Tax Law Services Ottawa Section
July 2011

3. Observations – Human, financial, and materiel resources

3.1 Human Resource Planning

A formal succession plan for the TLS – Ottawa Section needs to be developed and updated regularly.

Succession planning is a continuous, integrated, and systematic approach to developing and retaining employees and corporate knowledge in order to effectively sustain organizational operations. Succession planning activities often focus solely on senior management and leadership positions; however, best practices include consideration of all positions within an organization.

The Associate ADAGs advised the audit team that with respect to succession planning, the TLS Portfolio focuses more on “knowledge transfer” than on the replacement of people. We found that the TLS Ottawa Section conducts succession planning activities to help facilitate knowledge transfer from senior to junior resources. These activities include the fast tracking of junior counsel to senior positions and the pairing of junior lawyers with more experienced senior lawyers for mentoring purposes. These measures facilitate the sharing of knowledge.

As part of the human resource planning process, regional TLS offices such as the Ottawa Section work collaboratively with the TLS Portfolio Office to help develop human resource plans and strategic priorities, including succession plans. The Director and Deputy Director in the TLS – Ottawa Section are responsible for identifying the section’s succession planning needs and addressing succession planning issues with the support of the TLS Portfolio Office.

The Director advised the audit team that he has informal conversations with the Portfolio Office related to succession planning, and that succession planning is considered and incorporated into the TLS Ottawa Section staffing plan. The Director further stated, however, that due to significant workload demands no standalone formal succession planning document has been developed.

Senior management in both the TLS Portfolio and the Ottawa Section acknowledged that there is a risk associated with the lack of a formal succession plan. Due to the highly technical nature of tax law casework, there is a need to maintain sufficient expertise to address workload capacities.

Succession planning is a critical component of sustaining adequate and appropriate corporate knowledge within an organization Effective planning requires senior management to review and assess appropriate staffing levels and determine the appropriate technical expertise to meet the organization’s mandate. In our opinion, the Ottawa Section should develop a formal succession plan and update it on a regular basis.

Recommendation and Management Response

2. It is recommended that the Director, TLS – Ottawa Section ensure that a formal TLS succession plan is developed and updated on a regular basis. (Medium Risk)

Agreed. The TLS – Ottawa Section will work in close collaboration with the office of the ADAG, TLS Portfolio to develop and implement a national succession plan. Completion date: In conjunction with the regional offices and the TLS – Ottawa Section, the TLS Portfolio will develop a national succession plan by the end of this fiscal year. This plan will be updated on a regular basis.

3.2 Number and Mix of Resources

The TLSOttawa Section has an appropriate ratio of legal counsel to legal assistants.

The appropriate number and mix of resources deployed to work activities is critical to effective utilization of resources.

In the TLS – Ottawa Section legal assistants provide important assistance to counsel during the lifecycle of a legal file (e.g. preparing process documents for filing in legal proceedings, preparing memoranda, and gathering and categorizing documents).

Both the TLS Portfolio Office and the Portfolio Business Management Section advised the audit team that an acceptable ratio of legal counsel to legal assistants is approximately 3:1. The audit team found that the Ottawa Section has a ratio of legal counsel to legal assistants of 3.07:1 Footnote 1. The Director and Deputy Director stated that the number of legal assistants available was sufficient to support the Ottawa Section’s current workload.

In our opinion, the TLS – Ottawa Section has an appropriate number of legal assistants available to assist legal counsel in completing their case files.

An organizational review is required to determine the appropriate number of administrative resources.

The Ottawa Section has three administrative resources assigned to the office, which has approximately 76 resources in total. TLS – Ottawa Section senior management advised the audit team that the current complement of administrative resources has the appropriate skill set, but the number of resources is inadequate to meet the section’s demands. Administrative assistants stated that although they have the appropriate tools to complete their responsibilities, which include human resources, contracting, and invoicing tasks, they do not have the necessary time to address all the required demands.

We were told that because of the TLS Ottawa Section’s location in the National Capital Region with its large number of national decision-making bodies, administrative assistants in the section have more workload requirements than their colleagues in other TLS regional sections. TLS Ottawa Section senior management advised that they are in the process of determining where administrative efficiencies can be made, with a view to reorganizing workloads and staff within the section prior to engaging additional administrative resources.

We concur with this approach. The TLS – Ottawa Section should review its organization to capitalize on efficiencies and determine the appropriate number of administrative staff.

