Review of the Independent Forest Audit

Every five years the independent forest audit process is reviewed to ensure that it continues to be efficient and effective. 

The most recent review (2006) was undertaken by a private consulting team.  The consulting team brought independent expertise in process evaluation, public and stakeholder consultation, forest management and environmental auditing to the review. The key finding was that the independent forest audit process continues to be effective. However, there are improvements that can be made to the process, in order to make it more efficient and effective, and to improve the timeliness of reporting to the public.  These improvements will, for example, ensure efficient use of an auditee’s preparation time, that audit reports are more concise, deadlines are better adhered to by all parties, and that auditors spend their time checking the operations of most concern. Changes to the process will be phased in starting in 2008.

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Audit Review (2006) (Prepared by SENES Consultants Limited for the Ministry of Natural Resources) December 2006 (PDF, 1.3MB 106 pages)

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Executive Summary

Independent Forest Audits (IFA) are completed once every five years for each Sustainable Forest Licence to assess the quality of management and to ensure that the goal of forest sustainability is in hand.

This report documents the results of the second five year review of the IFA as required by the Crown Forest Sustainability Act and Ontario Regulation 160/04. This review examines what aspects of the process are working well, identifies what areas might benefit from possible improvements and provides options for possible changes to the IFA program. We focused our review on seven key areas of inquiry as requested by the MNR Steering Committee: timing and scheduling; relationship with certification audits; administration of audit program; audit process; audit scope; auditors and audit services; and, cost-effectiveness of audits.

Within each of these key areas we addressed a series of questions presented by the MNR Steering Committee by: reviewing relevant legal requirements; extensive consultation with interested parties; reviewing and analyzing IFA reports, Action Plans, the IFA Practices and Protocol (IFAPP) and other relevant documents; and analyzing the responses to a questionnaire sent to members of Local Citizens Committees (“LCCs”).

The MNR also requested that we consider the effectiveness, efficiency and economy of the audit program. Specifically, we were asked to consider the following three questions:

How effective is the audit process in achieving its intended objectives?

We believe that the IFA is generally effective in assessing compliance with the planning,
implementation and licensing aspects of forest management, but is not as effective as it should be in assessing sustainability aspects of planning and implementation. Limitations in assessing sustainability are related to both factors external to the IFA (i.e., the planning process, the state of the science of sustainability measurement) as well as to the manner in which the IFA is implemented. We also believe that the IFA is generally effective in assessing how well forest management objectives are met, subject to inherent limitations imposed on the IFA by the absence of available data and the qualitative nature of some objectives. We further believe that the IFA is generally effective in assessing the responses to recommendations identified in previous audits.

Does the audit program function in an efficient manner, given the resources it utilizes?

We believe that there are opportunities to enhance the efficiency in completing IFAs. In
particular, we noted widespread concerns that the IFA focuses too heavily on process checking as opposed to performance checking, that there is redundancy within the IFAPP, that samples sizes are too rigidly defined and that the scope of the IFA has expanded beyond the regulatory mandated objectives. Efficiencies may also be realized with streamlining of the release of IFA reports and action plans.

Is the audit process an economical undertaking?

We believe that there are opportunities to enhance the economy of the IFA, with the majority of these opportunities related to opportunities to enhance the efficiency of the IFA process (i.e., completion of audits) and by ensuring a sharp focus and economy of scope.

The key areas where we believe improvements in effectiveness and/or efficiencies can be made are:

1. Reduce / refocus the scope of the IFAPP: The IFAPP was criticized for being over-weighted on the evaluation of processes and light on the evaluation of performance. We realize that there are legal drivers requiring evaluation of process; however, we believe that these evaluations can be completed in a more efficient manner (i.e., incorporating more process checking into MNR routine activities; eliminating the trend analysis report; streamlining of the IFAPP to eliminate criteria not related to the core objectives of the IFA program). Further, we believe that increased emphasis is required on sustainability aspects of forest management.
   
2. Adoption of a risk-based audit program / cycle: The IFAPP is considered by many to be overly prescriptive in that it requires across-the-board coverage and does not allow auditors to focus on high risk activities. Further, audit cycles do not necessarily correspond to forest management planning activities (e.g., due to amalgamations) to allow for the effective use of IFA results, nor do fixed schedules / scopes reward good performers and allow closer monitoring of marginal performers. For example, audits in Year 2 of a 10-year plan could focus on the planning aspects while audits in Year 7 could focus on plan implementation and provide feedback in time for the next planning cycle.
   
3.  Integrate / co-ordinate IFAs with certification audits: There was much interest in integration / co-ordination of IFAs with certification audits to reduce the overall cost of what some considered to be duplicated audit systems; however, this integration will not be a simple task. Significant effort will be required to determine efficiencies from the coordination of the IFA with SFI/FSC/CSA. For example, streamlining the IFA by aligning it with certification systems would be tricky because different certification systems have different strengths and weaknesses. We believe that the most viable option would be by allowing auditors to rely on evidence provided from certification audits and by encouraging and facilitating efforts by SFL holders and auditors to avoid duplicating IFA work in certification audits (i.e., sharing of information).

In addition to these effectiveness/efficiency issues, we heard the following key concerns:

1. Audit reports are not made available in a timely manner;
2. Audit recommendations should be clearer, more relevant / prioritized and guidance is
   required to provide more consistency on licence extension recommendations;
3. Increased efforts are required to ensure Action Plans are prepared and implemented in a timely manner; and,
4. There may be opportunities to further enhance the independence of the IFA program by divesting MNR functions to the Forestry Futures Committee or other independent audit body.

We have offered a variety of options on these matters for consideration in ongoing efforts to improve the IFA program.