Independent Forest Audit Process and Protocol
124 Pages
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Independent Forest Audit Process and Protocol

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124 Pages
English

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Independent Forest Audit Process and Protocol To be used for 2008 and 2009 Audits. Ontario Ministry of Natural Resources February 2008 (Updated January 2009 for use with 2009 audits) Ontario Ministry of Natural Resources Independent Forest Audit Process and Protocol Copyright (c) Queens Printer, February 2008 Ontario Ministry of Natural Resources Independent Forest Audit Process and Protocol Table of Contents 1.0 OVERVIEW OF INDEPENDENT FOREST AUDIT PROCESS AND PROTOCOL (IFAPP) ..........3 1.1 NOTES ON AUDIT PROCESS ...................................................................................................................................3 1.2 PURPOSE..................................4 1.3 AUDIT SCOPE..........................5 1.4 GUIDING PRINCIPLES..............6 1.5 INDEPENDENT FOREST AUDIT PROCESS AND PROTOCOL ORGANIZATION..........................................................6 1.6 GENERAL AUDIT PRINCIPLES.8 Requirements for Conducting the Audit...............................................................................................................8 Objectivity Independence and Competence.........................................................................................................9 Due Professional Care..........................................................................................................................................9 Audit Evidence and ...

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Independent Forest Audit

Process and Protocol



To be used for 2008 and 2009 Audits.
Ontario Ministry of Natural Resources
February 2008
(Updated January 2009 for use with 2009 audits)

















Ontario Ministry of Natural Resources
Independent Forest Audit
Process and Protocol
Copyright (c) Queens Printer, February 2008


