1998 April Report of the Auditor General of Canada

Main Points

2.1 As a result of a lengthy period of fiscal restraint and recent expenditure reduction programs, some federal government agencies have been abolished, some departments merged and others reduced in size. It is estimated that the public sector work force will have been reduced by approximately 45,000 employees between April 1995 and March 1998.

2.2 We selected seven departments to examine how and the extent to which expenditure reductions have been implemented. These organizations, representing over 170,000 employees, differed in size, structure and reduction targets.

2.3 Generally, departments we reviewed met their 1995-96 and 1996-97 expenditure and work force reduction requirements. Given progress to date, we expect that most of them will meet their reduction targets for the remaining two years of Program Review.

2.4 We found that ministerial commitment and departmental leadership were evident in setting direction and attaining momentum. Factors such as the size of the reduction, readiness for change and the time available to plan had an effect on departments' strategic planning for reduction. Departmental implementation of reduction was generally rigorous and employees were well informed both prior to and during the reduction process.

2.5 Although most reduction targets were met, and overall compliance with work force reduction policies had improved since our 1992 Report chapter, Payments to Employees under the Work Force Adjustment Policy, we found questionable actions in some departments. The need for incentive packages was not always well researched and there was a tendency to call for volunteers prior to identifying positions surplus to requirement. Best practices suggest that an organization should conduct a thorough cost/benefit analysis of alternatives; target incentives to areas where they are needed most; and identify the extent to which there is a need to call for volunteers.

2.6 Departments focussed primarily on meeting reduction targets in a timely manner. Less emphasis was placed on cost management. Such factors as the initial lack of necessary financial and human resource information, departments not having to fund entirely the departure incentives they provided, and an unclear Treasury Board Secretariat accountability structure for departmental work force reduction costs contributed to a general lack of cost consciousness in departments.

2.7 Throughout work force reduction, departments treated departing employees in a humane and sensitive manner. Departments paid less attention generally to those who remained and to their concerns regarding the loss of experienced and qualified colleagues, the level of workload per employee and future departmental direction. Departments have now entered a period of transition that will require not only adjusting organizational structures and operations but also paying particular attention to ensuring that work force capability meets future operational demands.

Introduction

2.8 Fiscal restraint measures and public sector work force reductions have influenced the development and delivery of federal programs and services for a number of years. However, recent initiatives - for example, the 1993 government restructuring; various policy reviews in areas such as defence, science and technology, foreign affairs and social policy; and Program Review - have reshaped the roles, structures and activities of the federal government to an extent not seen since the period following the Second World War.

2.9 Collectively, these initiatives have led to a significant reduction in the costs of the federal government and the size of the federal public service. The changes have affected in quite different ways the many entities that make up the federal public sector. Some government agencies have been abolished, several departments have been merged, and almost all existing departments and agencies have had their budgets reduced - some very significantly.

Focus of the Audit

2.10 Chapter 1 reviewed the evolution of expenditure and work force reduction over the years, and discussed the role that central agencies played in the implementation of government-wide reductions. This chapter focusses on the way reductions were carried out by selected departments and agencies (hereinafter all referred to as departments). We selected seven departments for detailed audit work: the Canadian International Development Agency (CIDA); the Royal Canadian Mounted Police (RCMP); Statistics Canada (StatsCan); Department of National Defence (DND); Environment Canada (ENV); Human Resources Development Canada (HRDC); and Natural Resources Canada (NRCan). They represent a work force of some 170,000 public servants, military personnel and RCMP members, and they differ both in the size of the reductions they were required to make and the approaches they took.

2.11 Our examination focussed primarily on these seven selected departments. Where appropriate, we relied on reviews or audits carried out on behalf of central agencies or by the seven departments themselves. We also reviewed current studies and reports to identify relevant best practices in both the public and the private sectors in Canada, as well as in other countries such as the United States, Australia and New Zealand. These best practices provided a framework within which to identify lessons learned for the future. We examined the extent to which each department has applied these practices (see Exhibit 2.1 ).

2.12 Our audit focussed primarily on expenditure and work force reductions during the period from April 1995 to March 1997. In the case of DND, however, the audit covered the period from 1991 to 1997 in order to include significant military reduction activities not covered in our 1992 Report chapter, Payments to Employees under the Work Force Adjustment Policy. Our audit of the RCMP covered the period from April 1994 to March 1997.

2.13 Members of the Canadian Forces are subject to different obligations and terms of employment from those governing their public service counterparts. For instance, Canadian Forces members are not protected by the Work Force Adjustment Directive (WFAD) and as a condition of service may be relocated at any time. Nor does the directive protect uniformed and civilian members of the RCMP. Further details are presented at the end of this chapter, in the section About the Audit .

Observations

The challenges faced by departments were significantly different

2.14 When Program Review was launched in May 1994, many departments and agencies were already undergoing major changes. For example, a government-driven reorganization in June 1993 necessitated a realignment of policies, programs, activities and systems in several departments. At least one quarter of the cuts to operating budgets were to come from savings in administration. In addition, horizontal initiatives such as the Science and Technology Review and the Social Policy Review were under way, affecting many departments involved in those sectors.

2.15 Many departments that we selected were already facing challenges prior to Program Review. The changes each department was experiencing varied due to such factors as the size and geographic dispersion of the work force, the level of reduction required and the options or tools available to address the needed change. The following gives an indication of the renewal and re-engineering activities under way in each of the selected departments:

• Between 1989 and 1993, DND implemented six budget reductions totalling $14 billion. This required it to scale back most activities, close installations and reduce military and civilian personnel by 14,000 and 3,000 respectively. In addition, a 1993 review of Canada's Defence Policy brought about an additional budget reduction of $7 billion. At the same time, several renewal and re-engineering initiatives were under way. Projects focussed on such areas as changes to infrastructure, base closures, functional reviews of headquarters and increased delegation of authority.
• In June 1993, NRCan became a new department composed of the former departments of Forestry and of Energy, Mines and Resources. In addition to reducing administrative overhead, several of its sectors had initiated fundamental reviews of their missions, priorities and approaches. They also were adjusting to the termination of energy megaproject funding as well as some funding agreements with the provinces.
• HRDC became a new department in June 1993, taking in all or part of four former departments. This reorganization brought income support programs together with human resource development programs and linked it all to national economic and labour market requirements. Fiscal year 1994-95 was a year of transition, with organizational restructuring and reforms to the social security system. As HRDC was implementing its Income Security Program Redesign, it was initially excluded from Program Review.
• During the summer of 1993, Parks Canada separated from Environment Canada. This reduced the latter's full-time-equivalent staff by half, and marked the beginning of a significant restructuring initiative. The Department was also changing its structure and focus with the implementation of the Green Plan.
• The RCMP had been engaged in three major change initiatives - reducing its operating budget, restructuring its headquarters operations and redesigning its provincial and municipal policing operations in several provinces.
• In response to a change in Canada's foreign policy, CIDA had been implementing a long-term strategic initiative that entailed reassessing its policy and program direction, streamlining decision-making and delivery processes, changing its relations with stakeholders, and examining better people-management practices as well as cost reduction.
• Before Program Review, Statistics Canada had completed a series of expenditure reductions in 1992-93. It faced a further reduction of 2 percent in its operating expenditures starting in 1994-95, increasing to 7 percent by 1997-98. In addition, it had the challenge of planning and resourcing the five-year cyclical project for the 1996 census. The agency had also developed a corporate planning and monitoring capability that would assist in rethinking program delivery, seeking increased efficiencies and opportunities for revenue generation.

