PACP Committee Report
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Government Response to the Fifth Report of the Standing Committee on Public Accounts
PROTECTION OF PUBLIC ASSETS: OFFICE OF THE CORRECTIONAL INVESTIGATOR
On February 25, 2008, the House of Commons Standing Committee on Public Accounts submitted its Report to Parliament. The focus of the Committee’s report was Chapter 11, Protection of Public Assets: Office of the Correctional Investigator of the November 2006 Report of the Auditor General of Canada.
Pursuant to Standing Order 109 of the House of Commons, the Government must provide a comprehensive response within 120 days, or by June 24, 2008. This Response addresses all recommendations in the Report. The following provides the Government’s response.
Detailed Responses to the Recommendations
The government provide the Public Accounts Committee with an explanation by 30 June, 2008 as to why it did not seek reimbursement from Ronald Stewart for unearned salary and the cash-out of annual leave from 1990-91 to 1997-98, as identified by the Office of the Auditor General.
The Government pursued this question with rigour. The Comptroller General co-chaired with the current Correctional Investigator an advisory committee to review the matter.
After a review of the available information, the conclusion reached was that the work involved to attempt to establish the amount identified by the Auditor General for unearned salary and the cash-out of annual leave from 1990/91 to 1997/98 as a “debt to the Crown” would be very costly and potentially unproductive and the chances of recovering any debt were limited. Accordingly, the Government pursued a settlement that reflected taxpayers’ and the public’s best interests in this matter. The pre-tax value of this settlement exceeds $112,000.00.
The Office of the Correctional Investigator and Public Safety Canada provide detailed action plans to the Public Accounts Committee on how they intend to implement the recommendations of the Auditor General.
All recommendations in the Auditor General’s report have now either been fully implemented or are in the process of being implemented. The following specific actions have been taken:
Personal use of a government vehicle
T4 slips for the benefit of the personal use of a government vehicle by the former Correctional Investigator were recalculated using the 90 per cent personal use rate indicated in the Auditor General’s report, and these have been issued to Mr. Stewart.
Human resources practices
Public Safety Canada has taken the necessary steps to ensure that all human resources and staffing actions comply with Treasury Board, Canada Public Service Agency and Public Service Commission policies, directives and practices and with the Memorandum of Understanding between Public Safety Canada and the Office of the Correctional Investigator.
In October 2006, Public Safety Canada issued a directive to all human resources staff clarifying the roles and responsibilities when providing human resources services to the three review agencies within the Public Safety portfolio. The directive states that if a human resources advisor becomes aware of any activity or action which does not appear to be in conformity with established policies and/or best practices, the human resources advisor must bring the mater to the immediate attention of the Director General of Human Resources who will then take the necessary steps to resolve or clarify the matter.
Comptrollership and Management
The Office of the Correctional Investigator worked with the Office of the Comptroller General to secure the services of a qualified Senior Financial Officer. An interim Senior Financial Officer was recruited immediately after the audit and a permanent Senior Financial Officer has now been appointed.
A Manager’s Guide for Delegated Financial Signing Authority, developed by Public Safety Canada following the release of the Auditor General’s report, is now in use at the Office of the Correctional Investigator and the other small agencies in the Public Safety portfolio. This guide includes an acknowledgement form whereby the delegated manager acknowledges the importance of exercising authority under the Financial Administration Act and undertakes to seek advice before exercising their authority, when in doubt. Direction has been provided to all Public Safety Canada accounting staff to re-enforce their responsibilities related to exercising Section 33 and 34 authorities under the Financial Administration Act and ensure no one exercises those authorities for a transaction from which they have personally benefited. In addition, all staff with delegated human resources and financial authority have received training related to their responsibilities
Memoranda of Understanding have been established between the Office of the Correctional Investigator and Public Safety Canada and between Public Safety Canada and the other small agencies in its portfolio. These documents clearly define each organization’s roles, responsibilities and accountabilities.
The Privy Council Office has put into place a number of measures to inform heads of organizations about their accountabilities:
Prior to appointment, all Governor in Council appointees are required to certify in writing that they will comply with the ethical and political activities guidelines which constitute terms and conditions of their appointment.
Following their appointment, heads of organizations are sent a detailed welcome letter from the Privy Council Office which reminds them of their obligations under the guidelines and the Conflict of Interest Act and provides them with website links to and copies of all relevant guidance documents such as A Guide Book for Heads of Agencies and the Terms and Conditions of Employment for Full-Time Governor in Council Appointees. These guidance documents include references to all of the source documents, policies and rules which are summarized therein.
Revised one-on-one orientation sessions on the responsibilities and accountabilities of heads of agencies are now in place. Orientation courses are given at the Canada School of Public Service for heads of organizations focusing on financial literacy, basic roles and accountabilities, values and ethics and understanding the federal government.
