CRC can provide information on its real property management framework, including organization, financial authority and information systems, needed to assess its performance in real property management
  • The CRC has developed appropriate real property management policies, practices, procedures and information systems and managers are aware of them
  • Delegation of authority and accountability, at levels appropriate to efficient service delivery, has been clearly defined.
  • Reasonable controls are in place to prevent fraud and abuse.
  • CRC's real property management framework facilitates action supporting government policies and does not inhibit action with complex processes
  • Copies of relevant Treasury Board and other policies are readily available to staff involved in real property management.
  • Staff is qualified and receive training that develops and maintains the skills they need to execute their current and future responsibilities effectively.
  • Copies of CRC's real property plans, policies and decisions have been distributed appropriately and instructions have been followed

B. Real Property Information Systems

  • A real property information system is in place that readily provides information concerning restrictions on use, accessibility, contamination, cost, and other attributes of each property that the CRC administers
  • The real property information system identifies, where appropriate, the capital, historic and current operating and maintenance costs and cost trends of facilities
  • The CRC uses its real property information system to determine when and how to maintain, preserve or replace real property consistent with program needs
  • Automated processes and tools are being used effectively, where appropriate, in accordance with government plans for electronic data dissemination and decreased use of paper
  • The information system is cost effective, and program needs determine how much information is gathered and how frequently it is updated
  • The use of shared information systems and software within the CRC and within government has been examined and such systems and software are used wherever appropriate
  • The CRC provides current and accurate information in a timely manner to other departments and to the Directory of Federal Real Property, as required
  • The CRC participates in the Area Screening Canada Program
  • The CRC provides information to central agencies in a manner that is readily usable
  • The annual Information Management Plans of the CRC reflect the needs of the real property function

C. Long-Term Planning

  • Long-term capital strategies related to real property are prepared, reviewed and updated in accordance with Treasury Board real property management policy objectives

D. Project Planning

  • Project activity and proposals fall within approved capital plans and lease plans and established investment criteria, and the Long Term Capital Plan reflects project funding schedules

E. Periodic Review of Real Property Holdings

  • The CRC regularly reviews and evaluates its real property in terms of the real property's efficiency and effectiveness, adherence to real property policy, environmental risks, revenue-generating ability, appropriateness to program needs, accessibility, heritage designation and other relevant factors
  • Each real property asset is linked to program needs
  • Properties no longer required for program purposes are identified as soon as possible to minimize carrying costs before disposal
  • The length of time between the date of identification of excess property and the initiation of the disposal process is reasonable
  • The length of time between the initiation of the disposal process and the date of sale or transfer is reasonable
  • The CRC uses each property in accordance with the principle of highest and best use, keeping in mind the program requirements for the property and the option of using other property to deliver the program
  • Property meets the present and anticipated needs of the program at the lowest cost
  • Property is adaptable to the anticipated needs of the program
  • The CRC regularly assesses the physical state of its real property inventory
  • Definitions and analysis of real property requirements are linked to the analysis of program needs.
  • The amount of unused and underutilised space as a percentage of total space is minimal
  • The costs of maintaining and operating the facility are reasonable when compared to alternatives.
  • The CRC has assessed alternatives, including consolidating facilities within the CRC or with other departments' facilities
  • Vacant or underutilised real property is leased, sold or surrendered.
  • The CRC, when deciding whether to retain underutilised property, has calculated and reviewed the property's opportunity cost (operating and maintenance costs, grants-in-lieu, etc.).
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Appendix B

April 18, 2006 
Action Plan Communications Research Centre Management of Building Systems
Recommendation Management Response and Proposedaction Responsible Official Action Completion Date

5.1.1 Strategic Allocation/Reallocation of Resources

Recommendation 1.

It is recommended that the President, CRC ensure that a real property management reporting regime is established that provides members of the CRC Management Committee regular reports on the total costs and cost trends of its facilities, and of the real property expenditures made by each CRC science program or branch.

CRC will implement a methodology of internal cost allocation by Branch. The audit indicated it will not be an exact allocation but one that would be consistent within the CRC from branch to branch.

DFMM

April 1, 2007

CRC will also develop a process to capture the additional costs of research program changes or any new research program, recruitment initiatives and new infrastructure. These costs, including facility and operational costs will form a required part of any proposal and will be considered in the prioritization of research program initiatives. This methodology will be put in place beginning in fiscal year 2007/08 and will be modified as required in order to maintain effective resource allocation.

DFMM

April 1, 2007

Also, Director of Campus Operations will present regular reports of cost impacts to the management team.

DCO

November 14, 2006

5.1.2 Horizontal Collaboration

Recommendation 2.

It is recommended that the President, CRC revise the CRC's strategic and operational planning and budgeting processes to better ensure that the real property requirements or implications of science program plans are known to and reflected in the plans and budgets of its real property function.

CRC agrees to improve current processes. CRC will establish early consultation mechanisms to ensure that the implications for incremental operations and maintenance expenditures of planned equipment acquisitions and human resource plans are discussed between the research branches and campus operations.

DCO Research VP's

Completed

Any major acquisitions with implications on real property will be reported and discussed at the Communications Research Centre Management Committee (CRCMC), which meets every two weeks.

Research VP's

Completed

Vice Presidents will advise the Director of Campus Operations of the infrastructure implications of changes to their scientific program and equipment.