Ontario Ministry of Natural Resources

Independent Forest Audit
Process and Protocol

Table of Contents
1.0 OVERVIEW OF INDEPENDENT FOREST AUDIT PROCESS AND PROTOCOL (IFAPP) ..........3
1.1 NOTES ON AUDIT PROCESS ...................................................................................................................................3
1.2 PURPOSE..................................4
1.3 AUDIT SCOPE..........................5
1.4 GUIDING PRINCIPLES..............6
1.5 INDEPENDENT FOREST AUDIT PROCESS AND PROTOCOL ORGANIZATION..........................................................6
1.6 GENERAL AUDIT PRINCIPLES.8
Requirements for Conducting the Audit...............................................................................................................8
Objectivity Independence and Competence.........................................................................................................9
Due Professional Care..........................................................................................................................................9
Audit Evidence and Findings................................................................................................................................9
1.7 AUDIT TEAM QUALIFICATIONS...........................................................................................................................10
Lead Auditor........................................................................................................................................................10
Audit Team Qualifications and Composition ....................................................................................................11
2.0 ROLES AND RESPONSIBILITIES .............................................................................................................11
2.1 LEAD AUDITOR....................................................................................................................................................11
2.2 AUDIT TEAM MEMBERS.......12
2.3 MNR FOREST MANAGEMENT BRANCH..............................................................................................................12
2.4 MNR REGION LEAD REPRESENTATIVE13
2.5 FORESTRY FUTURES COMMITTEE .......................................................................................................................13
2.6 AUDITEE (SFL HOLDER AND/OR MNR DISTRICT; SEE SECTION 7.0 FOR DEFINITION)......................................14
2.7 SIGNIFICANT OVERLAPPING LICENSEES, CONTRACTORS AND/OR COMMITMENT HOLDERS ...........................14
2.8 LOCAL CITIZENS COMMITTEE.............................................................................................................................15
2.9 OBSERVERS15
3.0 INDEPENDENT FOREST AUDIT PROCESS (CONDUCTING THE AUDIT)..................................16
3.1 PREPARING FOR AN AUDIT ..................................................................................................................................16
3.2 AUDIT PLAN..........................20
3.3 PRE-AUDIT MEETING...........21
3.4 AUDITOR SELECTION OF SITES AND AUDIT PROCEDURES .................................................................................21
3.5 WORKING DOCUMENTS........22
3.6 OPENING MEETING AT BEGINNING OF FIELD AUDIT..........................................................................................22
3.7 FIELD AUDIT (GUIDELINE MINIMUM FIVE DAYS ON SITE)...................................................................................23
3.8 END-OF-DAY MEETINGS DURING FIELD AUDIT................................................................................................24
3.9 AUDIT FINDINGS..................................................................................................................................................24
3.10 CLOSING MEETING AT END OF FIELD AUDIT .....................................................................................................25
3.11 DRAFT AUDIT REPORT.........25
3.12 AUDITOR PRESENTATION OF FINDINGS TO LOCAL CITIZENS’ COMMITTEE ......................................................25
3.13 MEETING TO REVIEW DRAFT AUDIT REPORT ....................................................................................................25
3.14 DRAFT FINAL AUDIT REPORT .............................................................................................................................26
3.15 FINAL AUDIT REPORT...........26
4.0 ACTION PLANS AND STATUS REPORTS ..............................................................................................27
4.1 ACTION PLAN DEVELOPMENT27
4.2 LCC MEETING TO REVIEW RECOMMENDATIONS AND ACTION PLANS.............................................................27
4.3 ACTION PLAN STATUS REPORTS.........................................................................................................................27
5.0 RECORDS RETENTION ...............................................................................................................................27
6.0 REFERENCES..................................................................................................................................................27
7.0 DEFINITIONS ..................................................................................................................................................27
APPENDIX A – AUDIT PROTOCOL...........................................................................................................................A - 1
TABLE 1 - SCOPE OF AUDIT PROCEDURES RELATED TO FOREST MANAGEMENT PLANS – 2008
AUDITS.............................................................................................................................................................................A - 47
TABLE 2 - SCEDURES RELATED TO FORES – 2009
AUDITSA - 50
TABLE 3 SCOPE OF AUDIT PROCEDURES RELATED TO REPORTS OF PAST FOREST OPERATIONS
OR YEAR TEN ANNUAL REPORTS – 2008 AUDITS ...........................................................................................A - 55
TABLE 4 SCEDURES RELATED PAST FORETS – 2009 AUDITS....A - 57
APPENDIX B – AUDIT INFORMATION....................................................................................................................B - 1 C - COMPARISON AND TREND ANALYSIS OF PLANNED VS. ACTUAL FOREST
OPERATIONS REPORT.................................................................................................................................................C - 1
APPENDIX D – REPORTING FORMAT ....................................................................................................................D - 1 E – ACTION PLANS AND STATUS REPORTS..................................................................................E - 1
1.0 Overview of Independent Forest Audit Process and Protocol (IFAPP)

1.1 Notes on Audit Process

Many changes to the IFA are occurring following the 2006 review of the audit program. Some key
proposed modifications are planned for implementation in future years, particularly those which
require changes to the legal framework to support implementation. However, many of the proposed
changes are being put into place for 2008. Key changes currently being implemented include:

• Extensive revisions have been made to the IFAPP for 2008. Appendix A has been rewritten,
and reduced in length by over 50%. Its layout and organization has also been changed (see
Section 1.5 for an overview of the new layout of Appendix A).

• Attachments “1A and 1B” have been included again this year to provide direction on which
forest management plans, reports of past forest operations and year 10 annual reports are
within the scope of each of the 2008 and 2009 audits (see Section 1.3, Attachments 1A and
1B).

• Readers will note that the revised Appendix A now sets out a “Risk Level” of High, Medium
or Low for each procedure. Each risk level requires an associated sampling intensity.

• As in 2007, the Commitment principle and the Human resources criteria of the System
Support principle will be considered to be met if the Forest is certified to one of the three
accepted certification standards, i.e. the international Forest Stewardship Council Principles
(FSC) and Criteria for Forest Management; the Canadian Standards Association Sustainable
Forest (CSA) Management Standard (approved by the Standards Council of Canada), and;
the Sustainable Forestry Initiative (SFI). Such Forests will therefore not require an audit of
these principles and associated criteria as part of their IFA unless an issue arises as outlined
in Appendix A, Criteria 1 and 5.