Recommendation and Management Response

3. It is recommended that the Director, TLS – Ottawa Section conduct an organizational review to determine the appropriate number of administrative resources. (Medium Risk)

Agreed. The TLS – Ottawa Section has begun an organizational review to determine the appropriate resources required to effectively carry out responsibilities in the areas of finance, human resources, administration, and office management. Completion date: December 31, 2011.

3.3 Performance Review and Employee Appraisal Process

The Performance Review and Employee Appraisal (PREA) process in the TLS – Ottawa Section is appropriate.

Performance review is an ongoing process in which an employee and the manager/supervisor jointly establish and monitor objectives. Performance reviews and employee appraisals are intended to provide employees with regular feedback on their performance and to identify training and development requirements. The PREA process ensures that employees are given clear work objectives against which their performance will be assessed. Continuous feedback and, at minimum, annual assessments, allow opportunity for recognition of their achievements and discussion of areas requiring improvement.

Through interviews with management and staff and a review of relevant documentation, the audit team found that a formal performance appraisal process exists to evaluate employees’ performance, and that it is operating effectively. The performance assessments include specific, measurable goals, and management assesses results according to these goals and objectives.

3.4 Training and Development

Specific training on Ringtail is planned for all TLS Portfolio staff beginning in the fall of 2010.

Training must appropriately address the needs of the organization while contributing to the development of each employee’s skill set.

The Department has implemented a fully automated litigation support software system known as Ringtail. The main objective of Ringtail is to assist the Department in managing the growing number of large, complex, and multi-document cases. It is also intended to assist with the initiative of moving toward a paperless environment.

The audit team also found that Ringtail training is provided to TLS – Ottawa Section personnel who have been identified as having an immediate need to access the Ringtail system. The TLS – Ottawa Section is responsible for identifying which employees require training and the Litigation Support Centre is responsible for informing Ringtail users of upcoming training sessions including refresher courses. These departmental Ringtail training sessions are scheduled regularly every two months and are managed by the Litigation Support Centre.

We were told that in the TLS – Ottawa Section, paralegals in particular require additional training on using Ringtail. Both paralegals and legal counsel advised that legal counsel are relying more on the Ringtail system to manage legal documents, since Ringtail is a very good document management tool, which is accessible wherever a secure Internet connection exists. As more legal counsel use Ringtail, paralegals will require more knowledge of and proficiency with the system.

TLS Portfolio senior management advised the audit team that Ringtail training specifically tailored to the needs of individual staff groups (e.g. counsel, paralegals, legal assistants) is planned for the early fall 2010 for all personnel in the Portfolio.

TLS – Ottawa Section personnel complete individual learning plans and meet the five-day minimum requirement for training under the Department’s Learning Policy.

Individual Learning Plans (ILPs) are plans developed in partnership between a manager and employee. The individual learning plan identifies learning goals, associated learning activities, target dates, and the required investment on the part of the Department and the employee.

The Department’s Learning Policy requires that every employee receive a minimum of five days of professional development each year. In an effort to record, monitor, and satisfy the mandatory training obligation, all employees must develop an ILP each year. This is done in conjunction with the annual PREA cycle.

We found that TLS – Ottawa Section personnel meet their mandatory five-day annual training requirement. We were told that ILPs are generally prepared at the beginning of each new fiscal year during the annual PREA process. Interviews with Ottawa Section personnel indicated that they are generally able to attend the desired training sessions as long as these relate to their duties and sufficient funds exist within the training budget.

It is our opinion that the TLS – Ottawa Section has met the Department’s requirement for professional development and TLS – Ottawa Section personnel have appropriately completed their ILPs.

Administrative assistants in the TLS – Ottawa Section require additional training with respect to software tools to conduct their financial administrative responsibilities.

Support personnel require appropriate training in order to provide effective assistance to management.

Although administrative assistants in the TLS – Ottawa Section informed the audit team that management encourages an environment of continuous learning, they indicated that they require additional training to conduct their financial administrative responsibilities.

We were told that financial administration information sessions are made available to administrative assistants throughout the year. TLS – Ottawa Section administrative assistants indicated, however, that these sessions are infrequent and are provided on an as-needed basis when new Department-wide systems or applications are established (e.g. updates to the Integrated Finance and Materiel System (IFMS) or Salary Management System (SMS)). Administrative assistants advised that they would be more efficient at completing their financial administrative duties if they were provided with more relevant training on the software tools they require to meet their responsibilities (e.g. Excel, PowerPoint).

