1. Executive Summary

Background and why it is important

The Clerk of the Privy Council has made integrated planning in the Public Service a renewal priority since 2007-08. In the 2010 report, the Clerk states: “done well, integrated planning allows us to clearly identify gaps in the resources required to deliver on priorities, and then to close the gaps by redesigning the work, developing employee capacity or devoting more staff to the effort.” ^{Footnote 1}. SSHRC also recognized that integrated planning is an essential tool to achieving its strategic objectives, and in fiscal year 2009-10, the Agency launched the design and development of its integrated planning process. Furthermore, effective integrated planning establishes the priorities for an organization and identifies the human and financial resources required to maximize the probability of achieving those priorities.

SSHRC has gone through a number of changes in recent years such as workforce adjustments, renewal of its program architecture, program harmonization and the introduction of new Information Technology (IT) systems. A key tool used by SSHRC management to effectively prioritize and respond to these changes has been the implementation of integrated planning. 

Integrated planning at SSHRC has been an evolving process over the past five years. The integrated planning process has been led by the Corporate Strategy and Performance Division with active participation from SSHRC management and the Common Administrative Services Directorate (CASD).  

Audit objective and scope

The audit objectives were to assess the:

1. Completeness of the integrated planning framework to provide assurance that the framework follows Treasury Board guidance intended to assist SSHRC in achieving its objectives.
2. Extent to which integrated planning has been implemented to leverage key business processes (i.e., budgeting, risk management, divisional planning) in support of SSHRC’s objectives.
3. Effectiveness and efficiency of the implementation of the integrated planning framework to provide assurance that the integrated planning process has produced the intended benefits.

The scope of the audit included the design, implementation activities completed to date, and future enhancements such as performance measurement reporting and monitoring to further augment elements of integrated planning. The audit focused on the integrated planning process from April 1, 2012 to November 2013.

Key audit findings

SSHRC’s integrated planning process has evolved significantly over the past five years. The audit noted that one of the key achievements has been the development of a robust framework which includes all the components necessary to support effective and efficient integrated planning throughout the organization, aligning the Agency with best practices in government. Additionally, the audit found that integrated planning occurred at all levels of the organization, was information driven, transparent, value-based and well communicated.

While the audit noted considerable progress had been made in recent years, a few areas were identified where further enhancements are required:

1. Integrated planning can simply be referred to as processes that link strategic planning and operational planning to financial / human resources planning. The audit noted that SSHRC could further enhance its integrated planning process by more clearly aligning its strategic priorities (i.e., vision, direction) with its operational priorities (i.e., concrete, actionable priorities) and further ensure these operational priorities are consistent and evident throughout the Agency (i.e., that directorate/divisional activities—“key commitments” —support operational and strategic priorities). As such, the audit found that business processes such as annual budgeting and risk management could further be leveraged to maximize their full potential.
2. The audit also found that despite the fact that SSHRC and NSERC have similar business models, each Agency followed a slightly different integrated planning process with different information requirements and planning cycles. This suggests that staff working in common service areas, serving both Agencies, are required to participate and actively contribute to two integrated planning processes, creating a duplication of resource inputs and effort (i.e., committee meetings, consultation, completion of templates, etc.), and that the agencies may be missing opportunities to collaborate on common or related initiatives. 

Key recommendations stemming from the above findings include clarifying expectations for senior management to affirm and formally communicate operational priorities on an annual basis; and for SSHRC senior management to engage NSERC management for the purpose of identifying common integrated planning requirements and leveraging the common services model to its full potential.

Conclusion

SSHRC’s integrated planning framework and processes have helped to clarify the Agency’s priorities and activities across all divisions. Expected benefits of the process include improved connection of daily work, both within and across divisions, in support of fulfilling SSHRC’s mandate of promoting and supporting the very best research and talent in the social sciences and humanities. The recommendations in this report are intended to reinforce SSHRC’s achievements to date and help enhance the effectiveness and efficiency of SSHRC’s integrated planning process. Key to these recommendations is the role senior management plays in clearly articulating and communicating SSHRC’s operational priorities on an annual basis, as well as their role in engaging senior management within NSERC to identify process and other efficiencies to leverage the shared services model. It is expected that implementation of the report’s recommendations will lead to more effective business processes such as budgeting and risk management.

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2. Background

The Clerk of the Privy Council has made integrated planning in the Public Service a renewal priority since 2007-08. In the 2010 report, the Clerk states: “done well, integrated planning allows us to clearly identify gaps in the resources required to deliver on priorities, and then to close the gaps by redesigning the work, developing employee capacity or devoting more staff to the effort.” ^{Footnote 2} SSHRC also recognized that integrated planning is an essential tool to achieving its strategic objectives, and in fiscal year 2009-10, the Agency launched the design and development of its integrated planning process. Furthermore, effective integrated planning establishes the priorities for an organization and identifies the human and financial resources required to maximize the probability of achieving those priorities.

