Section III - Response to Parliamentary Committees and External Audits - DPR - 2013-14

Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

Sixth Report of the Standing Committee on Public Accounts, Chapter 3, Reserve Force Pension Plan – National Defence, of the 2011 Spring Report of the Auditor General of Canada

April 2012

The Standing Committee on Public Accounts examined the Office of the Auditor General of Canada chapter and made two recommendations that involved National Defence.

Original report

Government response

Committee recommendation:

1. That the Department of National Defence (DND) report to the Public Accounts Committee, by December 31, 2012, the status of all action plan items targeted for completion in 2012, as indicated in DND’s Management Action Plan.

2. That DND provide to the Committee a progress report on the status of the pension plan file backlog at the end of each calendar year, in order to determine if DND remedial actions have been effective to date and to determine if the 2017 target date for closing the pension backlog is achievable.

Government response:

Reservists are a vital part of the Canadian Armed Forces and are instrumental to their success at home and abroad. Since the introduction of the Reserve Force Pension Plan in 2007, National Defence has worked to refine service delivery and ensure that reservists receive pension benefits comparable to those of their Regular Force counterparts.

National Defence continues to address the Auditor General’s recommendations and enhance service delivery through the management action plan. Indeed, since the Committee hearing in December, the department had processed an additional 275 applications as of March 31st, 2012. Building on this momentum, the department will continue to seek efficiencies and make every effort to eliminate the backlog by 2017.

The Government shares the Committee’s views on the importance of the Reserve Force Pension Plan and accepts both of the Committee’s recommendations. Accordingly, National Defence will report to the Committee on the status of all action plan items targeted for completion in 2012, and provide the first annual progress update on the status of the pension plan file backlog, by December 31st, 2012.

Status Update

In May 2014, DND provided the Public Accounts Committee with a progress report on the Management Action Plan, based on progress as of 30 November 2013. This report indicated that all action plan items had been completed with the exception of the service election backlog and Military Pension Renewal Project documents, which are still in progress.

In that same report, DND provided a progress update on the status of the pension file backlog. As of 31 May 2014, a total of 3,901 files had been completed and DND is on-track to meet the 2017 closing date.

Response to Parliamentary Committees

Fourteenth Report of the Standing Committee on Public Accounts, Public Account of Canada 2012

June 2013

The Standing Committee on Public Accounts examined Public Accounts of Canada 2012 and made one recommendation that involved National Defence.

Original report

Government response

Committee recommendation:

1. That by September 30, 2013 the Department of National Defence (DND) provide the Standing Committee on Public Accounts with a plan, including specific initiatives and timelines, of how it intends to improve the proper recording and valuation of its inventory and asset-pooled items.

Government response:

The Government of Canada appreciates the work of the Standing Committee on Public Accounts and the Office of the Auditor General to address the issue of inventory management at National Defence. The Government of Canada supports the recommendation of the Committee and remains committed to continually improve upon the way it does business to achieve efficiencies, ensure transparency and accountability, and ensure the effective stewardship of public resources in line with Canadians’ expectations.

National Defence is aware of the importance of improving its inventory management practices and is committed to addressing the challenges identified by the Standing Committee on Public Accounts to more accurately account for the large volume of inventory and asset-pooled items it controls. That is why National Defence has adopted a deliberate, integrated and systematic approach to improve its inventory management practices.

Status Update

The Government tabled its response to the Committee’s report on October 16, 2013. DND remains on target to implement its new inventory management system by 2016-17.

Response to Parliamentary Committees

First Report of the Standing Committee on Public Accounts, 40th Parliament, 2nd Session, “Chapter 4, Military Health Care – National Defence of the October 2007 Report of the Auditor General of Canada.”

February 2009

Original report

Government response

Committee recommendation:

2. National Defence to provide information in its annual Departmental Performance Report (DPR) on the aggregate costs of the military health care system, as well as the number of physicians, nurses, pharmacists, medical technicians and physician's assistants employed in that system.

Government response:

The Government accepts this recommendation. DND will report this information in the Fiscal Year (FY) 2009-10 DPR. In future years, DND will also look for other ways to make this information available to the public.

Status Update:

The FY 2013-14 budget for Health Services is $416.3 million which represents the majority of the expected expenditures for the CAF health care system, noting that it excludes pay for Regular force military members and costs for current operations.

In FY 2013-14, the military health care system consisted of 324 Physicians, 566 Nurses, 121 Pharmacists, 2258 Medical Technicians and 222 Physician Assistants from the Regular Force, Reserve Force and Public Service.

