Auditor General finds weaknesses in NRC’s corporate governance and procedures

The National Research Council (NRC) is striking a task force to examine the need for realigning its governing council and possibly propose amendments to its enabling legislation. The task force was a response to a recent report on the NRC by the Auditor General of Canada (AG), which was critical of the governing council’s role in managing the agency and setting strategic direction for its scientific activities.

The AG contends that the role of the council is unclear and operates primarily as an advisory body and that the legislation outlining its role requires updating. Further, it recommends a review of the NRC’s senior management structure to ensure that there is appropriate financial and human resources accountability.

AG officials attended two governing council meetings last year and interviewed six members of the council’s executive committee.

Perhaps more ominously, the AG expressed concern that the NRC is expanding and taking on additional functions without any increase to its core budget, limiting its ability to reallocate resources and resulting in staff shortages at some institutes. “In recent years, the NRC has received additional parliamentary funding for specific initiatives but has had no increase in its base funding for ongoing operations since 1997-98,” states the report. “Although it has been able to benefit from increased self-generated revenues through increased fee-for-service activities and collaborative partnerships, it expects future increases of these revenues to be limited. The funding uncertainty put the long-term sustainability of current and new initiatives at risk.”

The AG says that given the tough choice facing NRC in the months and years ahead, it requires a “regular and vigorous process to synthesize its priorities” and recommends that its Vision 2006 document be augmented by a corporate business plan.

The AG also examined 43 larger research projects at eight institutes to assess research management at the institute level. The process found both good and bad practices and a general absence of systems and practices for selecting, reviewing and retaining only those projects that offer the best value for Canada. It singled out the NRC’s Genomics and Health Initiative as a program with a good priority-setting framework.

“Research management practices varied considerably among institutes; for the most part, they are a function of institute preference rather than a specific rationale,” the report stated. “While some met our expectations, many fell short.”

In response, the NRC has agreed to develop a priority-setting framework based on institute best practices.

In the area of human resources (HR) management, the AG found that current strategic goals and priorities are too broad to provide adequate direction for future needs. It zeroed in on motherhood statements in the NRC’s Vision 2006 document (R$, April 3/02) and concluded that they failed to establish key priorities.

The AG noted that the NRC “operates in an environment with fierce competition for new resources”, making the creation of an effective HR strategy a “huge challenge”. It recommends that NRC clarify its strategic goals for HR and make its DG of HR a member of the senior executive committee The NRC has agreed to the latter and notes that a new priority setting process for HR will be released this spring.

The AG also found that 28% of NRC’s researchers will be eligible for retirement in five years and stressed an “urgent need for succession planning”. It recommends the creation of an action plan to “address the critical challenges of recruitment, hiring and compensation practices, and succession planning at both the corporate and institute levels”.

NRC’s new performance measurement framework also received criticism. The AG said it had few meaningful standards or targets for assessing results and noted that, of the five strategic pillars outlined in Vision 2006, only two had concrete targets. It recommends that NRC “move urgently to establish a comprehensive and adequately resourced plan for addressing gaps and implementing its new corporate performance management framework”. NRC replied that actions are underway to address the gaps and link resources to strategic outcomes.

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