PACC Committee Report
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HOUSE OF COMMONS
OTTAWA, CANADA
K1A 0A6
Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its
THIRTEENTH REPORT
The Standing Committee on Public Accounts has considered Chapter 7 of the December 2002 Report of the Auditor General of Canada (Canadian Space Agency — Implementing the Canadian Space Program), and has agreed to table the following report.
Canada has long been involved in space research and exploration activities. Early activities were scattered among several departments and agencies and were coordinated by the Interdepartmental Committee on Space. However, the Committee was not able to set priorities and reallocate funds among these departments and agencies. Under this arrangement, Canadian space research and exploration activities remained fragmented and the federal government could not provide consistent support to Canadian industry participating in the effort.
To impose some structure and coherence on this fragmented situation, it was concluded that a distinct Canadian space agency was needed to bring focus to Canada’s space activities. It was believed that a separate agency that emphasized the contracting out of research and development could ensure the active involvement of the private sector and universities and enhance the social and economic benefits of Canada’s civilian space program.
The Canadian Space Agency (CSA or the “Agency”) was established by
order-in-council in March 1989. Many space-related programs and projects scattered among various departments and agencies were transferred to the new Agency. The two largest programs transferred to the CSA governed Canada’s participation in the International Space Station and the RADARSAT remote sensing satellite. As it is currently structured, the Canadian Space Program is heavily oriented toward domestic and international partnerships and close collaboration with key federal, provincial, and academic stakeholders.Between 1989 and 1999, the CSA was funded under long-term space plans approved by Cabinet and consisting mainly of major Crown projects. The Agency had to seek Cabinet approval for any supplementary funding required for projects. Its strategic and operational management practices were then appropriate for an organization with clear priorities and a limited number of large projects to manage. In 1999, the federal government announced the new Canadian Space Program to be managed by the Agency. The new program brought with it the approval of stable and ongoing funding and many other basic changes in the way the CSA operated. As a result of the renewal of the Canadian Space Program and the introduction of its new management framework, the Agency acquired the capability to establish its own priorities and manage a larger portfolio of projects within an annual budget of $300 million, beginning in 2002-2003.
The present fiscal year provided the first opportunity, since the CSA’s establishment in 1989, for the Office of the Auditor General to execute a value-for-money audit of the Agency and assess whether it is implementing the Canadian Space Program with due regard to economy, efficiency and effectiveness. The audit evaluated the Agency’s selection and management of space-related programs and projects, surveyed its human resources management regime and assessed its performance in monitoring and reporting to Parliament.
The Public Accounts Committee is very interested in the management and administration of the new Canadian Space Agency. Accordingly, it convened on 3 February 2003 to consider the evidence from the first audit and the testimony of the witnesses. Representing the Office of the Auditor General were Mr. Richard Flageole (Assistant Auditor General) and Mr. Reno Cyr (Principal). For the Canadian Space Agency were Mr. Marc Garneau (President), Mr. Pierre Richard (Senior Vice-President) and Mr. Jacques Bruneau (Director General, Corporate Management).
OBSERVATIONS AND RECOMMENDATIONS
Balance between capacity and financial obligations
Concerns were expressed about the Agency’s ability to carry out all the activities intended under the Canadian Space Program within its approved annual budget. The Agency’s current projects and programs, some of which were decided well before the CSA’s creation, represent ongoing and long-term financial commitments that considerably restrict the Agency’s ability to set its own priorities and manage them within its $300 million annual budget. Within that fixed budget, the Agency must continually make critical choices as to which project to finance in order to obtain the maximum impact from public monies.
Two major Crown projects, the International Space Station (ISS) and the RADARSAT remote sensing satellite, have in recent times been a source of considerable delays and cost overruns to the Agency. According to the audit report, the long-term financial obligations of the ISS alone will likely grow to take up almost one-third of the Agency’s current $300 million annual budget and cause an additional drain on the available resources. Early in 2002, in light of these prior commitments, cost overruns, and the desire to finance new initiatives, the Agency completed a review of program priorities for the current year with a view to avoiding funding shortfalls. The review resulted in the elimination of a projected $58 million deficit and reallocated about $12.5 million to fund new initiatives for the current fiscal year.
