Portfolio Offices
December 2010


3. OVERALL OBSERVATIONS – MANAGEMENT OF HUMAN, FINANCIAL, AND MATERIEL RESOURCES

3.1 Human Resources Planning

Each of the three Portfolio Offices examined prepares a human resources plan as Section 2 of the Department’s integrated business planning cycle.

Human resources plans that support the achievement of an organization’s strategic direction are a key element for organizational success. A sufficient number of people with the necessary skills to support the achievement of organizational objectives need to be in place.

Human resources planning takes place as Section 2 of the integrated business planning cycle. Since the fall of 2005, the Portfolio Offices complete human resources plans using templates developed by Management Sector. Four templates were used in the 2010-11 cycle:

  • FY 2010-11 HR Plan. This template identified human resources priorities in support of business and management priorities identified in the plans prepared during Section 1 of the cycle.
  • FY 2009-10 HR Plan. This template was the human resources plan completed during the previous cycle. As there had been changes since then (e.g. the Law Practice Model), Portfolio Offices used it to review their existing plans and update them as needed.
  • FY 2010-11 Staffing Plan. This template documented planned staffing and recruitment actions and other measures (e.g. succession plans, knowledge transfer strategies, revisions to position descriptions) to respond to gaps identified in the portfolio.
  • FY 2009-10 Staffing Plan. This template documented the current, in-year staffing plan developed in the fall of 2008. Portfolios used this template to review changes that may have taken place since then (e.g. the Law Practice Model) and updated the plan by documenting the status of each staffing action (e.g. in process, filled, cancelled).

We observed that each of the Portfolio Offices prepared their human resources plans in a manner consistent with the templates. Furthermore, all identified human resources priorities were consistent with their business and management priorities.

It is the audit team’s opinion that human resources planning for the three Portfolio Offices is satisfactory.

3.2 Number and Mix of Resources

Plans are under way to address under-resourcing of portfolio business offices.

A multi-year study, known as the “Footprint” Project, was undertaken within the Department of Justice. 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 1 is responsible, be they performed by Management Sector personnel or others working under the Sector’s functional authority”. The functions include managing finances, acquisitions, assets, real property, human resources, IM/IT, planning, and performance. ADMs and ADAGs in the Portfolio Offices have a ‘footprint’ of business office staff who support them in respect of these functions.

The business office staff in each portfolio include the following:

  • in the BRL Portfolio – the Business Manager, the Senior Planning Officer, and the Administrative Assistant;
  • in the Central Agencies Portfolio – the Business Manager and the Administrative and Resource Management Officer;
  • in the PSDI Portfolio – the Business Manager, the Office Manager, the Administrative Manager, the Administrative Officer, and the Records Clerk.

In examining a benchmark of nine other government departments, the “Footprint” Project found that the Department of Justice footprint is “abnormally low” compared to the other departments. It concluded that the ADM/ADAG “business manager organizations are under-resourced”. In other departments, these organizations represent on average 6.5% of the overall size of an ADM’s workforce, while in the Department of Justice the comparable figure is 3.4%. The study noted that “this exposes the ADM/ADAG, the Deputy Minister, and the Minister to risks related to the handling of ‘footprint’ functions”.

The study developed a flexible, scalable model for the ADM/ADAG business office, which would be headed by a Director of Business Management Footnote 2 at the EX-1 level and supported by:

  • administrative support for the Director of Business Management
  • a Financial Management Advisor supplied by the Chief Financial Officer Branch
  • a Financial Assistant
  • an Administrative Coordinator
  • a Strategic Planning and Performance Management Coordinator
  • a Human Resources Coordinator
  • a Records - IM/IT Coordinator

In response to the findings of the “Footprint” Project, the portfolios have produced three-year plans to increase the size of their business office organizations by the following FTEs:

  • BRL Portfolio – from 3.9 FTEs to 6.0 FTEs
  • Central Agencies Portfolio – from 1.6 FTEs to 4.0 FTEs
  • PSDI Portfolio – from 4.2 FTEs to 7.2 FTEs

The audit team concurs with these plans to address the current under-resourcing of the portfolio business offices.

3.3 Training and Development

Appropriate measures are taken to ensure that training and development is made available to staff in the three Portfolio Offices examined and lawyers in their LSUs.

The portfolios’ business office staff have all received training on the Department of Justice systems used in the business offices. We were told that taking training on some of these systems (e.g. IFMS) was mandatory to gain access to the system. Some staff have also received training on other software (e.g. software used to prepare organization charts in the PSDI Portfolio).

To encourage counsel in their LSUs to complete the five days of professional development mandated by the Department of Justice Learning Policy, the Portfolio Offices email invitations and notifications regarding departmental/portfolio training events to LSU heads and their administrative assistants. The Portfolio Offices provide a training budget to LSUs, which is included in the Department’s legal services rate structure formula, so that LSUs can use the funds to send lawyers to courses and conferences. Spreadsheets maintained by each portfolio track the use of the training budget, and we were told that reminders are sent to LSU heads if the spreadsheets show that the LSUs are not using their allocated budget. We were also told that the Portfolio Offices monitor the percentage of individual learning plans that have been created and signed by employees and managers.

