Audit of Indian Registration (Qalipu Phase II)

Background

The Audit of Indian Registration (Qalipu Phase II) was included in the 2014-2015 to 2016-2017 Risk-Based Audit Plan, approved by Aboriginal Affairs and Northern Development Canada's (AANDC) Deputy Minister on February 6, 2014. The audit was requested by the Assistant Deputy Minister Resolution and Individual Affairs Sector to provide assurance that adequate checks and balances had been built into the process for assessing applications. Furthermore, the audit was identified as a priority because the effective and successful implementation of the Qalipu Enrolment Process is key to ensuring the Department meets its obligations under the Agreement between the Crown and the Federation of Newfoundland Indians (FNI) regarding the recognition of founding members for the Qalipu Mi'kmaq First Nation Band.

In June 2008, the Agreement for Recognition of the Qalipu Mi'kmaq First Nation Band ("the Agreement") was signed by the Minister of Aboriginal Affairs and Northern Development (then the Minister of Indian and Northern Affairs) and the President of the FNI. The Agreement principally identified the process for the creation of a Band (for the Mi'kmaq communities of Newfoundland) under the Indian Act and the enrolment of its Founding Members. By November 30, 2009, following the conclusion of the first stage of the enrolment process, approximately 26,000 membership applications had been received. By November 30, 2012, the number of applications for Band membership had grown to 100,558.

The significant increase in the number of applications and the fact that these applications could not have been considered prior to the end of the enrolment process led Canada and the FNI to agree to discuss next steps regarding the consideration of applicants and the appropriate implementation of the 2008 Agreement. On July 4, 2013, a supplemental agreement was announced that clarified the process for enrolment in the Qalipu Mi'kmaq First Nation Band and resolved issues that emerged from the implementation of the 2008 Agreement. Specifically, the Supplemental Agreement:

• extended the timelines for review of the applications, ensuring all previously unprocessed applications can be reviewed;
• ensured that all applications received during all phases of the enrolment process, except those previously rejected, will be assessed or reassessed;
• provided that all those individuals whose applications would be assessed or reassessed are to be sent written notification and given an opportunity to provide additional documentation, if necessary;
• provided clarity regarding the assessment of an applicant's self-identification as a member of the Mi'kmaq Group of Indians of Newfoundland; and,
• provided guidance related to an individual's acceptance by the Mi'kmaq communities of Newfoundland, particularly as it relates to individuals not residing in the communities of the Mi'kmaq Group of Indians of Newfoundland.

All applications to become Founding Members of the Qalipu Mi'kmaq First Nation Band are currently being processed by the Winnipeg Processing Unit (WPU) in Winnipeg, and the National Processing Unit (NPU) located at 200 Montcalm, Gatineau. File processing by the WPU and NPU consists of performing an initial file review and providing a preliminary analysis to facilitate the Enrolment Committee (EC) decision making process. Applications that were previously received by the FNI's head offices in Corner Brook, Newfoundland were transported to the WPU for scanning and subsequent processing to be conducted in two phases. Phase I, which is now complete, was designed to assess the validity of the applications. Phase II, which began in November 2013, was designed to assess the eligibility of the applicant to become a Founding Member based on the following three criteria: i) self-identification, ii) ancestry, and iii) group acceptance.

Once the files are pre-analyzed by the WPU or the NPU, they are referred to the (EC for review and rendering of decisions. The EC is comprised of two representatives appointed by the Government of Canada, two representatives appointed by the FNI and an independent Chair, jointly appointed by the Government of Canada and the FNI. As per the Supplemental Agreement, all enrolment applications are to be reviewed and a decision of their eligibility should be issued by August 31, 2015. Apart from the EC, another key stakeholder in the processing of applications is the Implementation Committee (IC), comprised of representatives from both Canada and the FNI, which oversees and coordinates the implementation of the agreement.

Audit Objective and Scope

The objective of this audit was to provide assurance to senior management that the controls in place for the processing and assessment of applications related to Phase II of the Qalipu Mi'kmaq First Nation Band enrolment process are sufficient to ensure the accuracy of eligibility assessments and the integrity of information captured in the Indian Registration System (IRS) as it relates to Qalipu Phase II.

The scope of the audit included the Phase II A and B processes and controls designed to assess the eligibility of applicants to become Founding Members of the Qalipu Mi'kmaq First Nation Band and to ensure the integrity of information captured in the IRS related to Qalipu Phase II.

Audit fieldwork testing was conducted at Headquarters (HQ) and the WPU and covered the period from November 2013 to January 2015.

