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1982 Report of the Auditor General of Canada

Synopsis

9.1 The overall objective of the Minerals and Earth Sciences Program (MESP), as set out in the Estimates, is to ensure "the availability of mineral policies and strategies and timely earth science information, technology and expertise related to the landmass of Canada and its mineral and energy resources.,, MESP is composed of three major sectors: Mineral Policy, Earth Sciences, and Research and Technology. The three sectors report to the Associate Deputy Minister. Exhibit 9.1 sets out the organization.

(Exhibit not available)

9.2 The Mineral Policy Sector establishes policies and strategies to ensure adequate supplies of minerals and metals for Canada and undertakes assessments of Canadian and world supply and demand in minerals.

9.3 The Earth Sciences Sector, which is composed of the Geological Survey, Earth Physics, and Surveys and Mapping Branches, is responsible for ensuring the availability of geological knowledge about the mineral and energy resources of Canada, providing knowledge of the dynamic processes and hazards of the Canadian landmass (for example, earthquakes), publishing topographical maps, and conducting surveys of federal lands.

9.4 The Research and Technology Sector includes the Centre for Mineral and Energy Technology (CANMET), the Centre for Remote Sensing (CCRS), and the Explosives Branch. CANMET co-ordinates federal research efforts in mining and energy. CCRS develops and demonstrates systems to disseminate remote sensing data from aircraft and satellites. The Explosives Branch regulates the manufacture, storage and sale of explosives.

9.5 The budget for 1981-82 was just over $165 million. Personnel costs in the form of salaries and wages and benefits represent 58 per cent of total costs. Over a four-year period ending in 1981-82, the operating and capital budget increased by an average of 8.1 per cent a year, and authorized person-years decreased by 3 per cent during this period. Exhibit 9.2 illustrates the distribution of expenditures within MESP, and Exhibit 9.3 compares MESP expenditures with those of the Energy Program.

(Exhibits not available)

9.6 In the past few years, MESP has experienced unprecedented changes that are having a major impact on its historic roles and activities. The growth of the energy program has required new types of earth science information; technological advancements in the areas of satellites and computers have had a significant impact on CCRS and on Surveys and Mapping Branch. The federal government's priority on mineral policy has significantly changed the role of the Mineral Policy Sector and some of the priorities of the Earth Sciences and Research and Technology Sectors.

9.7 The Mineral Policy Sector is currently expanding its role in areas such as international minerals and regional development. This could involve considerable increases in budget and changes in personnel. To ensure value for money major changes in the responsibilities of this Sector must be properly planned.

9.8 In the Earth Sciences Sector, the Geological Survey has had to respond to the expanded information needs of the Energy Branch. This has shifted some of the emphasis of Geological Survey of Canada from developing basic geoscientific data to providing policy and regulatory information for resource assessments and special projects. The Branch now has to balance these new demands with its traditional activities and with limited increases in resources. In the Surveys and Mapping Branch, the compilation of maps is being revolutionized by applying digital methods and computers. This could immensely improve the productivity of the Branch's operations and change other ways in which the Branch fulfills its role in the future.

9.9 The expenditures of MESP have an impact that reaches far beyond its $165 million budget. The earth science information and the technology developed by the Program are vital to the identification, development and management of mineral and energy resources. They provide the basis for assessing petroleum resources, locating new sources of ore and improving mineral processing. Similarly, mineral policy and information can have a continuing influence on the viability of the mining industry. The minerals and metals industry is responsible for 20 per cent of total Canadian exports, 4.6 per cent of GNP and 130,000 jobs and is the major employer in 175 Canadian communities.

9.10 The current changes in the Department's role with respect to mineral and energy policy have an important impact on the roles, functions and priorities in MESP. The thrust of the federal government in the energy field and the mineral policy area and the recognition of the importance of geoscience information in the recent federal economic policy statement have placed new pressures on MESP to link its scientific and technical activities to achieving the economic goals of the government, particularly with respect to energy and minerals. This has been reinforced by placing MESP within the economic envelope of the Policy and Expenditure Management System. MESP must also adjust to the increased role of the provinces in resource development, remote sensing, geological surveys and surveys and mapping.

9.11 These changes have implications for major management processes such as planning, human resource management and financial management. Our review of MESP indicates that this organization has been able to respond well to some of these changes by improving the management practices that have existed in the past. In areas where significant re-assessment of the approach or role of a Branch has been required or where central management policies have been needed to guide the activities of a number of branches, MESP has had difficulties.

9.12 Many of the Program's current management practices are suited to the roles and activities MESP has traditionally performed; however, the recent changes require improved planning, including an enhanced capacity to assess the financial and economic effects of new initiatives, and new management policies and capabilities.

9.13 We found that MESP did not undertake sufficient studies or analyses of the economic implications of many of its scientific and technical information activities. In addition, the Mineral Policy Sector has not yet developed a full capability to analyse the international supply and demand of minerals or the effects of economic policies on the Canadian mining industry.

9.14 MESP has been making considerable efforts to improve its capability to analyse fully the trends and influences that affect its mandate. However, the Program is hard pressed to make the necessary improvements while at the same time accomplishing its current work. Further improvements in strategic planning are necessary so that the Program can asses its current activities in light of changing circumstances and develop new approaches to accomplish its objectives. This is particularly important as the Program considers new functions in areas such as mineral policy and off-shore resource assessment, and new technologies for computer mapping and remote sensing. MESP has recognized that it must develop and refine its skills in strategic planning and link the plans to operational activities and human resource requirements.

9.15 Human resources in MESP make up 58 per cent of expenditures. Over two-thirds of the personnel in the Program are involved in scientific or technical occupations such as research science or engineering. The success of MESP depends to a large extent on availability of specialist skills and proper management of staff. Because the Program does not plan for its human resources, strategic and operational decisions are being made without adequate consideration of this major factor. Weaknesses in human resource planning have resulted in shortages in occupational groups including petroleum geologists and geophysicists. Without further improvements in human resource management, the Program will have difficulty in acquiring the personnel to carry out its present and projected functions and in making the best use of its people.

9.16 Surveys and Mapping Branch is a world leader in applying the advanced technologies of the computer and satellite age to increase the efficiency of map preparation. However, the Branch has had to operate in the horse and buggy age when it comes to printing maps. Printing operations are inefficient and costly, partly because of obsolete presses. Although the Branch has presented capital submissions for new printing presses, the necessary decisions have been delayed for several years because of a dispute between the Department of Supply and Services and the Surveys and Mapping Branch concerning their respective authorities to print maps. This issue needs to be resolved quickly to avoid continued inefficiencies in printing operations.

