This Web page has been archived on the Web.

1985 Report of the Auditor General of Canada

Overview

6.1 The Public Service Employment Act (PSEA), which came into effect on 13 March 1967, sets out the mandate of the Public Service Commission (PSC). The Commission is responsible to Parliament for administering the Act and, as a result, for ensuring that all public service staffing activities comply with the merit principle. Approximately 225,000 people are subject to the terms of the PSEA; employees of Crown corporations and members of the armed forces are excluded.

6.2 The major responsibilities of the Commission under the Act are to:

- make appointments to or from within the public service, based on selection according to merit;

- develop and administer processes and standards for selecting candidates for positions in the public service;

- operate an appeals system for appointments and demotions or releases for incompetence or incapacity;

- investigate anomalies in staffing; and

- investigate and decide on allegations of political activity by public servants, and approve requests for leave to participate in political activity.

6.4 In the past few years, the Commission has devoted considerable time and energy to establishing the new management category. Furthermore, it has spent time on development activities such as elaborating policy and providing services and advice to departments.

6.5 The Treasury Board has also delegated to the Commission responsibility for several other functions, among them the following:

- managerial and specialty training;

- language training; and

- the audit of certain personnel functions and related functions and activities.

- human resource planning;

- programs of affirmative action and other measures to increase the participation of under-represented groups; and

- management of the management category.

6.9 Under the Financial Administration Act of 1967, the Treasury Board determines the personnel complement required to carry out programs approved by Parliament, establishes terms and conditions of employment for public servants, provides for the classification of positions, sets training policies, and negotiates as employer with public service unions on the terms and conditions of employment.

6.10 In addition to PSC's Appeals and Investigations Directorate, public servants have recourse through several agencies, notably the Public Service Staff Relations Board, the Canadian Human Rights Commission, and the Federal Court of Canada. Their decisions, and particularly those of the Federal Court, can exert considerable influence on how the merit principle is applied and public service vacancies are staffed.

6.11 Deputy heads of departments are responsible for implementing and adhering to Treasury Board and PSC human resource management policies. Of the 84,000 public service appointments made in 1984, about 98 per cent were made by departments under authority delegated to them by the Commission.

6.12 The interaction of all these organizations in human resource management makes implementing PSC staffing policies a complex process that requires several mechanisms to ensure co-ordination and consultation among everyone involved.

6.13 The Royal Commission on Financial Management and Accountability (Lambert Commission), the Special Committee on Personnel Management and the Merit Principle (D'Avignon Committee), and the Auditor General, in his report on management constraints, have all drawn attention to the fundamental personnel management problems that reduce administrative efficiency and effectiveness and undermine the authority and responsibility of the organizations involved. They have also pointed to the fact that central agencies tend to impose control rather than give general policy to departments and agencies. The PSC and Treasury Board began a reform of the personnel management function in 1979. The main elements of this reform include streamlining staffing regulations, tailoring delegation instruments to departmental needs, clarifying the respective roles and responsibilities of the Treasury Board and the Public Service Commission, and establishing the senior management category.

Audit Scope

6.15 We did not investigate the management of staffing by departments, the staffing processes or the appeals and investigation processes. We are thus not in a position to comment on the quality of the Commission's policies and services or on whether departments are satisfied with them.

6.16 With respect to language training, we looked at the planning and control methods in place, with particular attention to the use of human resources. Our investigation included a review of the management practices used by the directorates responsible for teaching and for linguistic services. We did not address the quality of teaching.

6.17 In the staff training and development area, we examined administration, how courses are designed and how training services are costed. Again, the quality of teaching was not investigated. We did not look at the operations of the Centre for Executive Development at Touraine, because Treasury Board was in the process of evaluating courses for senior management at the time of our audit.

6.18 Finally, with respect to administration, we examined the integrated management process, a system that comprises the Commission's planning, review and control mechanisms.

Observations and Recommendations

Staffing

6.20 To this end, the Commission's activities must be well integrated, enabling it to ensure that the staffing system is meeting the requirements of the Public Service Employment Act as well as the needs of departments and, if not, to take corrective action.

6.21 Needs analysis. In carrying out its policy development and delegation activities, the Commission issues policies and procedures, recommends regulations and exclusion approval orders to the Governor in Council, and conducts special studies on staffing. The Commission develops the delegation instruments giving departments and agencies their staffing authority and also provides them with consulting services. These activities are sometimes influenced by external factors such as Federal Court decisions, Treasury Board requirements or union demands, which are beyond the Commission's control.

6.22 This aspect of the Commission's activities is important because this is how the Commission sets the framework within which departments apply the PSEA and enforce the merit principle. To ensure that established guidelines allow departments to observe the law, while taking into account their needs, the Commission must regularly identify and analyse the individual and collective problems of departments, identify those factors that affect the system as a whole, set priorities and establish action plans.

6.23 The Commission has a number of sources of information on departments and agencies: the committees to which it belongs, periodic meetings with employee representatives, and data gathered in numerous dealings with departments, as well as the Commission's own audit, appeals and investigation and consultation activities. We concur that this is necessary and useful information, but the PSC has no centralized mechanism to conduct a systematic analysis of it and optimize the usefulness of its sources of information. A couple of examples come to mind:

- The annual staffing conference and quarterly meetings of chiefs of staffing are used mainly to disseminate information or to gather general comments about problems encountered in implementing one policy or another. It would be better if the results of these sessions were taken further and brought together into a broader Commission-wide needs analysis. These meetings could be part of a service-wide analytical process.

- Departmental requests to PSC regional offices for information on implementing policies and regulations are a good way of identifying needs. However, at headquarters, the Commission does not do a global analysis of requests to determine whether existing policies could be improved.

6.25 The Staffing Delegation and Consultation Division has a mandate to assist departments in developing, implementing and evaluating staffing programs that meet their individual needs. The Division can also initiate interdepartmental and government-wide studies. The Division responds to the needs of many departments through its various consultation projects. It does not, however, analyse data assembled in this manner to identify problems prevalent across the public service or to suggest how problems common to departments and agencies operating under the PSEA might be solved.

6.26 Two studies of staffing efficiency and effectiveness were conducted in 1983 and 1984. The results of the 1983 study were deemed inadequate as a basis for generalizing about staffing problems. At the time of our audit, the second study, which was supposed to be finished in December 1984, was significantly behind schedule. Once completed, it should provide means of addressing staffing problems in the six departments that participated in the project. The studies did not, however, include analysis of the problems the PSC encountered in pursuing its objectives. Because of their one-time nature, they cannot be a continuing source of information for the Commission.

6.27 The Public Service Commission should analyse on a continuing basis the needs and problems encountered by the public service as a whole in the use of the staffing system.

Commission's response: The Public Service Commission has analysed the staffing needs of the Public Service and will continue to do so. The manner and mechanisms used to conduct the analyses and synthesize the information will vary from time to time and must be flexible to adapt to a constantly changing personnel management and economic environment. While such mechanisms may not be exactly those that the audit team perceives to be required, they are nevertheless appropriate to our needs and those of the personnel community at large.

6.28 Project management. In the context of examining the Commission's methods of managing its staffing responsibilities, we looked at the management of projects for developing staffing policy and programs, as well as at administrative reform and delegation activities. Many of these projects involve the responsibilities of more than one branch, so how they are managed is often affected by a variety of participants.

6.29 We examined the management of several projects: the review of Regulations and the revision of the Staffing Manual, as well as more general activities such as the operation of the Delegation Advisory Committee and the management of administrative reform. Our examination revealed weaknesses in planning and control.

6.30 It appears that the review of the Regulations, which began in 1983 and was to have been completed at the end of 1984, will not be finished before the end of 1985. The delay was due partly to the Commission's failure to co-ordinate help from legal services. Further, there is no general work plan for the project.

6.31 The project to convert the Staffing Manual to the same format as the Personnel Management Manual published by the Treasury Board was not completed until June 1985. It was to have been completed by April 1983. The PSC did not assign a priority to the project and encountered difficulties establishing objectives and allocating the necessary resources for it. There was no general work plan for the project.

6.32 The report on the role and functioning of the Delegation Advisory Committee, approved in May 1984, revealed serious weaknesses and recommended, among other things, that the responsibilities of committee members be defined more precisely, that departments participate in the committee, and that analyses of departmental performance information be improved. None of the recommendations was implemented, however, until May 1985.

