Audit of the Elementary and Secondary Education Program

Acronyms

Executive Summary

1. Background

The Audit of the Elementary and Secondary Education Program (the Program) was included in Indigenous and Northern Affairs Canada's (INAC or the Department) 2016-2017 to 2018-2019 Risk-Based Audit Plan, approved by the Deputy Minister onMarch 4, 2016. The audit was identified as a priority on the basis of the Program's importance to the achievement of strategic objectives and is financially significant.

The Program is included in the Department's broader Education Program. It is managed and coordinated at the national level by the Education and Social Development Programs and Partnerships (ESDPP) sector and delivered at the regional level. The Program highlights the federal role in on-reserve elementary and secondary education. Through the Program, salaries for on-reserve school teachers and other instructional services are funded and support is provided to eligible students living on-reserve with elementary and secondary education programs comparable to those that are required in provincial schools by statutes, regulations or policies. For students who live on-reserve but attend provincially-operated schools located off-reserve, and private schools on or off-reserve, INAC provides funding for the tuition. INAC funding also covers student support services, such as transportation, and access to resources for learners with identified special education needs.

By providing funding support to Indigenous people and organizations designated by Indigenous people (such as tribal councils and Indigenous education organizations), or through direct service delivery in seven federally-operated schools, INAC works to promote Indigenous education, towards the strategic goals of greater self-sufficiency, improved life chances, and increased labour force participation.

The Program includes several sub-programs, each funding different types of expenditures. These sub-programs include:

• Core instructional and student support services ("core");
• High-Cost Special Education Program (HCSE);
• New Paths for Education Program ("New Paths");
• First Nation Student Success Program (FNSSP);
• Education Partnerships Program (EPP);
• First Nations and Inuit cultural education centres; and
• First Nations and Inuit Youth Employment Strategy (FNIYES).

Budget 2016 included a significant investment of $8.4 billion over five years, beginning in 2016-2017, for various programs including education, infrastructure and training, to contribute to a better quality of life for Indigenous peoples and a stronger, more unified, and prosperous Canada. Budget 2016 included a significant additional investment in elementary and secondary education on reserve, totaling $2.6 billion over five years starting in 2016-2017. This includes funding to address immediate needs, to keep pace with the growth of costs over the medium term and to support the transformation of the current on-reserve education systems through a respectful process of consultation and partnership with Indigenous communities. Funding will also cover support for First Nations language and culture, students with special needs, literacy and numeracy, and support for innovation, research, and measurement.

2. Audit Objective and Scope

3. Approach and Methodology

The Audit of Elementary and Secondary Education Program was planned and conducted in accordance with the requirements of the Treasury Board Policy on Internal Audit and followed the Institute of Internal Auditors' International Professional Practices Framework.

The approach used to address the audit objective included the development of audit criteria, against which observations and conclusions were drawn. The audit criteria developed for this audit are included in Appendix A. Relevant policies and directives referenced throughout the audit process are listed in Appendix B.

The audit team examined sufficient, reliable and relevant evidence to provide a reasonable level of assurance in support of the audit conclusion. The principle audit techniques used included:

• Interviews and walkthroughs with key individuals across the organization: Individuals selected to participate in interviews and walkthroughs represented regional and sector activity, and had responsibilities relating to core funding, financial controls, compliance, and/or the in-scope programs;
• Document review: Process documentation, governance documentation, communication tools and mechanisms, and documentation concerning Program policies and procedures were reviewed to gain an understanding of Program governance, the structure and implementation procedures;
• Design testing: Proposal tools and guidelines and evaluation processes were observed to validate the approach and findings and to determine design effectiveness across regions for the in-scope proposal-based programs and core funding;
• Operating effectiveness testing: A sample of proposals was selected for core funding and each of the in-scope proposal-based programs to validate approach and findings and to assess whether the controls identified in interviews and walkthroughs were implemented and operating as designed; and
• Analysis: Interviews, document review, design testing and operating testing results were compared to determine differences in regional approaches, identify challenges and opportunities to improve the adequacy of the management control framework in supporting the achievement of Program objectives.

4. Conclusion

The audit found that the management control framework generally supports the achievement of Program objectives, and regional implementation of Program procedures is largely compliant with relevant policies and directives. However, opportunities for improvement were identified in the areas of governance, communication and operations to further support the achievement of Program objectives, increase efficiency, maintain corporate knowledge and strengthen Program delivery.

5. Findings and Recommendations

In determining the scope of this audit, governance, communication and operations were identified as the three key lines of enquiry. These lines of enquiry were evaluated by the audit criteria through a combination of documentation review, design and operating effectiveness testing, interview procedures and analysis. Where a significant difference between the audit criteria and observed practices was found, the associated risk was evaluated to develop a conclusion and to document recommendations for improvement.