9.17 The recent changes affecting the Program have increased the requirements for central plans and guidelines in electronic data processing and security. Because the activities of MESP include developing, storing and transmitting scientific and technical information, the use of computer technology has considerable potential to help increase productivity. Advancements in the area of mini and micro computers have opened up a whole new range of possibilities for accomplishing the work of the Program. MESP does not have adequate planning mechanisms in place to capitalize on these technological advancements and to co-ordinate the acquisition and use of computers throughout the Program. Management needs to establish an EDP plan that would articulate the role that computers will play in producing, disseminating and storing scientific and administrative information for each of the branches and sectors as well as for the program as a whole.

9.18 Since more and more information is being stored on computers, there is also a need to develop security procedures to ensure the protection of critical or valuable data and to undertake risk assessments which would evaluate the costs of replacing information in relation to the cost of protecting it.

9.19 As a result of the Comptroller General's IMPAC survey, the Department initiated a Management and Control program (MAC) to improve management and accountability. After some initial improvements as a result of this program, MAC has become increasingly irrelevant to the problems and management requirements now facing MESP. For example, improvements in strategic planning, human resources management, and central policies in EDP are not formal parts of the MAC plan at this time. In addition, a management accounting and reporting system was developed under MAC at a cost of over $225,000. This system is still in the pilot project stage, and it is not clear that it can or should be implemented.

9.20 MESP is faced with many problems in managing change. The Program needs to develop new capabilities in strategic planning, human resources management and development of central policies. To manage this change process successfully, MESP needs to re-assess its current initiatives and augment its present capabilities in critical management areas.

Audit Scope

9.21 The comprehensive audit of the Department of Energy, Mines and Resources is being conducted in two phases -- the Minerals and Earth Sciences Program and the Energy Program.

9.22 The comprehensive audit of the Minerals and Earth Sciences Program included all the major branches in the Program. It also included those research functions of the Program that were covered in our audit of Research and Development, reported in Chapter 2 of the 1981 annual Report.

9.23 Our audit concentrated on the major management processes that have a significant impact on the operations of each Branch and on the Program as a whole. These are strategic and operational planning, financial management and human resource planning. In addition, we addressed other management areas, including evaluation and EDP. Because of the importance of technology transfer and the transfer of technical and scientific information in the Department, we also examined these activities.

9.24 At the time of the audit, there was a considerable amount of review activity in the Department. EMR was conducting an A-base review with Treasury Board of all its branches; it had just completed an internal audit of the Geological Survey; and several evaluations had been completed by the Program Evaluation Branch. We built on this work where appropriate.

Observations and Recommendations

Management Functions and Processes

Planning
9.25 Planning provides a framework for reviewing existing functions and defining new roles and activities that will be required to meet changing requirements. We audited both strategic and operational planning in MESP.

9.26 In the audit of strategic planning, we examined whether the program assessed the demands from its various clients or users, analysed and forecast key trends that affect the program, such as shifting international market demands, reviewed alternative approaches for achieving the objectives of the Program, and assessed the financial and economic impacts of program alternatives. In addition, we examined the links between strategic planning, operational planning and human resources management.

9.27 MESP's primary strategic planning activity, until the end of 1981, was developing strategic objectives and preparing a strategic overview. These efforts helped to clarify objectives and provide a better accountability framework for the Program. Within the branches, the major focus of planning was on specific projects or operations. Although this planning on a project-by-project or operations basis was generally adequate for the circumstances, it has not proved to be sufficient to deal with the major changes now affecting the Program.

9.28 Some examples of the weaknesses in strategic planning that emerged as a result of this situation are as follows:

    - The Mineral Policy Sector did not analyse fully the impact of international market trends on the economic viability of the mining industry.
    - Geological Survey of Canada did not formally analyse the fundamental changes that were affecting its organization as a result of increasing demands for information from the Energy Branch and other departments.
    - Surveys and Mapping Branch did not fully asses the impact of digital information and computer mapping on the roles and operations of the Branch.
9.29 As a result of these shortcomings, management has recently taken a number of positive steps to improve strategic planning. The Mineral Policy Sector is now redefining its role and functions in the context of its changing mandate and it has made some efforts to improve its capacity to undertake economic analysis. Both the Earth Sciences and Research and Technology Sectors are also reviewing their activities as part of the Mineral Policy review. In the Earth Sciences Sector, a series of futures conferences have been conducted to discuss some of the long-range issues facing the organization. A major problem facing the Program at this time is that many branches do not have adequate capabilities to re-assess their existing activities in light of new priorities. Major changes in roles or functions require a comprehensive re-assessment of human resource requirements, operational plans and projects, as well as a re-assessment of the impact of new functions on established and potential clients. In the past few months, MESP has taken some steps to overcome these weaknesses in strategic planning by developing improved planning capacities at the sector level.

9.30 In implementing investments to strategic planning within MESP, the Sectors should establish strategic plans in co-operation with the branches. The plans should outline the current and projected activities will be adjusted in light of chances affecting the Program.

The Department has recognized the need for a Corporate Planning Group, to deal specifically with department-wide and program-wide issues. Thus, the Department has recently restructured the former Co-ordination and Priorities Branch to incorporate Strategic Planning, Central Agency Liaison, Evaluation Branch, and the Office of the PEMS Co-ordinator. This group co-ordinates the revision of Strategic Objectives and the production of the Strategic Overview on an annual basis. These documents aggregate the strategic planning carried out by Sectors in co-operation with Branches.
9.31 We audited the Minerals Policy Sector and the Earth Physics, Explosives, and Surveys and Mapping Branches with respect to operational planning. In MESP, operational plans do not include human resource considerations in terms of skills needed or availability. For example, the Minerals Sector submitted operational plans based on the assumption that all positions were staffed when, in fact, during the previous year some divisions were 50 per cent understaffed. In all projects we reviewed, delays and terminations were related to human resource availability.

