12 – Audit of Industry Canada
Table of Contents
- Observations on the Appointment Framework
- Observations on compliance
- Action taken by the Public Service Commission
- Overall response by Industry Canada
12.1 This audit covers Industry Canada (IC)’s appointment activities for the period between June 1, 2012, and December 31, 2012. The objectives of the audit were to determine whether IC had an appropriate framework, practices and systems in place to manage its appointment activities and whether appointments and appointment processes complied with the Public Service Employment Act (PSEA), the Public Service Employment Regulations (PSER), the Public Service Commission (PSC) Appointment Framework and related organizational appointment policies.
12.2 IC’s mandate is to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians. As of December 2012, IC had 4 771 full-time equivalents in its workforce. The majority of IC’s employees had an indeterminate status and were working in the National Capital Region; the rest were spread out in regional and district offices across Canada.
12.3 IC carried out 145 appointments during the period covered by this audit. As part of our audit, we conducted interviews, analyzed relevant documentation and audited a representative sample of 35 appointments.
12.4 According to IC, the organization recently faced budget constraints and staff reductions. Consequently, IC developed a 2012-2013 People Management Transition Strategy to provide the framework for human resources (HR) activities across the organization, and to deal primarily with workforce adjustment. As a result, the implementation of IC’s staffing strategies was still ongoing at the time of our audit, and the results of the variance analysis were planned for summer 2013. Therefore, the audit team did not audit staffing strategies to determine whether these strategies described planned organizational staffing priorities and how and when they were achieved.
Observations on the Appointment Framework
The Public Service Employment Act and the Public Service Commission’s delegated authorities
A sub-delegation instrument was in place, but related controls were weak.
12.5 The PSC has the exclusive authority to make appointments to and within the public service as per the PSEA. The PSC delegates many of its appointment and appointment-related authorities to deputy heads, who in turn may sub-delegate the exercise of these authorities. The PSC expects deputy heads to have a sub-delegation instrument in place that is well managed and communicated across the organization.
12.6 The Deputy Minister signed an Appointment Delegation and Accountability Instrument (ADAI) with the PSC. The Deputy Minister of IC had full delegated appointment and appointment-related authorities during the period covered by our audit. We found that the Deputy Minister established an official sub-delegation instrument that was compliant with the ADAI. The ADAI and the sub-delegation instrument were communicated and made accessible to employees on IC’s intranet site.
12.7 We noted that the Deputy Minister of IC established conditions to be met for officials to exercise their appointment and appointment-related authorities prior to being sub-delegated. These conditions include having HR and financial authorities and completing the mandatory training. Only those officials who occupied a sub-delegated position, who had completed mandatory training and who met other specified conditions of delegation could exercise appointment authorities.
12.8 We also found that IC maintains a list of sub-delegated managers. This list is used by HR advisors to ensure that the manager signing a letter of offer is in fact sub-delegated. In our review of a sample of appointments, we found weaknesses in the management of the list, as not all managers on the list met the conditions of sub-delegation. More specifically, we found two appointments audited were signed by officials who did not meet the conditions of sub-delegation. Refer to Recommendation 1 at the end of this report.
Mandatory appointment policies and criteria were in place, but gaps were identified.
12.9 The PSC expects deputy heads to establish mandatory appointment policies for area of selection, corrective action and revocation, as well as criteria for the use of non-advertised appointment processes. The PSC also expects other appointment policies that organizations develop to be compliant with the PSEA, the PSER and the PSC Appointment Framework.
12.10 We found that IC put in place the mandatory appointment policies and criteria for the use of non-advertised appointment processes. We also found that these were communicated and made accessible to all employees on IC’s intranet site. These policies and criteria have been revised since their initial implementation. Given that IC’s sub-delegation instrument was silent on who can approve the revisions of the mandatory appointment policies and criteria, the authority to do so rested with the Deputy Minister. We found that the revisions were not formally approved by the Deputy Minister.
12.11 We found that IC’s Corrective Action and Revocation Policy, as well as its Criteria for Non-Advertised Appointment Processes, were compliant with the PSEA, the PSER and the PSC Appointment Framework. However, we found that IC’s Area of Selection Policy did not ensure that the lifeline provisions in place for Veteran Affairs and the National Energy Board, within this policy, were aligned with the PSC requirements. Refer to Recommendation 2 at the end of this report.
Planning for staffing
Strategies to support staffing priorities were established.
12.12 Organizational staffing strategies describe planned organizational staffing priorities and how and when they will be achieved. The PSC expects deputy heads to establish staffing strategies to address the priorities of senior management. The PSC also expects staffing priorities and strategies to be communicated.