Statement of Conformance

The audit conforms to the Internal Auditing Standards for the Government of Canada, as supported by the results of the quality assurance and improvement program.

Observed Strengths

Areas where significant progress and strengths were identified during the audit are as follows:

Conclusion

In general, the Qalipu application processing controls were found to be designed and operating effectively. In relation to targeted completion dates, progress has been made but there continue to be risks associated with timely completion of the Qalipu Enrolment process. Based on current progress, it is unlikely that the deadline of August 31, 2015 as stipulated in the Supplemental Agreement can be met as a result of:

• the current capacity of the EC to render decisions on the remaining files within the currently defined timeframe;
• files being set aside (approximately 500 as of January 31, 2015) for further processing, which include files relating to adopted individuals and files where further EC/IC clarification is required; and
• some IC decisions regarding processing that are yet to be made or implemented (i.e., QA process for the EC, and the process for entering decisions in the IRS).

Management is aware of these risks and has already identified, in partnership with the FNI, a number of options to mitigate these risks and address the concerns relating to the impending deadline as stipulated in the Supplemental Agreement.

Recommendations

The audit team identified areas where management control practices and processes could be improved, resulting in the following recommendations.

1. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector, in partnership with the FNI, should ensure that a solution is agreed upon as soon as possible and implemented in a timely manner to address the risk relating to compliance with the impending deadline. Furthermore, decisions that have already been made at the Implementation Committee level in relation to the Enrolment Committee quality assurance process and the process for entering enrolment decisions into the Indian Registration System should be formalized and implemented.
2. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector, in partnership with the FNI, should ensure that a formally documented project plan is implemented and used to effectively monitor and track the Qalipu Enrolment process. This will allow for proactive management of activities and delays to be dealt with in a timely manner. Furthermore, the existing progress reports should be revised to provide more clarity on the partially assessed applications as well as to track the extent of progress against the overall plan.
3. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector should ensure that all decision documents for Qalipu Founding Members are stored in such a way that the enrolment decisions are protected from loss or damage in the event of a disaster such as fire or flood affecting the Winnipeg Processing Unit. Alternatively, management should consider maintaining a copy off-site for any records that are not saved electronically.

Management Response

Management is in agreement with the findings, has accepted the recommendations included in the report, and has developed a management action plan to address them. The management action plan has been integrated in this report.

Qalipu Mi'kmaq First Nation Band

In 1989, the FNI, representing approximately 7,800 members from the nine Mi'kmaq communities across Newfoundland, along with Chiefs of six affiliated groups, began a Federal Court Action seeking eligibility for registration under the Indian Act.

Official negotiations between the FNI and the Government of Canada for the creation of a Band with no reserve land took place between 2004 and 2006. In June 2008, the Agreement for Recognition of the Qalipu Mi'kmaq First Nation Band was signed by the Minister of Aboriginal Affairs and Northern Development (then the Minister of Indian and Northern Affairs) and the President of the FNI. The Agreement principally identified the process for the creation of a Band (for the Mi'kmaq communities of Newfoundland) under the Indian Act and the enrolment of its Founding Members. By November 30, 2009, following the conclusion of the first stage of the enrolment process, approximately 26,000 membership applications had been received. By November 30, 2012, the number of applications for Band membership had grown to 100,558.

The significant increase in the number of applications, and the fact that all applications could not have been considered prior to the end of the enrolment process, led Canada and the FNI to agree to discuss next steps regarding the consideration of applicants and the appropriate implementation of the 2008 Agreement. On July 4, 2013, a Supplemental Agreement was announced that clarified the process for enrolment in the Qalipu Mi'kmaq First Nation Band and resolved issues that emerged from the implementation of the 2008 Agreement. Specifically, the Supplemental Agreement:

• extended the timelines for review of the applications, ensuring all previously unprocessed applications can be reviewed;
• ensured that all applications received during all phases of the enrolment process, except those previously rejected, will be assessed or reassessed;
• provided that all those individuals whose applications would be assessed or reassessed are to be sent written notification and given an opportunity to provide additional documentation, if necessary;
• provided clarity regarding the assessment of an applicant's self-identification as a member of the Mi'kmaq Group of Indians of Newfoundland; and,
• provided guidance related to an individual's acceptance by the Mi'kmaq communities of Newfoundland, particularly as it relates to individuals not residing in the communities of the Mi'kmaq Group of Indians of Newfoundland.