9.32 MESP should incorporate human resource considerations, such as skills, and availability into operational plans.

The Auditor General's concerns over the integration of Operational Activities, Strategic Planning and Human Resource requirements will be addressed by the group described in the previous response.
Insofar as possible, managers take human resource considerations into account in the preparation of operational plans. However, as a result of unusually high demand for certain scientific specialists, e.g., those related to hydrocarbon exploration and development, shortages have occurred. The salary differential between the private and public sectors has made the recruitment of new professional staff especially difficult. The situation is exacerbated by the long university training period required of such specialists.
Human Resource Management
9.33 MESP is composed of a group of highly specialized scientific and technical employees. The salaries and wages and other personnel costs for the 2,922 employees of the Program make up 58 per cent of total MESP expenditures.

9.34 The success of MESP is dependent on the quality of its human resources and its ability to attract and retain properly qualified scientific and technical staff. Because 69 per cent of the total staff is involved in scientific and technical occupations, it is of critical importance that the Program give proper recognition to the special needs and characteristics of these groups.

9.35 Human resource management in MESP is primarily the responsibility of Program management. It is supported by the Personnel Branch which is composed of a headquarters personnel unit and four branch units. The Personnel Branch reports to the Assistant Deputy Minister of Personnel and Management Practices.

9.36 Our audit of human resource management covered six branches and the Personnel function. Our work concentrated on human resource planning, training, and human resource information systems.

9.37 The Department has not stressed the importance of the human resource component of MESP, and, as a result, Personnel has not been active in analysing the present and future requirements of MESP.

9.38 MESP is not doing human resource planning in any formal or systematic manner. There are no plans to deal with long-range human resource requirements, to accommodate changes in skills resulting from technological or policy changes, or to develop scientific staff to assume management positions. However, some initiatives have been taken to deal with shortages in the petroleum geologists' group, to increase representation of French-speaking Canadians and to achieve equal opportunity objectives.

9.39 At the time of our audit, the information provided in the strategic and operational plans was not specific enough in terms of skills or required specialties to determine human resource requirements.

9.40 The Personnel Branch has established a small human resource planning capability, but it has spent most of its time identifying issues for the purposes of preparing the personnel management plan as requested by Treasury Board. Because there has been little, if any, support by MESP management for human resource planning, the major activities of Personnel Branch have been to provide services for staffing, classification, and pay and benefits.

9.41 As a result, several problems are being experienced. For example:

    - Earth Sciences Sector is having difficulty recruiting and retaining scientists in areas such as petroleum geology and geophysics. Planned initiatives in areas such as off-shore resource assessments or sea-bed mining will require specialized skills, which are currently in short supply.
    - Surveys and Mapping Branch does not have a sufficient influx of new personnel and new skills to take full advantage of the advances in computer mapping.
In many of these areas, the expertise is not easily available. It often takes six to eight years of university training to develop highly specialized research personnel. Without proper human resource planning, which would assess the present human resource capabilities in relation to the long-term needs of the Program, and then identify the gaps that will result from turnover, retirement or insufficient skills, MESP will continue to have major problems in this area.

9.42 The Management Practices Sector has recently recognized the problems in human resource planning and has engaged consultants to analyse the supply of and demand for scientific and technical personnel. The preliminary results of analysis indicates that shortages can be expected over the next six years in specialty areas such as geology and geophysics. Many of the areas where shortages are expected are important in terms of achieving the planned initiatives of the Program. For example, marine geologists will be essential to off-shore resource assessment activities; however, at present, no Canadian graduates are expected in this area over the next six years.

9.43 MESP should develop human resource plans that are closely linked to the strategic and operational plans of the Program.

9.44 MESP should establish a centre of expertise for human resource planning to assess long-term human resource requirements and availability, develop action plans for dealing with identified shortages and surprises, and make the necessary proposals to management as well as to Treasury Board and the Public Service Commission.

The Department agrees. Departmental Headquarters has been taking steps to strengthen the existing quality of and leadership in, human resource planning. A concerted effort has been made to improve the quality and practicality of the yearly Personnel Management Planning (PMP) process for the Department. Efforts are being made to closely integrate this with the Strategic Overview and Operational Plans of the MESP. Potential linking activities are being reviewed to make progressively stronger human resource planning matching with future Strategic Overview exercises.
9.45 Training. Training has received a low priority in MESP over the past several years. The original Training Branch, which was once composed of six persons, had a complement of two at the time of our audit. To maintain some capability, the training for the whole Department was recently consolidated under the Director of Personnel (Energy).

9.46 At the time of our audit, training needs were identified in an ad hoc way and were not related to operational requirements of the organization. As a consequence, there was no process in place to tie training to work requirements, or to help ensure that training provided is, in fact, appropriate. Although the Department is taking some positive steps in this area by developing a training policy, its training programs have yet to meet the organizations' needs for new skills such as those required as a result of changing management requirements and technological developments.

9.47 MESP should ensure that training needs are identified in relation to the human resource requirements identified by strategic and operational plans and that its training programs are evaluated to determine the extent to which they meet Program needs.

The Department agrees. To a certain degree this recommendation has been met on a piecemeal basis in the past. However, a Headquarters focal point for meeting these requirements is being planned and will centre in the Personnel and Management Practices Sector. This proposed departmental focal point would be the centre of expertise needed to integrate all activities aimed at identifying and meeting short and long-term needs for professional and other human resource requirements.
Beginning with the personnel planning now in progress for fiscal year 1983-84, the training needs of all departmental employees will be determined as an integral part of the strategic and operational plans and the annual human resources planning activity rather than separate and apart from them. Managers will be requested to identify the specific training needs of each individual employee arising from his or her job requirements. The manner in which these training needs will ultimately be met will be the subject of a discussion between the Manager and the departmental Training Development Section. An important focus of these joint discussions will be the most effective means of providing the requisite training.
It is a goal that all training programs be evaluated to determine the extent to which they meet program needs. To assist in this activity, the Training and Development Section shall be seeking the assistance of the Program Evaluation Branch of the Office of the Comptroller General as well as the Departmental Program Evaluation Branch. The aim in evaluating training for the MESP Program as well as all other departmental training will be to ensure that it meets the identified needs efficiently and effectively. Failure of any training programs to meet these needs will result as appropriate in their modification, termination or replacement by redefined and restructured training programs.
Financial Management
9.48 Because the Minerals and Earth Sciences Program is highly decentralized and the various Branches and Sectors operate with a considerable amount of autonomy, there is a need for strong financial management capabilities at both branch and corporate levels. To achieve this, the financial management function has been organized so that the corporate level provides policy guidance and co-ordination and maintains the central accounting system; the remaining financial responsibilities rest with branch officers.