From interviews with the TLS – Ottawa Section Director and Deputy Director, the audit team found that management was unaware of administrative assistants’ need for additional financial administrative training.

Recommendation and Management Response

4. It is recommended that the Director, TLS – Ottawa Section ensure that training with respect to certain software tools is provided to administrative assistants to assist them with their financial administrative responsibilities. (Low Risk)

Agreed. The Director, TLS – Ottawa Section will ensure administrative assistants are offered training in software tools to assist them with their financial administrative responsibilities including: IFMS (Integrated Financial and Material System); SFT (Salary Forecasting Tool); Excel. Completion date: December 31, 2011.

3.5 Flexible Work Arrangements

Flexible work arrangements in the TLS – Ottawa Section are functioning appropriately.

The Department of Justice recognizes the need to support employees in balancing their work and personal lives, while maintaining its ability to operate effectively.

In the TLS – Ottawa Section we found that flexible work arrangements are used to attract and retain employees. Senior management indicated that the benefits of flexibility are emphasized to potential recruits during the recruiting process. Both senior management and staff indicated that flexible work arrangements have been made available to all TLS – Ottawa Section personnel.

We found that flexible working hours, telecommuting, and earned days off (also known as variable or compressed work week) are the central forms of flexibility offered in the Ottawa Section. Flexible working hours are arrangements in which an employee is authorized to begin and end the workday between certain hours as long as the employee’s workday hours conform to the core hours of between 9:30 and 15:30. Telecommuting, or working from home, is available in ad hoc situations only. We were told that each request to work from home is reviewed and approved on a case-by-case basis and the staff member must be available during the normal course of a business day. In the TLS – Ottawa Section, earned days off are scheduled for a specific day of the week occurring every two to four weeks subject to operational requirements. When workload deliverables and deadlines require the presence of the TLS staff member (i.e. in the office or at court), the earned day off is rescheduled. Earned days off cannot be accumulated to be used consecutively at a later date. We found that the implementation of earned days off is tailored in accordance to the requirements and demands of the TLS – Ottawa Section.

Overall, we found that TLS – Ottawa Section supports employees in achieving a balance between their professional and personal lives, while maintaining a functional and professional office.

In our opinion, flexible work arrangements are available to employees and are working well within the TLS – Ottawa Section.

3.6 Law Practice Model

The TLS Portfolio made a submission to the DM Team to staff senior counsel for new complex and high-risk legal files.

The ability to hire and compensate both senior counsel and individuals with the appropriate, relevant technical expertise is essential for an effective and proficient legal workforce. Salary level is a significant factor in recruiting and retaining legal counsel.

In the fall of 2009, the Department implemented the Law Practice Model as part of a move to cut approximately $12.5 million from the Department’s overall budget as identified through a 2008 Strategic Review. In doing so, the Law Practice Model directly impacted how the Department’s portfolios were structured with respect to the number of lawyers comprising each classification level.

The Department of Justice has six distinct classification levels that apply to legal personnel (LA-1 to LA-3C). The salary level for each classification reflects the complexity of work and specialized legal expertise of the position. During our consultations with TLS – Ottawa Section personnel and management, we were advised that salary levels for counsel within the TLS Portfolio and the Department of Justice are not as competitive as those offered by the private sector and some provincial governments. To mitigate this challenge, management stated that TLS – Ottawa Section recruiters now emphasize the rich variety of TLS legal work, mentorship opportunities from highly trained and very experienced TLS counsel, and flexible work arrangements.

The TLS – Ottawa Section Director and Deputy Director advised the audit team that the implementation of the Law Practice Model is a significant factor impacting all facets of operations including hiring and retention. There is a perception that the Law Practice Model limits management’s ability to both promote capable staff and offer appropriate compensation to top recruits. TLS – Ottawa Section management emphasized that the Law Practice Model does not support the highly technical and specialized demands of TLS work. Ottawa Section management advised that the implementation of the Law Practice Model has in effect resulted in junior lawyers working on complex case files and that this work allocation is not sustainable.

3.7 Procedures Manual

There is appropriate procedural guidance for administrative personnel in the TLS – Ottawa Section.

Effective organizations consistently prepare detailed job descriptions, procedure manuals, and guiding documents for their employees. Procedure manuals are intended to provide formal guidance and comprehensive information on completing a particular task. If procedure manuals are not in place, an organization should have other mechanisms in place to assist administrative personnel and other non-legal personnel through unfamiliar situations.