• Auditor evaluation- the Ministry will institute a voluntary process to provide auditees and
the Forestry Futures Committee with an opportunity to complete auditor evaluation forms
to assess the performance of each audit team. The results will be shared with auditors,
and will serve as a tool to support continuous improvement of the audit program.

• A provision added to the RFP in 2007 has been continued (in RFP section 2.5.9) to highlight
potential opportunities for evidence sharing with certification audits.

• Audit teams are expected to demonstrate competency in forest estate modeling (see Section
1.7).

• The number of copies of the final report that are required to be printed has been further
reduced from 40 to 25 (see Section 3.15).

• Suggestions will no longer be highlighted or separately listed in audit reports, nor will they
be addressed in action plans. Any suggestions may be noted in the regular report text.

• Recommendations may still be directed at issues which relate to MNR corporate and
regional responsibilities, but they will be set out in separate listings in the audit report (see
"Independent Forest Audit Process and Protocol" 3 Appendix D). All collective corporate and regional recommendations will be addressed by
MNR in one action plan each year (see Section 4.1, and Appendix E).

• Standardized wording choices have been developed for the recommendations regarding
licence extension (see Appendix D).

• Requests for Proposals for two years’ of audit work will be issued whenever practical; this is
occurring for the 2008 and 2009 audits.

• At the time of contract award, auditors will be provided with a list of information
compiled from the Forest Information Portal on various administrative processes for the
forest being audited. To enhance the ability for analysis, auditors will be given access to
the FI Portal (see Section 3.1).

• Where doing so might increase the engagement of Aboriginal communities in the audit,
auditors will be expected to work through District Resource Liaison Officers (see Section
3.1).

• The time for draft report preparation will be extended to 60 days following the start of the
field work (see Section 3.11).

• Auditors will offer to present the audit findings to Local Citizens Committees (see Section
3.12).

• Action Plans will be posted on the MNR website (see Appendix E).

• A reminder that auditors’ roles must be carried in compliance with all applicable legislation,
including the Professional Foresters Act, 2000 (see Section 1.7).

• Lead auditors must be able to demonstrate that they are accredited as environmental auditors
(see Section 1.7).

Other changes are generally characterized as corrections, clarifications, updates and
enhancements, and do not represent major changes in how the audits are conducted.


1.2 Purpose
The Independent Forest Audit Process & Protocol meets the requirements of the Crown Forest
Sustainability Act and the Conditions of MNR’s Class Environmental Assessment Approval for
Forest Management on Crown Lands in Ontario (2003) as amended. It also meets the
requirements of Ontario Regulation 160/04 made under the CFSA (governing Independent Forest
Audits).

The purpose of the independent forest audit as documented in the regulation is to:
a. assess to what extent forest management planning activities comply with the Forest
Management Planning Manual and the Act;

b. assess to what extent forest management activities comply with the Act and with the
forest management plans, the manuals approved under the Act and the applicable guides;

"Independent Forest Audit Process and Protocol" 4 c. assess the effectiveness of forest management activities in meeting the forest
management objectives set out in the forest management plan, as measured in relation to
the criteria established for the audit;

d. compare the forest management activities carried out with those that were planned;

e. assess the effectiveness of any action plans implemented to remedy shortcomings
revealed by a previous audit;

f. review and assess a licensee’s compliance with the terms and conditions of the forest
resources licence.

The audit considers the compliance aspect of forest management planning through a thorough
review of the management plan in relation to the specific planning manual requirements in place
at the time of plan approval, a review of actual operations and the monitoring and reporting
requirements thereon. The audit also considers the specific contractual compliance relative to the
Sustainable Forest Licence (SFL). For purposes of this audit, the effectiveness of forest
management activities is examined based on planned versus actual results as verified through
field audit sampling. The audit reviews whether actual results are comparable with planned
results, and whether those actual results are accurately tabulated in the reporting process. In
addition, the Independent Forest Audit provides an opportunity to improve Crown forest
management in Ontario through adaptive management.

1.3 Audit Scope
The scope of the audit is determined by the MNR. Any subsequent changes to the audit scope
require an agreement between the MNR, the Forestry Futures Committee (FFC) and the lead
auditor.

This audit applies to MNR, all licensees, prime and overlapping, on the management unit being
audited.

Management Units to be audited each year will be identified by the Ministry when audit teams
are being sought to conduct audit assignments.

Audits are focused on a defined 5-year period, as set out in the Reference Information (Appendix
H to the Request for Proposals). There may be times, however, when it is appropriate for auditors
to investigate those activities that continue to the present (after the 5-year period has ended)
and/or events or conditions that occurred prior to the 5-year audit period that bear on the audit
period. Auditors are expected to pursue investigations outside of the normal 5-year period where
professional judgement leads to the conclusion that to do so is likely to provide a materially
enhanced understanding of the management of the forest.

The forest management unit will be assessed against forest management criteria that are
applicable for the period being audited. The applicable criteria have been identified in the Audit
protocol in Appendix “A”. Attachments 1A and 1B provide further direction on scope with
respect to forest management plans, reports of past forest operations and year ten annual reports.
Attachment 1A identifies the applicable criteria and procedures related to Forest Management
Plans to be utilized in auditing each of the forest management units in the 2008 and 2009
programs. The Attachment sets out criteria and procedures to be applied for each relevant Plan
term for each scheduled audit. Attachment 1B summarizes the audit criteria that apply to the
"Independent Forest Audit Process and Protocol" 5 Plan, RPFO and annual report terms that will be encountered for each of the management units to
be audited in 2008 and 2009.

1.4 Guiding Principles

The audit protocol is based on a set of guiding principles described in Table 1.

Table 1. The Eight Principles within the Audit Protocol

Commitment
Commitment is reflected in vision, mission and policy statements of the company and adherence to legislation and policies.
Vision and mission statements are intended to provide long-term guidance for the organization. Policy statements reflect how
the organization’s vision and mission will be achieved. These statements must be reflected in the day-to-day operations of the
organization.

Public Consultation and Aboriginal Involvement
The process of sustainable forest management planning, implementation and monitoring must be conducted in an open
consultative fashion, with the involvement of the Local Citizens Committee, Aboriginal communities, and other parties with an
interest in the operations of the forest management unit.

Forest Management Planning
The forest management planning process involves input from all members of the planning team as well as public consultation
and Aboriginal involvement to describe the current forest condition, values and benefits to be obtained from the forest, the
desired condition of the forest in the future, and the best methods to achieve that goal. Planning requirements have been
established which must be followed by all forest management units.

Plan Assessment and Implementation
Verification of the actual results of operations in the field compared to the planned assumptions and planned operations is
required to be able to assess planning as well as the effective achievement of plan objectives and compliance with laws and
regulations.

System Support
System support concerns resources and activities needed to support plan development and implementation so as to achieve the
desired objectives. The organization’s human resources and information management systems must support sustainable forest
management.

Monitoring
Monitoring programs must be developed and implemented to assess compliance and effectiveness of operations in relation to the
FMP, laws and regulations. Operations must be reported regularly and reporting must examine the effectiveness of these
operations in achieving management objectives.

Achievement of Management Objectives and Forest Sustainability
Periodic assessments of the forest management unit operations must be made in order to determine whether management
objectives, including forest sustainability objectives, are being achieved. This includes comparing the values of the planned
indicators against the actual values and assessing the reasons for any significant deviations.

Contractual Obligations
The licensee must comply with the specific licence requirements. Specific requirements, when relevant to MNR, must be
followed.