2.16 In addition to previous reduction requirements, the magnitude of required expenditure reductions from 1995-96 to 1998-99 during Program Review varied for each department selected. Exhibit 2.2 summarizes the level of required expenditure reduction for each department to 1998-99.

2.17 The options and strategies used to meet reduction requirements varied significantly among the departments examined. Some departments used work force reductions in a significant way to accomplish their expenditure reductions, while others (CIDA and StatsCan) did not use this option to the same extent. Some departments sought to augment their available funds by means of alternatives such as user fees, partnerships with stakeholders or cost-sharing arrangements. However, the possibility of placing greater reliance on such alternatives depended largely on the nature of the department's programs and activities, and its ability to identify willing partners.

Leadership

2.18 Expenditure and work force reductions require sustained, active and visible leadership from senior management. Leadership for change of this magnitude cannot be examined in isolation. It is most often demonstrated as a part of such management responsibilities as planning, communications and implementation, as discussed in subsequent sections of the chapter.

Senior management participation in reduction was evident

2.19 Senior management involvement and participation in expenditure reduction was evident in the organizations we reviewed. Ministers and senior departmental officials (deputies and executive committee members) provided a sense of direction from the outset and maintained momentum throughout the reduction process.

2.20 In all seven departments, deputies played a key initial leadership role in preparing, planning and implementing expenditure reduction decisions. In most cases, they established special task structures - which reported to the departmental executive committee and were headed by senior executives - to co-ordinate planning and implementation.

2.21 The following are some illustrations of leadership approaches demonstrated in the departments we examined:

• The Deputy Minister of Environment Canada exercised leadership through both a top-down and a bottom-up approach. He and his senior management team at headquarters developed a Department-wide approach to determining how expenditure reductions would be made under Program Review. Assistant deputy ministers, with regional directors general, managed the bottom-up approach to identifying opportunities for reduction.
• Leadership in the RCMP was best demonstrated by the nature and level of the Commissioner's visibility in all major change and expenditure reduction initiatives across the Force. His visible commitment to change and reduction was particularly important as he led a "Shared Leadership Vision". This was an initiative that sought increased manager and employee input and commitment to the RCMP's mandate, its values and, perhaps most important, the changes and reductions the Force was undergoing.
• In Statistics Canada, the Chief Statistician provided clear direction from the start that expenditure reductions were to be achieved through means such as rethinking and streamlining programs, and other efficiency measures. Senior management was committed to handling reduction initiatives in such a way that employee layoffs and departure incentives would be used only as a last resort.
• In HRDC, unlike other departments, expenditure reduction targets, program priorities and roles were determined by the Cabinet. The majority of the Department's operations had been excluded from Program Review before the February 1995 Budget. As a result, HRDC had about four months - from March to June 1995 - to determine how the expenditure cuts would be implemented. Senior management leadership had to be swift and decisive, given the late start. The Deputy Minister and the Associate Deputy Minister oversaw the development of a new vision, work force reduction plans, a review process and timetables, as well as a system to delegate responsibility for work force reduction decisions across the organization.

Strategic Planning

2.22 Effective reduction initiatives require strategic thinking and analysis. Simply reducing the number of staff or the size of the organization is a short-term solution that is frequently followed by the same or higher levels of resourcing in the long term.

2.23 As we have noted in paragraph 2.15, most departments we examined were already, to varying degrees, rethinking their mission and operations prior to Program Review. Some of these departments retained their previous special planning structures to deal with Program Review. Such strategic initiatives and analyses provided an effective foundation upon which to deal with the challenges of expenditure and work force reduction.

Time frame and size of reductions affected the ability to plan strategically

2.24 In addition to the knowledge departments had gained from previous renewal efforts, the Program Review process itself reinforced a strategic approach. Departments and their ministers were asked to answer six strategic questions that would assist in determining the areas proposed for reduction (Exhibit 2.3)

2.25 Departments also were given three years to implement Program Review. This extended period provided an opportunity to plan and implement reductions more strategically.

2.26 As Program Review began, some departments were better able than others to take advantage of their previous strategic analysis and planning capability. Success was dependent on factors such as the size of their expenditure reduction targets, the amount of time available to plan reductions and the degree of certainty about the extent of reduction. For example, while a short time frame to plan reductions proved advantageous to implementing them swiftly, it also meant that the ability to plan strategically was limited.

2.27 Departments with smaller reduction targets, such as the RCMP, CIDA and StatsCan, were better able than the others to use their previous experience with change. For instance, the RCMP used a set of Force-wide, previously approved reduction guidelines to determine what to cut first. CIDA used its planned work force reductions to adjust the profile of its work force in line with its new policy and program direction. As a result of previous reduction initiatives, StatsCan chose not to use employee departure incentives as the means to meet Program Review reduction requirements.

2.28 The key factor for HRDC was time. Unlike other departments, HRDC had only about four months to plan the $2.8 billion expenditure reduction announced in the February 1995 Budget. This translated into staff cuts of 5,000 full-time equivalents. This time constraint limited the Department's strategic options. From the outset, its expenditure reduction became mainly a budget-driven exercise, with priority areas for reduction set by Cabinet.

2.29 Initially there was little understanding of how the HRDC organization would look in the future or the work force skills that would be required. It was difficult to plan, given the uncertainties about the nature of future business lines and about the impacts of initiatives such as the new Employment Insurance legislation, and the new Service Delivery Network involving the closure of about 150 offices across the country. Other emerging changes, such as increased reliance on information technology, overhead cuts in national and regional headquarters and the new labour agreements with provinces, made strategic planning an even greater challenge.