Research VP's Corp Svc Dir's

Completed

CRC will investigate the possibility of creating an infrastructure reserve fund to pay for unanticipated infrastructure modifications or repairs that cannot be accommodated by previously budgeted funds.

DCO

DFMM

January 2, 2007

5.2.1 Management Systems

Recommendation 3.

It is recommended that the President, CRC and Assistant Deputy Minister (ADM) Comptrollership and Administration jointly develop recommendations for presentation to the Departmental Executive Committee on options for the organizational placement of the CRC real property function that will provide better assurance that funding targeted for real property is not redirected to meet program funding shortfalls.

CRC's real property function includes operation and maintenance and project management not only for CRC but also for other Campus tenants (DRDC, DND and CSA). Any change in organizational placement will need to consider the impact on all tenants and not just on CRC. The objective under this recommendation is to ensure that the funding targeted for real property is not redirected to other programs.

Part of this issue is already addressed through IC having a separate budget for capital and using a priority process for its allocation. Further, any change from the planned expenditure of capital budget requires CFO approval.

While operational plans include total cost for the activities, implications of any funding shortfall for real property on research programs is not explicitly discussed. Such a discussion will ensure that due priority is given to real property issues. This action should adequately address the key concern raised in the recommendation.

DCO

Completed

5.3 Risk Management

Recommendation 4.

It is recommended that, as necessary, the CRC review its real property capital planning requirements for inclusion in IC's Long Term Capital Plan as a means to mitigate risks to the department's real property assets at Shirleys Bay. In particular, the review should reassess:

  • The reasonableness of assumptions underlying the classification of real property capital projects as "funded";
  • The implications of the real property capital program for operational funding requirements at CRC;
  • Whether there is a need for developing more explicit, proactive risk management strategies and plans with respect to real property assets at Shirleys Bay.

CRC agrees with the recommendation and will develop an appropriate response consistent with IC priorities and TB policy.

    

CRC review its real property capital planning requirements for inclusion in IC's Long Term Capital Plan.

DCO

Completed

Assumptions underlying the classification of real property capital projects as funded.

DCO

Completed

The implications of the real property capital program for the CRC's operational funding requirements.

DCO

Annually in September

Whether there is a need for more explicit, proactive risk management strategies and plans with respect to the real property assets at Shirleys Bay.

DCO

April 1, 2007

5.4 Accountability

Recommendation 5.

It is recommended that the President, CRC ensure that the performance agreements for all managers in the Campus Operations Branch are up-to-date, and that they always reflect current responsibilities.

Performance agreements for DCO, RE&P and O&M for 04/05 are now complete and based on the branch operational plan.

DCO

Completed

The job descriptions for RE&P and O&M have been re-written to reflect current the organization and duties.

DCO

Completed

Recommendation 6.

It is recommended that the President, CRC review whether it remains appropriate for control of the budgetary allocation to address urgent health and safety issues to remain with the Director, Finance and Technology Transfer.

Control of the budgetary allocation for Health and Safety issues has been transferred to the Director, Campus Operations Branch.

PCRC

Completed

5.5.1 Regular Review, Evaluation and Reporting

Recommendation 7.

It is recommended that the Director, Campus Operations Branch establish a program for regularly reviewing, evaluating and reporting on its real property as per the requirements of the TB Real Property policies.

CRC agrees in principle with this recommendation, however, implementation would depend upon incremental funding.

Treasury Board Real Property Policies are based on the life cycle management concept. Life cycle management requires knowledge of current building conditions, and planned maintenance and repair. CRC would have to develop systems and assign personnel to create and update the required information. Compliance with this recommendation would require salary resources, as well as incremental, ongoing annual expenditures for consulting services to provide Building Condition Reports, as well as the software and hardware required for a system to report on annual maintenance and operating costs.

A program for regularly reviewing, evaluating and reporting on its real property as per the requirements of the TB Real Property policies will be carried out consistent with budgetary allocations.

DCO

April 1, 2007

5.5.2 Ability to meet Present and Anticipated needs

Recommendation 8.

It is recommended that the President, CRC conduct a review of the current and anticipated future cost of each of its science programs. This review should encompass the total cost of delivery, including the costs of upgrading and maintaining the real property platforms from which these programs are delivered. It should then determine, taking into account its mandatory program responsibilities, how many of these programs are sustainable in the long term, and take action to balance its program configuration with its long term financial capabilities.

The methodology detailed under Recommendation 1 will provide the data for determining the current and future costs of the science programs. The main issue here is the continual reduction in CRC's funding levels over the last four years while the client's requirements during the same period have not reduced and at the same time, the physical infrastructure has aged significantly. CRC has identified this funding issue to IC's senior management and a number of initiatives involving tenant participation are underway to seek additional funding. Should such funding not become available, R&D activities will have to be reduced. As noted under recommendation #1, a process will be instituted which will connect R&D programs with their associated real property costs to provide a more accurate program delivery/activity cost.

Discussions with tenant organizations will be held with the objective of asking them to contribute to the cost of the stewardship component of managing the Shirleys Bay Campus. The new Assets and Acquired Services Policy suite, which came into effect November 1, 2006, should assist in this regard.

PCRC Research VP's

April 1, 2007
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