The audit team is of the opinion that appropriate measures are taken to ensure that training and development is available for Department of Justice staff in the Portfolio Offices and the LSUs.

3.4 Financial Planning

Portfolio Office financial planning is consistent with the requirements established by the Chief Financial Officer Branch.

As noted earlier, Section 2 of the business planning cycle is completed two months after Section 1 and requires the Portfolio Offices to provide detailed operational planning information on specific resources (particularly, financial and human) needed to address the requirements and priorities identified in Section 1.

All portfolios are funded by a combination of the Department’s A-Base and cost recovery from their LSUs’ clients. We were told that the A-Base is distributed to the portfolios based on an historical allocation dating back to 1995; that the A-Base is shrinking in real terms; and that it is insufficient to meet demand for legal services. Demand for legal services that cannot be met from the A-Base must be met through cost recovery. In preparing their financial plans, portfolios consult with both their LSUs and the regions to estimate the number and level of resources (FTEs) needed to meet client demand for legal services. For example, in the case of LSUs, the FTE estimates are translated at approved departmental rates by the portfolio into a financial forecast for each LSU. This forecast is separated into a Department of Justice A-Base component and a cost recoverable component that the clients must fund. The cost-recoverable components are incorporated into service agreements with the client departments.

We were told that LSU client departments typically agree to fund the cost-recoverable components. However there is always a risk that funds needed to meet the forecast demand for legal services may not materialize (e.g. if there are issues obtaining a signed service agreement or with invoicing, or if planned funding via a Treasury Board submission is not approved). Portfolio Offices therefore closely monitor financial performance (i.e. salary expenditures for the portfolio’s lawyers and cost recoveries).

It is our opinion that Portfolio Office financial planning is consistent with the Chief Financial Officer Branch’s requirements.

3.5 Monitoring Financial Performance

All three Portfolio Offices examined monitor their financial performance on a regular basis.

Portfolio Offices have small O&M budgets. O&M budgets for the portfolios’ LSUs are provided by their client departments/agencies, and the Portfolio Offices do not monitor these budgets. Portfolio salary budgets, which include an A-Base and a cost-recoverable component for all lawyers in the portfolio, are the primary source of financial risks, that is, if portfolios cannot fully recover the cost-recoverable component from their LSUs’ clients, they will incur a deficit.

Every month (except for July and August), each Portfolio Office prepares a Financial Situation Report (FSR) that shows variance from the financial plan. The report is reviewed by the Business Manager Footnote 3, before being approved by the ADM/ADAG. Action is taken as appropriate, based on the information in the FSR. For example, towards the end of the 2009-10 fiscal year, the BRL Portfolio noted that cost recoveries were behind schedule. The portfolio consequently mounted a campaign to encourage clients to pay outstanding charges.

It is our view that the Portfolio Offices monitor their financial performance appropriately.

3.6 Materiel Management

Portfolio Office physical security is satisfactory.

Access to each Portfolio Office is restricted to individuals who have valid building passes. Visitors must report to a ground-floor control desk, have a verified appointment, show or surrender photo identification, and be escorted to the offices by a staff member.

Active files are kept in individuals’ offices or in the Portfolio Offices’ records room. Both are locked at night. There are high-security cabinets for confidential or secret files.

The audit team is of the opinion that Portfolio Office physical security is satisfactory.

Portfolio Offices are maintaining their own inventory records pending direction from Contracting and Materiel Management Division.

None of the Portfolio Offices is using BassetPro, the Department’s asset management system, to record their key physical assets. We reviewed inventory listings printed from the system and observed that some were not up-to-date. For example, in these listings, assets are shown as being assigned to specific employees and the inventory listing for the PSDI Portfolio Office still included the names of some employees who were no longer with the Portfolio Office.

A 2007 Audit of Materiel Management found that documentation, procedures, and controls surrounding the user side of the BassetPro system lacked the rigour necessary to assure management that inventory and asset information is accurate.

We were told by the Director, Contracting and Materiel Management Division (CMMD), that few users across the Department of Justice have access to BassettPro, which limits its use. We were told that CMMD had considered acquiring an asset management module for the financial system, but the necessary funding was not approved. CMMD is now considering other options for ensuring the accuracy of inventory records.

The Portfolio Offices had previously developed, or during the audit prepared for the audit team, their own asset listings. These varied in scope: some included only printers and computers; others included these items as well as label printers and BlackBerrys. With minor exceptions (i.e. newly received printers in the Central Agencies Portfolio Footnote 4), these listings were up-to-date and complete within their scope.

We were told that there have been no reported losses in one and a half years and that the incident at that time was a BlackBerry that was reported to security as lost.

It is our view that the Portfolio Offices should continue to maintain their own inventory records pending direction from the CMMD on revised corporate system requirements for asset management.

Date modified: