Report on the Audit of Compliance with Financial Policy in Departmental Legal Services Units - September 2014

2. Background

The authority for this audit is derived from the 2013-2014 to 2015-2016 Risk-based Audit Plan, which was recommended by the Departmental Audit Committee and approved by the Deputy Minister in July 2013.

The Department of Justice Canada (the Department) provides an integrated suite of high-quality legal advisory, litigation, and legislative services to the Minister of Justice and to all federal departments and agencies to support them in meeting the Government of Canada’s policy and programming priorities and to advance the overall objectives of the Government. One way services are provided is through a network of Departmental Legal Services Units (DLSUs) and legislative Departmental Regulations Sections (DRSs) co-located with client departments and agencies, principally within the National Capital Region but also throughout the regions. DLSUs are organized into five portfolios: Aboriginal Affairs Portfolio (AAP); Public Safety, Defence and Immigration (PSDI); Tax Law Services (TLS); Central Agencies Portfolio (CAP); and the Business and Regulatory Law Portfolio (BRLP). The DRSs report to the Legislative Services Branch (LSB).

The DRSs and DLSUs have a combined full-time equivalent (FTE) count of approximately 883 employees which represents 20% of the Department’s workforce. In addition to the Department employees, there are the support staff within the DLSUs who are employees of the client department. These support staff provide administrative services related to financial management within DLSUs. The annual expenses of both the DLSUs and the DRSs represent approximately 22% of the overall departmental budget, excluding grants and contributions. In fiscal year 2013-2014, this amount consisted of $111.9 million for salaries and $1.9 million for operating and maintenance (O&M) expenses.

The Heads of most DLSUs and DRSs manage a budget from the Department as well as a budget from the client department. Memorandums of Understanding (MOUs) between the Department and client departments are in place to define accountabilities and the cost recovery rates for legal services. O&M expenses that are excluded from the cost recovery rates, such as direct O&M (e.g., office supplies), are typically paid from the budget of the client department. Expenses that are included in the rates, such as training, are often paid by the client department and subsequently recovered from the Department in the form of an interdepartmental settlement (IS).

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