9.49 We found that the performance of the financial function is generally satisfactory, although there are some common and important systems development problems relating to the introduction of the management accounting and reporting system (MARS). Because of these problems, the system, which has been under development for three years, has not proceeded past the pilot project phase.

9.50 MARS has been developed in response to government initiatives in the area of financial management and accountability and is intended to supplement the existing financial information system. Specifications for MARS were developed without adequately surveying the intended users. The result was that certain important features were omitted, while other features, with limited application, were included. Since MARS cannot meet the specific needs of all branches, some branches must continue to supplement it with their own systems. The identifiable costs during the 1981-82 fiscal year for the development of MARS are more than $225,880. This represents one year's expenditure in a three- year program. The Department has recognized the problem with MARS and is currently preparing modifications to the system.

9.51 The Financial Administration Branch should undertake a thorough assessment of the appropriateness of MARS in relation to the needs of various user.

The recommended assessment has been undertaken and the need for certain system modifications has been identified. The departmental MARS Steering Committee is reviewing these modifications and will proceed with the required developmental work.

Mineral Policy Sector

9.52 The Mineral Policy Sector serves as a principal policy development and advisory unit to the Department with respect to the mining industry. Its current budget is $7 million and it has 137 person-years. The Sector also provides advice to the Minister of State for Mines, Minister of State for Economic and Regional Development and other departments on policy issues related to the minerals industry. These issues can include the economic consequences of mine closures and of international competition as well as the health and safety of miners. Its primary objectives, as outlined in the 1981-82 Strategic Overview, are to:

    - assess Canadian and world mineral supply capability;
    - evaluate and monitor key factors influencing Canadian and world demand;
    - co-ordinate development of federal policies and strategies in mineral development; and
    - assist less developed countries to develop their mineral resources in a manner complementary to Canada.
9.53 In the past, the Mineral Policy Sector has focused primarily on providing information and analyses of trends and developments in the minerals industry and preparing commodity reports for use by the private and public sectors. The recent Mineral Policy discussion paper, as well as changes in the roles of ITC, DREE and External Affairs, will now require the Sector to develop policy and economic analysis skills that have been, to a large extent, absent. The Sector is now assuming a lead role in researching and defining the federal policies for EMR-sponsored mineral development agreements with provinces and the departments. These changes require the Sector to review its mandate and upgrade its policy development capabilities.

9.54 The rapid changes in the role of the Mineral Policy Sector require active strategic planning to determine possible alternatives and to figure out how the Sector can best meet its mandate with its current and projected resources. We found that, over the last year, the Sector's strategic planning capability has progressed substantially. At this point, the Sector is developing a clearer idea of its role and purpose and is improving its capabilities to monitor and analyse mineral trends, assess alternative roles in relation to other departments, provinces and the industry, and co-ordinate with other organizations which affect mineral policy. Despite these positive steps, further improvements are necessary.

9.55 The Sector still does not have sufficient capability to analyse the economic effects of alternative policy directions or international trends. These are an increasingly important aspect of the mineral industry. The Sector has not developed the expertise to assess alternative roles for itself and has not established a clear process for developing and reviewing strategic issues. Finally, there are no clearly stated assumptions for analysing alternative strategies. For example, assumptions about mining trends and international minerals prices are essential because they provide the basis for the strategic planning process. The organization plans to expand its budget and person-years significantly in the next few years to meet its new responsibilities. Without an improved capability to assess the costs and benefits of new initiatives and their impact on achieving objectives, the Mineral Policy Sector will not be able to ensure value for dollars spent.

9.56 The Mineral Policy Sector should develop an increased capability to undertake strategic planning, and it should develop a clear process within the Sector to link strategic objectives with operational and human resource planning.

The Mineral Policy Sector recently created a Personnel Development Planning Committee reporting to the Assistant Deputy Minister to establish a basis for identifying training and development needs and to establish criteria for the priorization of training selection in order to develop a revised 1982-83 training plan and to establish a rationally determined training plan for subsequent years.
9.57 Operational planning in the Mineral Policy Sector is inadequate. We noted inconsistencies between the resource forecasts in various planning documents. Operational plans were developed assuming a full staff complement when some divisions were up to 58 per cent under-staffed. There are insufficient guidelines in the organization for linking operational plans to strategic plans. Reviews of projects have not been conducted to assess their contribution to operational goals.

9.58 The Sector should develop operational plans that reflect staff availability as well as any other factors that will substantially affect the integrity of the plan.

In developing any operational plan, a Sector has two choices: it can assume all authorized positions will be staffed and develop plans which will utilize all its resources, or it can assume it will only have the resources on hand at the beginning of the planning period to carry out work during the period. Given the practicalities of the two alternatives and given that the classification of ES positions was a major problem during the audit period, the Mineral Policy Sector chose to develop operational plans as if all resources would be obtained. The Sector, however, has taken this recommendation under advisement.
9.59 The Sector does not have an adequate human resource planning system to meet its changing requirements over the next few years. It is currently encountering difficulties in acquiring French-speaking staff and people with international mineral experience. To establish the necessary human resource levels and capabilities needed to meet its expanding role, significant improvements will be required in human resource planning and training. Without these improvements, strategic overviews will not include key factors such as the availability of mineral economists. Operational plans would thus be developed without adequate consideration of staff availability and capabilities.

9.60 The Mineral Policy Sector should develop a human resources plan that is closely linked to the projected operational requirements of the organization. This plan should include forecasts of human resource needs and availability and action plans to acquire or train required staff.

The Mineral Policy Sector is taking measures to implement this recommendation. However, the development of a long-range plan for the Sector is dependent on the results of the Mineral Policy Review which is now being completed by the Sector.
Surveys and Mapping Branch
9.61 The Surveys and Mapping Branch is the national organization responsible for mapping Canada. The activities of the Branch include establishing and maintaining the national geodetic system of reference monuments, collecting and distributing topographical and geographical information on the Canadian land-mass, and producing, distributing and selling maps and charts for public, industrial and military use. Surveys and Mapping has 961 person-years and a budget of $40.4 million.

9.62 In the past, the Branch has been concerned primarily with carrying out its operational activities. However, the advancement of new technologies, especially computerized mapping from digital information, has created new functions for the Branch and new ways of accomplishing existing tasks. It has also created new requirements for a strategic planning process that will help in planning the changing activities of the Branch in relation to other branches of EMR, other federal departments, the provinces, industry and the public.