2.30 NRCan and DND, along with other departments, were affected by uncertain final reduction targets. While NRCan benefited from its experience with previous change initiatives, uncertainty about its Program Review I reduction levels rendered planning more difficult during the months leading up to the 1995 Budget. In DND, the management of reduction initiatives was clearly complicated by continually increasing reduction targets and the corresponding difficulty of defining an end-state structure for the Canadian Forces. National Defence was given four different military reduction targets over the first four years of its reduction program (1991-94). The resulting need to change its plans so frequently hindered its ability to take a strategic approach to downsizing.

Selecting the Best Approach to Work Force Reduction

2.31 Organizations may offer departure incentives to employees affected by work force reduction in order to implement the reductions swiftly, reduce the need for involuntary terminations and minimize labour relations difficulties. At the same time, the implications (including cost implications) of decisions must also be taken into account.

2.32 We examined three areas that relate to selecting the best approach to work force reductions: cost/benefit analysis to determine the need for and content of departure incentive packages; accountability for assessing the cost impact of using employee departure incentives; and selecting the best approach to determining who should receive departure incentives.

The need for departure incentive packages was not well researched in some departments

2.33 Between 1991 and 1995, departments accomplished their staff reductions through the Work Force Adjustment Directive (WFAD) and Executive Employment Transition Policy (EETP). For DND and the RCMP, the situation was somewhat different. Although military members were not covered by the directive, DND believed it had a moral obligation to provide its members with terms and conditions of employment comparable with those of its civilians. The reductions required DND to determine the need for separate departure incentive packages in consultation with the Treasury Board Secretariat.

2.34 Although the need for DND's civilian departure incentive program in 1994 was established on the basis of a sound analytical framework, planning for its military reduction initiative suffered from insufficient front-end analysis, costing and definition. In 1991, DND was faced with the need to reduce the Canadian Forces from 84,000 to 76,000 by March 1995. Its original plan was to accomplish these reductions initially by means of natural attrition, reduced recruiting and the application of existing personnel policies such as the release of personnel at the end of their period of employment. Incentive packages were to be used as a last resort if the other mechanisms were insufficient to accomplish the necessary cuts. However, in late 1991 the Department decided to focus more on offering incentives to accomplish its reductions.

2.35 The decision to focus on incentive payments was based, in part, on the need to reduce personnel in specific military occupations and on DND's perception that it had a moral obligation to afford military staff the same benefits as civilian personnel, who had recently been given employment security as a result of the 1991 changes in the Work Force Adjustment Directive.

2.36 We could find no evidence that the incentive payments option was adequately costed and compared with the costs of alternative downsizing strategies. Our analysis, and that undertaken by DND's Internal Audit, indicated that even with reduced attrition, the targeted reductions for the first three years of the program could have been achieved without the 3,600 incentive packages. However, DND has indicated that without the use of incentives, the resulting Forces would not have consisted of the military trades and occupations necessary for operations. Subsequent government decisions in the 1994 and 1995 Budgets to reduce the Canadian Forces to 60,000 by March 1999 resulted in cuts significantly larger than natural attrition and other traditional methods could accomplish.

2.37 The RCMP believed that it would require departure incentive packages for uniformed and civilian members involuntarily laid off as a result of expenditure reductions. Throughout the development of the incentive package, the RCMP consulted the Treasury Board Secretariat, which recommended that the Force benchmark the size of proposed entitlements to other federal government incentive plans.

2.38 Although the RCMP's decision was based on the rationale that involuntary employee departures would occur as a result of reductions, there was limited analysis to determine the extent to which departure incentives would be required. The RCMP analyzed its traditional tools available to effect reductions but did not prepare a comprehensive needs analysis showing to what extent each of these tools - attrition, recruitment, redeployment, and RCMP Superannuation Act provisions to waive early retirement pension penalties - could be used to meet reduction requirements.

Minimizing the cost of using departure incentive programs was not a departmental priority

2.39 Minimizing the cost of using departure incentives was not an initial priority for the departments that we reviewed. A key reason for this appears to be that a portion of the incentive payments, particularly for those organizations deemed "most affected", was in many instances paid not by the department but through central funding arrangements.

2.40 This is not a new issue. As noted in our 1992 Report chapter, Payments to Employees under the Work Force Adjustment Policy, "Managers made decisions regarding payments in lieu without concerns for cost effectiveness." The chapter asked whether managers would have reacted differently if they had known the full costs of their decisions, and if their own budgets had had to absorb them. Although we have observed more cost awareness than in 1992, the same question is still relevant today. At the start of Program Review, departments focussed primarily on reviewing their programs, identifying areas for reduction, reducing expenditures, meeting reduction targets on time and maintaining fairness and equity in identifying those who would receive departure incentives, not on the costs of those incentives.

The issue of "payback" was not well communicated or always well understood

2.41 As indicated in Chapter 1, Treasury Board Secretariat established a test for cost effectiveness called "payback" to ensure that employee departure incentive costs would not be higher than the reduction in salary and wages. In December 1995, Treasury Board Secretariat indicated that, as a guideline, each department should recover its departure costs from a reduction in their salary, wage and benefits costs over a period of three years ending 31 March, 1998. Following Program Review II, the period of calculation was extended one year.

2.42 The late introduction of the payback test in December 1995 and subsequent changes to the original payback formula did not reinforce departmental accountability for cost effectiveness. For instance, in December 1995, Treasury Board Secretariat estimated the cost of a pension waiver to be $100,000. By that date, 64 percent of all employee departure incentives involving a pension waiver had already been approved for affected employees. A year later, the actuarial estimate increased to $125,000.

2.43 As a result, some departments did not manage rigorously the mix of the various departure incentives and the level of natural attrition. As departments were asked to provide only their reasons for exceeding the payback objective, there was little incentive for them to be concerned about accountability in this area. Departmental managers we interviewed indicated that they continued to have difficulty understanding the concept of payback and their accountability for it.

Volunteering for departure incentives was an accepted departmental practice

2.44 Once work force reduction has been decided on as a means to effect expenditure reduction, public and private organizations follow a number of different approaches. They may:

• call for volunteers and decide which positions to reduce on the basis of employee responses;
• cut specific positions that are considered non-essential to future requirements; or
• use a mixed approach, identifying both surplus positions and employees who wish to leave (volunteers) and then, as a first step, eliminating the positions where there is a match.

