Archived - Management Practices Audit of the Ontario Region

5.1.1 External Client Service Standards

Establishing a client service orientation, managing external clients' expectations, and being able to improve to better meet client needs is critical for the Ontario Regional office, which focuses most of its efforts on delivering services to external clients. It is important that regional offices establish external service standards that are communicated with clients and that regional management actively manage, monitor and solicit feedback from external clients on these service standards.

The audit found that, while formal external client service delivery standards and expected turnaround times have not been established and communicated internally or externally on a consistent basis, some informal external service standards have been developed (e.g. 45 days to process payments and 24 hours to respond to a phone call inquiry). However, these standards are not consistently communicated to staff and/or monitored to support management action. Regional management acknowledged that consistent national external service standards and expected turnaround times need to be established and communicated to help ensure consistent service delivery.

The implementation of national client service standards will help ensure that consistent, effective, efficient and timely two-way communication and collaboration is achieved in the delivery of services to external clients. Client service standards provide a target against which performance can be measured and monitored. In developing standards, a consistent, national approach should be developed that strikes an appropriate balance between the Department's efforts to improve the quality of service to recipients while also reducing the reporting burden.

5.2.1 Integrated Human Resources Planning

To ensure that the Region optimizes use of its human capital to support the achievement of its goals, it is important that human resource planning be aligned with strategic and business planning and that it includes information on the related financial resources. Without a good understanding of the human and financial resources required to implement strategic goals and planned activities, it is difficult for management to properly determine the real needs of the organization.

The Ontario Region has developed a number of HR planning documents to support the identification of personnel needs including the INAC Ontario Region HR Plan 2007/08-2009/2010 ("HR Plan"), the draft 2009/10-2012/13 INAC Regional Operations Sector Integrated HR Plan ("Integrated HR Plan"), and the Ontario Region Strategic Staffing Plan 2009-2012 ("Three-year Staffing Strategy"). During the course of the audit, AES noted that HR planning for the fiscal period 2010-11 was not as completed to the same level of detail as the previous fiscal year. Without clear plans and objectives for a fiscal year, it becomes more difficult to prioritize and coordinate HR activities across the Region.

Audit findings noted that HR planning for 2010-11 may not have been as robust as previous years due in part to a number of acting positions at the senior management level. Over the past two years, the Regional Director General position for the Ontario Region was filled by an Associate Regional Director General in an acting role. This created a number of additional acting senior management positions These positions have since been filled and management had scheduled a regional retreat on January 24th and 25th, 2011 to finalize the Integrated HR Plan and to develop an HR Plan, expected to cover the next three fiscal years.

5.2.2 Human Resources Recruitment, Hiring and Promotion

Within the federal government context, it is expected that staffing decisions consider current and future needs and are conducted in a manner that is fair and objective. It is critical that management practices and internal control procedures are in place to help ensure policy compliance, fairness and transparency in the staffing process. It is also important that management conducts periodic analysis of the staffing process to investigate possible trends and anomalies.

To define current and future staffing needs, the Ontario Region has identified the number of employees who are eligible for retirement over the next five years in the Potential Risk Assessment Report. A three-year Staffing Strategy has also been completed to indentify the Region's anticipated staffing needs and the planned staffing approach to address these requirements. This document is updated and monitored throughout the year at the Senior Management Committee (SMC).

A review of the sample of fourteen (14)^{Footnote 1} staffing files revealed that management's current practice to document, on the Human Resources Action Request form, the business rationale for positions being staffed is not consistently occurring. In four files reviewed, we did not find evidence of a clear indication of the business case to supporting the staffing action. As a result, there is a risk that these staffing actions may not be aligned with the organization's needs.

The file review also noted a number of files that did not contain the required documentation to support compliance with relevant legislation and government policies. This included the absence of right fit rationale and/or candidate assessment to support why a candidate was selected (5 of 14 files) and the absence of documentation to support why a candidate was considered a "priority" in the staffing process (1 of 14 files). While we understand that HR assumes an advisory role to support management throughout the staffing process, results of the file review indicate that opportunities exist to strengthen HR's involvement in verifying that appropriate documentation is obtained and retained by management. Insufficient documentation on file to support hiring rationale may result in the perception that staffing process are not fair and objective – a similar finding was noted in the October 2010 PSC Staffing Audit. It is our understanding that management has begun to implement a process to address this recommendation, which includes the requirement for the Director of HR to approve staffing files prior to the issuance of a Letter of Offer.