SSHRC has gone through a number of changes in recent years such as workforce adjustments, renewal of its program architecture, program harmonization and the introduction of new Information Technology (IT) systems. A key tool used by management to prioritize and respond effectively to these changes has been the implementation of its integrated planning process.

Integrated planning at SSHRC has been an evolving process over the past five years. The integrated planning process has been led by the Corporate Strategy and Performance Division with active participation and involvement from management within SSHRC and the Common Administrative Services Directorate (CASD).

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3. Audit Objective and Scope

The audit objectives were to assess the:

1. Completeness of the integrated planning framework to provide assurance that the framework follows Treasury Board guidance intended to assist SSHRC in achieving its objectives.
2. Extent to which integrated planning has been implemented to leverage key business processes (i.e., budgeting, risk management, divisional planning) in support of SSHRC’s objectives.
3. Effectiveness and efficiency of the implementation of the integrated planning framework to provide assurance that the integrated planning process has produced the intended benefits.

The scope of the audit included the design, implementation activities completed to date, and considered future implementation plans to augment elements of integrated planning such as performance measurement reporting and monitoring. The audit focused on the integrated planning process from April 1, 2012 to November 2013.

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4. Audit Methodology

The following methods were used in the conduct of the audit work:

• File and document review of various sources of information, including committee meeting minutes, planning documentation, policies, guidelines, training material, SSHRC internet, SSHRC intranet, etc.
• Interviews with internal key stakeholders involved in the integrated planning process including the Vice-President of the Research Directorate, Vice-President of the Research Capacity Directorate, Vice-President CASD, directors and managers.

The audit was carried out and completed using standards set by the Institute of Internal Auditors (IIA). The conclusions were drawn based on the assessment of audit findings against the criteria used for this audit (detailed in Appendix I). The audit criteria were based upon guidelines provided by the Internal Audit Sector, Office of the Comptroller General for auditing core management controls within government,^{Footnote 3} as well as Treasury Board’s Integrated Planning Handbook for Deputy Ministers and Senior Managers (2008).

The audit engagement was conducted in conformance with the Treasury Board’s (TB) Policy on Internal Audit, the Internal Auditing Standards for the Government of Canada, and the Institute of Internal Auditors (IIA) International Standards for the Professional Practice of Internal Auditing (Standards). These standards require that sufficient and appropriate audit procedures be conducted and that evidence be gathered to provide a high level of assurance on the findings contained in this report. The conclusions were based on a comparison of the situations as they existed at the time against the audit criteria.

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5. Key Audit Findings

The audit findings related to the three audit objectives are detailed in this section. Findings related to “efficiency and effectiveness of implementation” have been rolled into the two following sections since they are cross-cutting and should be evident in all areas of the business.^{Footnote 4}

5.1 Integrated Planning Framework

Treasury Board’s Integrated Planning Handbook for Deputy Ministers and Senior Managers states that “Integrated HR and business planning is the foundation for assessing and understanding current and future needs.” ^{Footnote 5} The audit expected a similar key benefit to be demonstrated as a result from SSHRC’s integrated planning process, i.e. that the integrated planning process would help the organization allocate and reallocate resources—HR and financial— to corporate priorities. A clear understanding of organizational priorities helps management initially align resources, and then subsequently reallocate resources should plans and requirements change. 

5.1.1 SSHRC incorporates all key Treasury Board elements to support an effective and efficient integrated planning process

The audit expected that SSHRC considered, and adopted as appropriate, all key elements in the planning and implementation of its integrated planning process, as per the guidance provided to the Government of Canada by Treasury Board. As such, it was expected that SSHRC’s integrated planning:

• takes place at all levels;
• is information driven;
• identifies risks and challenges;
• is transparent, values-based and well communicated;
• provides status reporting; and,
• monitors, measures and evaluates its efforts. 

The audit noted that all of the key elements of the TBS Integrated Planning Handbook were reflected in the integrated planning framework, suggesting that the planning process has been designed to effectively and efficiently support senior management in the achievement of their objectives.

5.1.2 Broad input has been sought in the development of SSHRC’s integrated planning.

The audit expected that SSHRC’s integrated planning process consider the internal and external environments in which the Agency operates through consultation with pertinent stakeholders. These ongoing scans and consultations are important activities to support the identification of priorities and help ensure selected priorities are relevant within SSHRC’s context and mandate.