Response to Parliamentary Committees

Eleventh Report of the Standing Committee on Public Accounts, 39th Parliament, 1st Session, “Chapter 2 of the May 2006 Report of the Auditor General of Canada on National Defence – Military Recruiting and Retention.”

December 2006

Original report

Government response

Committee recommendation:

8. The Department of National Defence determine the rate of attrition for female members of the Canadian Armed Forces and, in its exit surveys, seek to establish which factors prompt female members to leave the Forces before full service is completed. The results, along with corrective measures taken to encourage women to complete their full service should be reported in the Department's annual Performance Reports, beginning with the Report for the period ending 31 March 2008.

Government response:

A comprehensive survey analysis that will be conducted in the fall of 2007 will allow the Government to better understand the reasons female members of the Canadian Armed Forces decide to leave the military. Should trends be identified that indicate a need for change, the Government will initiate appropriate corrective measures. The results of this survey analysis, together with any corrective measures undertaken, will be reported in the DPR, beginning with the report for the period ending 31 March 2008.

Status Update:

Attrition research continues to include research focussed on attrition and retention of women in the CAF. A comprehensive 20 year comparison of overall male and female attrition rates is included in the Annual Reports on Regular Force Attrition (FY 2007-08 and 2011-12 (in progress)). In addition, research is underway to compare attrition/retention patterns of men and women by occupation group and career phase, and during basic training.

In support of the CAF Retention Strategy, the CAF Retention Survey and CAF Exit Survey continue to be administered to gather data on turnover intentions of CAF personnel. The physical fitness requirements for military service have been a key factor in loss rates for both men and women during basic training, but even more so for women. While remedial training has been in place for some time, additional measures being trialled at the CAF Leadership and Recruit School show promise in substantially improving women’s success rates in meeting physical fitness standards and thereby their success rates in basic training.

Female Attrition Rates for the CAF Regular Force
Fiscal Year (FY) Officers Non-Commissioned Members
2002-03 6.5% 6.7%
2003-04 6.6% 6.5%
2004-05 5.4% 6.3%
2005-06 6.0% 6.2%
2006-07 5.0% 8.1%
2007-08 6.9% 9.8%
2008-09 6.1% 8.6%
2009-10 7.3% 8.9%
2010-11 5.4% 7.3%
2011-12 4.9% 6.1%
2012-13 4.4% 6.4%
2013-14 5.6% 7.5%

The attrition rate for women in FY 2013-14 was very close to that for men.

Committee recommendation:

9. The Department of National Defence begin to report the results of the exit surveys it conducts among members of the Canadian Armed Forces in its Departmental Performance Reports (DPR) beginning with the Report for the period ending 31 March 2007. References to the methodology and scope of the surveys should be included.

Government response:

The Department of National Defence will ensure that the information identified in this recommendation is included in its annual DPR. However, since the comprehensive analysis of survey results will not commence until the fall of 2007, the reporting of these results can only begin with the report for the period ending 31 March 2008.

Status Update

The Exit Survey is given to all Regular Force members who are leaving the CAF voluntarily. Survey completion is voluntary. The objective of the analysis of Exit Survey data is to assess departing members' satisfaction with several organizational issues as well as to determine the extent to which these organizational issues and dissatisfiers influence their decision to leave the CAF. Analyses of 2008-11 data indicate that, although none of the organizational issues were identified as salient dissatisfiers or strong influential factors on members’ decisions to leave, the areas of greatest concern included concerns over work-life balance, the effects of postings and deployments on families, and the career management system.

As well, the CAF Retention Survey, which is administered biennially, is used to provide information regarding work and organizational factors that influence retention and attrition of CAF personnel. Results of the 2012 survey indicate that CAF personnel are satisfied with most of the work and organizational variables assessed. Respondents most frequently cited job satisfaction, satisfaction with pay, benefits and pension, job security/stability, and family obligations as contributing to their decisions to stay in the CAF. Areas identified as needing some additional focus included perceptions of organizational support, recognition, fairness and consistency in the way decisions are made, satisfaction with second language training, career management and work-life balance. Further, respondents reported that they chose to stay in the CAF because they experienced a sense of pride associated with being in the military and that working for the CAF allowed them to serve their country. Preparations for the administration of the 2014 Retention survey have commenced.

Committee recommendation:

10. That the Department of National Defence establish a target for the maximum acceptable rate of attrition of its trained effective strength and monitor the performance of the package of measures it has instituted to meet that target. The Department should begin to report its progress in its annual DPR beginning with the report ending 31 March 2007.

Government response:

The Government will include data regarding attrition rates in the Department of National Defence annual Departmental Performance Report beginning with the report ending 31 March 2007. However, the data will be based on trend analysis as opposed to pre-determined targets.