1.5 Independent Forest Audit Process and Protocol Organization

The Independent Forest Audit Process and Protocol consists of introductory material plus five
appendices. Appendix A is the detailed audit protocol. Appendix B outlines information
requirements. Appendix C documents the requirements of the trend analysis. Appendix D
outlines the format for the audit report. Appendix E describes the requirements for action plans
and status reports.
"Independent Forest Audit Process and Protocol" 6
The detailed audit protocol, found in Appendix “A” is organized based on the guiding principles
defined in Table 1. In each section there is a series of criteria and procedures which, if met, will
result in the principle being achieved. Compliance with the applicable criteria and procedures
will determine whether the forest unit complies with the general principle of forest sustainability.

The criteria are derived from the following sources:

• Declaration Order regarding MNR’s Class Environmental Assessment Approval for Forest
Management on Crown Lands in Ontario, MNR-71, June 25, 2003, and as amended by MNR
71-2 (2003 EA Approval);
• Reasons for Decision and Decision - Class Environmental Assessment by the Ministry of
Natural Resources for Timber Management on Crown Lands in Ontario (EA Decision);
• Crown Forest Sustainability Act (1994) as amended;
• Ontario Regulation 160/04 made under the Crown Forest Sustainability Act – Independent
Forest Audits (Audit Regulation);
• Forest Management Planning Manual for Ontario’s Crown Forests – 1996 and 2004 (1996
and 2004 FMPM)
• Forest Information Manual - 2001, amended 2004; 2007 (FIM);
• Forest Operations and Silviculture Manual – 1995 (FOSM) and associated guides;
• Scaling Manual - 1995, amended 2000; 2007;
• Forest Compliance Strategy (1996);
• Guideline for Forest Industry Compliance Planning (1998; 2005);
• Forest Compliance Handbook (1997, as updated);
• compliance policies and procedures of the Crown Forest Sustainability Act;
• other relevant statutes such as the Aggregate Resources Act, the Fisheries Act (Canada), the
Forest Fires Prevention Act, the Lakes and Rivers Improvement Act, and the Public Lands
Act;
• Applicable Ontario resource management guides, guidelines, policies, and procedures; and
• International/national standards for sustainable forest management systems.

Appendix A is laid out in six columns. The primary column headers, from left to right, are
entitled “Principle and Criteria”, “Procedure”, “Direction” (with 2 sub-headings – “Source” and
“Date Required”), “Evidence” and “Risk”.

• “Principle and Criteria”: This column sets out the criteria, statements of the purpose of the
main criteria, as well as statements of direction that provide focus for the forest management
activities being reviewed.

• “Procedure”: For each criterion presented, procedures have been developed for use in the
conduct of the audit. Procedures involve review and assessment of specific activities or
processes occurring on the management unit which require application of the audit team’s
professional judgment. In other cases compliance with the criteria will be based on specific
performance of an event or procedure by the management unit. Sample testing is required for
certain procedures.




"Independent Forest Audit Process and Protocol" 7 • “Direction - Source”: The column “Source” in the audit protocol identifies the source of the
criteria with which forest management activities must comply. This source may also apply to
“Direction” as outlined in the “Principle and Criteria” column. The auditor is required to
review these sources, and any other identified documents to obtain a complete understanding
of the applicable legislative, policy, guide, licence or other requirements in effect for the
specific management unit.

• “Direction - Date Required” is the effective date on which forest management units must
comply with the source referenced. Phase-in provisions must also be reviewed, for example
the 1996 and 2004 Forest Management Planning Manual requirements must be reviewed by
the auditor to determine which phase-in requirements apply to a particular management plan.

• “Evidence”: The evidence column notes evidence sources (documents, observations,
measurements, interviews, etc) that are applicable to the relevant criterion and procedure.

