Portfolio Offices
December 2010

EXECUTIVE SUMMARY

A significant proportion of the counsel in the Department of Justice are assigned to one of the 40 departmental legal services units (LSUs). LSUs provide client organizations with legal advice to facilitate their operations and ensure that the conduct of their affairs is in accordance with the law. Organizationally, each LSU is part of one of five Department of Justice Portfolio Offices. This audit focused on the management practices of three Portfolio Offices in the Department: Business and Regulatory Law (BRL), Central Agencies, and Public Safety, Defence and Immigration (PSDI).

The planning and the on-site examination phases for this audit were carried out between November 2009 and April 2010.

Management Framework

All three Portfolio Offices included in the audit had a well-developed control framework. Each Portfolio Office develops an annual two-section integrated business plan that is consistent with the Management Sector’s requirements. The business plan identifies priorities, potential risks, planned mitigation strategies for identified risks, performance indicators, and required resources. Planned strategic directions and priorities for each portfolio are aligned with government, departmental, and client priorities. Specific initiatives are listed for each of the priorities documented in the plan.

Performance against the key performance indicators—client perceptions of the usefulness, responsiveness, and timeliness of the legal services provided—is monitored through client feedback surveys of all LSUs in a portfolio over a three-year period. The surveys are conducted by the Management Sector’s Office of Strategic Planning and Performance Management (SPPM).

The three Portfolio Offices examined range in size, comprising from seven LSUs to 19 LSUs plus two secretariats, and an additional planned section. To provide the necessary management direction from the Portfolio Office, the larger offices are supported by one or two deputy assistant deputy ministers (ADM)/assistant deputy attorneys general (ADAG) Footnote 1. All Portfolio Offices have at least two other counsel providing advice on legal matters and a business office with two to five people. All of the portfolio heads, their deputies, and the 18 LSU heads Footnote 2 interviewed were satisfied with the existing span of control.

Each Portfolio Office examined uses a range of mechanisms to strengthen the links with its LSUs and the regional offices. These mechanisms include email communications (providing directives, advisories, and other information), regular meetings or teleconferences between the ADM/ADAG and LSU heads and regional directors, monthly bilateral meetings between the ADM/ADAG and LSU heads, and annual meetings.

Human, Financial, and Materiel Resources

Each of the three Portfolio Offices examined prepares a human resources plan as Section 2 of the Department’s integrated business planning cycle. All of the plans examined were prepared in a manner consistent with the Management Sector’s requirements. Furthermore, all identified human resources priorities were consistent with the Portfolio Offices’ business and management priorities.

Plans are under way to address under-resourcing of portfolio business offices based on the results of a multi-year study, known as the “Footprint” Project. The project’s goal was “to develop and confirm a structure for the management and operation of the functions for which the Management Sector Footnote 3 is responsible, be they performed by Management Sector personnel or others working under the Sector’s functional authority”. In response to the findings of the “Footprint” Project, the three Portfolio Offices examined produced three-year plans to increase the size of their business office organizations.

Appropriate measures are taken to ensure that training and development is made available to staff in the three Portfolio Offices and lawyers in their LSUs. Email invitations and notifications regarding departmental/portfolio training events are regularly sent to LSU heads and their administrative assistants. The use of training funds by LSUs is monitored by each Portfolio Office and reminders are sent to LSU heads if the funds are not being used.

All three portfolios are funded by a combination of the Department’s A-Base and cost-recovery from their LSU’s clients. We were told that LSU client departments typically agree to fund the cost-recoverable component. However, there is always a risk that funds needed may not materialize.

All three Portfolio Offices examined monitor their financial performance on a regular basis. Every month (except for July and August), each Portfolio Office prepares a Financial Situation Report (FSR) that shows variance from the financial plan. Action is taken as appropriate, based on the information.

Physical security of the Portfolio Offices is satisfactory. Access to each Portfolio Office is restricted; active files are kept in individuals’ offices or in the Portfolio Offices’ records room, both of which are locked at night; and there are high-security cabinets for confidential or secret files.

