Tax Law Services Ottawa Section
2. Observations – Management framework
2.1 Governance and Strategic Direction
An oversight body is in place and operating effectively.
Governance and strategic direction are essential components of an effective business operation allowing for internal coherence, corporate discipline, and alignment to planned objectives. These components also provide managers with the ability to effectively allocate human and financial resources to address priorities in an ever-changing environment.
The National Tax Board of Directors (NTBD) is the oversight body in the TLS Portfolio, providing strategic guidance and direction to all sections of the Portfolio. The mandate of the NTBD states that the NTBD is the “primary forum of consultation and strategic decision making for questions of a functional nature and of national interest within the mandate of the Portfolio.” The ADAG, Tax Law Services chairs the NTBD, which is comprised of the following TLS Portfolio members:
- the ADAG
- the two Associate ADAGs
- all TLS Portfolio directors and deputy directors
- the Senior General Counsel who represents the CRA LSU
- the Senior Advisor to the ADAG
- the Director, Business Management Section
The NTBD meets in person three to four times per year, by teleconference on a bi-weekly basis, and as needed. The meetings address all operational matters as they relate to the achievement of TLS Portfolio plans and priorities.
The NTBD keeps abreast of national issues related to tax law matters through review and discussion of performance management reports documented in the “Blue Book”. Last revised in May 2010, the Blue Book is prepared by Portfolio management and provides the Portfolio with a performance management framework used to evaluate the Portfolio in its delivery of legal advisory and litigation services to the CRA. In addition to the performance management framework, the Blue Book includes an analysis of the achievement of priority areas related to international and large client files, cost benefit/effectiveness of operations, sound financial management related to FTEs and resources, and litigation results. The TLS – Ottawa Section provides input into the Blue Book reporting process.
The NTBD monitors each region’s progress toward the achievement of the strategic plans and provides necessary further direction. Management decisions are made during NTBD meetings and the TLS portfolio directors communicate these decisions to their respective regional offices. These decisions are recorded in the Green Book, which was revised in February, 2010. The Green Book contains data on current year FTE distributions, budget allocations, revenue forecasts, and pertinent information related to planning for the coming fiscal year.
We reviewed the terms of reference for the NTBD including the mandate, meeting agendas and minutes, a sample of Blue Book reporting, a sample of decisions recorded in the Green Book, and relevant supporting documents pertaining to NTBD meetings. We found that the NTBD is an effective oversight body that includes the right mix of individuals to provide appropriate oversight and fulfill its mandate.
2.2 Business Planning
The TLS – Ottawa Section has not developed a business plan.
Effective business planning activities and documentation are essential for directing an organization toward the achievement of management’s strategic goals, priorities, and objectives. Formal plans need to incorporate objectives for all key areas of the organization.
The TLS – Ottawa Section regularly communicates with the Portfolio regarding business planning initiatives and progress toward its objectives. We were told that the Director and Deputy Director meet with the Portfolio Business Management Section and the ADAG at least twice a year to discuss the Ottawa Section’s business planning. The Director, Deputy Director, and the ADAG also have regularly scheduled weekly management meetings to discuss the Ottawa Section’s business planning initiatives. However, we found that the TLS – Ottawa Section does not have a formal written business plan. Moreover, we reviewed the TLS Portfolio Business Plan, which is written by the ADAG and Associate ADAGs, and found that the Portfolio Business Plan does not specifically refer to the Ottawa Section’s objectives.
It is our opinion that the TLS – Ottawa Section needs to develop a business plan to formalize the Director’s regular communications with the ADAG regarding the Ottawa Section’s objectives. Once the business plan has been developed, it could be provided to the ADAG for inclusion in the Portfolio Business Plan.
Recommendation and Management Response
1. It is recommended that the Director, TLS – Ottawa Section develop a business plan that sets out specific objectives for the TLS – Ottawa Section. (Low Risk) Footnote 1
Agreed. The TLS – Ottawa Section will develop a business plan to formalize its specific objectives in terms of the delivery of quality legal services to the Canada Revenue Agency and the organization’s ability to meet its current and future work. Completion date: By the end of this fiscal year, the TLS – Ottawa Section will simultaneously develop a formal business plan during the TLS Portfolio’s business planning cycle. This plan will be updated annually.
The organization of the TLS – Ottawa Section is appropriate.
An effective organizational structure encompasses clear definitions of roles and responsibilities that are vital to the successful management of an organization.
The TLS – Ottawa Section is headed by the Director and includes the Deputy Director, six senior counsel, four general counsel, 34 counsel, seven paralegals, 15 legal assistants, and three administrative assistants. The TLS – Ottawa Section is located on the same floor of the building in which the Portfolio office is located. This facilitates regular communication and collaboration.
