Ontario Regional Office
Regulatory Law Section
March 2010


3. MANAGEMENT OF HUMAN, FINANCIAL, AND MATERIEL RESOURCES

3.1 Human Resources

3.1.1 Planning

The RLS has effective human resource planning mechanisms in place.

Sound human resource planning is fundamental to an organization’s capability and capacity to effectively deliver services.

The RLS 2009-10 Business Plan contains strategic information with respect to human resource requirements. More specifically, the Business Plan provides a summary of the internal pressures that are expected to have a significant continuing impact on the Section’s delivery of legal services in 2009-10. Included in these internal pressures are such HR issues as unionization of counsel, management of change, and placement of the right people for the job. Furthermore, the Business Plan indicates that implementing public service renewal is a key priority for the RLS. This renewal has an impact on such areas as succession planning, recruitment and retention strategies, and the new classification standard that will be implemented for the LA classification. The auditors’ review of the Business Plan confirmed that key HR challenges faced by the RLS are well documented therein.

With respect to succession planning, the audit revealed that the ORO, including the Regulatory Law Section, is in the early stages of succession planning. During the audit, we were informed by the ORO HR Director that HR officials had recently completed their interviews with all ORO directors regarding the succession planning needs for their organizations. ORO HR used the standard TBS template to launch its succession planning initiative. Completed templates indicate the key risks of each organization and its top achievers. The ORO HR Director informed us that the next step in the succession planning process is to meet with ORO deputy directors to complete their templates. After these meetings have been completed, the ORO HR Director will meet with the ORO Regional Director General to confirm the nature of information the RDG requires in order to monitor progress against succession plans.

The RLS Director and Deputy Director are supported in their HR responsibilities by the ORO Human Resources group. This group provides a full range of HR services to the ORO Regional Director General and directors including staffing, classifications, labour relations, pay and benefits, learning and development. official languages, and employment equity.

In addition to human resource planning, we examined other specific HR activities (i.e. number and mix of resources, recruitment and retention, performance appraisals, and training) and concluded that HR expectations outlined in the 2009-10 Business Plan are being implemented effectively. The audit results pertaining to the specific HR activities examined are discussed below.

It is the audit team’s view that the fundamental elements for human resources planning are in place and are being implemented effectively.

3.1.2 Number and mix of resources

The RLS has the appropriate number and mix of resources.

The appropriate number and mix of resources deployed to work activities is critical to effective utilization of resources.

The RLS’s lawyer complement consists of nine general counsel, seven senior counsel, and 34 counsel. Support staff is comprised of eight paralegals, 20 legal assistants, and two administrative staff.

Work activities in the RLS are conducted on a case-by-case basis. Cases vary in length and complexity and require constant assessment and reassessment of resource needs as the risks associated with the cases change over time. When cases are received in the RLS, the Director and/or the Deputy Director review the files for complexity, identify the risks, and assign the cases to lead counsel. The lead counsel determine the resource requirements in more specific terms (number of counsel, paralegals, and legal assistants to be assigned to the cases). The resourcing proposals are discussed with and approved by the RLS Director.

During the audit, we examined management practices with respect to ensuring the appropriate number and mix of resources. We confirmed that the RLS adheres to the risk management requirements set out in risk management guidance issued by the Law Practice Management Directorate at headquarters. The number and mix of resources is driven by the risk profile of the specific case in question. Our review of legal files and interviews with counsel involved with these cases revealed that cases were resourced with the appropriate mix of lawyers, paralegals, and legal assistants. During our interview with ORO Human Resources representatives, we were informed that, in general, the RLS has the right mix of resources in place. HR representatives also related that finding the most appropriate balance between counsel and paralegals is an ongoing challenge.

It is our opinion that the appropriate number and mix of resources is being deployed to conduct the work in the RLS.

3.1.3 Staff recruitment and retention

The RLS manages recruitment and retention effectively.

Appropriate recruitment, hiring, and retention practices are fundamental to ensure that current and future operational needs are met

We found that the RLS Director and Deputy Director monitor resource requirements on an ongoing basis and are actively involved in recruiting, hiring, promoting, and retaining employees. The strategies employed focus on meeting current resourcing needs. The recruiting activities of the RLS Director and Deputy Director include recruiting experienced counsel, hiring summer students, and engaging full-time articling students. The audit revealed that RLS recruitment and retention practices are strongly focused on ensuring that both current and long-term operational needs are considered in the hiring process.