6.33 Since 1979, many of the Commission's activities related to broad administrative reform were undertaken following the reports of the Lambert Commission and the D'Avignon Committee. In the fall of 1984, the PSC launched a second phase of this reform.

6.34 However, we saw no evidence that the Commission had formally evaluated its own major activities following the Lambert and D'Avignon Reports or looked at the causes of problems such as those that occurred with the delegation of authority to line managers.

6.35 The Commission has set objectives for the second phase of administrative reform. At present, however, there is no overall plan describing the strategies, activities and resources needed to achieve service-wide objectives. No criteria have been established as a basis for monitoring and evaluating ongoing activities.

6.36 The Public Service Commission should require that projects have work plans specifying objectives, activities, resources, milestones, schedules and expected results and should exercise strict control to ensure that work plans are adhered to.

Commission's response: The PSC agrees that every major project should have a work plan that includes the attributes mentioned in the recommendation. However, the plan must not be so rigid or restrictive that it cannot be flexible enough to react to changing environmental conditions. An appropriate mechanism must exist to allow the plan to be adjusted to meet changing objectives, the redefinition of requirements or changes in policy or legislation. To assume that no such changes will occur would be shortsighted and unwise.

6.37 Monitoring departmental operations. The Commission does not monitor staffing operations conducted by departments in accordance with the monitoring role described by the PSC in the Personnel Management Manual.

6.38 The Appointment Information Management System (AIMS) provides information on the number and type of appointments made. However, our audit revealed that the PSC does not carry out a monitoring process that provides assurance that staffing policies and practices are achieving their intended results, are effectively applied, and that delegated authority is being properly exercised.

6.39 The Public Service Commission should monitor adherence to its policies and procedures, a role the Commission prescribes for itself in the Personnel Management Manual.

Commission's response: The PSC agrees with this recommendation and would stress that monitoring itself can be conducted in many ways. The Commission cannot and does not rely solely on formal reports, including audit reports, that are generated by various organizations within the Commission. It also relies on information obtained through links with various personnel management interests, both internal and external to the federal public service, many of which have been identified in the report. It is through the use of the varied feedback mechanisms that the PSC constantly monitors the adherence to, as well as the impact of, Commission policies and procedures. The nature of the Commission's mandate, and the effects it has on personnel management in the Public Service, do not allow monitoring thereof to be restricted just to narrow narrative and statistical reports. A variety of effective linkages is fundamental to monitoring, not just documented reports. However, recognizing the need for visible monitoring, the PSC is establishing a Monitoring and Review unit in the integrated Staffing Programs Branch.

6.40 Evaluating the staffing system. The PSC has little information on the suitability and effectiveness of its policies. Since 1982, only two policies have been evaluated.

6.41 The responsibility for evaluating the Commission's staffing policies was delegated to the Treasury Board Secretariat in 1982. Six policies were to be evaluated between 1982 and March 1986, but only two evaluations were done. The PSC has no other mechanism in place to evaluate the effectiveness of its policies.

6.42 The Public Service Commission should review the merits of delegating the evaluation of staffing policies to Treasury Board.

Commission's response: The PSC understands the concerns behind the recommendation but must point out that this is part of a broader picture involving its main partners in personnel management (Privy Council, Treasury Board, Committee of Senior Officials).

6.43 Exclusion approval orders. Section 39 of the Public Service Employment Act permits the Commission, with the approval of the Governor in Council, to exclude persons, positions or classes of positions in whole or in part from the operation of the Act where the Commission considers it not practicable or in the best interests of the public service to apply the Act. Exclusion approval orders are short-term devices responding to exceptional circumstances.

6.44 The use of exclusions has grown over the past few years, particularly in the hiring of temporary employees for periods of six months or less. In 1983, 10,000 appointments were authorized by exclusion approval orders; in 1984, there were approximately 14,000 appointments of this kind authorized.

6.45 On 16 March 1983, the Commission approved guidelines for considering requests for exclusion approval orders. The purpose of these guidelines:

is to outline the kind of considerations that should be taken into account when determining whether it will recommend to the Governor in Council approval of an exclusion order under section 39 of the PSEA and to summarize the basic information required in a submission to the Commission seeking such an order.