Status Update:

Due to the number of factors influencing attrition that are beyond the control of the CAF, including the state of the Canadian economy, instead of establishing a target for the maximum acceptable rate of attrition of its Trained Effective Strength (TES), the CAF closely monitors all aspects of attrition and uses statistical modelling to forecast attrition for each occupation for each fiscal year. These forecasts are used in formal, structured processes to determine the number of personnel who need to be recruited for each occupation for each fiscal year, and are published as the Strategic Intake Plan (SIP). During the reporting period, actual recruiting and attrition are monitored on a month-by-month basis and the Strategic Intake Plan is adjusted as required.

Since reaching its historical low in FY 2011-12, the attrition rate has increased for the past two years; however, it remains close to the average value that has been observed since the late 1990s. It is expected to remain the same or increase slightly in FY 2014-15, before declining again. As a result of several retention initiatives targeted at high-loss stages of service and reduced pressures on the recruiting and training systems, most occupations are either at their authorized strength levels or have sufficient personnel in the training pipeline to make up current shortages. The overall trained strength of the Regular Force has been steady and at the end of FY 2013-14, was at 57,449 in relation to the trained establishment requirement of 60,418.

Attrition Rates for the CAF Regular Force
Fiscal Year (FY) Trained Officers Trained Non-Commissioned Members

Overall CAF: Trained and Untrained

2002-03

4.9%

6.4%

6.4%

2003-04

4.5%

6.3%

6.1%

2004-05

4.5%

7.1%

6.7%

2005-06

5.4%

6.8%

6.8%

2006-07

6.3%

8.0%

8.3%

2007-08

6.8%

8.3%

9.1%

2008-09

7.7%

8.9%

9.1%

2009-10

6.3%

7.1%

7.6%

2010-11 5.3%

6.8%

6.6%

2011-12

5.4%

6.5%

6.0%

2012-13

5.2%

7.2%

6.6%

2013-14

5.5%

7.2%

7.3%

The attrition rates above were calculated based on data obtained from the Human Resources Management System (HRMS) in April 2014. Note that the attrition rates calculated for FY 2013-14 may still change as the data are updated in HRMS.

Response to Parliamentary Committees

Fifteenth Report of the Standing Committee on Public Accounts, 39th Parliament, 1st Session, “Chapter 5 – Relocating Members of the Canadian Armed Forces, RCMP, and Federal Public Service of the November 2006 Report of the Auditor General of Canada.”

May 2007

Original report

Government response

Committee recommendation:

5. That the Department of National Defence, the Royal Canadian Mounted Police, and Treasury Board Secretariat include, in their annual DPR, references to the Integrated Relocation-Program as it relates to their employees. Information on the numbers of employees using the Program, the costs, and the extent to which the purposes of the Program are being achieved must be included. This performance information must be included in DPRs beginning with Reports for the period ending 31 March 2008.

Government response:

The Government accepts this recommendation.

Status Update:

The purpose of the Integrated Relocation Program (IRP) is to relocate CAF personnel and their families in the most efficient fashion and at the most reasonable cost to the public while having a minimum detrimental effect on the employee and family, and on departmental operations.

In 2013-14, the following moves were coordinated through the Brookfield Global Relocation Services (GRS), by quarter:

FY 2013-14 Total 11073

2013-Q2

5550

April

3061

May

1408

June

1081

2013-Q3

1821

July

700

August

631

September

490

2013-Q4

1635

October

657

November

588

December

390

2013 Total

9006

2014-Q1

2067

January

466

February

401

March

1200

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)

The DND/CAF was involved in five Auditor General (AG) audits completed during FY 2013-14:

Chapter 2 of the spring 2013 tabling, entitled Security in Contracting;

Chapter 7 of the spring 2013 report, entitled Federal Search and Rescue Activities;

Chapter 3 of the fall 2013 report, entitled National Shipbuilding Procurement Strategy; and

Chapters 4 and 8 of the 2013 spring report, entitled Official Development Assistance through Multilateral Organizations, and Spending on the Public Security and Anti-Terrorism Initiative, respectively, also contained minor references to DND/CAF.