During our interview with ORO Human Resources representatives, we were informed that the RLS is regularly involved in a full range of recruiting activities. These representatives also confirmed that RLS resourcing needs are constantly changing as a result of the continuous change in the nature of the RLS’s business (i.e. the recent merger of the Public Law Group and the RLS, and the increasing volume of class action lawsuits). Finally, they indicated that the RLS’s current resource levels were reasonable.

It is our view that the RLS has appropriate recruitment and retention practices.

3.1.4 Training

The RLS is taking reasonable measures to ensure its employees receive appropriate training.

Sufficient and appropriate training is fundamental to improving an employee’s effectiveness in his/her current job and for enhancing the skills required for future challenges.

The ORO has a Corporate Training Plan in place that provides for overall generic training in such areas as negotiation skills, staff relations, health and safety, and employment equity. There are also mandatory departmental training courses, such as the training on financial delegation that is provided to managers before they are given budgetary responsibility. The RLS Director and Deputy Director informed the audit team that the bulk of training for professional staff takes place on the job rather than through formal training courses. They also informed the auditors that meeting with their professional colleagues at conferences is another form of training provided for counsel. We were told that conference attendance is well controlled through HQ, and stringent control over travel costs means that the bulk of conference attendance takes place locally.

During interviews with ORO Human Resources representatives, we were informed that the ORO budget for corporate training had significantly increased in 2009-10 over previous years and that funds allocated for training were spent on training. Our examination of the 2009-10 budget and actual figures for RLS training confirmed that there was a significant increase in training funds provided between 2008-09 and 2009-10. Furthermore, individual learning plans (ILPs) were in place for all RLS personnel and the RLS had a 100% completion rate.

We are of the view that the RLS is taking a reasonable approach to providing training to its employees.

3.1.5 Performance appraisals

The RLS has an effective performance appraisal process.

The performance appraisal process is important as it provides employees with feedback on their work and identifies their training needs.

Performance appraisals are completed annually in a timely manner and both the RLS Director and Deputy Director share the responsibility for managing the performance appraisal process. Both supervisors and employees sign the appraisal form and appraisal documents are completed for the entire staff (i.e. legal counsel, paralegals, legal assistants, and other support staff).

Approximately 50 of the 80 RLS staff are legal counsel who are compensated based on their salary, employee benefits, and performance pay. The performance pay component of their compensation package is a major incentive to ensure appraisals are completed on a timely basis. ORO Human Resources advised us that there have been no formal complaints regarding the performance pay assessment process in the RLS.

The performance appraisals identify the employee’s training needs. There is a correlation between the training needs contained in the appraisals and those contained in ILPs.

It is our view that the RLS has an effective performance appraisal process in place.

3.2 Financial Resources

3.2.1 Planning

The RLS has effective financial planning practices in place and receives strong support from ORO Finance.

Sound financial planning is required to ensure that all of the resourcing requirements of an organization are identified.

ORO Finance provides financial services to the Regional Director General and the directors in the Ontario Regional Office. The ORO Director of Finance reports operationally to the ORO Regional Director General and functionally to the Chief Financial Officer Branch in headquarters. ORO Finance is comprised of the Director; a Manager, Budgeting and Planning; a Manager, Accounting Operations; a Financial Officer; and a support team of three financial advisors, five service agents, and an Administrative Assistant.

ORO Finance provides two key services: planning and budgeting, and accounting services. With respect to the planning and budgeting function, Finance is involved with such activities as providing financial input for the annual Business Plan, preparation and loading of budgets for ORO organizational units, preparation of periodic financial situation reports (FSRs), and cost recovery forecasting and monitoring. With regard to accounting services, the Accounting Operations Unit provides a range of services to the ORO. These services are described in more detail in the “Administration of financial resources” section below.

The RLS Director and Deputy Director informed the audit team that the services provided by ORO Finance were excellent and effective. Budgeting and Planning Unit staff work closely with the RLS both on preparation of the financial component of the Business Plan and on the ongoing monitoring of planned versus actual expenditures, which results in the preparation of periodic financial situation reports. There is also ongoing collaboration with respect to cost recovery activities.

