Audit of Land Management

5.1.1 Governance of Operational Performance

Governance is the foundation for all other components of internal control. Governance bodies should receive sufficient, complete, timely and accurate information to maintain an effective oversight role, and to ensure that there is adequate challenge and discussion on all matters related to the administration of reserve land and resource activities. Performance measurement processes ensure that necessary information on the land management operations is available to inform oversight and discussion.

Oversight of the administration of reserve lands is made more complex by the organizational structure of AANDC. The LED Sector is responsible for developing lands policy, and has created a three-year strategic plan that identifies objectives, sets out priorities and describes key steps in the achievement of the plan. Responsibility for lands operational activities lies with the Regional Operations Sector; the devolution of the responsibility for registering lands instruments as of December 1, 2012 to the regions removed the participation of LED headquarters personnel from day-to-day operations.

As a result, LED's ability to effectively oversee operations is reduced, since LED has effectively "outsourced" all operations of lands programs to Regional Operations.

The audit expected to find that senior management in the LED and Regional Operations Sectors had established a formal oversight body that meets regularly to establish priorities, reviews performance of lands activities, and receives information necessary to allow for effective monitoring of the performance of lands management activities in regional offices.

The audit found that there is limited coordination between LED and RO in the oversight of lands activities, and in performance measurement and reporting. In each Region, oversight of lands operations is included in the scope of regional governance committees, but the audit did not identify a national LED governance committee that regularly reviewed land management operations.

Working groups have been established by Lands Officers in Regional Offices and coordinated by headquarters LED personnel. These working groups are operational in nature, and facilitate the sharing of information on specific land management topics among group members.

It was also noted during the audit that although LED has issued a Strategic Plan, that plan is not widely used by lands units in regional offices in the setting of priorities. Priorities for land management activities are identified in annual unit or directorate business plans that roll up into regional business plans. Performance measurement and reporting activities refer to these regional plans.

It was also noted during the audit that there is limited performance reporting on regional land activities, and there has been no assessment of performance compared to previous years, nor to expected volume of work or performance outcomes. Although much of the work on lands transactions is performed in reaction to requests made by First Nations, the audit expected to find some performance reporting, such as trends analysis, or measurement of throughput for the various instrument types processed. Some performance statistics were retained by unit managers in some regions, but the audit did not find program-wide performance analysis that would enable senior management to determine whether adjustments were required in lands operation.

Without formal oversight to establish priorities, and effective monitoring of the performance of lands management activities in regional offices, there is a risk the department may not be able to adequately measure progress and make improvements to the efficiency and effectiveness of land management activities.

5.1.2 Resource Allocation

Resource allocation should support the strategic priorities of the organization and ensure that the roles and responsibilities of a position are appropriate for the job level. Resources should be allocated by taking into account the volume of work in different regions as well as the complexity of the work. Given that land transaction processing is reactive work based on submissions by the First Nations in the region, appropriate resource allocation is important to ensure that the Department can fulfill its statutory obligations as well as its strategic priorities.

The audit expected to find that resource allocation and organizational structure are effective and aligned with strategic priorities.

The audit found that lands transactions vary depending on the region. Some regions focus on more complex transactions of longer duration, like designations and leases. While these transactions are not typically registered in a high volume each year, they are becoming increasingly complex and require significant time and resources. Other regions process many straight-forward transactions per year, and fewer complex transactions. The audit found that regions are starting to specialize in their management of lands transactions; that is, Lands Officers are now beginning to be organized into teams that focus on specific types of transactions, rather than function as Lands generalists, handling all transactions associated with one or more First Nations.

The audit found roles vary among regions. Some regions consist primarily of Lands Officers at the PM-02 and PM-03 level, where some regions have more senior Lands Officers at the PM-04 and PM-05 level. There is no standardization across the regions to ensure that job classification levels are consistent with the complexity of transactions associated with a given role. There is also discontent among Lands Officers that the delegation of the registry function to the regions has impacted their job duties and responsibilities, but not their job description nor their classification. Despite being listed as a priority in the LED Strategic Plan, no analysis on transaction volume and complexity per available resource has been conducted in the regions.

If resources are not allocated by taking into account the volume of work in different regions as well as the complexity of the work performed there is a risk that the department will experience reduced efficiency and possible discontent among staff.

5.2.1 Roles, Responsibilities and Training

A clear understanding of the roles and responsibilities of Lands Officers and other personnel involved in lands transactions is critical to the efficient management of a land file. For management and staff within an organization, formal definitions of roles and responsibilities are often found in job classifications and job descriptions. Lands Officers rely on tools such as process and procedural manuals, checklists, and formal training programs to maintain competencies required to perform their role and meet their responsibilities.