The three Portfolio Offices are not using the Department’s BassetPro system to manage their key physical assets. A 2007 Audit of Materiel Management found that the BassetPro system lacked the rigour necessary to assure management that inventory and asset information is accurate. We were told that Contracting and Materiel Management Division (CCMD) had considered acquiring an asset management module for the financial system, but the necessary funding was not approved. We examined asset listings prepared by the Portfolio Offices. With minor exceptions, these listings were up-to-date and complete within their scope.

Information Systems

Information from departmental systems is used to monitor Portfolio Office performance and to support accountability. Financial reports, resource levels indicated by the Salary Management System, and the utilization of departmental personnel in the LSUs from iCase reports, are all reviewed on a regular basis. Action is taken based on the information.

All three Portfolio Offices report receiving satisfactory support from Information Management Branch, principally through the Help Desk.

The three Portfolio Offices have satisfactory controls to protect the security of electronic information. Access to departmental systems is controlled physically and logically. Access to systems for new employees depends on the employee’s security level and the required tasks of his/her position. When employees leave employment with a Portfolio Office, procedures are in place to ensure that their system access is revoked.

Compliance with Key Legislation and Related Policies

There is compliance with the requirements of the Official Languages Act and the Contracting Policy.

Interfaces with Other Justice Sections and Regional Offices

The Portfolio Offices’ interfaces with the Public Law Sector are satisfactory, but there are concerns regarding the impact of the Department’s cost recovery practices on consultations with the Sector. With the introduction of cost recovery, there has been a decline in the number of requests for specialized advice from LSUs and changes in the types of requests for legal services. We were told that LSU lawyers are now more likely to either generally perform more legal analysis themselves and then ask Public Law Sector counsel to review their analysis, or request brief telephone consultations for which they do not want to be billed.

The Portfolio Offices’ interfaces with the Management Sector vary, depending on the size of the portfolio’s business office. The Central Agencies Portfolio Office, which is the smallest of the three Portfolio Offices, expressed some concerns with respect to the number of reporting requirements to which it must respond and its ability to do so. It should be noted that there has been significant turnover in its business office staff. Management Sector's Administration Directorate also expressed concern with the priority given by the Portfolio Offices to administrative services functions (e.g. safety, security, accommodations). In addition, Client Services and Operations in the Human Resources and Professional Development Directorate noted that there was no common point of contact for portfolios having large numbers of LSUs, and that it would prefer to deal with a business manager at the portfolio level rather than with each individual LSU. As the Portfolio Offices increase the resources in their business offices, they should be better able to provide any required focal points for interactions with Management Sector directorates and address the administrative services functions that may not be accorded as high a priority as warranted.

Portfolio Offices’ interactions with regional offices are satisfactory. These occur regularly on substantive legal files through email, teleconferences, periodic face-to-face meetings, and as required ad hoc discussions. The interactions were described as effective.

Business and Regulatory Law Portfolio Office

Most LSU heads interviewed stated that more support from the BRL Portfolio Office on common administrative challenges and horizontal issues not related to legal matters would be helpful. The level of expertise in LSU administrative offices varies. Some larger LSUs have experienced full-time office managers who have subordinates with considerable expertise. Smaller LSUs tend to have few administrative staff. The portfolio business office stated that it would be difficult to determine the appropriate level of services for these LSUs. In the audit team’s experience, there is an opportunity for the BRL portfolio business office to take a more proactive leadership role in identifying and helping LSUs address horizontal management issues and in responding to common administrative requirements. A recommendation has been made to this effect.

We were told that the BRL Portfolio Office communicates best practices as part of its regular interactions with LSUs and regions. We found that there were mixed views on whether these methods of communication were satisfactory. A recommendation has been made to ensure that recommended best practices are clearly communicated as such.

The testing of a sample of financial transactions identified an instance where the business office had been billed twice for a $6,741 travel claim. A recommendation has been made that the BRL Portfolio Office institute a procedure to ensure that invoices from the travel service are reconciled with its travel record on a regular basis.