In addition to its current financial commitments, the Agency has also decided to participate in the U.S.-led Mars Exploration program and extended its cooperation agreement with the European Space Agency (ESA), including participation in several new ESA programs. The CSA’s participation in both these initiatives will require considerable amounts of long-term funding.
The recent loss of the Space Shuttle Columbia and its crew has put a hold on both the Canadian Space Agency’s astronaut program and its participation in the International Space Station pending the outcome of NASA’s enquiry into the accident. This tragic incident has further underlined the Agency’s vulnerability to unexpected events. The resulting delays and cost overruns will no doubt have long-term repercussions on CSA’s capacity to finance current and future initiatives of the Canadian Space Program.
Given the CSA’s limited budget, its dependence on other space agencies to fulfil its own mandate, and other internal challenges that it faces, it is imperative that, before taking on new long-term commitments, the CSA fully analyze their future financial implications, their relevance to the strategic plan and their impact on the Agency’s capacity to deliver the Canadian Space Program. To this end, the Auditor General urged the CSA to develop a new strategic plan integrating the Agency’s objectives with its financial capacity. The Agency shares the same concerns and continuously strives to identify and disclose potential risks and cost implications. Mr. Garneau indicated that the Agency has already developed an action plan in response to the recommendations, and he offered to forward it to the Committee. This prompts the Committee to make the following recommendation:
RECOMMENDATION No. 1
That the Canadian Space Agency prepare an action plan together with an implementation timeframe for measures designed to improve the Agency’s capacity to identify, evaluate, and disclose potential risks, costs and benefits of projects. That the Agency table this document in Parliament no later than 30 November 2003.
Performance reporting
The Agency’s measurement and reporting of performance are incomplete. It has few performance indicators to measure its progress toward achieving strategic outcomes, and its method of performance reporting makes it difficult for Parliament to assess whether the Agency is fulfilling its mandate. According to the audit report, the Agency does have performance indicators for project delivery, budget and milestones. However, these indicators do not match projects with any of the seven strategic outcomes, and the CSA has developed few performance indicators to measure progress toward them. In reporting to Parliament, the Agency arbitrarily matches the strategic outcomes with consolidated information from reports of its directorates.[1]
The Agency concurs with the audit findings. The CSA itself believes that its own strategic outcomes are not correlated with accurate measurement criteria, and it has begun a review of its strategic outcomes. It is now in the process of asking Treasury Board for permission to renew its planning and reporting accountability structure. The Committee considers that good performance reporting is vital to accountability to Parliament and the Canadian public, and thus recommends:
RECOMMENDATION No. 2
That the Canadian Space Agency implement, without delay, measures designed to improve the Agency’s performance reporting capacity by developing project performance measurement processes that are properly integrated with the Agency’s strategic outcomes. That the Agency prepare an action plan together with an implementation timeframe and table this document in Parliament no later than 30 November 2003.
Implementation of the Space Program Management Framework
The Agency’s Space Program Management Framework called for the creation of an advisory council and service line advisory groups to provide advice on corporate strategic directions and on priorities, strategies and plans for each of the major service lines. At the time the audit was completed, it was noted that not all the elements of the Management Framework had been put in place. The Advisory Council had been formed in late 2001, but had yet to fulfil its obligations; and owing to staffing delays, only one out of five service line advisory groups had been set up. To support effective planning, the audit urged the Agency to ensure that all components are operational and fully integrated within the Framework.