We found that there are no formal TLS-specific procedures manuals in place to help guide administrative personnel in their assigned duties. However, administrative personnel stated that sufficient departmental manuals and TBS guiding documents are available for reference purposes when administrative staff encounter new situations. Although more formalized TLS-specific manuals could benefit Ottawa Section administrative staff, the audit team found that the close physical proximity of the TLS – Ottawa Section to both the Portfolio Business Management Section and the Department’s Chief Financial Officer Branch allows TLS – Ottawa Section administrative personnel to speak directly with the appropriate individuals for guidance and direction whenever such guidance is required. We also found that administrative personnel use the TLS information system, Fiscal Path, to obtain additional guidance on TLS-specific matters.

In our opinion, appropriate procedural guidance is available to assist TLS – Ottawa Section administrative resources with their duties.

3.8 Administration of Financial Resources

The administration of financial resources in the TLS – Ottawa Section is appropriate.

The successful management and administration of financial resources within an organization is an essential responsibility of senior management.

The TLS – Ottawa Section works collaboratively with the Portfolio Business Management Section in monitoring and administering the Ottawa Section’s financial resources and ensuring compliance with financial policies and procedures.

The audit team found that the TLS – Ottawa Section communicates regularly with the Portfolio Business Management Section with respect to financial resource allocations to the Ottawa Section. TLS – Ottawa Section management indicated that they are satisfied with the most recent level and timing of initial resource allocations received from the TLS Portfolio. They also advised the audit team that they are continually well informed regarding their final budget allocations.

TLS – Ottawa Section management regularly generates and reviews financial reports from the IFMS and the SMS. In doing so, the Director is responsible for identifying significant variances between management expectations and results observed within the reports.

In our opinion, the financial administration of resources in the TLS – Ottawa Section is appropriate.

Monitoring activities related to financial resources and allocations of expenses are appropriate in the TLS – Ottawa Section.

Administrative personnel generate SAP reports on a monthly basis to provide senior management with a financial overview of the two cost centres in the TLS – Ottawa Section. SAP reports are produced from the IFMS module (Department-wide) and access to the reports is based on the file permissions granted. Data in the reports are secured through system-generated security measures.

Through our interviews and documentation review, we found that LS – Ottawa Section administrative personnel regularly review expenses that are processed through the cost centres. This review helps ensure the accuracy of accounts being used for expense allocation and validates expenditures that originate within the TLS – Ottawa Section. The audit team also found that the Director and Deputy Director regularly meet with the Portfolio Business Management Section Director to discuss key general ledger accounts (e.g. travel and training) where risks for errors are common because of the large number of financial transactions processed through the accounts. These meetings help to ensure proper coding of expenses and help validate all expenses charged to the TLS – Ottawa Section.

It is our opinion that there is an appropriate level of monitoring of financial resources and expenses related to the TLS – Ottawa Section.

3.9 Control and Protection of Key Assets

Control and protection of key assets within the TLSOttawa Section office is adequate.

The proper control and protection over key assets used in a business operation is an essential aspect of management activity. Appropriate measures to help mitigate the chances of assets being damaged or stolen should be operating effectively and these measures should be reviewed regularly to help sustain their efficiency and relevancy.

We held consultations with key management and staff within the TLS – Ottawa Section and the TLS Portfolio Office. We reviewed relevant documentation including procedural manuals related to the security of assets on the Department’s Intranet and performed a walkthrough of the iCase information management tool. (For details on iCase, see Information Systems section.)

We found that physical access to the TLS – Ottawa Section building is restricted. Individuals are permitted entry into the building only with a valid security building pass issued by the Bank of Canada. All visitors without a building pass must be escorted by an authorized departmental resource.

The security of client information is controlled and maintained via computer password protection and locked physical filing cabinets. Each computer workstation is only accessible if the user has a password that is in compliance with security standards. We found that access to iCase legal files is only granted to TLS Portfolio personnel. We were told that each TLS office is responsible for establishing its own protection procedures for physical assets. These procedures are established in accordance with the recommendations and guidance provided by the Department’s Accommodations Directorate.

Assets are acquired centrally. Before the initial receipt of an asset, the Department’s Vendor Relations and Contract Administration attach an identification “tracking sticker” and records the pertinent information in a centralized inventory database. This is used to verify the assets in an employee’s possession on leaving the section.

In our opinion, the TLS – Ottawa Section has adequate processes and procedures in place to maintain proper control and protection over departmental assets.

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