The audit examination revealed that this strong collaboration between RLS and ORO Finance staff ensures that financial planning activity in the RLS is comprehensive, ongoing, accurate, and completed on a timely basis. For example, we examined the financial plan and periodic variance reports for the RLS. These documents provided evidence of ongoing interaction between RLS and Finance officials and resultant remedial action taken. Furthermore, the audit team’s discussions with the RLS Director and Deputy Director and with the Director of ORO Finance confirmed that these two organizations work together effectively. This collaborative approach to planning provides a sound basis for controlling resources throughout the year.

It is our view that effective financial planning is undertaken in the RLS.

3.2.2 Resource levels and receipt of funding allocations

There is insufficient funding provided to manage a specific class action lawsuit and to fund support services.

The adequacy and timing of funding provided is fundamental to an organization’s ability to achieve desired results.

The operations of the RLS are funded via A-Base allocations and funding obtained through cost recovery from client departments and agencies. The audit team did not perform a comprehensive analysis to assess the adequacy of the funding levels provided to the RLS, as this was beyond the scope of the audit. However, from interviews with the RLS Director and Deputy Director and our documentation review, it is evident that there are concerns regarding resource levels. The concerns are two-fold. [Removed Text]. The secondary concern is with the adequacy of funding for RLS support services in general.

[Removed Text]. The RLS Director stated that, due to the increased activity regarding this lawsuit, resourcing RLS operations within the current RLS resource base has become increasingly challenging. Given these circumstances, there is a need to re-examine the adequacy of funding provided by the client department to service this case. Specific cases that demand an inordinate amount of resources could be funded through Regional Office or Headquarters reserves.

With regard to the adequacy of funding for RLS support staff in general, we reviewed the RLS 2009-10 Business Plan and noted that it articulated the concern regarding the chronic shortage of support resources. During our interview with Business and Regulatory Law Portfolio (BRLP) management in headquarters, we were also informed of concerns regarding shortages in O&M funding in the BRLP in general.

In our view, the funding shortfalls for the specific class action lawsuit and support services warrant further attention by senior management. The audit team is concerned with the Section’s approach to meeting increasing service demands in the long term within the existing resource base.

As part of the examination of resource levels, we also discussed the timing of funding allocations with both the RLS Director and the ORO Director of Finance. Both officials confirmed that funding allocations were timely.

Recommendation and Management Response

3. It is recommended that the RLS Director, in conjunction with the ORO Regional Director General, examine the extent of the funding shortfalls identified.

I agree. Action has already been taken since the on-site examination phase of the audit to address this issue. Specifically, issues related to resources available for managing the class action lawsuit referred to have been settled with the responsible client department. The necessary staff have been recruited and assigned to the class action team, and arrangements have also been made for appropriate assistance from other regional offices and legal agents for specific tasks related to the defence of these actions.

This recommendation as it relates to funding the specific class action lawsuit mentioned, has already been implemented, as outlined above.

Efforts by the ORO Regional Director General and the RLS Regional Director are continuing on an ongoing basis to improve the support services for the RLS. Some progress has already been made with the creation of the new RLS iCase Coordinator position as well as the new AS-03 and AS-04 positions referred to above. The ORO RDG and the Regional Director of the RLS continue to discuss the support services necessary to ensure that appropriate support services are provided to support the legal work of the RLS, consistent with the levels of support provided to the other large legal divisions in the ORO (i.e., the Tax Law Services Division, and the Immigration Division) and in the Department. Requests have been made for additional funding from reserves, but as noted in the draft audit findings, there are “concerns regarding shortages in O&M funding in the BRLP in general.” The funding of support services is an issue which will likely require continued and ongoing efforts to risk manage under current conditions.

3.2.3 Administration of financial resources

The measures taken to administer the RLS’s financial resources are adequate and the RLS’s financial transactions are in compliance with the requirements of the Financial Administration Act.

The RLS receives regular financial reports from IFMS and SMS. The RLS Director reviews the reports, identifies significant variances, and meets with the relevant legal counsel to obtain further details on the variances. Based on these discussions, remedial action is taken, as necessary, to resolve the issues.

The RLS Director and Deputy Director take a proactive approach to managing resources. They meet on a weekly basis to discuss the overall operational and financial status of the Regulatory Law Section and any financial issues with regard to specific cases.

Our examination confirmed that at the time of the audit sound practices were in place with respect to the conduct of Section 33 Financial Administration Act (FAA) payment authority. More specifically, our examination of a sample of transactions revealed that current delegation of financial signing authority instruments were in place; up-to-date specimen signature records were on hand; and desk audit procedures were in place. The ORO Accounting Operations Unit has completed its first bi-weekly report on accounting operations activities, processes, and procedures. From our review of this report and discussions with RLS management, we found that RLS management have a thorough understanding of the requirements relating to both sections 33 and 34 of the FAA.