12.13 IC developed a 2012-2013 People Management Transition Strategy, in recognition of organizational realignment and the impact on its workforce, to provide the framework for HR activities across the organization and to deal primarily with workforce adjustment. In support of this document, IC also developed a Resourcing Strategy for 2012-2013, which identified staffing strategies that supported each of the six staffing priorities. We found that these priorities and strategies were communicated and made available to employees on IC’s intranet site.
Capacity to deliver
Roles, responsibilities and accountabilities were communicated.
12.14 The PSC expects deputy heads to ensure that those who have been assigned a role in appointment processes have been informed of their responsibilities and have the support to carry out this role.
12.15 We found that roles, responsibilities and accountabilities were defined, documented and communicated in various organizational documents such as the ADAI, the Instrument of Delegation, the EX Appointment Policy for the Executive Group and Staffing Service Standards that are accessible to sub-delegated managers and HR advisors on IC’s intranet site.
12.16 We also noted that sub-delegated managers had access to an HR advisor whose knowledge had been validated by the PSC.
Monitoring activities were not always effective.
12.17 Monitoring is an ongoing process that allows deputy heads to assess staffing management and performance related to appointments and appointment processes. Monitoring makes it possible to identify issues that should be corrected, to manage and minimize risk and to improve staffing performance. The PSC expects deputy heads to undertake the mandatory monitoring outlined in the PSC Appointment Framework and adjust practices accordingly.
12.18 We found that, during the period covered by the audit, IC conducted some activities in regard to the mandatory monitoring required by the PSC appointment policies, such as acting appointments of over 12 months and appointments of casual workers to term or indeterminate status through non-advertised processes for appointments made in 2011-2012. At the end of the audit, the remaining mandatory monitoring requirements were yet to be completed.
12.19 IC conducted a transactional monitoring exercise that covered appointments made in 2010 and 2011. The results of the monitoring exercise, as well as associated recommendations, were presented to the Director General of the Human Resources Branch in March 2012. An action plan and timelines were developed. Recommended actions were to be implemented between August 2012 and May 2013. In May 2013, IC indicated that the actions were now planned to be fully implemented by November 2013. Given that the identified actions have not yet been implemented from the monitoring for appointments made in 2010-2011, and given that they are currently monitoring appointments made in 2011-2012, this had an impact on the capacity of the organization to identify risk areas and take remedial measures in a timely manner.
12.20 We also found that IC had developed a control mechanism at the transactional level to ensure completeness of staffing files. We found that IC had developed a checklist to assist HR advisors and sub-delegated managers in documenting their appointment decisions, which is consistent with the PSC Appointment Framework. However, despite the completed checklist indicating that the information was on file, the intended results were not achieved since 63% (22 out of 35) of the appointments reviewed lacked important information and/or did not substantiate that merit was met and/or that the values were respected throughout the appointment process, as presented in the following section. Refer to Recommendation 3 at the end of this report.
Observations on compliance
Merit was met in most appointments audited.
12.21 The PSEA establishes that all appointments must be made on the basis of merit. Merit is met when the Commission is satisfied that the person to be appointed meets the essential qualifications for the work to be performed, as established by the deputy head, and, if applicable, any asset qualifications, operational requirements and organizational needs established by the deputy head.
12.22 We found that merit was met in 74% (26 out of 35) of the appointments audited, and was not demonstrated in 26% (9 out of 35) of them. The main reasons for merit not being demonstrated was that the assessment tool was not fully applied or the organization was unable to provide documentation supporting merit, such as proof that the person appointed met the advertised education requirements or assessment documentation for the person appointed. We also found cases where the assessment tool did not cover all criteria used to make the appointment. Table 1 provides a summary of our observations concerning merit for the appointments audited. Table 2 provides a further breakdown of the reasons for which merit was not demonstrated. Refer to Recommendation 3 at the end of this report.
12.23 In three appointments where merit was not demonstrated, IC provided, in May 2013, revised assessments that now demonstrate that the persons appointed met all of the qualifications used for each appointment.
Information on appointment processes was sometimes incorrect or incomplete.
12.24 In our review of appointment processes, we found instances where there was either missing information or significant errors in the information available to candidates. In 46% (16 out of 35) of the appointment processes reviewed, the qualifications on the notification of consideration or information regarding acting appointments were not the same as those used to make the appointment, and/or the English and French versions of the advertised statement of merit criteria were substantially different. For example, one statement of merit criteria indicated the requirement to have “knowledge of policies” in the English version; however, in the French version, this essential qualification was “knowledge of practices.” When the information on the appointment or appointment process is incorrect, the values of fairness, transparency and access are at risk, as not all potential applicants may choose to apply, or persons in the area of selection may not avail themselves of their recourse rights. Refer to Recommendation 3 at the end of this report.
Priority persons may not have received proper consideration.
12.25 The PSEA and the PSER provide an entitlement, for a limited period, for certain persons who meet specific conditions to be appointed in priority to others. The organization must take into consideration persons with priority entitlements, and must also obtain a priority clearance from the PSC before making an appointment.