The audit found that the Agency did consider the internal and external environments and sought broad input from relevant stakeholders in the development and implementation of its integrated planning process. Furthermore, the audit noted that SSHRC’s scanning and consultation considered the corporate environment within SSHRC, the university research environment, and perspectives from other organizations.

5.2 Alignment of Integrated Planning Within SSHRC

Every organization needs clear articulation and alignment of its strategic priorities (i.e., vision, direction), operational priorities (i.e., concrete priority initiatives) and the priorities of the directorates and divisions (i.e., activities or “key commitments”). This is a ‘cascade-down’ perspective (as seen in Figure 1.1) in which the organization’s priorities begin in broad and aspirational terms, and become more concrete and refined the closer objective-setting gets to the day to day work of staff. Alignment of these three layers of priorities is important because it ensures that each level within the organization (as well as each functional business area) from senior management to individual staff members works in unison for a shared purpose and all move in a common direction.

Figure 1.1 Levels of Organizational Priorities

Description of figure

Figure 1.1 Levels of Organizational Priorities

Figure 1.1 illustrates three levels of organizational priorities that begin in broad and aspirational terms, and become more concrete and refined the closer objective-setting gets to the day to day work of staff; the three levels or organizational priorities shown are: strategic, operational and directorate/divisional.

Once clear and communicated throughout the organization, these priorities are expected to be incorporated into business processes such as annual budgeting, risk management, divisional planning, and employee performance management. Of particular importance is how operational priorities are incorporated into the annual budgeting process since this process determines how funds and human resources will be allocated (and later reallocated) to ensure the achievement of priorities. Moreover, one of the chief expectations of integrated planning is that the ‘priority setting’ that results from it will be used to inform management’s decision-making with respect to resource movement.^{Footnote 6}

5.2.1 Priority initiatives require clarification by senior management

The audit expected that SSHRC’s integrated planning process would align strategic, operational and directorate/divisional priorities using a cascade down approach (as described above) and that these priorities would be incorporated into the appropriate business processes to ensure their achievement. The audit found that SSHRC had developed a strategic plan on a three-year cyclical basis that is aligned with its strategic outcome—“To make Canada a world leader in social sciences and humanities research and research training”—and three strategic priorities (along with several strategic level sub-priorities)^{Footnote 7}, as identified in both the 2013 Strategic Plan and 2013-14 Corporate Plan. However, the audit noted that the alignment between the strategic and operational priority levels was not clear. This was thought to have four main impacts:

1) Resources may not be optimally deployed to support operational and strategic priorities

In the absence of clearly articulated operational priorities, the audit found that SSHRC’s movement of resources appeared to be based on factors not explicitly linked to priorities (i.e., requirements at the directorate and divisional level). This suggests that SSHRC’s budgeting process is not yet fully integrated into the integrated planning to ensure operational and strategic priorities are attained.

2) Directorate/divisional planning could be better used to support operational and strategic priorities

The audit found that the absence of clearly articulated operational priorities, management and staff had limited guidance in developing directorate and divisional plans that were designed in a manner to ensure that their activities (key commitments) contributed to the achievement of the operational and strategic priorities. This suggests that planning efforts at this level may not have achieved their intended purpose. Furthermore, the audit also found that priorities were not consistently considered in the performance agreements of directors, suggesting that performance management at this level was not always used in a manner to rally directorates/divisions around concrete operational priorities.

3) Corporate risk management is not fully exploited to support operational and strategic priorities

In order for organizational priorities to be achieved it is critical that the risks to achieving those priorities are identified, assessed, mitigated and monitored on a periodic basis. The audit found that SSHRC had developed a risk management process which is updated on an annual basis and formally refreshed every five years. SSHRC’s risk management process currently monitors 14 risks to the general delivery of its mandate. However, in the absence of clearly articulated operational priorities, the current process does not consider the corporate risks to the concrete projects at the operational level which then drive the achievement of the broader strategic priorities. This suggests that SSHRC’s risk management approach is not being fully leveraged to help the Agency reach its operational and strategic priorities.

4) Monitoring of priorities remains at the strategic level and is not designed to assess how directorates and divisions contribute to achievement of operational and strategic priorities

The audit found that two progress reports (mid-year and end-of-year) were presented to senior management and to governing Council in 2012-13 concerning the high level achievement of strategic priorities. The audit also found that SSHRC had developed a Performance Measurement Framework (PMF) which identifies a number of outcomes and expected results aligned to the Program Alignment Architecture (PAA). However, without clear articulation of operational priorities—the operational layer between SSHRC’s broad strategic priorities and the day to day work of staff—and expectations for directorates/divisions to report against those, it is difficult to monitor the contributions of directorates and divisions to the overall achievement of SSHRC’s operational and strategic priorities.

