Tax Law Services Prairie Region
2. Observations – Management control framework
2.1 Governance and Strategic Direction
An 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 National Tax Board of Directors (NTBD) is the oversight body in the TLS Portfolio, providing strategic guidance and direction to all sections of the Portfolio. The mandate of the NTBD states that the NTBD is the
“primary forum of consultation and strategic decision making for questions of a functional nature and of national interest within the mandate of the Portfolio.” The ADAG, Tax Law Services chairs the NTBD, which is comprised of the following TLS Portfolio members:
- the ADAG
- the two Associate ADAGs
- all TLS Portfolio directors and deputy directors
- the Senior General Counsel who represents the CRA LSU
- the Senior Advisor to the ADAG
- the Director, Business Management Section
The NTBD meets in person three to four times per year, by teleconference on a bi-weekly basis, and as needed. The meetings address all operational matters as they relate to the achievement of TLS Portfolio plans and priorities.
The NTBD keeps abreast of national issues related to tax law matters through review and discussion of performance management reports documented in the “Blue Book”. Last revised in May 2010, the Blue Book is prepared by Portfolio management and provides the Portfolio with a performance management framework used to evaluate the Portfolio in its delivery of legal advisory and litigation services to the CRA. In addition to the performance management framework, the Blue Book includes an analysis of the achievement of priority areas related to international and large client files, cost benefit/effectiveness of operations, sound financial management related to FTEs and resources, and litigation results. The TLS – Prairie Region provides input into the Blue Book reporting process.
The NTBD monitors each region’s progress towards the achievement of the strategic plans and provides necessary further direction. Management decisions are made during NTBD meetings and the TLS Portfolio directors communicate these decisions to their respective regional offices. These decisions are recorded in the Green Book, which was revised in February, 2010. The Green Book contains data on current year FTE distributions, budget allocations, revenue forecasts, and pertinent information related to planning for the coming fiscal year.
We reviewed the terms of reference for the NTBD including the mandate, meeting agendas and minutes, a sample of Blue Book reporting, a sample of decisions recorded in the Green Book, and relevant supporting documents pertaining to NTBD meetings. We found that the NTBD is an effective oversight body that includes the right mix of individuals to provide appropriate oversight and fulfill its mandate.
2.2 Business Planning
The TLS – Prairie Region has an appropriate business planning process.
Effective business planning activities and documentation are essential for directing an organization towards the achievement of management’s strategic goals, priorities, and objectives. Formal plans need to incorporate objectives for all key areas of the organization.
The TLS – Prairie Region regularly communicates with the TLS Portfolio Office regarding business planning initiatives and progress toward its objectives. We were told that the Prairie Regional Director meets with the Portfolio Business Management Section and the ADAG at least twice a year to discuss the TLS – Prairie Region’s business planning. The TLS – Prairie Regional Director and the ADAG also have regularly scheduled conference calls (bi-laterals) to discuss issues relating to the TLS – Prairie Region. The TLS – Prairie Regional Director also advised the audit team that there is ongoing communication with personnel in the Portfolio Business Management Section regarding business planning activities related to financial and resource requirements.
The audit found that the TLS – Prairie Region has a formal written business plan to guide TLS activities within the Prairie Region. The 2010-2011 Business Plan Prairie Regional Office – Tax Law Services outlines objectives that are incorporated into the Department’s Regional Business Plan for the Prairie Region. Senior management in the TLS – Prairie Region regularly update the Prairie Region Business Plan. We found that the TLS – Prairie Regional Director, in conjunction with the Prairie Management Team, works with the Deputy Regional Director, the Director (Acting), and the Regional Director General (RDG) (Acting) to collaborate and update the plan each quarter to reflect developments related to each business planning initiative.
It is our opinion that through the development of its business plan, the TLS – Prairie Region has formalized its business priorities and provides appropriate direction toward the achievement of its strategic objectives.
The organization of the TLS – Prairie Region is appropriate.
An effective organizational structure encompasses clear definitions of roles and responsibilities which are vital to the successful management of an organization.
The TLS – Prairie Region is comprised of four offices: Edmonton, Calgary, Saskatoon, and Winnipeg and is headed by the Regional Director. The TLS – Prairie Region also includes a Deputy Regional Director, a Director (Acting), six senior counsel, a Senior General Counsel, approximately 44 counsel, seven paralegals, 17 legal assistants, two iCase personnel, four administrative assistants, and an articling student.