6.47 We also noted that the PSC does not monitor how departments are administering exclusion approval orders, despite the fact that a special audit conducted by the Commission revealed signs of abuses in the system.

6.48 The Public Service Commission should document the factors it has taken into account for recommending exclusion approval orders and should monitor departmental administration of exclusion approval orders.

Commission's response: The PSC agrees with this recommendation.

6.49 Auditing. Part of the Commission's mandate is to ensure adherence to the merit principle in all public service appointments and to report to Parliament about this. With staffing authority for 98 per cent of appointments delegated to departments, the PSC must ensure that departments are using delegated authority properly and in accordance with the merit principle. Auditing is important because it is among the most important ways the Commission has of knowing whether its policies are being followed and, if not, of identifying problems and suggesting corrective action to departments.

6.50 Under three 1982 agreements between the PSC and the Treasury Board, the Commission is also responsible for auditing personal service contracts and management systems used for specific aspects of classification, compensation, labour relations and official languages. The PSC has also audited departmental affirmative action programs since April 1983 and training activities since April 1985.

6.51 Our examination of the Commission's audit activities covered the objectives, methodology and reports of the Audit Branch, as well as its planning and control mechanisms. We looked at eight audits and two follow-up audits conducted in departments in 1983-84 and 1984-85. To ensure that we covered the Commission's entire audit process, we chose to examine audits that had been completed by 31 March 1985. As a result, our sample did not include audits carried out under the new auditing directives issued after June 1984.

6.52 In Part III of the Estimates for 1985-86, the Commission states that one of its objectives is to audit staffing and personnel management activities delegated to deputy heads by the Treasury Board and the PSC. Another objective is to "increase awareness of parliamentarians, the Treasury Board Secretariat and the Commission of the effectiveness of the personnel system and of the impact of policies, practices and regulations on the system." The Commission goes on to say in its Part III that the "activity involves the examination of the management of staffing and other personnel management systems, including the assessment of the effectiveness and the effect of policies, practices, procedures and regulations on these systems."

6.53 The text of Part III of the Estimates conveys the idea that the PSC audits all aspects of personnel management in the public service. The Commission does audit specific aspects of personnel management, but its mandate for auditing classification, compensation and labour relations is limited. In our view, the agreements between the PSC and the Treasury Board are too restrictive to allow the Commission to audit the personnel management function as a whole. Moreover, the scope of the Commission's audit work is not such that it can evaluate the effectiveness of the personnel management system in the way that evaluating effectiveness is described in the Program Evaluation Guide issued by the Office of the Comptroller General.

6.54 The Commission should clarify its auditing mandate, as well as the objectives associated with this activity.

Commission's response: PSC understands the concerns which underlie this recommendation but here also must point out that this can only be done in the context of an overall review of the monitoring, the auditing and the evaluation of personnel management operations in consultation with our partners.

6.55 In March 1984, the Commission published the Guide to Personnel Audit and Review, setting out the process it planned to follow in its audits. Since 1983, the Commission has also used auditing guidelines covering selected aspects of staffing, such as the area of competition, and the personnel functions delegated by the Treasury Board, such as the monitoring and auditing of classification. The Guide and the guidelines form the nucleus of the Audit Branch's methodology.

6.56 As we examined the Commission's audit files, several facts came to light:

- The planning process, including the criteria used to determine the scope of an audit, is not documented in the audit files. It is therefore impossible to review this important part of the audit and to ensure that the significant elements, particularly those selected for examining the staffing process, have been audited.

- Few of the guidelines specify which documents and control points are to be examined or identify auditing procedures in such a way as to ensure that all audits are uniform in terms of both quantity and quality. Nor do the guidelines contain criteria against which auditors can examine the various management functions.

- The documents known as audit programs are in fact descriptions of the entity being examined and of the scope of the audit. They provide auditors with instructions about the work to be done. The instructions are far too general, however, to provide any assurance that all auditors will apply audit procedures and techniques uniformly.

- Working paper files do not contain all the information necessary for assessing the quality and quantity of work completed. When it comes to management audits, it is virtually impossible to determine what questions have been addressed and what evidence has been found to support observations. It was not possible to tell whether every step had been followed in performing compliance tests or whether problems the auditors identified in documents had been corrected.

