Tax Law Services Portfolio Office
2. OBSERVATIONS – MANAGEMENT FRAMEWORK
2.1 Governance and Strategic Direction
An appropriate 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 main governance and oversight body for the TLS Portfolio is the National Tax Board of Directors (NTBD). The NTBD is the primary forum of consultation and strategic decision making concerning questions of a functional nature and of national interest within the mandate of the Portfolio. The NTBD is chaired by the ADAG, TLS Portfolio and meets every two weeks via teleconference and two to three times per year in person. The NTBD is comprised of the following members:
- the ADAG
- the Associate ADAGs
- all TLS Portfolio directors and deputy directors
- the Senior General Counsel who heads the CRA LSU
- the Senior Counsel Advisor to the ADAG
- the Director of the Business Management Section
The composition of the NTBD ensures that the different regional perspectives are taken into account in Portfolio decision making. The Business Management Section provides secretariat services to the NTBD.
For each NTBD meeting, the Business Management Section prepares two books of key documents: the Budget Management Update, including the Financial Situation Report, and the Performance Management Framework. These documents enable the NTBD to address priorities and issues impacting the Portfolio based on a strategic or integrated planning process.
During the audit, TLS regional directors reported that the information provided by the Portfolio Office to support the work of the NTBD is timely, well organized, and complete. NTBD meeting minutes are promptly communicated throughout the TLS Portfolio Office and TLS regional sections, and before the meetings action items are followed up and members canvassed for new agenda items.
The ADAG participates on departmental governance and oversight committees (e.g. Departmental Finance Committee) and NTBD members also participate on departmental committees. HQ Portfolio managers participate at the weekly Management Meeting. This participation ensures that all aspects of departmental initiatives (e.g. Expenditure Review, Law Practice Model, collective bargaining) are considered in the governance of the TLS Portfolio.
In our opinion, the NTBD is operating effectively and achieving its mandate as the primary oversight body for the TLS Portfolio.
There is a need to implement the recommendation of the Department’s corporate services “footprint” exercise that addresses the resource requirements of the Business Management Section.
A clear and effective organizational structure is fundamental to the effective management of an organization. To support the achievement of organizational objectives, the organizational structure requires a sufficient number of people with the necessary skills.
Corporate services within Justice Canada are provided by the Management Sector in conjunction with the Chief Financial Officer (CFO) Branch. The Management Sector provides such services as human resources and professional development, security, informatics, and strategic planning. The CFO Branch provides financial services that include corporate accounting and resource management. The Department’s Review of Legal Services conducted in 2006 indicated that a significant workforce gap was present with respect to the provision of corporate services. This review used benchmarking based on the legal service costing model to derive the ‘footprint’ for the provision of corporate services. Footprint activities were calculated for four categories; Regional Administration, Local ADM Support, Functional Authorities (NCR), and Functional Authorities (National). This workforce gap was found to be present across the Department, and additional resources devoted to narrow the gap were only sufficient to meet additional government-wide accountability initiatives. Appendix C presents an overview of the increased accountabilities that have transpired since 2006.
With respect to the TLS Portfolio, funding to date has addressed its corporate risk capacity by strengthening financial and administrative services, and providing key support for managers in the areas of human resources management, training and development, and the Fiscal Path application. However, in the key areas of performance management, business planning, records management, and communications, which in the TLS Portfolio are Business Management Section activities, workload has increased since 2006 without a concomitant increase in human resources.
The audit team identified that the Business Management Section in the TLS Portfolio has a wide range of responsibilities and significant workload. For example, the TLS Portfolio Office has taken extraordinary steps to coordinate participation in several ongoing client initiatives to facilitate a reduction in the volume of litigation and the costs of conducting litigation. These initiatives require the Business Management Section to develop monitoring and management reporting procedures. Furthermore, the section provides customized information-intensive Performance Management Framework and Budget Management Update reports to the NTBD as well as monthly reporting to the CRA. The Business Management Section also reports on the full range of services provided by the Department of Justice to the CRA, not just those of the TLS Portfolio. For example, the section provides a single point of contact for client invoicing for all departmental sectors and portfolios. In our opinion, while having a single point of contact for the client is a good practice, this increases the workload of the Business Management Section.