The Treasury Board Secretariat has been monitoring the effectiveness of small agencies through its latest Management Accountability Framework exercise.
A new management control framework in the key areas of human resource management and financial management has been put into place by the current Correctional Investigator, with support from the Treasury Board Secretariat and Public Safety Canada. Financial management and accountability policies, human resources management procedures, and performance measurement and reporting regimes have all been improved.
Within the office of Correctional Investigator, a new expenditure control system has been developed and implemented, and new practices for approval of leave and expense claims are in place.
The Chief Financial Officer Model include clear roles and responsibilities for the Treasury Board Secretariat to monitor and ensure that chief financial officers understand and fulfill their duties.
The Government supports this recommendation. The new financial management policy suite will outline the roles and responsibilities of the Comptroller General to monitor and ensure that Chief Financial Officers understand and fulfill their duties.
The Treasury Board Secretariat publish on its website by 30 June 2008 a list of all the senior financial officers in the federal government, and keep this list up to date.
The Government supports this recommendation. Treasury Board Secretariat will publish on its website by June 30, 2008, a list of senior financial officers for all departments as defined in the Financial Administration Act. The list will be updated on a regular basis.
The Treasury Board Secretariat conduct regular Management Accountability Framework assessments of all small organizations and clearly establish the frequency of these assessments on its website.
The Management Accountability Framework (MAF) Directorate of the Treasury Board Secretariat is in the final year of establishing a three-year rotational cycle for the assessment of small agencies. By the end of 2008-2009, all small agencies will have been assessed once. By the end of 2011-2012, all small agencies will have been assessed for a second time.
The list of all departments and agencies to be assessed in Round VI will be posted on the TBS website in September.
The Management Accountability Framework is a high-level tool that is used to define the conditions that need to be in place to ensure the government is well-managed and to promote management excellence. The government uses MAF assessments to identify management strengths and weaknesses in individual departments and agencies so that departments and agencies can improve their own organizational performance.
The Office of the Comptroller General ensure that all small independent organizations are subject to internal audit on such a regular basis as to prevent serious management problems from occurring; that these audits be conducted at least every five years; and that the Treasury Board Secretariat publish a schedule for these audits, including the names of the organizations to be audited, in its report on plans and priorities, beginning with the report for 2009-2010.
The Government supports the principles underpinning the recommendation. However, the approach being taken by the Office of the Comptroller General is risk based and thematic, as opposed to cyclical, such that each audit examines a specific topic (e.g. contracting) across sample organizations. This is a cost-effective approach to making use of limited audit resources.
The Office of the Comptroller General’s Government-Wide Horizontal Internal Audit Plan, a copy of which has been provided to the Chair of the Public Accounts Committee, has identified an ambitious schedule of audit topics across small departments and agencies for 2007-08 through 2009-10. This plan will be updated annually to ensure appropriate risk-based audit coverage across the population of 44 organizations designated by the Policy on Internal Audit as small departments and agencies. Phased implementation of the Policy will see its fundamentals in place by April 2009.
The Office of the Comptroller General will continue to assess the extent of total internal audit coverage of small departments and agencies and will report relevant information in the most current annual Internal Audit Plan.
The Privy Council Office ensure that all Governor in Council appointees to head small organizations are adequately fulfilling their management responsibilities before recommending their reappointment.
The Government supports the principle underlying this recommendation. Most Governor in Council appointments are for fixed terms so there is no entitlement to re-appointment. It is the purview of the responsible Minister to determine whether or not an incumbent should be recommended for re-appointment. This assessment is based on the overall performance of the incumbent, which includes management responsibilities. In the case of those appointees who are entitled to receive performance pay, their performance reviews can be a source of useful information to the Minister in making this determination.
The Privy Council Office cease the practice of providing quasi-judicial Governor in Council appointees management pay, beginning in 2008-2009.
The Government supports this recommendation. In order to preserve their independence from government, quasi-judicial Governor in Council appointees no longer receive any management pay or performance pay.
The former Correctional Investigator, Ron Stewart, was advised in October 2000 that due to the quasi-judicial nature of his position, he would no longer be eligible to receive performance pay but that his management responsibilities would continue to be recognised until such time as a new compensation system was put into place for all quasi-judicial positions. Mr. Stewart received ‘management pay’ for the fiscal years 1999-2000 to 2002-2003.
In 2002, a new classification and remuneration structure was put into place for all quasi-judicial positions. Under this structure, quasi-judicial appointees receive salaries at slightly higher ranges than those payable to Governor in Council appointees in non-quasi judicial positions. The slightly higher salary ranges set for quasi-judicial appointees are meant to compensate for the fact that they are not eligible to receive performance or management pay.