- The Branch's audit reports are long documents mixing description with analysis and positive observations with negative findings. Because of the style of reports, it is difficult to tell whether the problems discussed are serious or just appear that way.

6.58 Even so, these steps will not bridge all the gaps revealed by our audit. Auditors are not well supported by directives or adequate supervision and review of their work. Moreover, audit personnel have little training in audit concepts and techniques. There is no quality control at any stage in the audit process, from planning to reporting.

6.59 The Audit Branch should:

- complete its directives on audit methods, scope and the documentation required to support findings;

6.60 Appeals and investigations. Under the Public Service Employment Act, the Commission is required to operate an appeals and investigation system for appointments and demotions or releases for incompetence or incapacity. This system is an important element in managing staffing. About 10 per cent of appealable selection processes were appealed in 1984.

6.61 Our audit covered only how information from the appeals system is integrated into the management of the staffing system. The analysis of appeals and Appeal Board decisions gives an indication of the problems departments are having in administering the PSEA. This information is both an indicator of the extent to which staffing activities reflect the merit principle and a means of ensuring that the principle is adhered to.

6.62 We noted that the information is adequately conveyed to the policy development group, which analyses it and presents its conclusions to the Delegation Advisory Committee.

6.63 Selection standards and tests. The PSC develops selection standards and tests and provides services and advice to departments on how to apply them. The Commission gives and corrects between 40,000 and 50,000 selection tests each year.

6.64 We found that this part of the Commission's work is properly planned and that the branch responsible for it has appropriate mechanisms in place to control project implementation.

6.65 Outside recruitment and other central services. One of the PSC's responsibilities is recruitment from outside the public service. To this end, the Commission set up a National Applicant Inventory System in 1983 so that Canadians in all parts of the country would have equal access to federal public service jobs. The system processed about 160,000 job applications in 1983-84, and 40,000 candidates were referred to departments in response to 14,000 requests to fill vacancies. The Commission maintains an inventory of between 25,000 and 30,000 names to fill these requests.

6.66 The PSC also provides central services to departments, such as administering language tests, maintaining a lateral transfers system, and operating a priorities system so that employees declared surplus or laid off can be placed in other public service jobs.

6.67 The PSC has appropriate mechanisms in place to manage outside recruitment and other central services and to account for its use of human resources. For example, the number of person-years forecast in activity work plans is linked to expected volumes and unit costs. Volume and unit cost forecasts are based on experience and on facts that come to light as plans are being developed. There is an activity analysis carried out at mid-year and year-end where actual unit costs are compared with forecasts and with last year's actual costs, and any discrepancies are explained. The use of person-years is analysed in the same way.

6.68 The Commission has also developed an appropriate management information system for outside recruitment. In addition to data on the number of requests received and referrals made, the Commission has indicators on the proportion of under-represented groups in the inventory and the referral system, on how long it takes to process requests for referrals, and on the proportion of candidates that do not meet the minimum requirements of jobs for which they were referred.

6.69 We are satisfied with PSC management controls over its outside recruitment activities and the central services provided to departments.

Language Training

6.71 Language training comprises two activities: teaching, and technical and specialized services. Teaching resources are divided among teaching itself, teaching support activities (course preparation, supervision, etc.), leave and training, and administration. Technical and specialized services include linguistic and client services. Exhibit 6.1 shows how person-years are allocated to these activities.

(Exhibit not available)

6.72 We looked at the management methods used in the units responsible for teaching and for linguistic services. The audit also included an analysis of the use of teaching resources.

6.73 Teaching. The Commission needs good planning and control tools to manage its resources in the face of a fluctuating workload. The tools the PSC has are satisfactory and working well. For example, in the centralized program, there is a mechanism for identifying the number of teachers available each week, the number of groups of students, and the number of students starting or finishing courses. Teaching resources are allocated on the basis of this information.

6.74 Overall, we observed that the total number of student-hours declined by about 20 per cent over the past three fiscal years. The decline is due partly to the fact that fewer conditional appointments to bilingual positions are being made and partly to the overall decline in staffing activity.