12.26 As part of our sample, 27 appointments reviewed required a priority clearance before proceeding with an appointment. In five of these appointments, the information used to obtain priority clearance and that used to make the appointment decision was different. Differences included conditions of employment, location of the appointment and tenure. These situations could have resulted in persons with a priority entitlement not being appropriately considered. Refer to Recommendation 4 at the end of this report.
- The Deputy Minister of Industry Canada should strengthen the control mechanisms of the delegation process to ensure that officials meet the conditions of sub-delegation before exercising sub-delegated appointment and appointment-related authorities.
- The Deputy Minister of Industry Canada should review the organization’s Policy on Area of Selection to align it with the PSC Appointment Framework, and ensure that all departmental policies and criteria for non-advertised appointment processes are duly approved.
- The Deputy Minister of Industry Canada should ensure that control mechanisms are enhanced to ensure that appointment processes and related decisions are fully documented and based on accurate and reliable information. This would enable the Deputy Minister to ensure that appointment-related decisions comply with legislative, regulatory and policy requirements and identify areas of concern, as well as take actions in a timely manner to address the recommendations.
- The Deputy Minister of Industry Canada should ensure that the information used to obtain priority clearance and used to make the appointment are the same.
12.27 We concluded that most of the elements of IC’s appointment framework were in place. We noted that the organization had established strategies to support staffing priorities, and that roles, responsibilities and accountabilities were communicated. We also found that mandatory appointment policies and criteria were implemented, and that most of them were compliant. IC also had an appropriate sub-delegation instrument; however, weaknesses were found in related controls, as not all managers who signed the letter of offer met the conditions of sub-delegation. Finally, we found that some monitoring activities took place, but that improvement is required to ensure compliance of appointments and to identify the need for remedial measures in a timely manner.
12.28 We also concluded that merit was met in most appointments audited. Merit was not demonstrated in the remaining appointments reviewed. The main reason for merit not being demonstrated was that the assessment tool was not fully applied. We also found that information on appointments and appointment processes available to potential applicants and candidates was at times incorrect or incomplete, thereby placing at risk the values of fairness, transparency and access. Finally, we noted that priority persons may not have always received proper consideration.
Action taken by the Public Service Commission
The PSC systematically reviews audit information as well as an organization’s management response and associated action that it has taken or will take in response to the audit results and recommendations to determine whether any action should be taken by the PSC. As a result of this review, the PSC is satisfied with IC’s management response and the actions it has taken or committed to take in response to the audit results and recommendations. The PSC will monitor the implementation of IC’s action plan and its staffing performance through its regular monitoring activities, including the annual Departmental Staffing Accountability Report.
Overall response by Industry Canada
Industry Canada (IC) takes seriously the insights provided by this report and has implemented an action plan, with activities to be completed by June 2014, to address the findings and recommendations contained therein. Specifically, the department will:
- make changes to its staffing sub-delegation system to clarify criteria for sub-delegation, maintain supporting documentation and ensure that updated information on sub-delegated managers is available to human resources Advisors;
- update its Policy on Area of Selection and implement processes to ensure that staffing policies are duly approved; and
- put more rigorous processes in place to ensure that persons with priority entitlements are given appropriate consideration.
Furthermore, any delays in the conduct of monitoring activities and implementation of corrective action due to an intensive focus on workforce adjustment measures undertaken in 2012 are currently being addressed. Over 2013-2014, IC will complete its outstanding monitoring activities, conduct follow up and take corrective action on audited files, and make changes to its monitoring approach to ensure that it is more timely and of greater assistance to senior management in making strategic staffing-related decisions.
The deputy head is committed to further strengthening IC’s staffing regime to ensure full alignment with legislative, regulatory and policy requirements, as well as respect of the appointment values. The Senior Management Committee will oversee implementation of the action plan.
|Merit was met||Assessment tools or methods evaluated the essential qualifications and other merit criteria identified for the appointment; the person appointed met these requirements.||26 (74%)|
|Merit was not met||The person appointed failed to meet one or more of the essential qualifications or other applicable merit criteria identified.||0 (0%)|
|Merit was not demonstrated||Assessment tools or methods did not demonstrate that the person appointed met the identified requirements.||9 (26%)|
|Total appointments audited||35 (100%)|
Source: Audit and Data Services Branch, Public Service Commission
|Merit was not demonstrated||Reasons for merit not demonstratedFootnote 1|
|No assessment performed||Assessment tool did not evaluate all of the appointment criteria||Assessment was not applied as per tool||Organization was unable to provide documentation that supports merit|
Source: Audit and Data Services Branch, Public Service Commission
- Footnote 1
In some cases, more than one reason applies to an appointment.
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