Audit of the Management Framework of the Canadian Space Agency's (CSA) Ground Infrastructure Subprogram

Criterion 1

The subprogram's operations are appropriately planned.

Condition

Conclusion on the criterion:

Our audit showed that the subprogram's operations are appropriately planned. However, some opportunities for improvement were identified.

The subprogram's expected outcomes are clearly defined

In our opinion, the CSA Ground Infrastructure subprogram's expected outcomes are clearly defined. They have been developed and adequately monitored using the CSA's corporate work plans. They guide the CSA's activities for the purpose of operating an integrated ground infrastructure system to receive, process and make available space data required by users.

The main expected outcomes are as follows:

• Reliable ground infrastructure.
• The CSA's satellites function in accordance with operational requirements.
• Canadian and foreign data needs are met through ground infrastructure.
• Foreign satellite missions are supported.
• Satellite data is transmitted to GoC organizations and research institutions.

Performance indicators are in place and performance is measured periodically to monitor the achievement of outcomes. According to the data provided by the subprogram, all of the expected outcomes were achieved in 2015-2016.

Operations planning

In our opinion, the CSA Ground Infrastructure subprogram's operations have been adequately planned. The work plans clearly illustrate the operations required to achieve the expected outcomes. Operations are divided into two main activities: satellite operations and data handling. These activities are performed as part of satellite missions, such as Radarsat-1, Radarsat-2, NEOSSat, SCISAT, M3MSat, and the RCM currently in development.

Considering the scale and importance of the RCM, we have paid particular attention to the planning of the mission's ground infrastructure. As a matter of fact, the CSA's satellite operations will face important changes in 2018, when the RCM becomes operational. This mission's operational volume will be higher than the one currently in operation. The contractor responsible for construction of the RCM's satellites will also be responsible for the RCM's operations during its first year of operation. A number of the CSA's employees will be reassigned to the RCM's operations with the contractor during the first year, and the CSA will become responsible for its operations starting the second year. As the satellites' launch is scheduled for July 2018, there are about 13 months left in which to complete preparations for the ground infrastructure. A work plan describing preparatory steps and a forecast budget for operations were developed and presented to the RCM's vice-president's steering committee. Several actions such as obtaining the operating licence and improving the capacity of the antennas are currently underway. The submitted plan adheres to the timeline, but a final decision concerning the RCM's operational model has yet to be reached. Different opinions on the matter are currently being studied.

Planning for future infrastructure needs

The CSA's infrastructure needs have been established in accordance with new satellite programs' requirements for new equipment as well as in accordance with needs to maintain or increase current equipment capacity. This type of spending is recorded in a capital expenditure plan listing the CSA's initiatives and expenses to that effect. The total of these expenses varies annually between $0.5 and $2.5 million.

A large portion of the budget is allocated to initiatives to increase capacity. For example, nearly $5 million was invested in the last 3 years to allow a partner's antennas to send commands to the CSA's satellites. It is anticipate that this equipment will be used by a number of the CSA's satellite missions, including the RCM.

Another portion that varies from $0.5 to $0.7 million per year is allocated to the renewal of existing equipment and to the replacement of obsolete infrastructure. To this end, we expected to find an equipment maintenance book in which to document plans and corroborate decisions made concerning the type of work to be executed. However, this process currently takes place during team meetings and is not officially documented. We believe that a regularly updated maintenance book would accurately indicate CSA's needs and efficiently support planning and decision making for this kind of spending. A recommendation was made in this regard.

Financial planning

We have noted that a financial plan has been drawn up in accordance with upcoming operations and missions. This planning is carried out taking into consideration the overall expenses and particularities for each mission. Among other things, an increase of the operations budget is planned for the RCM's launch in 2018. This budget increase will cover salaries, licences, service contracts and the cost for using the antennas for data receipt. An operating budget developed for this purpose was presented to the RCM project vice-president's steering committee. This plan could be modified depending on the operational model selected for the mission.

Furthermore, as previously mentioned, the program makes capital expenditures every year to increase capacity or maintain the infrastructure. This spending is recorded in a capital expenditure plan that lists future initiatives and expenses. The last update to the capital expenditure plan for the subprogram was made in November 2015. We feel that it should have been updated in 2016-2017 in order to support planning. A recommendation to this effect has been made.