2.45 Each of these approaches has advantages and disadvantages. The exclusive use of voluntarism may be seen as the most humane and quickest method to effect reduction, because the people who go are those who want to leave. However, there are numerous disadvantages to using this technique alone. It can create false expectations among employees; there may be a mismatch between those volunteering to leave and the unit or job cuts required; or the organization may lose the best performers, who usually have the least difficulty finding suitable employment elsewhere.

2.46 Voluntarism was used for a variety of reasons. Work force reduction was primarily an involuntary program; that is, its fundamental purpose was to provide departure incentives to employees affected by expenditure reduction. We expected that departments who decided to cut positions and staff would normally identify surplus jobs, grant a departure incentive to the incumbents and then abolish those positions. In situations where a number of similar jobs were affected, departments would consider the use of the mixed approach, matching surplus positions to employees volunteering.

2.47 Some departments we examined (DND, HRDC, NRCan) provided incentives to volunteers. In some cases, the practice was formalized within the organization. In some it was deployed as part of a mixed approach. In others, we identified individual examples of this practice, particularly in executive work force reduction. Several factors have contributed to its use:

• the attractiveness of the financial incentive package offered to employees;
• the additional 15 weeks' cash payment incentive offered by Treasury Board to employees who left before 15 July 1995;
• the use of a system of alternates ("swapping") that allows people who want to leave to swap jobs with people who want to stay;
• the short time frame in which departments had to make reduction decisions;
• the magnitude of the work force reductions required in some departments; and
• the prevailing government objective to ensure peace in the workplace while effecting significant reductions.

2.48 In some departments, we found instances where management did not first identify surplus positions but rather focussed first on employee wishes. For instance, CIDA switched some of its staff who wanted to leave from essential to non-essential positions, which it declared surplus. Those employees were granted departure incentives.

2.49 HRDC approved the departures of the majority of employees who volunteered to leave. At the outset, the focus was on employees, not on positions. The most difficult task for managers was to deny requests for early departures. Our field visit to regional and local offices revealed that there was confusion about work force reduction targets, perceived by managers as "moving targets". In the end, about 600 more departure incentives were given to employees than were required to meet the reduction requirements.

2.50 We estimate the cost of the additional 600 departure incentives to be approximately $50 million. Normally, the wage and salary savings from employee reductions are used to recover the cost of departmental incentives. In this case, HRDC used the savings from these extra cuts (estimated at $23 million) to fund other operational requirements, such as the hiring of additional term employees. From April 1995 to December 1997, the number of term employees increased by 625.

2.51 Some employees who volunteered and were approved for departure had experience and skills that these departments would later require. For instance, in DND, reductions in 1992 and 1993 resulted in shortages in six army combat trades and in vehicle technicians. Increased peacekeeping commitments, as well as inadequate control over the number of applications accepted, contributed to these shortages. A decision in 1995 to approve 1,500 more applications than were required helped to achieve the overall reduction target but resulted in shortages of pilots, naval signalmen, naval radio operators and military police.

Implementation

2.52 Once they have decided to undertake work force reductions, most organizations create a special structure, project team or committee to plan and co-ordinate implementation. Staff of these structures need to be free from operational distractions so they can focus their efforts on the reduction. They are usually under the direction of a senior manager and include personnel from line operations and corporate policy and planning functions.

2.53 In most departments that we reviewed, headquarters set corporate priorities and criteria. Guided by those criteria, sector or field organizations prepared proposals that were reviewed by key stakeholders at headquarters and then reviewed and approved by senior management. Branch and field-level managers implemented the proposals. Several of the departments maintained central implementation teams to facilitate and co-ordinate progress across the department.

2.54 We found that departments generally used existing staff functions in areas such as finance and personnel to co-ordinate and control individual transactions, and to ensure compliance with targets as well as the Treasury Board's Work Force Adjustment Directive. In many organizations, union-management working groups were established to deal with issues stemming from work force reduction initiatives.

2.55 To augment the work of their central teams, decentralized organizations used networks of regional committees. Many of the organizations experienced some initial difficulty acquiring and co-ordinating the necessary financial and human resource information to support work force reduction. As the reduction progressed, however, departments reported improved information systems and reporting.

Communications

2.56 In the climate of uncertainty surrounding any expenditure or work force reduction, it is essential to establish clear and effective lines of communication. A two-way communications strategy is needed to provide employees with accurate and timely information and to receive feedback, questions and concerns.

2.57 Employees need information on the objectives being pursued; management's strategies; how many and in what way employees will be affected; planned arrangements for consultation with employees and their unions; guidelines and procedures that will be followed; and the overall timetable of activities. Employees also need an opportunity to ask questions, contribute ideas and provide frank and open comment.

Communications with employees were well managed

2.58 Departments used a wide variety of communication techniques to ensure that employees were made aware of what was being done, why it was being done and the specific details of various departure initiatives being offered. Employees were given a variety of ways to provide feedback and receive answers to their questions. These included question-and-answer sessions, and fax or telephone numbers that employees could use to receive personalized counselling or responses to their queries.

2.59 Departments used videos, special bulletins and existing newsletters and magazines to ensure that all staff received a consistent message as quickly as possible. Where individual employees had been identified for potential departure, they often received an individualized package of information and met privately with managers and other specialists.

2.60 In most organizations, senior management visited major centres to deliver the message and respond to questions and concerns, in some cases assisted by union personnel. Some departments ran workshops, focus groups and briefing sessions to both give information and receive feedback.

Treating Employees in a Humane and Sensitive Manner

2.61 Work force reduction has a significant impact on those who leave the organization and those who remain. It is essential that senior management endeavour to minimize the negative effects of downsizing on both groups. It is important that management show genuine concern and understanding for those leaving and provide appropriate transition assistance.

2.62 Management and staff who remain need to understand fully how work force reduction will impact on the organization, how the organization will now function and how their work will change. There is a need to pay particular attention to determining how the organization will adapt to the reduced work force; what changes will be made in the operational processes or work design; what the resulting impact will be on the workload of employees; and their capacity to carry out their responsibilities.

Employees were treated humanely and with sensitivity

2.63 The departments we examined provided good examples of humane and sensitive treatment of employees, particularly those who were departing. Some examples include the use of alternates ("swapping"); virtually no involuntary layoffs (RCMP); a departmental policy emphasizing employee needs and interests as a factor in identifying surplus jobs (HRDC); seminars for managers, dealing with the impact on affected employees; training for employees in stress reduction; and transition workshops and job fairs for those leaving (NRCan).