The audit expected to find that roles and responsibilities of Lands Officers and other personnel involved in lands transactions are clearly defined and understood. The audit also expected to find that AANDC lands management personnel are provided with appropriate training, tools, resources and information to support the fulfillment of their duties. As noted in Section 5.1.2, the audit found that roles vary among regions with no standardization across the regions.

The audit found that training for Lands Officers is provided informally and responsibilities are learned on-the-job and through shadowing/mentoring with more senior staff. Recently training was provided to participants from each Region on the new responsibilities to register transactions in ILRS, which was delegated to the regions as of December 1, 2012. While participants found the training helpful in explaining how to register basic transactions, the training did not cover more complex transactions and some Lands Officers in the Region indicated that they are unsure how to register these files. The volume and profile of transactions processed varies by Region and some regions have become specialized in certain types of land transactions, where targeted training would be beneficial.

The roles and responsibilities of the new Support Centres (for designations and registration) are still unclear to regions. As the Support Centres are still in the process of being set up, regions noted that Support Centre capacity to provide expertise on issues was limited, and that functional expertise still resides in the regions. Training for staff in the Support Centres included the general registry training provided to all Lands Officers; however, there are currently no plans for additional training to take place. This has created a lack of knowledge and expertise in the Support Centres, and a lack of confidence among Lands Officers that the Support Centres can provide help required on specific issues.

Without proper training provided to Support Centre staff there is a risk that the Support Centre will not have the knowledge and expertise to fulfill their responsibilities. Without additional training on registering complex transactions for Lands Officers, there is a risk that transactions could be improperly or inconsistently registered.

Recommendation:

No recommendations were identified in this area.

5.4.1 File Management Quality

An effective file management process should support the completion and registration of lands transactions by providing Lands Officers with a standardized toolkit of resources to process files accurately and consistently. These resources should ensure that Lands Officers are completing files according to policy, retaining required documentation and registering the appropriate information into the Indian Lands Registry System (ILRS).

The audit included a review of a sample of 110 land transaction files (i.e. 26 leases, 25 permits, 19 designations, 15 BCR allotments and 25 transfers). The audit expected to observe that lands transactions are recorded accurately and that documentation is complete. The audit also expected to find that adequate operational practices are in place in order to ensure accuracy and quality, and that reporting on the status of land management transactions is communicated appropriately and in a timely manner.

To assist Land Officers in fulfilling their responsibilities, the department has developed a Land Management Manual. The Land Management Manual is a 655-page resource tool which has the basic technical information needed to manage resource land. The manual contains general information on reserve lands, specific procedures, and policy information. The audit found that regions use the Land Management Manual as a reference in order to complete lands transactions; however, it was noted that regions have started to diverge from the manual as much of the policy in the manual is out of date, and the manual blends policy with procedures. This has resulted in a general lack of clarity across the regions as to what documentation is required to be retained, as well as what constitutes a complete file. While the manual includes a few example checklists, some regions have created and implemented control checklists as a way to ensure accuracy and completeness in file transactions. These checklists identify all the required steps and documentation for each type of transaction, and typically require sign-off by the Lands Officer before the file is reviewed and approved by a Manager. Other regions have not yet implemented a control mechanism, and files are processed and approved without a means of ensuring that all aspects have been appropriately completed.

Based on a review of sample land transaction files, the audit found that generally, documentation is retained to evidence that all procedures were followed. Audit testing noted a few exceptions where reviews were not adequately evidenced or documents were not properly retained by regional staff (e.g. notifications, missing copy of Ministerial Order or Order in Council, BCRs, Affidavits, etc.). It was noted through sample files reviewed that in regions that have not yet implemented control mechanisms like checklists, it was more common for files to have missing documentation compared to regions with implemented control checklists.

Regions tend to have limited resources to train new Lands Officers. While the Land Management Manual is used as a base reference, there are few guidelines and procedures to help a Lands Officer through a file. Informal coaching and mentoring from more senior Lands Officers is how most Lands Officers learn what is required to complete a file. This has created variations in how land transactions are processed and documented within regions as well as between regions, as Lands Officers each have their own way of processing a file. In some regions Lands Officers use individually-created checklists, work plans and file-tracking methods, which are not standardized practices.