9.63 Organization. The Surveys and Mapping Branch is organized into six divisions: Geodetic Survey, Topographical Survey, Legal Surveys, International Boundary Commission, Geographical Services and Reproduction and Distribution. A Branch Headquarters Unit is responsible for overall management.

9.64 We audited the Branch Headquarters Unit, and the Topographical Surveys, Legal Surveys, and Reproduction and Distribution Divisions.

9.65 Planning. Several major changes have direct implications for planning in the Branch. The introduction of computer technology into the surveying and mapping process is a major element in many divisions, particularly the Topographical Surveys Division. Digital mapping, computerized geographical information systems, sophisticated positioning systems for geodetic surveying and the increasing role of the provinces in mapping could shift the emphasis of the Branch from map production to storage and retrieval of data held in decentralized data banks. In the long run, remote sensing has some potential to increase the efficiency of topographical mapping.

9.66 At the time of our audit, the Branch had not fully assessed the strategic issues facing the organization or the potential of new approaches that could assist it to accomplish its mandate more efficiently. Planning is satisfactory in most respects, but it deals mainly with daily operating activities like producing maps or carrying out surveys. Management has had difficulty divorcing itself from these daily concerns so that it can assess new approaches or alternatives for accomplishing the organization's mandate.

9.67 Surveys and Mapping Branch has recently begun to assess its changing role in response to the potential of digital mapping and develop new approaches to carrying out its functions. At the time of the audit, however, the Branch had not developed any formal plans in this regard.

9.68 The Surveys and Mapping Branch should develop a strategic plan that outlines how the role of the Branch is expected to change over the next few years and the implications of this for organizational arrangements, budget expenditures, human resource requirements and relationships with clients.

Studies are currently under way to define the future role of the branch, taking into account organizational structure, relationships with clients and the need for human and financial resources. A report and recommendations are expected to be considered during the next fiscal year.
9.69 Inventory management. The Reproduction and Distribution Division currently stocks 15,000 map titles, distributing them through mail order, 7 consignment centres and 858 sales outlets at the rate of 3 million sheets per year. The Division also prints some 3,000 different titles annually for a total volume approaching 8 million copies. About half of this is contracted out.

9.70 The techniques for managing and controlling production and inventories of stock for distribution are not adequate and do not reflect modern industrial management practices.

9.71 The Reproduction and Distribution Division's inventory of maps averages 20 million sheets at a wholesale value of $25 million. A current agreement with the Department of National Defence requires 400 copies of every map to be stocked at all times for emergency use. The Division does not use modern inventory management practices to ensure that stock levels of maps are not too high in relation to DND requirements and other demand. These practices would take into consideration such things as estimated demand, production levels, storage capacity and costs, and scheduling concerns. Excessive inventories of maps result in additional operating expenses and higher storage costs and ultimately lead to large quantities of obsolete maps. The Branch disposes of as many as 850,000 to 1,000,000 copies a year as a result of its map revision program.

9.72 The Division has recognized that there are inventory control and distribution shortcomings and intends to implement a computer-based system to help overcome them. This system will, however, mechanize only record keeping and control transactions. Thus, the Division may remain unaware of the inventory and production levels appropriate to meet demand and reasonable service levels. A technique for establishing inventory levels is needed to reconcile demand with production and procurement capacity.

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9.73 The Surveys and Mapping Branch should establish an inventory management system that reflects modern industrial practices.

The Department agrees. Management has implemented a project to determine the most economical production and inventory levels for the branch.
9.74 Printing operations. Printing operations are inefficient and costly, partly because the presses are obsolete. The Branch's eight two-colour presses print about eight million copies of maps a year in up to nine different colours. Because the current presses have a limited colour capacity, some maps must be passed through the presses four times to obtain the necessary colour combination.

9.75 The Branch has prepared capital submissions for the funds necessary to replace its existing presses with computer-controlled four-colour machines. These will enable it to accomplish current workloads with six fewer personnel and only two presses. The Department estimates that if it had replaced one of its small presses in 1975-76 at a cost of $150,000, it would have saved $900,000 in operating costs alone over a five-year period.

9.76 The replacement of the Branch's printing presses has been under discussion with Treasury Board and the Department of Supply and Services (DSS) over the past few years. The issue has not been resolved because of a dispute between DSS and EMR concerning their respective mandates with regard to printing.

9.77 The issue of acquiring adequate printing presses should be resolved quickly to avoid continued inefficiencies in printing options.

Agreed. This issue has been discussed by DSS, EMR and Treasury Board. A decision is expected shortly.
9.78 Human resource planning. The Branch's staff costs amount to over $24 million, approximately 60 per cent of the annual expenditures of Surveys and Mapping. The technical and professional work force must be able to respond to continuous technological change.

9.79 We found that the Branch does not undertake systematic human resource planning. Human resources are projected on a numerical basis only; there is no specification of the skills required of individuals or how the existing work force is to be prepared for technological change. Training needs are identified haphazardly and are not evaluated in terms of future Branch requirements.

9.80 The Branch has undertaken some staff training in preparing performance appraisals, developing skill inventories in Topographical Surveys and setting up career development plans in Geodetic Survey. The steps that have been taken do not add up to human resource planning at the Branch level.

9.81 The Branch is aware of its weaknesses in this area and has recently engaged a consultant to develop a human resource planning system.

9.82 The Branch should introduce a human resource planning system which is directly linked to strategic and operational planning. The system should project human resources requirements and training activities and should propose action plans to close identified gaps and deal with problems.

As the result of an A-Base Review earlier this year, the Branch is undertaking a study of its human resource requirements. A human resource planning framework will be finalized in November 1982 with implementation of the system planned for fiscal year 1983-84.
9.83 Security. We observed that there is a lack of central security policy and central security function to guide MESP in its handling and storage of valuable data. For example, in the Surveys and Mapping Branch we found that security systems are not adequate with respect to storage and access control. The 1982 A-Base Review of Surveys and Mapping indicates that there are no duplicates of air photo negatives; the originals have a replacement value of $137 million. The Review also points out that reproduction materials, or "artwork", from which maps are printed need secure storage along with air photo negatives. Digital data for topographical map compilation is not stored securely and in duplicate. The same is true of much of the geodetic survey data, although the Geodetic Survey Division has a partially completed program under way to solve this problem. The present replacement value of digital topographical data is $1 million. Once all topographical information is stored in this form, the figure will increase to over $70 million.

