Legal Agent Account Verification Process
4. Observations – Taxing legal agent accounts
4.1 Consistency in Taxing Legal Agent Accounts
Legal agent accounts are taxed in a consistent manner.
Our review of a sample of legal agent contracts demonstrated that legal agent accounts are being taxed in a consistent manner. We surveyed four client departments and found that taxed accounts are accepted as rendered. In the sample of transactions reviewed, there was no instance of a client requesting an adjustment to a taxed account. We found instructing counsel were knowledgeable in taxing legal agent accounts and were experienced in verifying that the time charged by legal agents was appropriate to the work accomplished.
The sample of transactions examined indicated that each legal agent account was verified for the hourly rates charged; that the practitioners working on the file were authorized; and that criteria related to disbursements and hours worked per day were in compliance with the legal agent contract terms and conditions. We found evidence that checks were made to ensure that the computation of charges was arithmetically correct; that the account was monitored against payments to date; and that where adjustments to the account were required, appropriate documentation was on file.
4.2 File Structure for Legal Agent Account Files
needs to develop a standard file structure for legal agent account files for use by all regional offices.
When a legal agent is assigned to a case, a paper file is opened to store financial and appointment documentation. This file should be kept current and should contain all relevant information for financial and appointment monitoring purposes. Appointment monitoring information in the file should include documentation to support outsourcing approvals, security clearance approvals, notifications and approvals of amendments related to personnel working on the mandate and their per diem rates, a copy of the appointment and any subsequent amendments, as well as a record of all important communications related to the letting of the contract and contract implementation. For financial monitoring, the file should include a checklist of the steps involved in verifying each financial transaction, a copy of the taxed account and letters of transmittal, and any other financial information related to the appointment (e.g. the amount expended to date, balance remaining on contract for current and subsequent years, and any changes in rates or personnel).
We found that LPMC has not developed guidelines for the file structure of documents pertaining to legal agent accounts. LPMC has developed a Compliance and Verification Checklist for financial transactions; however, not all regional offices use the checklist and the checklist is not comprehensive.
The use of a standard file structure for legal agent account files maintained in the legal service portfolios, including a detailed checklist, would help to ensure that information pertaining to financial transactions as well as other relevant information is included in the file. With respect to files where Justice Canada is responsible for paying the legal agent, we found some instances where copies of legal agent accounts with the FAASection 34 approval were not retained on the regional file. We also found one instance of a duplicate payment in the amount of $231.38 that was made by the ORO. These situations may have been avoided if a standard file structure and detailed checklist had been used.
Recommendation and Management Response
8. It is recommended that the Director, LPMC develop a standard file structure for legal agent account files for use by all regional offices. (Medium Risk)
Agreed. The LPMC will develop a standard file structure prescribing the content of the legal agent files maintained in regional offices or legal services units. The requirement to comply with the established standard file structure will be implemented by June 30, 2011 and will be communicated to relevant stakeholders by the ADAG Litigation.
This file structure will also be referenced in the updated taxation procedures and integrated into the operational Directive described in our response to Recommendation 1.
Implementation of the standard file structure: June 30, 2011
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