In 2010-11, as part of the Department’s corporate services “footprint” exercise, the Senior Director, Portfolio Design and Development, Management Sector reviewed the resource requirements of the Business Management Section of the TLS Portfolio and recommended the creation of a senior position reporting to the Director. This review took into account that the TLS Portfolio is a single client portfolio and recognized the greater range of support requirements being performed by the TLS Portfolio Business Management Section than that typically observed for similar sections in other portfolios.
As part of the audit, the audit team reviewed the organization and workload of the Business Management Section. In our opinion, the approach recommended in the Department’s corporate services “footprint” exercise is reasonable.
Recommendation and Management Response
1. It is recommended that the ADAG, TLS Portfolio ensure that the recommendation of the Department’s corporate services “footprint” exercise is implemented to address the resource requirements of the Business Management Section. (Medium risk) Footnote 1
Agreed. Further to the “footprint” exercise of the Department’s corporate services, the first round of funding in 2010-11 was used to fund approximately two FTEs in the Business Management Section. In 2011-12, additional funding was received for approximately one FTE to assist with cost increases for the section. The funding continues to be insufficient to cope with current cost increases. The Portfolio will work with the Chief Financial Officer to implement its review of “footprint” recommendations given the current economic climate. Completion date: March 31, 2012, and updated each year.
The TLS Portfolio has established service standards.
Service standards enable clients to define their expectations in terms of timelines and costs of delivery as well as the recourse available to clients when expectations are not met. Service standards typically include pledges or principles that address such things as mutual respect, courtesy, integrity of process, and fairness, which serve to establish the expected business environment.
The TLS Portfolio has established service standards, which are detailed in the Department’s MOU with the CRA, and has published and disseminated these in brochure format within the Portfolio and made them available throughout the CRA. The service standards set out the commitment of the TLS Portfolio to provide clear and practical guidance on resolving legal issues and the identification of opportunities to implement policies and programs by administrative rather than legislative or regulatory means. The service standards also require counsel to work with the client in an advisory capacity to enhance client program and policy implementation. Compliance with the service standards is monitored by the NTBD on a national basis, by the Directors for their regions, by the Department through client surveys, and is tracked in the Performance Management Framework.
In our opinion, the service standards established by the TLS Portfolio reflect all of the criteria of the “Service Standards: A Guide to the Initiative” established by Treasury Board. The continuous monitoring of the standards and reporting in the Performance Management Framework is indicative of a commitment to improve quality of services provided as well as to maintain an atmosphere of mutual respect and understanding.
The TLS Portfolio Office file assignment process is working effectively.
Efficient control and administration over the workload assignment process is a fundamental aspect of management’s ability to use human resources prudently. In a legal environment, the file assignment process must consider both the experience level and skill sets of resources.
The TLS Portfolio Office is responsible for the processing and assignment of approximately 1,800 General Procedure files each year. The Tax Court of Canada rules for General Procedure files and Informal Procedure files (effective January 1, 1990) are intended to expedite objections to tax assessments or reassessments through the least expensive determination. Typically, every proceeding where the matter requiring resolution meets a specific dollar threshold will follow either the General Procedure or the Informal Procedure of the Tax Court. The General Procedure is followed when the amount in issue is greater than $12,000. The Associate ADAG, Tax Assessment, TLS Portfolio assigns each General Procedure file to a specific regional TLS office.