Regions have also begun to electronically file documents; however, no standardized indexing system has been created or implemented. This has resulted in ad hoc filing techniques specific to each region and in some cases to each Lands Officer, making document retrieval difficult as there are no naming conventions or lists of required documents in place. A standard indexing practice for electronic files would be essential to ensure the accessibility and retrieval of the key documents for a registration, as well as the working file documents captured in the Comprehensive Integrated Document Management system (CIDM). Examples of working file documents would include draft versions of instrument documents, completed checklists, correspondence, evidence of review and approval, etc.

Reporting on the status of active files varies among regions. Some regions require that Lands Officers maintain up-to-date Work in Progress (WIP) lists of all active files, which are reviewed as required by managers. Other regions do not track active files and limit reporting to the number of transactions registered in the region in a given period. This reporting varies among regions from a quarterly to ad hoc process.

Without effective and standardized file management practices or control checklists to ensure quality and support the completion and registration of lands transactions, there is increased risk of inaccurate or incorrect registrations.

5.4.2 Use of Information Systems

Effective information management systems should support the execution of business processes by improving their overall efficiency, promoting data consistency and integrity, and standardizing processing steps.

The Indian Land Registry System (ILRS) consists of documents related to and interests in reserve (and any surrendered) lands that are administered under the Indian Act. The audit found that use of the system is generally consistent from Region to Region. ILRS is generally accepted by users as a useful tool. ILRS documentation and training on registration of documents was provided to selected 'power users' as part of the devolution of ILRS to the regions.

NetLands is a web-enabled AANDC computer application used in the management of land transactions on reserve lands. It assists users to schedule activities, track revenues, documents, correspondence and significant events related to lands transactions. According to system documentation, NetLands is designed to help Department and First Nations staff manage land projects and associated land instrument details such as:

• terms and conditions of instruments (e.g. rent payments);
• payments;
• monitoring (rent review, insurance, environment, breaches, disputes);
• people, organizations and companies associated with a land instrument; and,
• instruments which modify the original instrument.

NetLands allows a user to enter "bring forward" (BF) dates for events that should be addressed to meet the terms and conditions of the transaction, various policies and legal obligations.

The audit expected to find that NetLands is used to manage the processing of lands files, particularly those files that are more complex, and therefore more likely to remain in process over longer periods. The audit also expected to find that NetLands is used to provide project management functions to Land Managers and Lands Officers, such as tracking deadlines relevant to the processing of a land file prior to its completion and registration, and tracking expiry dates or renewal dates after a land transaction is completed and registered.

The audit found that although a 2010 AANDC Directive mandates the use of NetLands, the way the system is used was found to be inconsistent across regions included in the audit. Lands Officers use NetLands to varying degrees to monitor revenue-generating lands transactions (i.e. leases and permits). In some regions, for example, transactions (e.g. permits related to resources) were not entered in NetLands but were monitored in spreadsheet-based tools. The audit also found that NetLands use varied from officer to officer in the same region.

There is no direct connection to NetLands from the Indian Lands Registry System (ILRS), nor is there system-level integration that permits the direct transfer of data for a land instrument registered in ILRS to NetLands, where the terms of the instrument are monitored. Data related to an instrument entered in ILRS must be re-entered in NetLands, which can reduce efficiency of Land Officers. In one region, data entry in NetLands has been standardized through the use of an intake form; this checklist assists Lands Officers with data input requirements, naming conventions, and data quality by guiding a user through various fields in the system, based on the type of land instrument. The audit did not find similar procedural checklists for NetLands in other regions.

Data completeness was also noted as an issue; in some regions, only primary "head" leases are entered into NetLands, resulting in the system being unable to track sub-leases registered on the land. In its 2013 Report on Plans and Priorities, AANDC sets a performance target for the use of NetLands, and expects that 70% of new leases and permits registered in ILRS will be tracked in NetLands by March 2013 (in the 2012 Departmental Performance Report, the March 2013 target was 100%). The achievement of this target will be difficult to determine if data completeness issues remain.

The use of NetLands as a reporting tool appears to be inconsistent across the regions. Operational reports on transaction details, such as a report showing those instruments requiring rent review as of a given date, arrears reports, and the creation of letters requesting the filing of insurance information, are used to support the monitoring of land instruments. NetLands reports are not used to provide management information to LED on a regional or national level.

The audit found that NetLands provides limited project management capabilities, but did not find that the system was used to manage files in process prior to registration. Project management features available for monitoring key dates on instruments were not always used; some Lands Officers note that it was simpler to use other means, such as calendar reminders placed in their personal desktop office software, to monitor rent review and expiry dates.

Without information management systems which support the effective and efficient processing of land management transactions there is increased risk of inaccuracies, inefficiencies, and data integrity may be compromised.