Ontario regional management is provided with a quarterly HR dashboard from Headquarters that contains key workforce composition statistics, including: external employee hires; internal promotions by category (e.g. term and indeterminate); and, the number of acting transactions. Management uses the information from the dashboard to inform discussions of staffing needs at SMC. The report does not indicate the number of acting assignments staffed through non-advertised processes or the length of the assignment term. During our transaction review, we noted one instance where a non-advertised acting position was extended from an initial term of approximately two months to over one year. Given that the extension of short-term acting positions into long-term acting positions may not appear to be fair and objective, a report that identifies this activity would help to highlight potentially unfair hiring practices so that appropriate management action can be taken, when warranted.

5.2.3 Management of Staff Performance and Training & Development

To help ensure the satisfaction of employees and provide input on career development, it is important to engage employees in a discussion on goals and objectives and to provide employees with timely and constructive feedback on their performance and opportunities for development.

In the Ontario Region, training is provided to supervisors, managers, and directors to help them provide effective guidance and oversight related to EPMs, including how to establish goals that are specific, measurable, attainable, realistic, and timely (i.e. SMART goals). We found the quality of employee goals to vary in apparent direct correlation with the quality of the employee's supervisor's goals. The review of fourteen (14^{Footnote 2} ) EPMs identified two EPMs where employee goals were very brief and generic and four EPMs where the measurability of goals could be improved. The absence of a central quality control review for EPMs increases the likelihood that the goals developed are inconsistent and do not meet expectations. This may result in employees having goals that performance cannot be measured against and lead to misinterpretations with respect to their expected roles that need to be taken to support development.

We also noted that employee training and development was not clearly identified in EPM goals or linked to Learning Plans (10 of the 14 files examined). If performance goals are not clearly linked to Learning Plans, there is a potential for inconsistency between the employee's Learning Plan and the needs and capabilities of the Region. In addition, we noted that management in the Ontario office is transitioning to a new Learning Plan form that does not allow individuals to document clear rationale for proposed learning activities. Without a clear rationale, there is a risk that the activities proposed do not link to employee or regional needs.

For two of the employee EPMs/Learning Plans reviewed, we noted that EPMs and Learning Plans were not completed as the employee joined the office after the start of the performance year. HR indicated that the requirement to establish Learning Plans and EPMs for employees that join the office after the start of the performance year has not been formally communicated and is not being monitored. Delaying the establishment of employee goals until the start of the next performance year has the potential to set employees back in their development and career path.

In the previous fiscal year, Headquarters established a target completion rate for EPM forms at 90%. This included both the completion of employee performance evaluations for the previous year, as well as goal setting for the upcoming fiscal year. The audit noted that the EPM report generated through the Department's Human Resources Management System required manual adjustments to remove individuals in acting positions who were reported twice. It is our understanding that these adjustments were required across all regions and resulted in additional effort to determine the correct EPM completion rate.

According to departmental policy, Learning Plans for the fiscal year (April to March) are to be completed and approved by May 31st. This provides employees with approximately three quarters (or nine months) in which to complete planned learning activities. Comments noted that employees have experienced difficulties attending training in the second and fourth quarter due to increase workloads associated with vacancies over the summer months (Q2) and preparing for year-end (Q4). Moving up the deadline for the completion of Learning Plans would provide more time for employees to complete planned training; potentially increasing the completion rate of planning learning activities.

In the Ontario Region, individual Learning Plans are compiled and coordinated into an overall learning plan. While individual Learning Plans are developed and approved at a directorate level, the overall learning plan is administered centrally through HR. As those responsible for approving individual Learning Plans are not accountable for establishing and managing the Region's learning budget, the overall budget is exceeded by the costs associated with each approved learning plan. As the learning plans are implemented within the Region's budgetary constraints, often times approved learning may be deferred so that spending remains within the available budget. By decentralizing the training budget, thus pairing the approval and budgetary authority, management would be able to consider the full extent of their available budget prior to approving individual Learning Plans for their directorates. Region-wide training initiatives could remain central to align with HR's responsibilities to coordinate mandatory training for all employees.