5.3 Operations

Compliance with the National Program Guidelines was supported by management control frameworks as demonstrated through walkthroughs for identification of control activities with Program Officers. However, limited process documentation existed for two of the three regions visited, and in the third region documentation had recently been developed, but was not fully implemented. Each region had a unique approach to program implementation, including the execution of proposal approvals, proposal evaluations, Financial Administration Act controls, and their funding allocation methodologies. Without documented common procedures, each region has placed reliance on the knowledge and experience of Program Officers. This represents a risk of losing corporate knowledge and continuity in relationships. Each region, however, expressed interest in formalizing and documenting their processes. There is an opportunity for HQ to provide guidance and templates that would be useful for implementation to aid regional offices in documenting processes as well as facilitate some consistency in implementation.

Several efficiencies and best practices were identified in the regions visited, which could benefit other regional offices, including:

• A formula-based approach to HCSE to reduce administrative capacity dedicated to proposals. This approach further supports Program objectives as high-cost special education needs generally follow a student through their lifetime without annual changes to needs.
• Limiting the calls for proposals to one per program to reduce administrative capacity dedicated to proposals, even with an additional funding stream introduced under New Paths. The initial New Paths proposals were re-assessed under the new stream; however, foresight was provided to the recipient communities to allow them to prepare one proposal to fit multiple funding streams.
• Process documentation and evaluation templates have been developed in one of the regions visited to aid individuals who are new to the Program. This documentation has also facilitated a thorough understanding of the programs and procedures, as well as demonstrating compliance through supporting tools and templates.
• An education information session is held annually by regions with Indigenous communities, which provides an increase in face-to-face interactions and also provides an opportunity for training and education expert panel discussions at the session.

Limited sharing of best practices occurs across regions, especially related to program implementation approach, design and documentation of processes, tools and templates. Regional collaboration normally focuses on issues that require urgent attention rather than facilitated working groups.

Recommendation:

4. The Assistant Deputy Minister, Education and Social Development Programs and Partnerships, in collaboration with the Senior Assistant Deputy Minister, Regional Operations, and the Assistant Deputy Minister, Northern Affairs Organization, as applicable, should formalize and communicate common education program processes and templates for control activities specific to education for implementation across regions, factoring-in existing best practices, which may be leveraged.

6. Management Action Plan

Appendix A: Audit Criteria

The following audit criteria were developed to ensure an appropriate level of assurance in meeting the audit objective.

Appendix B: Relevant Policies and Guidelines

The following authoritative sources (i.e. Policies/Guidelines) were examined and used as a basis for this audit:

• Treasury Board Policy on Transfer Payments
• Financial Administration Act
• ESDPP National Program Guidelines

Appendix C: Program Descriptions

Core instructional services provides funding for basic organizational capacity to support core operations, such as paying education staff, classroom and school supplies, operating and maintaining schools, guidance and counselling and tuition fees at Indigenous elementary and secondary schools. Core funding allocations are determined based on the nominal roll through a funding formula which is executed by the regional offices.

The New Paths for Education program is a regionally-managed proposal-based program that requires recipient communities to prepare and submit proposals in order to receive funding. The program objectives support expenditures such as: First Nation Management and Governance Capacity, School Effectiveness (including Language and Culture), Parental and Community Engagement, Teacher Recruitment and Retention and Information and Communications Technology. Funding amounts are determined on a case-by-case basis and limited by total funding available for the proposals received by each region.

The High Cost Special Education program is a regionally managed proposal-based program for high-cost special education students assessed with moderate to profound learning disabilities. Activities funded under the program include identification of students with high-cost special education needs, identification of the category or categories of exceptionality that applies to each student, preparation of an Individual Education Plan for each student and procurement or delivery of the types of services recommended in the student's education plan funding. Funding is based on an annual funding request, whether in the form of a proposal, work plan or application.

The First Nations Student Success Program (FNSSP) is a nationally-managed proposal-based program that aims to increase student achievement levels in three priority areas: literacy, mathematics (numeracy) and student retention. The activities funded through this program are required to include student success plans for improving student achievement levels in literacy, mathematics and student retention, student learning assessments and performance measurement systems for schools to monitor and report on how students are doing. Funding for this program is merit-based. Proposals are assessed at a national level by a national selection committee.

The Education Partnerships Program (EPP) aims to advance First Nation student achievement in First Nation and provincial schools while promoting collaboration between First Nations, provinces, INAC and other stakeholders. EPP supports two categories of partnership development: partnership establishment (such as the negotiation and drafting of tripartite education Memoranda of Understanding) and partnership advancement. This program is a National, proposal-based program for which funding allocation decisions are based on merit as demonstrated in the submitted proposals and evaluated by a national selection committee.