6.75 Despite this decline in the demand for its services, the Language Training Program Branch had continued to operate with virtually the same level of resources. As a result, the figures on resource use show that the efficiency of teaching programs has fallen by about 16 per cent. In other words, the existing complement of teachers is sufficient to provide an additional 300,000 student-hours. Conversely, the present number of student-hours - about 1.7 million - could be provided with 79 fewer person-years. These surplus resources have been devoted to preparation and other teaching-related activities, teacher training and developing new course options.

6.76 The surplus has resulted from several factors:

- the decline in the number of students;

- the number of situations where the Commission has to provide classes to smaller groups; and

- the difficulty of redeploying personnel while at the same time observing certain provisions governing working conditions set up through the teachers' collective agreement.

6.78 Linguistic services. The Linguistic Services Directorate (LSD) provides services to both internal and departmental teaching programs. Services include developing courses and devising ways of measuring students' progress.

6.79 We observed that precise objectives and priorities for the Directorate have not been defined. Nor does the LSD collect statistical and analytical data on the nature of requests for its services or keep a record of the criteria used as a basis for selecting projects. As a result, neither the Directorate nor the Commission can evaluate whether the work done was warranted or justify the 88 person-years devoted to these activities.

6.80 At the project management level, we found that LSD had established a series of steps to follow in carrying out projects. In general, the steps are both followed and documented during the planning and execution of the work. However, management information could be improved. Activity reports are used by LSD to communicate information about the projects completed during the current month and those planned over the short term. These reports, however, do not indicate the number of hours spent on the work, the number of people assigned, or the costs of the work in progress as compared to the planned resources and work schedule.

6.81 The Linguistic Services Directorate should:

- set overall objectives for all its activities;

Staff Development and Training

6.83 The budget for the PSC's training program accounts for about 10 per cent of all funds allocated by the federal government to training. The balance is divided among departments and administered by them. The Staff Development Branch is financed through a revolving fund and a subsidy from Treasury Board.

6.84 Our audit concentrated on the administration of the Branch and on the methods used to cost the courses it offers. We did not examine course content or the quality of teaching, nor did we look at the activities of the Centre for Executive Development at Touraine.

6.85 The Commission has achieved marked progress in the administration of training since 1981. The choice of courses offered has been rationalized and the human resources devoted to training have been reduced. The Commission has been able to move from a deficit in the revolving fund to a position where it is now recovering its costs.

6.86 For the past three years, the Commission has been using the systems approach to training to develop new courses and revise existing ones. The methodology describes each step that should be followed in designing, giving and evaluating a course.

6.87 Of the 97 courses available, 26 have been revised using this approach. We looked at three such courses to see whether the methodology had been observed and found that the main steps had been followed and documented.

6.88 The methods used to cost courses are satisfactory. Costing is essential, because the Commission recovers its costs by billing departments that use the services and through subsidies from the Treasury Board. Subsidies cover costs such as revising courses using the systems approach and extra expenses incurred as a result of the decision to maintain the Centre for Executive Development in Touraine.

Program Planning and Evaluation

6.90 We found that certain elements of the PSC's system comply with Treasury Board Secretariat's Policy and Expenditure Management System and that the existing elements of the system are well integrated.

6.91 At the time of our audit, the Commission had not yet evaluated any of its programs, despite the fact that it has been eight years since Treasury Board issued its program evaluation policy and the Commission set up its integrated management system. The PSC has done some evaluation studies and management reviews, but only on some program components. Most of these studies lacked rigour and were based on information that was not assembled systematically.

6.92 We have already mentioned that responsibility for evaluating staffing policy was delegated to Treasury Board in 1982. In our opinion, the evaluation of staffing policy should be an integral part of the Commission's evaluation plan, as outlined in the Program Evaluation Guide issued by the Office of the Comptroller General.

6.93 The Commission has taken some steps toward setting up a program evaluation unit. The position of director was filled in January 1985, and the Commission is now looking for staff for the other positions.

6.94 The Public Service Commission should finish assembling its program evaluation team and should integrate in its evaluation plan all evaluation activities, including the evaluation of staffing policies.

Commission's response: The program evaluation function has defined and strengthened its resourcing requirements and is currently staffing to effectively conduct its role. Proposals to integrate evaluation activities have been developed and are in the process of discussion with PSC's partners in personnel management (Privy Council, Treasury Board, and Committee of Senior Officials).