When questioned about this matter, Mr. Garneau informed the Committee that, since the completion of the audit, all the components of the Framework had been established. All five service line advisory groups were now functioning and, after a number of meetings, the Advisory Council was also functioning and had provided input to the Agency’s memorandum to Cabinet in November 2002. The Committee welcomes this development and makes the following recommendation:
RECOMMENDATION No. 3
That the Canadian Space Agency include in its departmental performance reports a summary discussion of the strategic advice and input provided by the Advisory Council and by the service line advisory groups to the Canadian Space Agency. That the Agency begin reporting their contribution in the Departmental Performance Report for the fiscal year ending 31 March 2004.
Human resources management
Given its former mode of funding based on the number of long-term capital projects, the Canadian Space Agency has made extensive use of term and contractual employment to carry out its various activities. Since it has now acquired stable annual funding, the Agency has been changing the mix of its workforce in favour of more permanent staff through new hiring and by converting some existing term and contractual positions into indeterminate positions. Although the Agency had approved a human resources management framework in 1999, the audit noted that the Agency’s human resources plan was not based on demographic analysis; nor was it integrated with the CSA’s strategic and operational plans. Moreover, the Agency’s human resources management systems and practices needed to be upgraded in order to properly identify and evaluate current needs and anticipate future human resources requirements. While the Agency has recognized the need to develop a comprehensive human resources plan, the audit found no plan at either the directorate or the corporate level that identified the Agency’s future staffing requirements for 2000-2001 or 2001-2002. Nor had the Agency set up a human resources committee to consider and approve human resources plans, as required by its own guidelines.
The audit also identified other areas in the Agency’s human resources management systems and practices that required strengthening, notably in the areas of personnel training and career and succession planning. The Agency claims it is committed to developing and implementing an integrated human resources management framework to enhance its ability to recruit, retain and develop the professional expertise it requires to perform its duties and achieve the goals of the Canadian Space Program. It also claims it is in the process of developing a human resources plan to be completed by late 2003. This prompts the Committee to propose the following recommendations:
RECOMMENDATION No. 4
That the Canadian Space Agency prepare an action plan together with an implementation timeframe to complete the development of its human resources management plan, including the establishment of a human resources committee.
RECOMMENDATION No. 5
That the human resources management plan be integrated with the Agency’s strategic and operational plans. That the Agency table both the action plan and implementation timeframe in Parliament by 30 November 2003.
RECOMMENDATION No. 6
That the Canadian Space Agency prepare an action plan together with an implementation timeframe to upgrade its information systems and practices to support the Agency’s comprehensive human resources planning. That the Agency table both the action plan and implementation timeframe in Parliament by 30 November 2003.
The Canadian Space Agency, as the Auditor General stated, is an organization in transition. Involved in domestic and international space activities, it must overcome enormous challenges. Initially established to coordinate a small number of multi-year capital projects, it must now manage a larger portfolio of projects and develop a coherent national space exploration strategy, often involving complex partnerships with various levels of government, industry, and academia.
Particularly challenging to the Agency is how to balance its capacity to deliver space projects with respect for its long-term financial obligations, all within the constraints of a $300 million annual budget. The Canadian Space Agency has in the past managed this successfully, but the task will become more difficult, especially with multi-million dollar high-risk ventures involving international partners such as the ongoing International Space Station, the U.S.-led Mars Exploration program, the Galileo project and the European global navigation satellite system. It must develop and fully implement a new strategic plan to ensure the proper equilibrium between current and future financial obligations and its current annual funding.
The Agency must also address many internal issues such as project management, human resources planning and management, and performance reporting. The Agency has already taken some positive steps in this regard but it still has considerable work to accomplish. The Committee urges the Agency to develop the required action plans and implement them in a timely fashion.
Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this report.
A copy of the relevant Minutes of Proceedings (Meetings No. 10 and 24) is tabled.
Respectfully submitted,
JOHN WILLIAMS, M.P.
Chair
[1] Office of the Auditor General of Canada, December 2002 Report of the Auditor General of Canada, Chapter 7 (Canadian Space Agency — Implementing the Canadian Space Program), Ottawa, December 2002, p. 20.