Roles and responsibilities of the TLS – Ottawa Section and the TLS Portfolio Office are generally understood. The TLS Portfolio Office is responsible for all planning and organizing activities, in collaboration with the regional offices. The Ottawa Section’s responsibilities include providing litigation and advisory services to the CRA and providing assistance to other TLS regional sections. The TLS – Ottawa Section is not responsible for performing collections work; all collection work that arises in Ottawa is transferred to the Quebec Regional Office (Ottawa). The TLS – Ottawa Section also operates as an overflow section to deal with matters that other TLS sections/regions are unable to handle due to workload capacity or lack of expertise. The ADAG communicates the requirements directly to the Ottawa Section Director. From our consultations with the Director, Deputy Director, and legal counsel and our review of meeting minutes, we found that the TLS – Ottawa Section senior management (the Director and Deputy Director) meet on a regular basis to discuss pertinent organizational and financial matters that pertain to the TLS – Ottawa Section.
The TLS – Ottawa Section has prepared job descriptions for each category of personnel. Also, the section has sufficient numbers of bilingual staff to enable it to address the bilingual case files of both Ottawa and other regions.
We were told that in conjunction with the ADAG, the Director annually reviews the Ottawa Section staffing plan as well as the level and skill set of resources in the section to assess workload requirements and assist in the appropriate distribution of case files to staff. This review process assists in ensuring that the TLS – Ottawa Section is organized with the necessary combination of resources to address its complex files.
Based on interviews and our review of the delegation of authority tables, we found that there is appropriate delegation of authority in the TLS – Ottawa Section. Delegation of authority testing takes place for those who have been delegated with various levels of authority to ensure the Ottawa Section is appropriately organized. Removal of delegated authority can also take place. The Director stated that the Ottawa Section functions effectively with the current delegation of authority. In our opinion, the delegation of authority is operating effectively.
We found that the organizational structure allows for management and staff to be clearly held accountable for the conduct and completion of their duties.
An appropriate file assignment process is in place and operating effectively.
Efficient control and administration over the workload assignment process is a fundamental aspect of a manager’s ability to use human resources prudently. In a legal environment, the file assignment process must consider both the experience level and skill set of resources.
The TLS – Ottawa Section has approximately 43 lawyers having a broad spectrum of experience, from junior counsel who have recently been called to the Bar to senior counsel with over 37 years experience. Files are assigned to personnel who have the level of skills and experience to appropriately manage and complete the file work. The Associate ADAG (Tax Assessment), TLS Portfolio assigns files to a regional TLS office on a case-by-case basis with consideration given to the complexity and risk levels of each case. The TLS – Ottawa Section Director and Deputy Director assign files to lawyers and ensure that large complex files are assigned to senior lawyers in the section who have the appropriate skills and experience. The Director and Deputy Director meet with each lawyer personally to discuss caseload requirements and current workloads.
We found that the Director and his team have an effective communication process to effectively manage and monitor the file assignment process.
2.5 Leading and Communicating
Leadership and communication in the TLS – Ottawa Section is appropriate.
Communication directly impacts an organization’s ability to achieve success. Management must effectively design strategies to help ensure communication is timely, accurate, and appropriate in achieving planned goals and priorities.
Because of their close proximity in the same building, the TLS – Ottawa Section and the TLS Portfolio Office have a high degree of ready communication and collaboration. The TLS Portfolio Office provides overall direction to the Ottawa Section and shares information through meetings and by maintaining an open-door policy. TLS – Ottawa Section senior management communicates readily with the Portfolio Office by phone, email, or in person whenever guidance or assistance is required on the Ottawa Section’s assigned workload and when financial/budget issues arise. To discuss matters relevant to the TLS – Ottawa Section, the Director has a bilateral meeting with the ADAG every six to eight weeks. In addition, both the Director and Deputy Director participate in the ADAG’s formal weekly management meeting with all Portfolio headquarters managers, as well as in the ADAG’s bi-weekly conference calls and three-times-yearly meetings of the National Tax Board of Directors for the Portfolio. The Director and/or Deputy Director then communicate matters to members of the section, as appropriate. We found that the level and extent of the TLS Portfolio Office’s direction to and open communication with Ottawa Section senior management assists the TLS – Ottawa Section Director in providing effective communication and leadership to Ottawa Section staff.
We found that there are effective and efficient forms of communication within the TLS – Ottawa Section. The Director and Deputy Director communicate with staff through regular bi-weekly meetings and ongoing one-on-one communications. The bi-weekly staff meetings serve as a forum for discussion with respect to the achievement of strategic goals and priorities. TLS – Ottawa Section personnel advised us that they were satisfied with the communication, direction, and leadership from senior management within the TLS – Ottawa Section.
We also found that the information system Fiscal Path provides the TLS – Ottawa Section with pertinent information on the Portfolio’s values, ethics, and practices.
In our opinion, leadership and communication in the TLS – Ottawa Section is appropriate.
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