Roles and responsibilities of the TLS – Prairie Region and the TLS – Portfolio are generally understood. The TLS Portfolio Office is responsible for all planning and organizing activities, in collaboration with the regional offices. The TLS – Prairie Region is responsible for providing litigation and advisory services to the CRA within the Prairie Region. The TLS – Prairie Regional Director reports to the RDG of the Prairie Region –on matters that affect the Prairie Region and communicates directly to the ADAG, TLS Portfolio to report on significant tax law matters.
From our consultations with TLS – Prairie Region senior management and legal counsel and our review of meeting minutes, we found that the Regional Director and Deputy Regional Director meet on a regular basis to discuss pertinent organizational and financial matters that pertain to the TLS – Prairie Region.
The TLS – Prairie Region has prepared job descriptions for each category of personnel. Based on our review of the delegation of authority tables, we found that there is appropriate delegation of authority in the TLS – Prairie Region. The Regional Director stated that the TLS – Prairie Region functions effectively with the current delegation of authority.
In conjunction with the ADAG, the TLS – Prairie Regional Director annually reviews the Prairie Region staffing plan as well as the level and skill set of resources in the section to assess workload requirements and assist in the appropriate distribution of case files to staff. This review process assists in ensuring that the TLS – Prairie Region is organized with the necessary combination of resources to address its complex files.
We found that the organizational structure in the TLS – Prairie Region allows for management and staff to be clearly held accountable for the conduct and completion of their duties.
An appropriate file assignment process is in place and operating effectively.
Efficient control and administration over the workload assignment process is a fundamental aspect of a manager’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 – Prairie Region has approximately 50 lawyers having a broad spectrum of experience, from junior counsel who have recently been called to the Bar, to senior counsel with several years experience. Files are assigned to personnel who have the level of skills and experience to appropriately manage and complete the file work. The Associate ADAG (Tax Assessment), TLS Portfolio assigns general procedure files to regional TLS offices on a case-by-case basis with consideration given to the complexity and risk levels of each case. The TLS – Prairie Regional Director holds regularly scheduled meetings (twice weekly) with the Deputy Regional Director and team leaders to determine which legal counsel should be assigned to each file and ensures that large complex files are assigned to litigation teams that are led by senior lawyers in the Prairie Region who have the appropriate skills and experience. The assignment of large complex files often involves direct consultation with the senior counsel cadre. Informal procedures, EI and CPP Tax Court files, collections files, and non-assessment litigation files are assigned directly to counsel by the Deputy Regional Director and team leaders, in consultation with the Director only if necessary. Appellate litigation files are assigned by the Director, in consultation with the Deputy Regional Director and the team leaders. Through interviews with TLS – Prairie Region personnel, we determined that these meetings are an effective and efficient means for appropriately assigning new files to counsel in the TLS – Prairie Region Office.
We found that the TLS Prairie Regional Director and her team have an effective communication process to effectively manage and monitor the file assignment process.
2.5 Leading and Communicating
Leadership and communication in the TLS – Prairie Region is 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.
During the audit we found that there are effective and efficient forms of communication within the TLS – Prairie Region. We found evidence that the Portfolio Office provides direction to the Prairie Region and shares information through meetings and by maintaining open lines of communication.
TLS – Prairie Region senior management communicate readily with the Portfolio Office by phone, email, or in person whenever guidance or assistance is required. TLS – Prairie Region senior management advised that the communication and direction from the TLS Portfolio Office is timely and effective. TLS – Prairie Region senior management further stated that due to the ease of communication with the TLS Portfolio, they are able to easily obtain required guidance/direction when necessary. The Director (Acting) advised that he speaks with the ADAG every second month to informally discuss activities within his office, such as the progress of certain files, concerns, and items of interest to the ADAG.
The ADAG and the TLS – Prairie Regional Director also have formal scheduled meetings every six to eight weeks (bi-laterals) to discuss matters relevant to the Prairie Region. In addition, the TLS Portfolio Office holds bi-weekly conference calls with all NTBD members. TLS – Prairie Region senior management convey information from these meetings to staff during the regular section meetings. The RDG (Acting) of the Prairie Region indicated that the efficient management practices related to legal files within the TLS – Prairie Region is a direct result of positive, timely communication and direction from the both the TLS Portfolio Office and TLS – Prairie Region senior management.
We also found that the information system Fiscal Path provides the TLS – Prairie Region with pertinent information on the Portfolio’s values, ethics, and practices.
In our opinion, leadership and communication in the TLS – Prairie Region is appropriate.
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