Audit of the Management of Moveable Assets

Report Summary

Introduction

The audit of the Management of Moveable Assets was undertaken by the Audit and Accountability Bureau (AAB) in accordance with the 2003-04 Risk-Based Audit Plan, as approved by Health Canada's Departmental Audit and Evaluation Committee.

The objectives of the audit were to assess the adequacy of the:

• identification and management of risks related to assets management objectives:
• Moveable Assets Management Control Framework, including monitoring and reporting processes in place to mitigate risks; and
• operational and financial information in place for decision-making and reporting, in compliance with prescribed policies and procedures of the Treasury Board Secretariat and Health Canada.

Health Canada's managers and employees have custodial and managerial responsibility for all departmental assets, including the acquisition, utilization, improvement, maintenance, tracking, storage and disposal of those assets. The Material Management Division (MMD) within the Assets Management Directorate (AMD) of the Corporate Services Branch (CSB) provides both functional direction and a range of material management services to managers and employees, in support of departmental program activities.

At the end of the 2002-03 fiscal year, Health Canada recorded a total of more than $250 million worth of assets on its Balance Sheet. There is not a specific dollar amount for moveable assets on the Department's general ledger. Moveable assets include items known as "attractive" items, such as TV's, VCRs, Personal Digital Assistants (PDAs), etc., as well as all assets valued at more than $1,000, other than real property and motor vehicles.

The audit covered the policies, procedures, processes and structures established by management at both the departmental and branch levels to enable Health Canada to achieve its objectives for the management of moveable assets.

Key Findings

The auditors found that various initiatives undertaken by MMD, if fully implemented, would significantly mitigate risks associated with the management of moveable assets within the Department.

AMD engaged the consulting firm Covenco to recommend a series of projects and activities that would result in the implementation of an Assets Management Framework (AMF) within the Department. The resulting March 2003 Covenco report, entitled Health Canada AMD/MMD Asset Management Framework, included a total of 33 recommendations to address weaknesses identified in the Department's AMF. All 33 recommendations were accepted by MMD and an Action Plan addressing each of the recommendations was developed in January 2004. MMD expects to complete the implementation of corrective measures by the end of December 2005.

During the Preliminary Survey Phase of the audit, the auditors reviewed the methodology used by Covenco to conduct the study, as well as the resulting report, along with the corresponding Action Plan developed by MMD. In addition, key staff members within MMD were interviewed, as well as selected individuals at the Directorate level within AMD.

The auditors found that the review conducted by Covenco was comprehensive in nature and used a reasonable methodology. The corrective measures included in MMD's Action Plan appear to fully address the weaknesses identified in the Covenco report. It was also found that the corrective measures recommended in the Covenco report sufficiently cover the various sub-elements of the objectives for this particular audit.

As a result, the audit was terminated at the conclusion of the Preliminary Survey Phase. As such, AAB is not providing a level of audit assurance against the audit objectives at this time. However, in the opinion of the audit team, the recommendations, if fully implemented, would sufficiently mitigate risks relating to the management of moveable assets within the Department.

Recommendation

It is recommended that the Assistant Deputy Minister of Corporate Services Branch ensure that the recommendations contained in the Health Canada AMD/MMD Asset Management Framework produced by Covenco are fully implemented by December 31, 2005.