We met with the Manager, Accounting Operations Unit to confirm our understanding of how the Section 33 FAA function is carried out in the RLS. We also reviewed a sample of expenditure transactions related to the Regulatory Law Section’s budget. All transactions examined had relevant supporting documentation (e.g. copies of invoices, contracts) and the required approvals under the FAA. They were also properly coded and processed on a timely basis.

We are of the opinion that the measures taken to administer the RLS’s financial resources are reasonable and conducted in accordance with the FAA.

3.2.4 Training in finance and contracting

RLS officials have received the required training regarding FAA delegation of financial signing authority; however, training on contracting is required.

Adequate training in the finance and contracting functions is required to foster sound management of these functions.

The Department of Justice requires mandatory training on the FAA delegation of financial signing authorities for officers who have/will have delegated authorities and for those who may be placed in acting positions. This training must be completed before officers are formally delegated these authorities. In the case of the RLS, the Director, the Deputy Director, and the Administrative Officer are the only officials with delegated authorities under the FAA. We found that these officials have received the required training.

From our interviews with the RLS Director, the Deputy Director, and the Administrative Officer, we found that they have a sound understanding of the responsibilities associated with the FAA authorities delegated to them.

With respect to training on contracting, during our interview with the ORO Contracting Officer, we were informed that training of ORO staff regarding government contracting requirements had commenced in 2009-10 with the training of Immigration Law Division staff. We were also informed that prior to this date training on contracting in the ORO had been conducted on an ad hoc basis. The initial training on contracting that the ORO Contracting Officer provided was very successful. We were told that it is planned to expand contracting training to all ORO organizations including the Regulatory Law Section. Based on our discussion with the RLS Director, Deputy Director, and ORO Contracting Officer, we found that RLS management have a sound understanding of government contracting requirements.

It is our view that training for finance as it applies to RLS staff is appropriate and that training on contracting should be provided.

Recommendation and Management Response

4. It is recommended that the RLS Director ensure that training on contracting is provided to RLS staff.

I agree. The RLS Regional Director has instructed the RLS Training & Development Coordinators to arrange for training on contracting with a particular emphasis on expert witness contracting to be made available to all Regulatory staff as soon as the ORO Contracting Officer is available to do so. (It is noted that this session has already been provided to the Immigration Law Division and recently to the Business Law Division). The T&D Coordinators will also make arrangements for a second more general presentation later to RLS staff on contracting for services generally. Timeframe: July 30, 2010.

3.3 Materiel Resources

3.3.1 Protection of assets

Mechanisms are in place to protect the physical assets of the RLS.

The RLS uses a variety of physical assets in the conduct of its business. These assets consist primarily of office furniture, computers and related equipment, cell phones, and other communication devices.

During the audit, we interviewed the Manager, Information Holdings, who has functional responsibility for physical assets in the ORO. During the interview, we were informed that physical assets were not considered a high risk in the ORO. He informed us that over the course of the last seven years, since he has had functional responsibility for physical assets, there have been no thefts on the premises. During the audit we observed that access to the ORO premises is secured by card access. Camera surveillance is also used to provide additional security to the already well-secured premises. In our view, precautions are in place that provide for the protection of physical assets.

3.3.2 Physical security

Reasonable precautions are taken to secure the workplace and the well-being of its employees.

Physical security is of prime importance given the sensitive nature of the work conducted in the ORO.

As indicated above, the ORO work premises are reasonably well-secured. During our interview with the Manager, Information Holdings, who has functional responsibility for physical security in the ORO, we were told that there has been only one security incident in recent times. The Manager informed us that last year there was a case of a suspicious package found on ORO premises. The municipal police bomb disposal unit was alerted and removed the package, which they subsequently confirmed was not a threat. An “Incidents Report” was completed for this situation.

The Manager also informed us that threat risk assessments (TRAs) are conducted on a periodic basis and the results of these assessments are recorded in TRA reports. We were advised that no significant risks were detected as a result of these assessments. Our discussion with the Director, Safety, Security and Emergency Management Division in headquarters confirmed that TRAs are received periodically from the ORO and that no significant risks have been identified.

In our view, precautions are taken to secure the ORO work premises and the well-being of its employees.

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