5.3.1 Risk Management

In today's environment, the need for effective risk management to promote good governance and demonstrate accountability is critical. There is an expectation that INAC regional offices understand their key risks and have appropriate mitigation plans in place. Having a documented approach to risk management enables management to better identify, articulate and understand the potential risks to the achievement of the organization's objectives and to determine the exposure to these risks given controls and/or mitigation activities. The focus of this audit was on the risk management at the regional/organization level; other risk management activities conducted in the Region (e.g. intervention, financial monitoring) were not part of the scope of this audit.

The Ontario Region identifies risks through the Ontario Region Business Plan Summary 2010-2013 and discusses risks at the Regional Management Committee and the Regional Operations Committee. Operational program risk management focuses on projects and First Nation clients and follows a variety of approaches to risk management, including a "general assessment" which considers risks associated with contribution agreements and recipients. Corporate service risks related to HR are identified and formally reported on in the Quarterly Report. While not in scope for the audit, we noted a number of national tools used by regional management to assess project funding risks and recipient risks that are used to identify risk-based monitoring procedures.

Results of interviews indicated that the Region does not have a documented, formal approach to risk management or a risk profile that is consistently followed and communicated across the Region. Instead, they asses and manage risks in distinct areas, including those related to clients, HR, and Finance Management. Without a formal risk management framework that documents an approach to assess, monitor and report on identified risks, management will not be able to determine if risks are being consistently managed across all programs and areas in the Region.

5.4.1 Operational Objective Setting and Planning

The achievement of regional objectives is enabled by the collective suite of management processes and controls that are in place to set strategic direction, operational plans, objectives, and priorities and to provide guidance on how resources should be allocated to achieve these plans. Resource allocation and budgets support the planning and use of financial, human and physical resources. These are critical elements of planning, as they define the nature of resources and competencies required and improve the possibility that sufficient resources exist to achieve objectives. These controls provide employees and third-party service providers with an understanding of priorities and performance targets and provide direction in the pursuit of operational objectives.

The Regional 2010-11 Corporate Business Plan includes twelve (12) objectives that are aligned to the Department's strategic objectives. Each objective details the key activity, expected duration, performance indicator/milestones, quarterly targets, data source, risk of achievement, estimated FTEs requirements, accountabilities and priority linkage. Progress against key Corporate Business Plan priorities are reported on in the Quarterly Report. Interviews indicated that regional planning efforts will be further strengthened in the upcoming year given the appointment of the Regional Director General. AES understands that a regional planning session with senior management was conducted on January 19 and 20, 2011. The agenda for this session included time to identify the top five business priorities which are expected to support the Regional Business Plan for 2011-12.

A review of the 2010-11 Quarterly Report (Q2) revealed that no estimates of the financial resources required to meet key individual activities and objectives are provided. While the report does contain some financial information (Annex 2 of the Quarterly Report), it is limited to a summary of the Region's total quarterly spend for salary, non-salary and grants and contributions, and is not linked to a particular activity and/or objective. The lack of financial estimates and the lack of detail in regional planning and reporting documentation for each activity and/or objective is negatively impacting the Region's ability to monitor and report on the cost of planned activities.

5.4.2 Performance Measures

Sound decision making and effective reporting is enabled by relevant and timely information gathering on results and performance. Performance measures, including self assessments, employee satisfaction surveys, internal reviews, quality assurance processes, and monitoring of performance, are important tools that provide management with key diagnostics used to manage the achievement of organizational objectives.

The audit found that performance indicators/milestones are established and reported against by Directorate for each of the key activities included in the Quarterly Report. The audit team noted that key activities were not established for any corporate services, with the exception of HR. Without key activities and performance measures for all areas in the Region it is difficult to determine how management prioritizes activities and resources across the office.