All applications to become Founding Members of the Qalipu Mi’kmaq First Nation Band are being processed by the WPU and the NPU, which include several entitlement officers physically located both in Winnipeg and Gatineau. Applications that were previously received by the FNI’s head offices in Corner Brook, Newfoundland were securely transported to the WPU, for scanning and subsequent processing to be conducted in two phases. Phase I, which is now complete, was designed to assess the validity of the applications. Phase II, which began in November 2013, was designed to assess the eligibility of the applicant to become a Founding Member based on the following three criteria: i) self-identification, ii) ancestry, and iii) group acceptance.

Phase II has been divided into two sub-phases: Phase II A and II B. Phase II A included the review of approximately 24,000 applicants that were originally accepted as Founding Members of the Qalipu Mi'kmaq First Nation Band and were granted Indian Status.

The Supplemental Agreement established an opportunity to provide additional documentation prior to the processing of their application, which was permitted between November 2013 and February 2014. During that time, the WPU received more than 1.5 million pieces of documentation. Prior to commencing the assessment of these applications (referred to as Phase II B), each piece of information was scanned by the WPU. Once the files are pre-analyzed by the WPU they are referred to the EC for review and rendering of decisions. The EC is comprised of two representatives appointed by the Government of Canada, two representatives appointed by the FNI and an independent Chair, jointly appointed by the Government of Canada and the FNI. As per the Supplemental Agreement, all enrolment applications are to be reviewed and a decision of their eligibility should be issued by August 31, 2015. Apart from the EC, another key stakeholder in the processing of applications is the IC, which oversees and coordinates the implementation of the agreement and advises the parties on issues relating to the establishment of the Qalipu Mi’kmaq First Nation Band.

2.1 Audit Objective

The objective of this audit was to provide assurance to senior management that the controls in place for the assessment and processing of applications in Phase II of the Qalipu Mi'kmaq First Nation Band enrolment process are sufficient to ensure the accuracy of eligibility assessments and the integrity of information captured in the IRS as it relates to Qalipu Phase II.

2.2 Audit Scope

The scope of the audit included the Phase II A and B processes and controls designed to assess the eligibility of applicants to become Founding Members of the Qalipu Mi'kmaq First Nation Band and to ensure the integrity of information captured in the IRS related to Qalipu Phase II. The audit scope also included a follow-up on recommendations related to Qalipu Phase I resulting from the previously conducted Audit of the Indian Registration System.

Audit fieldwork/testing was conducted at HQ and the WPU and covered Phase II of the Qalipu enrolment process for the period from November 2013 to January 2015.

The audit did not include an assessment of Indian registration processes outside of those directly related to the Qalipu Enrolment Process, such as regional and band office registration activities and card issuance processes. The audit also did not include an examination of the new Secure Integrated Registration and Certification Unit, which will see the reorganization of the Individual Affairs Branch and the combination of registration and card issuance processes into a single window approach as this will be subject to a separate audit during the 2015-2016 fiscal year.

The scope of the audit did not include an assessment of the appropriateness of decisions rendered on individual assessments, but rather included an assessment of the process used to render the decisions. Also, while the intent was to assess the integrity of the final decision in IRS, this was not possible as decision entry into IRS had not yet commenced.

5.1 Targeted Completion

The Supplemental Agreement requires that the Qalipu Enrolment process be completed by August 31, 2015. During the audit, it was noted that based on the volume of applications assessed to date and the current rate of processing, all Qalipu applications will not be assessed within the targeted completion date of August 31, 2015. We identified two major causes that would prevent this from taking place.

1. We were informed that the current rate of decisions being rendered by the EC was approximately 2,000 files per month at the time of our testing (January 2015). At that time, there were close to 17,000 decisions that had been rendered, meaning that approximately 77,000 applications still need to be assessed and decisions rendered thereon by August 31, 2015. It was further noted that the EC will be required to build some family trees (for the ancestry criteria assessment) for an as yet undetermined number of applications, thereby adding additional processing time during the assessment.
   
   We were informed that RIA management, in partnership with the FNI, has already prepared several options to address the concerns relating to the impending deadline date as stipulated in the Supplemental Agreement and that a decision on next steps is pending.
2. Pursuant to the implementation strategy, the following files were intentionally set aside (i.e. no processing is continuing at the moment) for future processing:
   • Files where self-identification criteria are met - These files are to be retained in a separate secure electronic storage folder (referred to internally as a "bin") for the next stage of processing (Group Acceptance and Ancestry).
   • Files related to applications for adopted individuals - These files are to be set aside in a separate "bin" until the procedures for addressing these files are defined and implemented.
   • Files where EC or IC clarification is required - These are files to be set aside in a separate "bin" for further evaluation due to reasons such as unclear documentation, unique cases based on documentation not seen to date, etc.