Organizational structure and human resources planning

During the audit, we reviewed the subprogram's organizational structure. Out of the 24 positions identified, 3 were vacant. We also noted that many positions were filled temporarily. However, it should be noted that a new organizational structure was implemented at the beginning of 2017-2018.

As a result of the implementation of the new organizational structure, a number of staffing activities are planned throughout 2017-2018, including the staffing of a certain number of temporary positions in preparation for the launch of the RCM project.

Risk identification and management

The risks identified for the Ground Infrastructure subprogram were documented during the CSA's corporate risk assessment in 2015. The results of this assessment identified a low risk level for the subprogram with regard to most corporate risks, except for the risk of potential cost increases and the risk of security of people, goods and information. These had been assessed at a medium risk level and mitigation measures were to be put in place.

As for a potential increase in costs, we have identified a major project that was subject to this risk over the last few years. This involved an investment of a little over $5 million that aimed to increase the capacity of a partner's antennas. The work was managed by the partner and is almost complete. So far, the budget envelope has been respected. The residual financial risk is limited. From a technical point of view, the documentation reviewed shows that the CSA has been monitoring the situation throughout the performance of the work to make sure that the requirements were met. A new collaboration agreement between the two parties for the use of these antennas by the CSA within the framework of RCM is currently being developed. The business model and usage costs are currently being discussed.

With respect to the risks associated with the security of people, goods and information, one of the mitigation measures identified was the annual update of the BCP. However, we ascertained that the business continuity plan had not been updated for a few years. Certain employees identified as responsible for the BCP have either left the organization or no longer work with the subprogram. Furthermore, none of the subprogram's employees can access the BCP electronically. It is restricted to those working for the Security and Facilities group. As for the contents of the BCP, certain elements suggested in the Government of Canada's Guide to Business Continuity Planning are absent, such as readiness procedures and quality assurance techniques (exercises, maintenance and auditing). Bearing in mind the high criticality level of the subprogram's operations in relation to satellite operations, we feel that the BCP should be updated in order to become an efficient management tool if needed. Accordingly, the CSA is currently in the process of reviewing BCPs for the entire organization. We have reviewed the relevant data security documentation and noted that the expected principal general security controls are in place.

Organization

Space Utilization Branch

Function

Director, Space Operations

Action plan details

Recommendations 1 and 2 – Maintenance book and capital expenditure plan

The maintenance book and the capital expenditure plan for ground infrastructure will be updated as part of the Annual Reference Level Update (ARLU) for 2018-2019 scheduled for August and September 2017, and then on an annual basis. They will be included in the ARLU documents that are approved by the Space Utilization Management Committee. An approval request for the combined elements will then be directed to the Integrated Investment Review Board (IIRB).

The maintenance plan for the RCM will be based on the RCM System Maintenance and Spares plan developed by the general contractor. This document delivered on June 24, 2016 will be updated when the ground system is sufficiently developed.

Deadlines: R1 : ARLU calendar for 2018-2019

R2: Presentation of the capital expenditure plan to the IIRB in September 2017

Recommendation 3 – Business continuity plan

The Branch contributes to departmental efforts to update the BCP as identified in the Directive for the Business Continuity Planning program from February 2017.

The update will include the names of those responsible for the plan. Quality assurance is included in the new procedure. We will respect the calendar proposed by Security and Facilities management.

Deadlines: R3: Security and Facilities management calendar:

• Analyze impacts on operations – mid-September 2017
• Finalize business continuity plans – January 31, 2018
• Implement business continuity plans – March 31, 2018
• Review the program and update it – March 31, 2018

Criterion 2

The subprogram activities are controlled in an appropriate manner.

Condition

Conclusion on the criterion:

Our audit demonstrated that the subprogram's activities are appropriately controlled.

The spending authorizations are controlled, and the expenditures are approved and made to in accordance with acts, policies and regulations.

We examined a sample of ten operating expenses for five trips. The sample selection was based on a variety of activity types, the monetary value and the type of contract used. The total value of the expenses reviewed was $1.65 million and represented approximately 11% of the total expenses for the 2015–2016 fiscal year and the first three months of 2016–2017 fiscal year.