The audit found that the lack of alignment between the strategic, operational and directorate/divisional priorities was due to the fact that the broader integrated planning process did not formalize the expectation for senior management to articulate and formally communicate their selection of a small number operational priorities on an annual basis. While the audit found evidence in the Corporate Plan to suggest that SSHRC was engaged in major initiatives such as Imagining Canada’s Future, Grants Management System, and the Aboriginal Research Integrated Strategy, it was not clear how these projects were identified for inclusion in the Corporate Plan, and their linkages to the Strategic Plan. That said, there was evidence in the 2013-16 Strategic Plan to support that senior management had identified the Future Challenge Areas project as critical to SSHRC’s Plan. However, this project appears as a stand-alone in the document and there is limited information to support the role it plays in the achievement of SSHRC’s strategic priorities.

Recommendation 1: The audit recommends that, on an annual basis, senior management identify a limited number of operational priorities (suggest three to five in total) and these priorities need to be articulated and formally communicated to support resource allocation/reallocation decisions. Once this is achieved, the audit further recommends that senior management:

• consider the operational priorities in the development of the annual budget allocation and subsequent reallocation, to support clearer alignment of resources to priorities;  
• consider the operational priorities in the context of corporate risk mangement;
• consider the need for additional tools to ensure a consistent approach for directorate and divisional planning, monitoring and reporting on operational priorities; and,
• consider the need for tools to ensure performance information is available at the planning stage to support the identification of operational priorities and key commitments.

5.2.2 Efficiencies could be achieved by further aligning both Agencies’ planning processes

The objectives of SSHRC and Natural Sciences and Engineering Research Council (NSERC) are very similar in that they both support postsecondary research and research training for the benefit of all Canadians. Given this similarity, a shared services model has been implemented through the Common Administrative Services Directorate (CASD) to provide support to both Agencies in common business areas such as information management and technology, human resources and finance.

The audit found that despite similar objectives and business interests, each Agency followed a slightly different integrated planning process with different information requirements and planning cycles. As a result, CASD staff is required to participate and actively contribute to two integrated planning processes, creating a duplication of resource inputs and effort (i.e., committee meetings, consultation, completion of templates, etc.). The audit noted that in light of the recent deficit reduction initiative aimed at enhancing efficiencies within the Agency, aligning common elements of SSHRC’s integrated planning with NSERC’s process represents an untapped opportunity for efficiency improvement.

Recommendation 2: The audit recommends that SSHRC senior management initiate discussions with NSERC to identify common requirements and standardize integrated planning processes, tools and reports (where possible) to better leverage efficiencies from the current shared service model.  

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6. Conclusion

An effective integrated planning process is a key management tool that clearly identifies the Agency’s priorities to support initial resource allocation and reallocation as circumstances change. SSHRC has demonstrated considerable progress in implementing an integrated planning framework and process over the past three years and has designed a framework which supports efficiency and effectiveness. 

The audit recommendations in this report are intended to reinforce SSHRC’s achievements to date and help further enhance the effectiveness and efficiency of this important management planning tool. Key to these recommendations is the role senior management plays in clearly articulating and communicating SSHRC’s operational priorities—the concrete endeavors that represent the operational layer between the Agency’s broad strategic priorities and the day-to-day work of its staff. Once operational priorities have been articulated by senior management, key business processes such as budgeting and risk management can be effectively leveraged to ensure their success, which in turn, will impact the accomplishment of SSHRC’s strategic priorities. Identifying operational priorities is also expected to help more clearly link the work of the directorates and divisions with the longer term direction of the Agency (as identified by SSHRC’s strategic priorities), providing an enhanced sense of purpose and allowing individuals to understand their unique contribution to the organization’s achievements. Furthermore, SSHRC and NSERC can further leverage their shared services model by exploring options to introduce a common integrated planning process.