9.84 The Department is aware of security shortcomings throughout EMR, and the Internal Audit Branch plans to conduct a security audit in the near future. Our section on EDP deals further with this subject.

Earth Physics Branch
9.85 The Earth Physics Branch provides expertise, information and advice regarding geophysical processes that can affect resource development. This Branch, which has a budget of $9.9 million and 169 person-years, has shifted its emphasis in the past few years from scientific research to providing technical advice to a variety of governments and private sector organizations on questions such as geophysical hazards affecting hydro dam construction or damage caused by the construction of pipelines in permafrost zones.

9.86 As a small relatively cohesive organization, Earth Physics has been able to rely on simple management systems complemented by informal project planning, assessment and control. This has provided the Branch with sufficient flexibility to meet the changing demands for its services.

9.87 We found that generally the Branch is managed well. It has been able to respond in the past to changes in operational plans, and project management systems have been developed that are well suited to the needs of the scientific character of the work. There is adequate review of projects and priorities on a continuing basis.

Explosives Branch
9.88 The objective of the Explosives Branch is to administer the Explosives Act and Regulations in the interest of public safety. The Branch has a budget of $1.4 million and a complement of 41 people. Its major functions are to authorize and test explosives, regulate their manufacture, sale, road transportation, issue licences and permits, and inspect to ensure compliance.

9.89 We found that the management of operations is generally satisfactory, but could be improved by the better use of comparative data on actual against planned expenditures. For example, historical data could be used to estimate and classify inspections and to cost inspection tours. These standards could be compared to actual hours and dollars spent. In this way, the Branch would have the necessary information base to assess due regard for efficiency.

9.90 The strategic overview for the Explosives Branch does not include all the strategic issues affecting the organization such as the introduction of new explosives, technological change, or the human resource requirements that will result from changes. By improving the analysis of these trends, the Branch could improve its capability to manage its operations and to respond to changes in the explosives field.

9.91 Although Canada has a good safety record for the handling of explosives throughout industry, the Explosives Branch does not have a system or information base to measure its effectiveness in minimizing accident risk. For example, the Branch does not develop and analyse historical data which relate inspections and other activities to the frequency of accidents or analyse the effects of inspections conducted by other organizations such as the RCMP.

9.92 The Explosives Branch should develop statistical information that will enable it to analyse the relationships of its activities to the frequency and risk of accidents.

Specific statistical analyses have not been developed because the accident rate and related risk of accidents are too low to justify, on a cost-effective basis, the additional resources which would be required for a formal rather than a judgemental approach. The priorizing of inspections involves the judgement of experienced inspectors together with company performance information recorded in appropriate files maintained by the Explosives Branch.

Special Areas and Support Functions

IMPAC
9.93 In 1978, the Department initiated a Management and Control program (MAC) designed to remedy perceived weaknesses in management controls identified during the Comptroller General's IMPAC survey of the Department. Twelve sub-projects were identified to achieve department-wide improvements in the same areas such as:

    - the process for identifying strategic objectives and revising long-term plans;
    - the links between budgets and operational plans;
    - reporting systems for performance indicators; and
    - the use of cost-based accounting for financial reports.
9.94 As a result of the MAC program, strategic objectives have been identified for the Mineral and Earth Sciences Program and the internal audit and evaluation functions are in place. However, other aspects of the program, such as the management accounting and reporting system (MARS), have not been as successful. This reporting system has been in the pilot project stage for three years, and it is not yet clear that it can or should be implemented. The development costs alone for this system exceed $225,000.

9.95 The MAC program has contributed to developing an improved accountability and management framework for MESP, but it has not kept pace with the Program's changing management requirements. For example, the MAC program does not include improvements in strategic planning or in human resources management. These are very important to the Program at this time. The Program has not fully re-assessed the relevance of the MAC program to its needs and has not developed a new action plan.

9.96 The Department should undertake a complete reassessment of its Management and Control Program with respect to MESP and develop an approach based on the current and anticipated management requirements of the Program.

The concerns of the Auditor General over the implementation of the Management and Control system will be addressed through the PEMS Co-ordinator, who forms an integral element in the Strategic Planning and Evaluation Branch. As required, the MAC plan will be modified to reflect the changing requirements of the Department as they are identified, and new or modified systems will be developed for implementation.
Program Effectiveness Measurement and Reporting
9.97 Program effectiveness evaluation is carried out by the Program Evaluation Branch in the Management Practices Sector. The Department has adopted a policy for program evaluation and a long-term evaluation plan and procedures that generally conform to the Comptroller General's guidelines on program evaluation. The results of evaluation are reported to the Associate Deputy Minister and a Management Review Committee composed of senior EMR officials. The budget for 1981-82 was just over $300,000, and the staff complement was six person-years. To date, the Evaluation Branch has produced seven program evaluations, six evaluation assessments and seven related evaluation documents. Our examination covered the assessments and evaluations done after 1978 in relation to MESP. We examined evaluations of Explosives, Surveys and Mapping, and Geological Survey and the evaluation assessments of the Canada Centre for Remote Sensing and Mineral Development.

9.98 We found that the evaluation assessments of remote sensing and the mineral development activity were satisfactory. The evaluation of the administration of Explosives was not satisfactory because of inadequate measures of the effectiveness of the Program. The Geological Survey and Surveys and Mapping evaluations both relied on surveys of specific users to measure their effectiveness. These evaluations were satisfactory, but a more comprehensive methodology could have included a survey of potential users such as the general public and central agencies, as well as some assessment of the economic value of the information produced and its economic effects. The evaluation results were properly reported to management and have resulted in changes at the Program level.

9.99 The long-term evaluation plan adopted in 1981 and revised in 1982 has suffered significant delays. This plan was based on the assumption that the Program Evaluation Branch would obtain specified additional resources. At the time of our audit, these resources had not been provided. As a result, evaluations scheduled in the plan have been delayed, especially evaluations of the energy program. The Program Evaluation Branch needs to obtain the additional resources required to implement the long-term evaluation plan adopted by senior management or modify the plans accordingly.