In the Security in Contracting chapter, the AG completed a follow-up to a 2007 AG audit, and assessed progress made by Treasury Board Secretariat (TBS), Public Works and Government Services Canada (PWGSC), and selected departments and agencies, in addressing the issues identified in the 2007 audit. There had been two recommendations from the 2007 report directed at DND. The AG report concluded that, while a number of improvements have been made since the 2007 audit, some significant weaknesses still remain. Of the total of ten 2007 recommendations, the current audit assessed seven as having made satisfactory progress (one of these involved DND), two as unsatisfactory, and one as satisfactory for RCMP but unsatisfactory for DND. With respect to the Industrial Security Program, departmental processes related to identifying the security requirement for contracts have been implemented. With respect to other recommendations from the 2007 report dealing with departmental policies and procedures and the completion of Security Requirements Check List (DND and Defence Construction Canada (DCC)), progress has been made on recommendations directed at RCMP and DCC, while progress at DND has been varied. This link is to the complete audit report, including recommendations:

http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_02_e_38187.html

In the chapter on Federal Search and Rescue (SAR) Activities, the report concludes that the CAF and Canadian Coast Guard (CCG) adequately respond to air and marine SAR incidents and have met minimum established standards of readiness for federal SAR. However, risks to the ability to continue to adequately respond to SAR incidents are emphasized, due to the challenges to the availability of SAR personnel and equipment, and a SAR information system in need of replacement. This report also concludes that there is no coordinated federal prevention strategy to reduce the number and severity of SAR incidents and that the SAR New Initiatives Fund, which is administered by the National Search and Rescue Secretariat (NSS), needs to be improved. While CCG and CAF operational-level roles and responsibilities are clear, the lack of a formal policy presents challenges for coordinating, planning, monitoring, analyzing and reporting on SAR activities. Six of the nine recommendations in the report are directed at National Defence, including NSS. The recommendations can be found through the following link to the complete audit report:

http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_07_e_38192.html

The fall 2013 report, entitled the National Shipbuilding Procurement Strategy (NSPS), reported that DND, PWGSC, Industry Canada and the Department of Fisheries and Oceans had designed and were managing the NSPS in a way that should help sustain Canadian shipbuilding capacity and capability. In addition, the AG concluded that the current approach should help the government to procure federal ships in a timely, affordable manner, consistent with the “build in Canada” shipbuilding policy, and also made several positive points about the competitive process for selecting the two shipyards. The AG also reported, however, that changes were made to the draft umbrella agreements after the selection process to allow shipyards to be compensated for their capital investments should a project be cancelled, delayed or reduced in scope, and concluded that these later changes were not consistent with the original Request for Proposal. The AG reported that not all performance measures for the NSPS are in place, and that there is a risk that Canada will not acquire ships in an affordable manner, since the strategy does not include a provision for the regular monitoring of the expected additional costs or benefits to Canada. Furthermore, the AG noted that the budgets for the three ships examined during the audit (Arctic Offshore Patrol Ship, Joint Support Ship, and the Canadian Surface Combatant) had not been adjusted since being established as rough estimates early in the planning, and, as a result, that DND has had to reduce the expected number and capability of the military ships to remain within the budget caps. This audit report contained three recommendations directed at DND/CAF and PWGSC, which can be found through the following link to the entire report:

http://www.oag-bvg.gc.ca/internet/English/parl_oag_201311_03_e_38797.html

In the spring 2013 report, which focussed on Official Development Assistance (ODA) spending through multilateral organizations, there were no specific recommendations directed at DND/CAF. There was minimal involvement of DND in this audit due to the limited attribution of DND expenditures to ODA. The report notes, in an exhibit of ODA spending by department, that DND expenditures attributable to ODA for FY 2010-11 were $16.5 M and that none of these expenditures were through multilateral organizations. A link to the entire report is included here: http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_04_e_38189.html

An overall objective of the spring 2013 audit report on Public Security and Anti-terrorism Initiative (PSAT) was to determine whether the reporting of funds allocated and spent under the PSAT initiative was complete and consistent with the PSAT objectives and themes. As part of the audit, departments including DND, were asked to validate the information received from TBS with respect to the PSAT annual reports and evaluations completed by each department and agency. DND was also involved in a separate audit sample for two of the approximately 40 annual PSAT reports that the OAG reviewed in detail. There were no recommendations directed at DND/CAF from this report. The entire report can be found at: http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_08_e_38193.html

External audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages

There was one Public Service Commission audit completed and reported in the fiscal year ending 31 March 2014. This audit covers DND’s appointment activities for the period between October 1, 2011, and September 30, 2012. There were 5 recommendations resulting from this audit for DND. The entire report can be found at http://www.psc-cfp.gc.ca/adt-vrf/rprt/2013/ar-rv/13-dnd-mdn/index-eng.htm, Audit reports 2012-2013: 13 – Audit of the Department of National Defence.

There were no external audits by the Office of the Commissioner of Official Languages completed and reported in the year ending 31 March 2014.

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