Tax Law Services Ottawa Section
July 2011

1. Introduction

1.1 Background

The Department of Justice employs approximately 4,300 individuals and delivers legal services including advisory, litigation, and legislative and regulatory drafting. The Department provides legal services to government on a portfolio basis. Six portfolios encompass the range of federal departments and agencies.

The Tax Law Services (TLS) Portfolio is dedicated to providing legal services to the Canada Revenue Agency (CRA). Under the authority of the Canada Revenue Agency Act, the CRA is responsible for the administration of tax programs as well as the delivery of economic and social benefits. It also administers certain provincial and territorial tax programs. The CRA promotes compliance with Canada’s tax legislation and regulations and plays an important role in the economic and social well-being of Canadians.

The Assistant Deputy Attorney General (ADAG), Tax Law Services heads up the TLS Portfolio, which is comprised of approximately 300 counsel. The TLS Portfolio delivers legal services through a departmental legal services unit (LSU) co-located with the CRA and seven regional TLS sections located across the country Footnote 1. This audit focused on the regional TLS section located in Ottawa.

The TLS – Ottawa Section provides a wide range of legal services to the CRA, including conducting litigation before the Tax Court of Canada and the Federal Court, and dealing with disputes concerning assessments and reassessments of taxes by CRA under the Income Tax Act, the Excise Tax Act (HST/GST), and the Employment Insurance Act.

The TLS – Ottawa Section consists of 70 staff and has an annual O&M and Salary budget for 2010-11 of approximately $7.9 million.

The key risk factors that were considered in relation to this audit entity include: impact of legal work on the programs and activities of the CRA; appropriateness of linkages with Department of Justice organizations; ability to respond to client demand for legal services; the level of efficiencies in the organization and in workload management; adequacy of information for decision making; accurate reporting of performance information; provision of consistent legal advice and litigation services; management of electronic information; and appropriateness of linkages with the client. These risk factors were considered in the development of the audit program.

1.2 Audit Objectives and Scope

The overall objective of this audit was to provide assurance that the management framework within which the TLS – Ottawa Section operates is effective

The scope of the audit included the operations and activities of the TLS Section in Ottawa. The audit focused on: practices, procedures, and activities relating to the management control framework and the management of human, financial, and materiel resources; reliability of information contained in information systems; compliance with key legislation and related policies; risk and legal file management and forecasting demand for legal services; interfaces with other Justice sectors and client departments; and client satisfaction.

The audit included the operations and activities of the TLS Section in Ottawa.

The planning and on-site examination phases of the audit were carried out between May and November 2010.

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