2.64 We found that given the magnitude of the change required and the short time frame allowed, departments generally placed less emphasis on the needs of employees who would remain, particularly during the period of work force reduction. Managers and staff we interviewed in DND indicated that more support had been afforded to those departing than to those staying. Increased workload has emerged as a common concern of many employees who remain in that Department and in others that we reviewed.

2.65 However, some departments did focus on employees who remained. For example, Environment Canada and Statistics Canada used climate surveys or environmental scans to identify staff concerns and elicit employee input and ideas. HRDC created career centres for both departing and remaining employees. In addition, it conducted a number of studies and surveys. NRCan conducted special seminars for employees who remained.

Monitoring and Measuring Progress

General compliance with Treasury Board rules for departure incentive programs

2.66 Monitoring, reviewing and evaluating results achieved is an important ingredient of effective expenditure and work force reduction. Monitoring and evaluation mechanisms are needed to ensure that the change initiative is progressing as planned, the desired results are achieved in a timely and cost-effective way and there is compliance with approved policies and guidelines.

2.67 The Treasury Board Secretariat provided guidelines to departments and a management and accountability framework for departure incentive programs. All departments were expected to be accountable for fulfilling their responsibilities. A series of measures and tools were developed to promote sound management of the programs.

2.68 We examined the extent to which the seven selected departments complied with both the spirit and intent of applicable Treasury Board policies and procedures. We reviewed reports of departmental midterm audits, DND internal audits and Treasury Board-directed audits that covered all departure incentive programs. We reviewed the compliance work of internal audit and, after applying our standards for reliance, came to the conclusion that we could rely on the results.

2.69 A key expectation was that departments would conduct midterm audits of their departure incentive programs. We found that six of the seven departments we reviewed had done so. Statistics Canada did not conduct a midterm audit due to the low number of employee departure incentives granted.

2.70 Our review indicated that the selected departments generally complied with Treasury Board policies and guidelines covering departure incentive programs. However, we noted some deficiencies and areas for improvement, including compliance with rules for executive cash-out programs and controls for monitoring returning employees.

2.71 Since 1992, DND's Internal Audit Division has undertaken comprehensive audits of the Department's human resources management. Among other things, these audits have covered contracting for personnel services, management information systems, military pay and civilian overtime. Internal Audit also conducted a thorough examination of both the military and civilian reduction programs.

2.72 These audits have been crucial to the improvements we observed at DND. Management has recognized the fairness and accuracy of the audits and has responded to the recommendations. Among the appropriate corrective measures undertaken, DND has issued and disseminated a Lessons Learned Report, issued guidelines and monitored post-employment contracts for personnel services, refined eligibility criteria for departure incentives and regularly issued status reports to central agencies and the Department's senior management.

Executive departure programs were generally well managed

2.73 We reviewed the Treasury Board-directed audits of the Executive Employment Transition Policy (EETP) covering five of the selected departments (CIDA, DND, HRDC, Environment, NRCan). Initial concerns about staffing in the Executive category triggered the audits, which examined 74 departure incentives provided to executives between 1 April and 31 December 1995. These audit reports indicated that executive departure programs had been generally well managed. Most paid executive departures had followed the rules; however, the audit reports did note some questionable cases. Six executives received departure incentives after they had been shifted to special assignments, without a corresponding reduction in the established number of executive positions. Three executives received incentive packages while on leave without pay.

Some recipients of departure incentives are returning

2.74 The Treasury Board Secretariat guide on the Public Service Post- Employment Regime, issued on 31 July 1995, outlines the terms, limitations and conditions for those who have received departure incentive packages and later wish to return to the public service as employees or on contract.

2.75 Recipients of departure incentives returning as employees. As indicated in Chapter 1, employees can be rehired or reappointed to positions in the public service, DND and the RCMP. Since July 1995, employees in all organizations returning within the period for which they have received a departure incentive must return, on a pro rata basis, the incentive payment they received. Prior to July 1995, all departments except DND (military) were subject to rules requiring that rehired or reappointed employees repay their departure incentives. Before December 1995, RCMP members were required to repay the remaining value of their incentive payment only if they were re-engaged as a uniformed member. As a general rule, the government does not expect that many former public servants who received departure incentives will return to the public service.

2.76 We noted that between February 1992 and March 1997, about 600 employees who had received a departure incentive were rehired across all departments, DND and the RCMP. The majority (486) were from DND. Of these, 274 were military members who returned to DND as civilians and 73 who returned as military members.

2.77 About 130 of the 600 employees returned within the period covered by the requirement to repay on a pro rata basis the incentive they had received. Most of these rehires (110) were former DND employees. Of these, 75 had returned before Treasury Board established, in July 1995, terms and conditions for the repayment of incentives. National Defence informed us that there was no legal requirement for these employees to repay their incentive payments. This illustrates the importance of having guidelines in place to deal with such situations.

2.78 Of the remainder who returned after 1995, four came back to DND and repaid the appropriate portion of their incentives. In all cases that we examined, the applicable rules were followed. However, we do not know whether the remaining 25 employees rehired in other departments have repaid their incentives as required.

2.79 Recipients of departure incentives returning as contractors. We were also concerned about non-compliance in contracting with recipients of departure incentives. Under the Public Service Post-Employment Regime, former employees are permitted to earn only up to $5,000 during the "window period" (the number of weeks covered by the cash payment they received) for personal services contracts immediately after employment.

2.80 We could not determine the extent to which recipients of departure incentives were returning on contract during the "window period". Unless controls were set up to monitor returning employees, this was difficult to track because an individual could return undetected to the same department or another federal department as an associate or employee of a consulting firm.

2.81 National Defence, for example, concerned that military recipients of departure incentives might have returned to the Department on contract, conducted an internal audit. Although there was no specific tracking system for this purpose, an internal audit analysis was performed to identify departure incentive recipients returning as consultants. Over the two-year period under review, 150 recipients were found to have returned as consultants. However, based on a limited review of a sample of these contracting situations, DND Internal Audit indicated that there was no reason to suggest that the rules concerning post employment or conflict of interest had been contravened.

2.82 Weaknesses in the systems and processes for contracting and post-employment were also identified in departments' midterm internal audit reports. They included a lack of co-ordination between the contracting and human resources divisions and between headquarters and regions to determine whether cashed-out employees were subsequently rehired under contract (DND military, RCMP); and a lack of regular review and monitoring of contracting with former public servants (DND civilian and RCMP).