We noted that the program complied with acts, policies, regulations and relevant guidelines issued by the CSA and the central agencies. Essentially, these operations were authorized and approved in accordance with the Financial Administration Act (sections 32, 33, and 34). The transactions were made on the basis of payment relating to contractual agreements and to laws and guidelines. Additionally, the trips reviewed were justified and the most economical methods were used.

With respect to contract awards, we selected a sample of five contracts awarded to providers without bids. For the documents examined as a whole, the justification and the documentation used for the process were adequate and in compliance with the Treasury Board's Contracting Policy.

Financial transactions were accounted for appropriately

We examined the accounting of the selected expenses in the above criterion and we determined that they were appropriately recorded in the accounting records.

We also examined a sample of seven items from the inventory to determine whether the way they were recorded and the amortization methods used were appropriate. This involved mainly used or stored equipment for the operation and management of satellite infrastructure. The inventory items whose value was the highest and whose date of acquisition was the furthest back in the past were selected to target the riskiest items. The amortization methods used were appropriate and no deficiency was found in this area. However, one piece of equipment in the subprogram's inventory out of the seven examined could not be located and another was declared obsolete and disposed of, even though both still appeared in the inventory records. Additionally, we noted on several occasions that the location of equipment in the warehouse was not up to date. The risk to the organization arising from this deficiency is low, as these equipments were already amortized and no value was recorded in the financial statements. These equipments were also no longer used. Nevertheless, we recommend reviewing the inventory list to determine its accuracy and make any corrections to it so that there is adequate control over the equipment.

With respect to cost breakdowns between missions and recording common operating costs, we reviewed the formulas used and the transactions completed in 2015 and 2016 and we noted that the accounting for expenditures was correct.

Controls are in place to allow for monitoring of activities

We noted the controls in place to promote the efficient monitoring of activities. Several accounts and reports submitted were used to monitor the activities of each mission. We paid close attention to the investment project mentioned earlier that was aimed at increasing the capacity of a partner's antenna. We noted that a weekly follow-up on the project was done to determine whether the project's requirements were met. Additionally, several monitoring documents were used, such as meeting minutes, reports on ongoing and upcoming activities along with test reports and procedures. An audit and compliance matrix for each requirement was created for the program.

We also paid special attention to the controls surrounding the production of collaborative agreements for the subprogram. In fact, the subprogram is responsible for more than 30 collaborative agreements with several national and foreign partners such as Government of Canada departments, provincial governments, and foreign governments. We examined a sample of five collaborative agreements and we noted the main controls expected were applied, including the review of agreements by legal services and the signing of agreements by authorized individuals. However, we identified some differences between the roles and responsibilities listed in the document CSA Policy & Procedures on Collaborative Arrangements and what happens in practice. These differences primarily concern the role of the Policy Branch in the agreement development process Additionally, depending on the source of the information, the list of collaborative agreements obtained during the audit was different. For control and monitoring purposes, it would be desirable to have a complete list with the details for all active and cancelled collaborative agreements. We are of the opinion that a review of the roles and responsibilities of the different stakeholders involved in the CSA collaborative agreement development process would be appropriate to determine whether updating the policy is required.

Organization

Directorate, Space Utilization

Function

Director, Space Exploration

Action plan details

Recommendation 4

The inventory record or log will be reviewed in accordance with the established official calendar. Special attention will be given to the location of equipment and those responsible will ensure that equipment is written off when necessary. Finally, some equipment was assigned to satellite operations even though it belonged to other sectors. Corrections will be made if required.

Deadline: March 31, 2018

Criterion 3

The activities are measured according to the expected outcomes and are subject to accountability.

Condition

Conclusion on the criterion:

Our audit demonstrated that the subprogram's activities are measured according to the expected outcomes and subject to accountability.

Accountability

We noted that the performance indicators have been established and compared to the mid-year and year- end objectives. Accountability and reporting are carried out during the CSA integrated management cycle. Additionally, regular meetings are held with the CSA management to report on the subprogram's activities.

We have also selected a sample of 5 performance indicators and we have validated the data used during the CSA reporting and accountability process for the 2015–2016 fiscal year. No significant gap was observed and we have noted the outcomes/results released are valid.

Organization

N/A

Function

N/A

Action plan details

N/A

Deadline: N/A