9.100 Our examination of the management of program evaluation showed that project management was inadequate. Two of the evaluations we examined took considerably longer than originally planned. For instance, the evaluation of the remote sensing activity started in March 1979, and an evaluation assessment were only completed in April 1982. The evaluation of the Geological Survey of Canada started in July 1979 and was still in progress at the time of our audit. There are inadequate management controls over the planning and conduct of these evaluations. Too much time has been spent on lengthy evaluation assessments or descriptive analyses of programs. Terms of reference are vague and do not include detailed work plans or a calendar of evaluation tasks. Consequently, unplanned activities and reports have been added, and the purpose and methodology of studies has been changed while evaluations have been in progress.

9.101 The Program Evaluation Branch should reassess the time and resources devoted to carrying out evaluation assessments and develop an improved project planning and management system that clearly establishes and monitors the expected outputs of evaluation.

A determined effort is now being made to limit the time and resources devoted to evaluation assessments, although variations will necessarily occur, depending on the size, complexity and maturity of the program component. Recently, management systems, including Branch Work Plans, Project Work Plans and Time Sheets have been adopted, which will be used to monitor and control all phases of program evaluation.
9.102 To monitor program effectiveness, MESP needs to have in place effectiveness indicators that are specific to each activity. Since most of the branches of MESP produce scientific or technical information for a variety of users, one of the best ways of monitoring effectiveness is through continuous user feedback. In many branches, such as Earth Physics, Surveys and Mapping and Remote Sensing, there are formal mechanisms for ongoing communication with users. This includes an array of advisory committees such as the Geoscience Council, the Interdepartmental Committee on Remote Sensing, and the Industrial Advisory Committee on the Earth Sciences. We found that the branches use a wide range of informal mechanisms to monitor effectiveness. They include conferences, peer review and working relationships with industry, government and university contacts. These mechanisms are a good way to monitor the effectiveness of their activities.

Electronic Data Processing
9.103 MESP is primarily concerned with collecting, manipulating and disseminating large volumes of research data. Computer technology can therefore increase the economy and efficiency of data handling in the Program. Our review concentrated on EDP policy and planning, EDP acquisition, and EDP data security and protection.

9.104 The largest source of computer services within the Department is the Computer Science Centre (CSC) which operates as an internal service bureau. It was established in the early seventies as a service organization for the Department and for other governmental scientific groups. Whereas CSC controlled most of the EDP budget in the early seventies, it now represents only 33 per cent of a total annual expenditure of $18.6 million ($12 million for MESP). The Department now has over 100 mini-computers, and several branches in MESP have their own computing centres.

9.105 The rapid development of computer technology has provided many new opportunities to increase efficiency in processing scientific and technical information and in integrating information within the Program; for example, computer systems now automatically collect seismographic information. Automated information systems can not only increase the ability to transfer information between branches but they can ultimately improve access by users.

9.106 At the time of our review, there was no evidence of department-wide EDP policies or strategies for the supply of computer services, or long-range management plans to meet computing requirements. The Department is aware of this situation and has retained the services of a consultant to assist it in preparing the EDP policy required by Treasury Board. This work has just begun. The importance of clear EDP plans and guidelines in realizing gains in the economy and efficiency in the Program needs to be further emphasized by senior management.

9.107 We found that the present service role of CSC does not lend itself to developing overall plans for MESP with respect to applying computers to the work of the Program. At the time of our audit, an independent evaluation of the role of the Computer Science Centre had not been carried out to determine its effectiveness in meeting the needs of the Program in this regard and to explore alternative roles, functions and activities.

9.108 The Department should review its approach to EDP services, develop a department-wide EDP plan that would articulate the role that computer will play in the production, dissemination and storage of scientific and administrative information for the Program as a whole. This review should include reassessment of the present role of the Computer Science Centre.

The Department has established an independent EDP adviser who has developed a draft EDP policy along with a planning structure. This is currently (late September) being discussed at the senior management level. It addresses the areas of EDP, office automation, telecommunications and data banks. The draft policy and plan will be submitted to the Computer Policy Committee of the Department in mid-October and to the Senior Management Committee of the Department for final approval early in 1983. A reassessment of the role of the CSC is included as part of this process.
9.109 There was no evidence of department-wide policies and procedures to guide MESP with respect to controlling EDP acquisitions, especially mini- and micro-computers, word processors and office automation equipment. Formal feasibility studies were available for only two of the seven cases we reviewed. EDP equipment of this type is the product of some of the most rapid and fundamental technological advances of recent years and it can, if properly used, greatly increase the efficiency of work by both scientific and administrative users.

9.110 The Department should establish a policy to ensure that its acquisition of EDP goods and services conforms to Treasury Board guidelines.

A policy to ensure that acquisitions by the Department of EDP goods and services conform to Treasury Board guidelines is incorporated in the departmental EDP policy and planning structure now being developed by the EDP adviser.
9.111 Procedures for ensuring the protection of critical or valuable data are inadequate. Risk management methods, which would determine the costs of replacement in relation to the cost of protection, are not used. For example, Surveys and Mapping Branch has spent two years of work and $1.6 million to convert map data to digital information; it is not protected by off-site storage. Similarly, CCRS does not maintain duplicates of certain tapes containing irreplaceable source data.

9.112 The Department should conduct risk assessments with respect to the need for protecting valuable data and establish appropriate security procedures.

Procedures for the conduct of risk assessments with respect to the need for protecting valuable data and establishing appropriate security procedures are incorporated in the departmental EDP policy and planning structure now being developed by the EDP adviser.
Contracting
9.113 Our government-wide study on contracting procedures is reported in Chapter 3. Within EMR, the audit was executed by a joint team from this Office and from the internal audit group. We found that departmental policies and procedures were inadequate to ensure compliance with Treasury Board directives and statutory regulations. In particular, existing circulars do not assign responsibility for the various functions in the contracting process. As well, there is no centralized system to monitor contracting practices and enforce central agency or departmental directives.

9.114 This lack of central direction and control has led individual sectors within the Department to devise their own contracting procedures, often in breach of existing regulations. In many cases, contracts were prepared only after the work or services had begun.

9.115 With respect to service contracts, there was no formal evaluation made during, or at the end of, the contract period. Without written records, there is no documentation on previous performance and management may contract with firms that have already shown a lack of expertise.

9.116 Following the submission of the internal audit report to senior management at EMR this year, the Department is drafting new policies and procedures to improve management and control in this area.