• “Risk”: The breakdown of audit procedures into different categories, based on complexity
and their potential impact on sustainability is identified in the ‘Risk’ column. The different
categories of audit procedures will be used to differentiate the level of sample required. The
different categories are: (L) - administrative only, (M) administrative but also have a bearing
on sustainable forest management (SFM), and (H) those directly related to SFM. For 2008/09
the IFAPP directs audit firms to assess 20-30% of the audit procedures that are identified as
(L), 50-75% of those identified as (M), and 100% of those identified as (H) per Audit
Principle and associated criteria. For example: if the public consultation principle and
associated criteria contained 20 (L) type procedures, auditors are expected to examine 20-
30% of them, i.e. 4-6. Forests which are certified in accordance with one of the certification
standards accepted by Ontario may require sampling at the lower end of the indicated
sampling ranges. The auditors will use generally accepted auditing industry standards to
guide their approach to randomness, risk factors and specific audit concerns and to
correspondingly identify which procedures will be sampled. The reduction in sampling may
result in a corresponding cost reduction. This categorization also provides a basis for audit
teams to more efficiently allocate team members to audit tasks which best match each
individual’s skills and abilities. The categorization of audit procedures is only a component
of sampling; the overall approach to Sampling Design is addressed in section 3.1.

1.6 General Audit Principles

Requirements for Conducting the Audit
The auditor will undertake the audit if, after consultation with the MNR and the auditee, it is the
auditor's opinion that:

a ) there is sufficient or appropriate information to conduct the audit;
b ) there are adequate resources to support the audit process; and,
c ) there is adequate co-operation from the auditee.

If situations are encountered where the auditee offers inadequate cooperation to the audit team, the
auditor should communicate with the contact person identified by Forestry Futures Committee
(FFC).
"Independent Forest Audit Process and Protocol" 8
Objectivity Independence and Competence
To ensure the objectivity of the audit process and its findings or conclusions, the members of the
audit team must be independent of the activities they audit. The members of the audit team must
be objective and free from bias and conflict of interest throughout the process.

The audit team must possess an appropriate combination of knowledge, skills and experience to
carry out audit responsibilities (see Sections 1.7, 2.1 and 2.2 for specific IFA requirements).

Every member of an audit team must be independent of the Government of Ontario and of any
licensee, contractor, or party who is the subject of the audit. An auditor shall disclose to the
Forestry Futures Committee and MNR if he or she is not independent of the activities being
audited. As part of the selection process, input regarding potential conflicts of interest will be
obtained from the Ministry and forest companies being audited.

Due Professional Care
In the execution of the audit, the auditor must use the care, diligence, skill and judgement
expected of any auditor in similar circumstances. Auditors will comply with all applicable
legislation and policy in the conduct of the audit.

The relationship between the auditor/auditee and MNR must be one of confidentiality and
discretion. The audit team will not disclose information or documents obtained during the audit
to any third party without the expressed approval of the MNR and the auditee.

The auditor must follow procedures that provide for adequate quality assurance. Auditors should
consult the CSA/ISO documents related to audit quality assurance; which are referred to in
Section 6.0. Reports must be of adequate quality to be accepted as final reports by the FFC.

Audit Evidence and Findings
The auditor will collect, analyze, interpret, and document appropriate information to be used as
evidence in an examination and evaluation process to determine whether the criteria are met.

Evidence should be of such a quality and quantity that competent auditors working independently
of each other would reach similar findings from evaluating the same evidence.

Sufficient objective evidence, as outlined in the audit protocol, must be collected to assess
whether the audit criteria and procedures have been met. The procedures in the audit protocol are
meant to serve as a guide to the auditor and are not necessarily intended to be all-encompassing.
The auditor should supplement the procedures in the protocol with risk assessments made during
the audit, taking into account the unique attributes of a particular forest.

Sufficiency is a measure of the quantity of audit evidence obtained. The sufficiency, or quantity,
of evidence can represent either:

• the volume of evidence obtained (i.e. the number of individual facts that have been gathered
or the number of times that it has been examined); or
• the completeness of the evidence obtained, (i.e. whether the facts and findings are sufficient
to permit an adequate comparison with the audit criteria and thereby provide persuasive
support for the audit findings).

"Independent Forest Audit Process and Protocol" 9