Eleven subject matter-specific coordination networks, each led by a National Coordinator located in a TLS office, have been established. Each TLS office has a Regional Coordinator on each network who reports to the National Coordinator on a regular basis in respect of any important litigation and/or development in the law in the coordinated subject area. The national coordinators report to the appropriate Associate ADAG in respect of any important litigation and/or development in the law in the coordinated subject area. The national coordinators organize conference calls, where information is exchanged and issues are discussed. TLS colleagues across the country as well as CRA and other government officials are invited to attend the conference calls. This coordinated approach, buttressed by information on the Fiscal Path Intranet site, including subject-matter-specific discussion blogs, enables information to be quickly disseminated throughout the TLS Portfolio and ensures the consistency of the Portfolio’s legal positions. This process is working effectively and allows centres of expertise to develop.
2.4 Leading, Communicating, and Professional Development
Leadership, communication, and professional development in the TLS Portfolio Office are 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.
In the TLS Portfolio Office, the ADAG and Associate ADAGs have an open-door policy. They also hold monthly one-on-ones with direct reports, which provide an opportunity to discuss Portfolio matters and address specific issues. In addition, every two to three years the ADAG and Associate ADAGs make cross-country visits to the regional TLS sections to discuss functional issues and canvass views. Furthermore, the TLS Portfolio Office holds a bi-weekly meeting on Management of the Law at which any TLS Portfolio legal counsel may participate.
The TLS Portfolio has developed an Intranet site known as Fiscal Path, which is available to all Portfolio staff on a password-protected basis. Once staff have logged on, Fiscal Path’s various modules provide information on all Portfolio policies, practice directives, operational guidelines, committees (membership and minutes), training, as well as contacts within TLS. The three TLS regional directors we interviewed noted that the repository of Portfolio information available on Fiscal Path is especially invaluable to new counsel, not only as a learning tool but also for obtaining contacts and news, and following blog discussions related to the Portfolio’s work.
Fiscal Path also provides access to the Portfolio newsletter, the ‘Tax Tribune’, which provides monthly updates on activities, programs, and personnel within the Portfolio. News clipping services as well as a Portfolio-specific daily news section provide current information on such matters as upcoming professional development; court activities; new policies, procedures, and practices; activities of the ADAG and Associate ADAGs; as well as information on the status of specific files before the courts. We found that the e-learning module is an important aspect of Fiscal Path in the provision of guidance on such matters as practice, advocacy, administration of the law, and replies to Notice of Appeal. Major links to other sites accessible from Fiscal Path include GASPARD, Quicklaw, the CRA, the Tax Court of Canada, the Federal Court of Canada, the Supreme Court of Canada, and the Federal Court of Appeal. Based upon the audit interviews, in our opinion, Fiscal Path is effectively serving as the main communications tool of the Portfolio.
Professional development is a high priority for the TLS Portfolio as files are becoming increasingly complex and new legal topics are emerging. The Portfolio has entered into an MOU with the CRA’s Compliance Programs Branch regarding professional development, in recognition of the need for increased technical tax training as a professional development priority. The MOU provides counsel and CRA tax professionals access to the training opportunities provided by each organization, space permitting, without the imposition of course fees.
Furthermore, three specific programs have been implemented to support the TLS Portfolio’s focus on professional development. First, the TLS Professional Development Coordinator is charged with developing and implementing the TLS National Training and Development Program, which delivers technical tax training courses for counsel nationally, a national training event every two years, and specialized training for paralegals and support staff. Second, the Twinning Program allows counsel the opportunity to broaden their work experience without relocating by drawing on the experience of counsel in another office who specialize in a particular area of tax law. For example, counsel working on a resource file in the Maritimes may twin with counsel located in the Prairies who work on these types of files on a day-to-day basis. Third, the Mobility Program enables counsel who wish to broaden their work experience by relocating to a different city to work in another TLS section. We were told that people who have participated in the Mobility Program have found it to be an enriching experience personally and professionally, as they work with new colleagues in a new city and often in a second language.
Based on the results of our examination and interviews, we found that the TLS Portfolio Office is providing effective communication and leadership and appropriate professional development opportunities.
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