Technology Transfer
9.117 Technology transfer ensures that the results of federal science and technology activities are used by other sectors such as private industry, provinces, municipalities, universities and non-profit organizations. We reviewed the Canada Centre for Remote Sensing (CCRS) and the Canada Centre for Mineral and Energy Technology (CANMET) to examine their technology transfer activities. Both organizations were discussed in Chapter 2 of our 1981 Report on research and development.

9.118 CANMET has recently established a technology transfer organization and is implementing the recommendations on technology transfer that were made to the Department in our 1981 audit of Research and Development.

9.119 The Canada Centre for Remote Sensing is responsible for developing and demonstrating satellite and airborne remote sensing technology and for increasing its use through technology transfer.

9.120 Our interviews revealed that CCRS is highly regarded by federal, provincial and industry representatives in terms of its approach to technology transfer. CCRS successfully employs a broad range of technology transfer mechanisms. Examples include contracting out research and development, a well defined interdepartmental and public-private sector consultative structure, and co-operative federal-provincial demonstration projects. We found that planning, execution and evaluation of individual technology transfer projects are adequate. CCRS could, however, improve its approach to technology transfer by defining more clearly its goals with respect to specific user groups, determining how different technology transfer approaches can reach the potential users, and monitoring the extent to which various approaches have contributed to user acceptance.

9.121 When CCRS was established, it was thought that proven remote sensing technology would provide sufficient benefits to assure rapid acceptance by users. Although progress has been made, the technology has not achieved the anticipated application. To overcome some of the barriers to the use of remote sensing data, CCRS requested and received additional funds and person-years for marketing and demonstration projects. We noted that the central agencies and other departments that reviewed the CCRS submission expressed different perceptions about the role of CCRS in technology transfer. As a result, CCRS is faced with some uncertainty about the priority it should give to technology transfer and about its role in that area.

9.122 CCRS is considering a major new initiative that involves launching a Canadian radar satellite (RADARSAT). If undertaken, this project will have a significant impact on the organization's role and budget, and will offer a range of technological, resource, and economic benefits to Canada. We noted that, although a number of assessments dealing with the costs and benefits of certain aspects of the initiative had been done or were planned, a comprehensive assessment of the available technology transfer options (various Canadian options, buying data from other countries, joint ventures with other countries) in terms of the incremental costs and benefits associated with each had not been performed. CCRS is aware of the need to analyse the options for providing remote sensing data to meet Canadian needs.

9.123 The Canada Centre for Remote Sensing should define its technology transfer role, develop technology transfer objectives in terms of target markets and penetration, devise methods for assessing alternative technology transfer strategies, and establish procedures for evaluating programs, and undertake a comprehensive assessment of RADARSAT in relation to other options for meeting Canadian Satellite data needs.

The Canada Centre for Remote Sensing is in the process of formally defining its technology transfer role and objectives through EMR strategic planning process. When agreement is reached at the corporate level, the Centre's operational plan will be amended accordingly. This process is expected to be completed by March 31, 1983. By that time all position descriptions at the Director and Chief level will be amended to identify responsibilities for the planning, implementation, control and evaluation of the technology transfer program. The methods and procedures chosen to assess alternatives and evaluate progress will be appropriate to the approved technology transfer objectives. Technical assessments of specific options for meeting Canadian radar data needs have now been completed under the RADARSAT Phase A program or are in progress. These studies will be included in an overall economic assessment which will be completed by the end of 1983 (prior to the start of Phase B).
Information Programs
9.124 One of the primary functions of the Minerals and Earth Sciences Program is providing information for the purposes of resource development and management. The overall objectives of the Program in the Main Estimates call for the provision of timely earth science information. One of the sub-objectives provides for the Program "to increase public awareness and understanding of federal mineral end earth science programs and their social and economic effects." To achieve this sub-objective, MESP has defined a public information program in its operational plan.

9.125 The information function within EMR is divided between a Corporate Communications group and several branch units. The Corporate Communications' function is primarily concerned with providing information to the general public through advertising or general publications. The branch units focus on technical or scientific information for specific audiences such as industry, universities or international organizations. For example, the Geological Survey of Canada provides information to resource industries on the geological structure of a given region; Surveys and Mapping Branch provides topographic maps to a variety of users. MESP is well known for the high quality of technical and scientific information that it is able to provide to these users.

9.126 At the present time, MESP does not have a clearly defined approach to achieving its public information sub-objective. The allocation of responsibilities between the Corporate Communications Branch and the sectors or branches is unclear, and the overall accountability for achieving this sub-objective is confused. Consequently, MESP does not know to what extent it is achieving this sub-objective across the Program.

9.127 In the past year, there have been several new initiatives in the public information area. However, without an overall policy and plan for the Program, the contribution of these initiatives to achieving this public information sub-objective will remain unclear.

9.128 MESP, in conjunction with the Communications Branch should develop a communications plan that outlines how the Program will achieve its sub- objective with respect to public information and develop procedures to evaluate its achievement of this sub-objective.

The Branch has been under very serious pressure to respond to the National Energy Program. The communications requirements of the MESP are clearly recognized to be increasing and the Branch is dedicating additional resources to planning and implementing MESP communications. Planning is moving ahead most successfully in the Earth Sciences Sector and greater use is now being made of pre-campaign testing and post-campaign evaluation. The same approach is planned for the Research and Technology component of MESP.
Information for Parliament
9.129 The Treasury Board has directed departments and agencies to prepare their Estimates in a new form. In accordance with this directive, MESP is drafting a preliminary Program Expenditure Plan for the 1983-84 fiscal year.

9.130 Implementation of the recommendations outlined in this report would contribute significantly to the quality of this Plan. Improvements in strategic planning would enable MESP to provide better information on the overall trends that affect on the Program. Development of an economic analysis capability, within the context of both planning and program evaluation, would facilitate illustration of the contribution of MESP activities to Canadian resource development and management. Human resource planning would increase the capability of the Program to define its personnel requirements. Improvements in computer planning would similarly aid in rationalizing EDP expenditures.

9.131 The Office of the Comptroller General has suggested that expenditure plans include information on program outputs as justification for resource requests. Many of the functions of MESP involve scientific research and, for these, it will likely be difficult to provide output measures. In activities not involving research, such as topographic mapping or inspections in the Explosives Branch, MESP currently develops some output measures; however, controls will need to be introduced to ensure their reliability.