As noted earlier, this presents a risk that, given the volume of applicants, the assessment and rendering of decisions for these remaining applications may not be completed within the currently defined timeframe.

Recommendation

See recommendation in Section 5.2 below.

5.2 Pending Decisions

During the audit, we noted that there were two IC oversight decisions that affected the progress of the Qalipu assessments that were made but were not yet formalized, such as those relating to the QA process on EC decisions. If left unimplemented, this contributes to the risk that the assessment of the applications will not be completed within the defined timeframe in the Supplemental Agreement. Specifically:

• The decision to implement a QA process to ensure that decisions are rendered consistently by all EC members was made by the IC. We have noted that the work to design this process has been started by the FNI and that a first draft has been tabled; however, this process is yet to be formalized and implemented.
• While it has been determined that selected staff in the WPU will be entering EC rendered decisions into the IRS, this process has yet to be confirmed, formalized and implemented along with the process to perform QA to ensure that the decisions entered into the IRS reflect the decisions in the signed EC batch lists and the electronic version of the batch list, which will be used to generate letters to applicants.
• While options have been prepared by RIA management to complete processing within a specified period of time, a decision has yet to be made on which option to take.

Recommendation

1. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector, in partnership with the FNI, should ensure that a solution is agreed upon as soon as possible and implemented in a timely manner to address the risk relating to compliance with the impending deadline. Furthermore, decisions that have already been made at the Implementation Committee level in relation to the Enrolment Committee quality assurance process and the process for entering enrolment decisions into the Indian Registration System should be formalized and implemented.

5.3 Monitoring and Tracking

During the audit, we noted that there is no formally documented monitoring mechanism (e.g. documented project plan) in place that provides an overview of the entire Qalipu Enrolment process to manage the end-to-end timelines. It was noted, however, that monitoring is ongoing and a document exists that lists certain activities and their status. Although a high level work plan has been developed, the lack of a detailed project plan poses a risk to comprehensive project management with respect to timelines, expected duration of activities and proactive management of anticipated bottlenecks and unexpected events. Further, in the event of slippage of individual tasks, there is a risk that timely management intervention may not occur.

Management has indicated that they are aware of the need for a formally documented detailed project plan and will develop one once a decision on the solution for timely completion (see 5.1 and 5.2) is made. We further noted that while a monthly progress report is prepared and submitted to Senior Management, the information in the report relating to partially assessed applications is incomplete as it does not indicate the outstanding level of effort on these applications or the deadline as stipulated in the Supplemental Agreement and the extent of progress against the overall plan. We have been informed that the template for the report was originally created to address specific information needs of Senior Management and has been revised several times and that future versions of the report are expected to contain more information that will allow for an assessment of progress against targets.

Recommendation

2. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector, in partnership with the FNI, should ensure that a formally documented project plan is implemented and used to effectively monitor and track the Qalipu Enrolment process. This will allow for proactive management of activities and delays to be dealt with in a timely manner. Furthermore, the existing progress reports should be revised to provide more clarity on the partially assessed applications as well as to track the extent of progress against the overall plan.

5.4 Storage of Enrolment Committee Decisions for Phase II A

We found that the "decision lists" on which the EC documented the decisions rendered for Phase II A applications are stored in a locked cabinet that is not rated as fire-proof. Further, we noted that there were no electronic or physical back-up copies of the supporting documentation kept for the decisions (i.e., the only copy was stored on-site in the locked cabinet). This means that in the event of a fire, the supporting documentation for the decisions on these applications could be lost.

Recommendation

3. The Assistant Deputy Minister of the Resolution and Individual Affairs Sector should ensure that all decision documents for Qalipu Founding Members are stored in such a way that the enrolment decisions are protected from loss or damage in the event of a disaster such as fire or flood affecting the Winnipeg Processing Unit. Alternatively, management should consider maintaining a copy off-site for any records that are not saved electronically.

5.5 Follow-up on Recommendations from the Audit of the Indian Registration System (IRS)

An Audit of the IRS was conducted in 2013-2014. We reviewed the recommendation from that audit that pertained to the Qalipu Enrolment process and noted that, while previously known weaknesses have been addressed and improvements have been made, there continues to be one issue that remained unresolved at the conclusion of our audit. Below is a summary of the actions taken to address the recommendation pertaining to the Qalipu Enrolment process as noted in the Audit of the IRS.

Recommendation

See Recommendation in Section 5.2 above.