The BRL Portfolio Office’s information and file management practices are satisfactory and its procedures have been documented.

Management in both the BRL Portfolio Office and the Litigation Branch stated that the relationship between the two is satisfactory. They both recognized the ongoing challenge in ensuring that high risk cases are properly identified. We were told that the approach for managing litigation and sharing information on litigation files is appropriate.

Central Agencies Portfolio Office

The Central Agencies Portfolio Office has developed administrative procedures that include a significant number of references to Internet sites or contact names and telephone numbers. For such a document to remain useful, it must be kept up-to-date. No one person, however, has been assigned that responsibility. A recommendation has been made that clear responsibility for keeping the Portfolio Office’s administrative procedures manual up-to-date be assigned.

The heads of smaller LSUs within the Central Agencies Portfolio would like more support on financial management matters in particular. The significant turnover in the Portfolio Office has precluded this from occurring. As a result of the “Footprint” Project, the number of staff in the Central Agencies Portfolio business office will be increasing. With more staff, the Central Agencies Portfolio will be in a better position to provide leadership and support to LSUs.

A sample of 25 transactions from 2008-09 and 2009-10 was reviewed to determine the compliance of the Central Agencies Portfolio Office with the Financial Administration Act (FAA). For the invoices examined from 2008-09, some were missing certification that the goods were received or the services provided, or the certification was found to be inconsistently carried out. Improved controls were implemented in 2009-10 and no errors were found in the sample for 2009-10.

The Central Agencies Portfolio Office’s administrative procedures manual does not provide guidance on filing procedures for either paper or electronic records. Despite the absence of procedures, staff reported that they are able to find documents in either format when required. As staff numbers grow as planned under the “Footprint” Project, it will become more difficult to ensure the consistent application of the existing informal procedures. A recommendation has been made that document filing procedures be included in the Portfolio Office’s administrative procedures manual.

The Central Agencies Portfolio’s working relationship with the Litigation Branch is satisfactory.

Public Safety, Defence and Immigration Portfolio Office

The PSDI Portfolio Office has made progress in developing procedures for use by the LSUs within the portfolio and plans to continue developing procedures in response to LSU issues. Several minor omissions in the procedures were noted, but they were otherwise appropriate.

The PSDI Portfolio Office provides appropriate leadership and communications to LSUs on LSU administrative issues. The business office has been proactive in identifying areas where LSUs are experiencing problems and in preparing guides and delivering training to address common problems. Most LSU heads were generally satisfied with the support and direction received from the Portfolio Office on financial and other administrative matters. The PSDI’s National Litigation Coordination Team scans portfolio litigation files for novel or significant legal issues. The team then analyzes them for legal trends, disseminates the information to LSUs and regions, and prepares briefings and opinions. The team also holds regular teleconferences with LSUs and regions.

Some lawyers in the PSDI Portfolio Office keep files in their offices. We were told that the Records Clerk has had limited success in having the lawyers send their files to the records room. This has created a file-processing backlog. In the summer of 2009 the Portfolio Office hired a student to clear the backlog. It is the audit team’s opinion that the PSDI Portfolio Office needs to identify mechanisms that will promote the more timely movement of inactive files from individual lawyer’s offices to the records room for file closure and archiving as necessary. A recommendation to that effect has been made.

In some cases, a significant amount of time is spent finding the electronic version of a document. At the time of our on-site audit work, there were no procedures in the PSDI Portfolio Office regarding electronic filing. However, we were advised that the need for procedures for managing electronic information has been given a higher priority.

The current interactions between the PSDI Portfolio and the Litigation Branch are satisfactory. Efforts have been made, in particular since 2008, to improve communications and ensure that key information is shared on a timely basis.

The management responses to the recommendations contained in this report were provided by the Assistant Deputy Minister, Business and Regulatory Law Portfolio; the Assistant Deputy Attorney General, Public Safety, Defence and Immigration Portfolio; and the Assistant Deputy Minister, Central Agencies Portfolio.

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