The Privy Council Office provide the Public Accounts Committee a report by 30 June 2008 on actions taken to ensure that all full-time Governor in Council appointees are appropriately advised and trained.
Over the years since 2002, the Privy Council Office put in place a number of initiatives to ensure new Governor in Council appointees received a proper orientation to the public service. These initiatives included: offering one-on-one orientation sessions for new Governor in Council appointees who are heads of agencies on key responsibilities and accountabilities; establishing an orientation course for directors and chairs of Crown corporations; and, providing ‘welcome’ letters to new appointees with basic information concerning entitlements and responsibilities.
Revised one-on-one orientation sessions on responsibilities and accountabilities of heads of agencies are now in place.
In 2005, the Canada School of Public Service also put in place a revised set of orientation courses for heads of agencies on financial literacy, basic roles and accountabilities, values and ethics and exposure to the federal government. In the most recent fiscal year, the Canada School of Public Service held five orientation sessions for heads of agencies.
In 2008, the Privy Council Office established a series of Learning Advisory Committees composed of members of the various Governor in Council appointee communities, to provide advice and guidance on orientation and learning programs and to act as a sounding board for the Canada School of Public Service on course curriculum.
During the process of revamping its orientation and training programs for heads of organizations, the Privy Council Office will examine the best means to ensure that these Governor in Council appointees are appropriately advised and trained, including mandatory training.
The Privy Council Office require full-time Governor in Council appointees that head an organization to sign a statement that they have read, understood, and accept their responsibilities as outlined in the Guide Book for Heads of Agencies, and any other relevant guidance documents.
In March 2007, the Prime Minister issued new ethical and political activities guidelines for public office holders. As well, the Conflict of Interest Act came into force in July 2007.
As a means of informing public office holders of the standards of conduct expected of them, each notice of vacancy published on the Governor in Council appointments website (and in the Canada Gazette)advises interested candidates and prospective appointees that Governor in Council appointees are subject to the ethical and political activities guidelines for public office holders as well as the Conflict of Interest Act. Prior to appointment all appointees are required to certify in writing that they will comply with the ethical and political activities guidelines which constitute terms and conditions of their appointment.
Following their appointment, heads of agencies are sent a detailed welcome letter which reminds them of their obligations under the guidelines and the Conflict of Interest Act and provides them with website links to all relevant guidance documents such as A Guide Book for Heads of Agencies and the Terms and Conditions of Employment for Full-Time Governor in Council Appointees. Copies of these guidance documents and session descriptions of the one-on-one orientation program noted above are also included in the welcome package.
A document such as A Guide Book for Heads of Agencies is designed to provide a brief overview of a range of topics concerning operations, structures and responsibilities in the federal government in order to assist heads of agencies in their understanding of the role they play as chief executive officer of the agency. The responsibility which a chief executive officer bears for the conduct of the work of the agency and the effective functioning of the organization cannot be entirely captured in guidance documents.
As outlined above, the Privy Council Office has already put into place a number of new measures to inform heads of agencies about their responsibilities as chief executive officer of the organization. Guidance documents such as A Guide Book for Heads of Agencies and Terms and Conditions of Employment for Full-Time Governor in Council Appointees are currently under revision. Once these documents are revised, the Privy Council Office will consider whether to require heads of agencies to sign a declaration that they read, understood and accepted their responsibilities as set out in all relevant guidance documents.
The Office of the Correctional Investigator and Public Safety Canada examine whether sanctions should apply to those who knew about the inappropriate practices of the former Correctional Investigator but did not take sufficient actions to stop them.
In arriving at a conclusion as to whether sanctions of employees were warranted, the current Correctional Investigator took a number of steps to ensure due process and weigh the evidence carefully. On November 29, 2006, an advisory committee was established with senior representation from the relevant government agencies and departments. This committee was personally co-chaired by the Comptroller General of Canada and the current Correctional Investigator. Public Safety Canada also examined the circumstances surrounding these events to determine if sanctions should be considered with respect to its employees.
The current Correctional Investigator and Public Safety Canada both concluded that while mistakes were made and government policies were not followed, those mistakes were made without intent to circumvent laws or regulations governing the public service. The available evidence did not support imposition of sanctions on any employees. Furthermore, management and staff in the Office of the Correctional Investigator did not benefit from the former Correctional Investigator’s actions; staff in Public Safety Canada had no basis on which to judge the validity of the annual requests of the former Correctional Investigator to cash out leave; all supporting documentation related to travel, hospitality and computer purchases was complete and appeared to Public Safety Canada staff to properly support legitimate business transactions.