Results

2.83 We reviewed departmental results of reduction from four perspectives: expenditure and salary and wage trends during the reduction period; departmental work force reduction and the number of employee departure incentives provided; the cost of departure incentives; and the extent to which departments are meeting their reduction targets.

Most departments reduced their expenditure levels

2.84 Exhibit 2.4 outlines actual expenditure trends from 1993-94 to 1996-97 for the sample departments and the government as a whole. Each departmental chart shows net expenditures (excluding transfer payments and public debt charges) and gross salary and wage expenditure trends.

2.85 Net departmental expenditures have been reduced in three of the departments we examined (Environment, DND and NRCan). In others they have either risen (Statistics Canada) or both risen and decreased (RCMP, CIDA, HRDC).

2.86 In the same period, salary and wage expenditures followed a different pattern. In five departments their level rose initially and then fell. Government of Canada net expenditures and salary and wage trends tended to fall after fiscal 1994-95.

Departmental work forces are being reduced

2.87 We also examined departmental changes in the number of indeterminate employees, from before reductions until 31 March 1997. Exhibit 2.5 outlines the trend in each of the sample departments as well as the number of departure incentive packages provided to employees during the same period.

2.88 We found that the number of indeterminate employees in five of the seven departments decreased over the reduction period. Only CIDA and Statistics Canada increased their number of indeterminate employees. In most departments, the number of departure incentives provided to employees exceeded the reduction in the number of indeterminate employees, for such reasons as:

• employees transferred into the department during Program Review (CIDA);
• newly funded initiatives that required additional human resources (Statistics Canada, RCMP);
• the civilianization/reclassification of uniformed positions and replacement of the uniformed incumbents, who departed with an incentive (RCMP); and
• an increase in municipal and provincial contract policing positions by contracting partners (RCMP).

2.89 In DND, however, the reduction in the number of indeterminate employees far exceeded the number of incentive packages provided.

2.90 Exhibit 2.6 summarizes some incremental departure incentive costs to 31 March 1997. The costs of departure incentives varied significantly among the departments selected. The differences can be explained by such factors as the number and type of departure incentives provided by departments, the level of the natural attrition used during reductions, and the profile of departing employees (for example, lower-paid compared with higher-paid employees).

Departments are meeting their reduction targets

2.91 The departments we reviewed met their 1995-96 and 1996-97 expenditure reduction targets. We expect that most of them will be able to meet their reduction targets in each of the remaining two years of Program Review if the government continues its commitment to expenditure reduction targets.

2.92 As indicated in Chapter 1, a key reason for this is that expenditure reductions resulting from Program Review are taken out of departmental budgets at the outset of each fiscal year. In addition, we examined the extent to which departments spent within the budgetary levels prescribed by Treasury Board for these years.

2.93 We reviewed the overall funds available for use (spending authority) for each of the seven departments, and their net actual expenditures, for 1995-96 and 1996-97. "Funds available for use" incorporates all changes in funds available to departments, including budget reductions and moneys for new initiatives. We found that from an expenditure reduction perspective, departments spent within their funding limits over this two-year period.

Impacts

2.94 Fundamental change involves risk: risk that the timing will be wrong, risk that what is planned or required will not occur, risk that unwanted consequences will result, or risk that in the long term, the situation will be worse than the current status quo. Program Review and other changes that were occurring across departments presented such risks. As previously noted, planned targets for departmental expenditure reductions - the primary goal of the Program Review exercise - are being met. In addition, Program Review provided a collective opportunity to change the focus of government and the way it functions.

2.95 Our findings were based on departmental studies, departmental midterm audit reports, and interviews with managers, employees and union representatives. Because Program Review and other departmental change initiatives are still under way, any assessment of the impact of work force reduction must be considered preliminary. However, our audit work provides some immediate insights.

Vital operations were maintained in least affected departments

2.96 Of our seven departments, RCMP, CIDA and Statistics Canada were among the least affected organizations. We found that they possessed both the means and the interest to ensure that vital core operations and activities were not impeded by work force reduction requirements.

2.97 As of March 1997, the majority of the RCMP's work force reductions under Program Review I were in administrative functions. Reductions were also made in airport policing and other peripheral activities, while protecting core policing operations. In addition, the RCMP used other techniques to effect savings in operating expenditures, such as civilianizing positions previously classified as regular uniformed RCMP members. Its Program Review II reductions are being met by eliminating federal funding for policing at Canada's nine international airports. The RCMP is withdrawing from four airports and recovering its costs at the remaining five. Other reductions will be met through other initiatives, including cost recovery.

2.98 Statistics Canada maintained a no-layoff policy, instead achieving required expenditure reductions by reducing or eliminating specific survey activities and reassigning the employees involved or by redesigning automated survey methods. CIDA made cuts both to its aid disbursements abroad and to its operating and salary and wage budgets, the latter representing the smaller cuts.

2.99 Before Program Review, both CIDA and the RCMP had fundamentally changed the way they were organized and operated. These long-term initiatives remained a departmental priority even as Program Review cuts were announced. In effect, Program Review requirements accelerated the implementation of existing departmental change initiatives.

Some operational impacts were noted

2.100 Staff we interviewed in NRCan, HRDC, Environment Canada and DND identified some significant operational impacts as a result of Program Review reductions. For example, the rate at which Environment Canada's Weather Service accelerated its planned automation and the consolidation of a number of its weather offices reduced its ability to meet certain World Meteorological Organization guidelines.

2.101 Some scientists in NRCan indicated that as a result of reductions, they no longer have the funds and technical staff they need. Others worried that the loss of some key senior scientists may negatively affect their organization's reputation and, as a result, its ability to attract needed funding.

2.102 While HRDC has reported some improvement in its overall level of productivity, there have been some indications of operational problems as a result of work force reduction. The departure of experienced employees and the closing of several offices have, to some extent, affected the level of personalized service to clients. Some managers informed us that office closures have, in some instances, increased clients' waiting time for personalized service.

2.103 National Defence also experienced a change in the Canadian Forces' ability to operate at normal capacity after large reductions in strength and unforeseen peacekeeping demands, which led to some undermanning of key military occupational groups. Internal audit reports indicated that the first two years of reductions in DND caused some shortages in six army combat trades and in vehicle technicians. Similar problems occurred in 1995 with pilots, naval signalmen, naval radio operators and military police. As a result, some additional recruiting was required.

2.104 Expenditure reductions have left many departments with less funds and fewer staff to meet new and changing priorities. The financial flexibility they had in the past to meet these challenges has been greatly diminished. Departments are engaged more than ever in making choices among programs and projects they can no longer fund, practices and processes they can no longer follow, and services they will have to provide either differently or not at all.