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7. Management Response to Audit Recommendations

Item	Recommendation	Action Plan	Target Date
1.	The audit recommends that, on an annual basis, senior management identify a limited number of operational priorities (suggest three to five in total) and these priorities need to be articulated and formally communicated to support resource allocation/reallocation decisions. Once this is achieved, the audit further recommends that senior management:	Accepted
	consider the operational priorities in the development of the annual budget allocation and subsequent reallocation, to support clearer alignment of resources to priorities;	For the 2014-15 integrated planning process, three priorities have been identified by SSHRC and are guiding the planning of activities and the allocation of resources. A formal process to ensure the identification of three to five priorities, along with appropriate resources, will be developed and implemented for the next cycle of integrated planning.	Q3 2014-15
	consider the operational priorities in the context of corporate risk;	As part of the upcoming review of its corporate risk profile, SSHRC will modify its risk management processes to ensure that operational and divisional level risks are considered in the context of corporate risk. SSHRC will consider operational priorities during the annual review of SSHRC’s Corporate Risk Profile.	Q3 2015-16
	consider the need for additional tools to ensure a consistent approach for directorate and divisional planning, monitoring and reporting on operational priorities;	SSHRC will develop additional tools to provide a more structured and consistent approach for directorate/ divisional planning, monitoring and reporting.	Q3 2014-15
	consider the need for tools to ensure performance information is available at the planning stage to support the identification of operational priorities and key commitments.	SSHRC will develop tools and processes that will allow performance information to be incorporated, as it becomes available, in the existing planning and reporting cycle.	Q3 2015-16
2.	The audit recommends that SSHRC, NSERC and CASD collaborate to identify common requirements and standardize integrated planning processes, tools and reports (where possible) to better leverage efficiencies from the current shared service model.	Accepted. SSHRC has initiated discussions with NSERC and CASD to explore opportunities for alignment and standardization. SSHRC and NSERC will develop an action plan to identify steps to further align and standardize, where necessary, integrated planning within the two agencies, keeping CASD interests into consideration.	Q3 2014-15

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8. Appendix I Audit Criteria

Audit Objective #1: Completeness of the integrated planning framework to provide assurance that the framework follows Treasury Board guidance intended to assist SSHRC in achieving its objectives.

Audit Criteria	Report Reference
1.1 SSHRC adequately considers all key integrated planning steps and framework elements.	5.1.1
1.2 SSHRC considers the internal and external environment and seeks broad input in the development and implementation of integrated planning.	5.1.2
1.3 SSHRC has adequately considered the Corporate Risk Profile (CRP) in its integrated planning framework and/or implementation.	5.1.1
1.4 SSHRC has appropriate tools and guidance available to support the integrated planning initiative.	5.2.1
1.5 SSHRC conducts periodic reviews of the integrated planning framework and initiative to assess strengths and/or weaknesses to identify potential improvements.	5.1.1

Audit Objective #2: Extent to which integrated planning has been implemented to leverage key business processes (i.e., budgeting, risk management, divisional planning) in support of SSHRC’s objectives.

Audit Criteria	Report Reference
2.1 SSHRC Directorate and Divisional planning activities are aligned with the integrated planning framework and initiative.	5.2.1
2.2 SSHRC’s integrated planning framework and initiative is adequately communicated and supported by training activities/material.	5.2.1
2.3 SSHRC’s integrated planning framework and initiative is fully aligned within SSHRC and between SSHRC & CASD.	5.2.1, 5.2.2

Audit Objective #3:  Effectiveness and efficiency of the implementation of the integrated planning framework to provide assurance that the integrated planning process has produced the intended benefits.

Audit Criteria	Report Reference
3.1 SSHRC has established a comprehensive integrated planning initiative with key project management elements including: clear roles, responsibilities, accountabilities, delegation of authority, oversight and tone at the senior management level.	5.1.1, 5.2.1
3.2 SSHRC adequately communicates roles and responsibilities or ensures that staff understands roles and responsibilities regarding the implementation of the integrated planning framework and initiative.	5.1.1, 5.2.1
3.3 SSHRC’s integrated planning framework and initiative is fully aligned within SSHRC and between SSHRC & CASD.	5.2.1, 5.2.2
3.3 Risk that SSHRC’s integrated planning tools and guidance are not effective in supporting the integrated planning framework and initiative.	5.2.1
3.4 SSHRC’s integrated planning framework and initiative is implemented as planned and includes consideration of potential conflicting priorities and project risk.	5.1.2, 5.2.1
3.5 SSHRC allocates (reallocates) resources to corporate priorities based on the integrated plan.	5.2.1
3.6 SSHRC senior management information for decision making related to the implementation of the integrated planning framework and initiative is timely, complete and accurate.	5.1.1, 5.2.1
3.7 SSHRC senior management monitors the results of actual performance to planned performance and adjusts as required.	5.2.1
3.8 SSHRC’s integrated planning initiative considers the appropriate level of human and financial resources.	5.2.1, 5.2.2

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9. Audit Team

Chief Audit Executive: Phat Do
Internal Audit Principal: John-Patrick Moore
Senior Internal Auditor: Alice Hanlon

Consultant: KPMG