2.105 NRCan provides an example of the impact of lost financial flexibility. During 1997, the Department reprofiled its budget allocations to accommodate re-engineering and other initiatives, leading to further downsizing. Unions strongly objected and employee reaction was negative, although departure incentives were still available.

Departments understand their programs and operations better

2.106 Most of the departments we reviewed indicated that Program Review has made it possible for their managers to better understand their programs, operations and activities, how they function and what they contribute. As a result, in many instances these departments have taken the first step toward better handling of the Expenditure Management System, business planning and performance reporting.

Human resource impacts of work force reduction

2.107 We identified some preliminary human resource issues as a result of our audit work in the seven departments and our review of midterm audit reports of 30 other departments. In summary, we found:

• low employee morale;
• lower levels of employee trust in their management and loyalty to their organizations;
• the loss of needed employee skills and experience;
• increased workload per employee; and
• higher levels of employee uncertainty about the future direction of the public service and their departments.

2.108 Some managers and employees in NRCan, Environment Canada and HRDC identified an overall increase in workload per employee. Shortages of skilled and experienced employees were identified in DND, HRDC, Environment Canada and NRCan. Employee uncertainty about their future and that of their organizations has increased in some departments, due in part to shifting reduction targets. While all of these factors impact adversely on employee morale, the effects of continuing circumstances such as fiscal restraint and salary freezes before and during this period cannot be discounted.

2.109 However, we also received positive comments on the human resource impact of work force reduction. Employees and union representatives in some departments praised management's handling of reductions. Very few grievances were filed in the seven organizations. Managers also noted that work force reduction and financial incentives have created an opportunity to renew and restructure the work force by releasing employees considered unsuitable for future responsibilities in the changed departmental structure.

Work force age distribution has changed in departments

2.110 We examined the age distribution of the seven departments both before work force reduction and as of 31 March 1997. We found that departmental work forces have generally become more middle-aged. In 1997 there were proportionally fewer employees below age 40 than five years ago. For example, DND's under-40 civilian work force has decreased since 1992 by about seven percent, while the number of employees between 40 and 50 has increased by 15 percent. This change is consistent with the fact that about one in three departures was by an employee either younger than 40 years or 60 and older.

Some departmental occupational groups have been significantly reduced

2.111 Our review of selected departments reveals that some occupational groups have been significantly affected by work force reductions from March 1995 to March 1997.

• The Administrative Services Group was reduced by 22 and 19 percent in HRDC and NRCan respectively.
• The Clerical and Regulatory Group decreased by 31 and 22 percent in NRCan and HRDC.
• The Secretarial Group was reduced by 44, 40, 29 and 21 percent respectively in HRDC, NRCan, RCMP (public servants) and Environment.
• DND civilian administrative support and operational groups were reduced by about 30 percent.

2.112 We also noted that the Executive group at NRCan has been reduced by 29 percent since 1995. Since 1992, the upper rank levels in DND (lieutenant colonel and above) have decreased by 24 percent. Our review of Treasury Board Secretariat data concerning Natural Resources Canada and Environment Canada, two major science-based departments, reveals that since 1994 the number of indeterminate employees in their science and technology groups has been reduced by about 23 percent. The total impact will not be known until the end of Program Review in 1998-99.

Conclusion

Lessons Learned and Recommendations

Reduction initiatives need effective management

2.113 Our review of departmental leadership as well as planning and implementation practices confirmed that expenditure and work force reductions require effective management. We found leadership and strong senior management involvement in the seven departments selected. Any change process of the magnitude of Program Review requires continuing political commitment and leadership at the top to ensure that goals are met and direction is maintained.

Readiness for change is an advantage

2.114 The management of change is now , more than ever, an integral part of ensuring survival in both the public and private sectors. The operating cultures of many organizations are shifting to embrace change as a prerequisite to continued organizational viability. Departments that we examined are also undergoing this change in management culture and recognizing the need for ongoing mechanisms to deal with it.

2.115 Strategic planning was an important mechanism for managing departmental reduction effectively. Departments that had already been rethinking their operations and organizational structures were better able to make effective use of the limited time available to plan for expenditure reductions. They were also able to integrate their reduction initiatives with their re-engineering efforts.

2.116 Some of our sample departments were already engaged in advanced planning and preparation at the outset of Program Review. Statistics Canada provided a good illustration of ongoing structural readiness for change as it had altered its planning, operating and monitoring infrastructure in order to cope with the degree of continuing change it anticipated.

2.117 In our view, Program Review gave most departments enough time (three years) to carry out each phase of required reductions, a feature that increased departmental planning options and allowed for a longer-term approach and a more orderly transition process.

More emphasis on costs is needed

2.118 Departmental priorities have clearly been focussed on meeting reduction targets in a humane and timely manner, while placing less emphasis on cost management. The lack of emphasis on cost management, coupled with the number and value of departure incentives offered to employees, contributed to higher than expected costs of reduction in some departments.

2.119 In our view, the Treasury Board Secretariat could have done more to ensure that departments were fully accountable for their use of costly employee departure incentive packages. While the concept of "payback" was sound, there were several concerns about the way it was designed, applied and calculated at the departmental level. We have found some improvement since our 1992 audit, but departments continue to put limited emphasis on the costs associated with reducing their work forces.

2.120 In future, Treasury Board Secretariat needs to work more closely with departments to ensure that they strike an appropriate balance between meeting reduction targets in a humane and timely manner and managing the costs of reduction programs.

2.121 At the end of Program Review, Treasury Board Secretariat should work with departments to determine final work force reduction costs and final reductions in salary and wage expenditures. Treasury Board Secretariat should ensure that Parliament is fully informed.

Treasury Board Secretariat's response : Departments are reporting work force reduction costs and expenditure reductions to us on an ongoing basis. We accept that we will report, comprehensively, at the end of Program Review, scheduled for March 1999.

2.122 Good management relies on timely, accurate information. Reduction initiatives are not alone in their need to be supported by information. Any complex decision-making process must have access to sound data. We found that departments had some initial problems identifying and providing the necessary financial and human resource information. Departments that were already changing or reducing their organizations when Program Review began had ready access to relevant management information that supported them in handling requirements for reduction. Others had to build this capability over time.

2.123 As an important first step in any future change initiative of this magnitude, departments should ensure that they have the necessary financial and human resource information available on an ongoing basis.

Treasury Board Secretariat's response : The Treasury Board Secretariat will continue to ensure that financial and human resource information systems are adequate to meet management and reporting requirements. In co-operation with departments, we will make required improvements and departments will be given greater access to integrated data bases developed at the Treasury Board Secretariat.

Need for a sustainable and adaptable work force to meet future challenges

2.124 In light of ongoing reduction activities as well as other departmental changes, it is essential that departments continue their efforts to identify and assess the impact of recent reductions on the composition and capability of their work forces. The loss of both younger and older employees presents specific challenges for the future. Some key aspects to examine would include the change in overall levels of employee experience and competency, vulnerability to future losses arising from attrition and retirement, and the need for different and accelerated recruitment strategies.

2.125 In 1997, the Privy Council Office launched a public-service-wide program called La Relève. Its purpose is not only to address long-standing human resource issues but also to deal with the consequences of work force reductions under Program Review. Its ultimate goal is to revitalize the federal public service as an institution.

2.126 Departments should continue to examine the impact of expenditure reductions on the composition and competency profile of their current work forces and prepare plans to meet identified future challenges.

Treasury Board Secretariat's response : La Relève has brought an enhanced awareness to the Human Resource Planning imperative and the need to support employees so they will continue to provide high-quality services to the Canadian taxpayers.

Need for priority in dealing with human resource impacts of reduction

2.127 Generally, the departments we examined were good examples of fair and sensitive treatment of departing employees. However, the remaining work force may be vulnerable. In her Fourth Annual Report to the Prime Minister on the Public Service of Canada (1997), the Clerk of the Privy Council speaks of a "quiet crisis under way in the public service today", fueled in part by the results of the recent work force reductions. Our audit findings on human resource impacts, particularly in the most affected departments, support that concern.

2.128 Management and employee concerns about the loss of experience and qualified employees, the perceived high level of workload per employee and uncertainty about future departmental direction best characterize the current mood in these departments.

2.129 Management now needs to focus on the employees remaining after the reductions have taken place. In general, this will require focussing on the remaining departmental work force from the perspective of changes in work processes, employee retraining and future workload and productivity requirements.

---

About the Audit

Objectives

• To determine the extent to which announced targets for expenditure reduction or, where specified, work force reduction have been or are likely to be achieved.
• To identify the cost of work force reductions and to determine the extent to which the initiatives resulted in savings.
• To assess the extent to which departure incentive programs were managed in accordance with relevant policies, directives or guidelines.
• To identify lessons learned for possible application in the future.

Scope

We examined expenditure and work force reduction efforts at both the central agency and departmental levels from the perspective of leadership, accountability, planning, implementation, cost, results and the impacts on departments and employees.

We reviewed the evolution of expenditure and work force reductions over the years, with an emphasis on the management and results of expenditure and work force reductions announced since 1995, in the context of Program Review. Our audit covered the departure incentive programs described in summary in Chapter 1, Appendix A, including the Work Force Adjustment Directive (WFAD), Force Reduction Programs (FRP), the Civilian Reduction Program (CRP), the Early Retirement Incentive (ERI), the Early Departure Incentive (EDI), the RCMP Work Force Adjustment and the Executive Employment Transition Policy (EETP). We also considered the results of work force reductions due to privatization and devolution.

In Chapter 1, we report on activities of central agencies, including the Department of Finance, the Treasury Board Secretariat, and the Privy Council Office in relation to expenditure and work force reductions. We examine issues such as central planning, direction and guidance, the management and accountability framework, and the achievement of overall results. The rationales for the expenditure reduction decisions themselves were excluded from the scope of our audit, as was the evaluation of the effects of work force reductions on individuals who had already left.

In Chapter 2, we review the implementation and management of expenditure and work force reductions in seven departments selected for detailed audit work. The departments were the Canadian International Development Agency, Environment Canada, Human Resources Development Canada, National Defence (military and civilian), Natural Resources Canada, the Royal Canadian Mounted Police (members and civilians), and Statistics Canada.

Criteria

The criteria used in this audit were drawn from Treasury Board Secretariat policies, directives and guidelines as well as best practices from public and private sector experience with expenditure and work force reductions.

We expected:

• goals, objectives and parameters of expenditure/work force reduction initiatives to be clear and consistent with government intent;
• appropriate rationales to be prepared in support of reduction decisions;
• roles, responsibilities and accountabilities to be clearly identified and communicated;
• central agency officials and senior departmental officials to clarify in a timely manner reduction initiative expectations and procedures;
• plans to be in place to ensure effective implementation of reductions at both the departmental and service-wide levels;
• appropriate mechanisms to be in place to monitor progress, and adjustments to be made where required;
• reductions to be made in accordance with the spirit and intent of relevant central agency and departmental policies and directives, including guidelines on ethics and conflict of interest;
• results to be periodically evaluated and reviewed, and corrective action taken where indicated;
• expenditure reductions, work force reductions and savings to be consistent with approved target expectations;
• impact of reductions to be identified; and
• results, including work force reductions, costs, savings and effects, to be reported to appropriate authorities.

Approach

We focussed our examination primarily on actual government and departmental expenditure and work force reductions covering the period from April 1995 to March 1997 and, to some extent, those estimated up to March 1998. In the case of the Department of National Defence, our audit work included the period from 1991 to 1997, to cover both the Force Reduction and the Civilian Reduction programs. Our audit of RCMP covered the period from April 1994 to March 1997. Where appropriate and to the extent possible, we have relied upon audit work conducted on behalf of central agencies and in departments that we examined.

We gained an understanding of the evolution and history of expenditure/work force reduction since its inception in the 1960s. We reviewed the best practices related to reduction initiatives in both the public and the private sectors in Canada, as well as in the United States, Australia and New Zealand.

Our audit work included interviews, reviews of documentation, and analysis of information contained in numerous information systems managed by the Treasury Board Secretariat, the Department of National Defence or Public Works and Government Services Canada. Where appropriate, we have also drawn from relevant audits or follow-up work performed by this Office.

Audit Team for Chapters 1 and 2

Assistant Auditor General: Maria Barrados
Principals: Jacques Goyer and Ron Wolchuk

Louis Bisson Claude Brunette Janique Caron Sophie Chen Denise Coudry-Batalla Martin Dompierre Judith Farley Catherine Gendron Ernie Glaude Lilian Goh

John Holmes Manfred Kühnapfel Annie Lavoie Jacques Leduc Gerald Rosinski Yvon Roy Don J. Smith Alain Soublière Chantal Thibaudeau Dan Thompson

For information, please contact Jacques Goyer (Chapter 1) or Ron Wolchuk (Chapter 2).