Follow-up Audit of the Temporary Foreign Worker Program

From: Employment and Social Development Canada

Official title: Follow-up Audit on the Temporary Foreign Worker Program

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List of acronyms

EI
Employment Insurance
ESDC
Employment and Social Development Canada
IAS
Internal Audit Services
ISA
Information Sharing Agreement
ISB
Integrity Services Branch
LMCC
Labour Market Conditions in Canada
LMI
Labour Market Information
LMIA
Labour Market Impact Assessment
MAP
Management Action Plan
NQMP
National Quality Monitoring Program
OAG
Office of the Auditor General
PIP
Performance Information Profile
PO
Program Officer
POB
Program Operations Branch
RLMA
Recent Labour Market Assessment
RoE
Record of Employment
SEB
Skills and Employment Branch
TFW
Temporary Foreign Worker
TFWP
Temporary Foreign Worker Program

1. Background

1.1 Context

The Office of the Auditor General (OAG) conducted an audit on the Temporary Foreign Worker Program (TFWP) at Employment and Social Development Canada (ESDC) in 2017 and made some observations regarding the management of the program.

The OAG found that:

While the OAG audit concluded that ESDC implemented measures that helped reduce the number of temporary foreign workers (TFWs), the auditors determined that the Department did not do enough to ensure that employers hired TFWs only as a last resort. The Department was found to rely largely on the information provided by employers to determine whether the need for TFWs was justified. ESDC developed a Management Action Plan (MAP) to address the ten OAG recommendations issued to the Department.

A commitment was made by the Department to the Public Accounts Committee to conduct an assessment of the implementation of the MAPs. A progress assessment on the implementation of the MAP responding to the OAG audit of the TFWP was undertaken by Internal Audit Services (IAS) to review progress by the Integrity Services Branch (ISB), the Program Operations Branch (POB), Skills and Employment Branch (SEB) and ESDC regions.

1.2 Audit objectives

The objectives of the follow-up audit were to:

1.3 Scope

The scope of this follow-up audit focused on the implementation progress and the effectiveness of the activities identified in the approved MAPs in addressing the 2017 OAG recommendations. The scope of the audit included the four quarters of 2018 to 2019 and the first quarter of 2019 to 2020.

The audit team conducted fieldwork and audit activities at National Headquarters within ISB, POB, SEB and at the regional offices.

A random sample of 175 Labour Market Impact Assessment (LMIA) applications and 56 inspections were selected from the following 7 TFWP application types:

1.4 Methodology

This follow-up audit was conducted using a number of methodologies and techniques which have included (but are not limited to): 

2. Management action plan assessment

OAG recommendation 5.41:

ESDC should review current policies, guidance, and processes to identify opportunities to strengthen the assessment of employers’ recruitment efforts. The Department should ensure that TFWP officers can more fully verify the accuracy of employers’ statements and that employers use the program only as a last resort.

Overall assessment: partially implemented

Actions:

1. review of current recruitment policies

Status:

completed

Actions:

2. revise recruitment policies

Status

completed

Actions:

3. train Program Officers (POs) in the regions

Status:

completed

Actions:

4. develop and communicate directives on recruitment and advertising requirements

Status:

all completed except for the Directive on working conditions

Actions :

5. develop and communicate Questions and Answers on changes to recruitment requirements  

Status:

completed

Internal Audit’s observations:

POs rely on the information submitted by the employer on the application. Apart from asking the employer, Protected.  

OAG recommendation 5.44:

ESDC should establish a quality assurance framework for the Temporary Foreign Worker Program. The framework should ensure that program officers’ decisions relating to the application process are consistent with program requirements and that employers hire temporary foreign workers only as a last resort.

Overall assessment: Implemented

Actions:

1. launch quality assurance pilot

Status:

completed

Actions

2. evaluate quality assurance pilot results

Status:

completed

Actions:

3. launch National Quality Monitoring Program (NQMP)

Status:

completed

Internal Audit’s observations:

OAG recommendation 5.58:

ESDC should ensure that TFWP officers have access to relevant Employment Insurance data and sufficient Record of Employment data for use in their assessments of employer applications for temporary foreign workers.

Overall assessment: partially implemented

Actions:

1. review and update current recruitment policies

Status:

completed

Actions:

2. operationalize the updated policies

Status:

completed

Actions:

3. develop policies to support the use of the new Recent Labour Market Assessment (RLMA) Tool, including Employment Information (EI) data

Status:

policy being drafted

Actions:

4. implement the RLMA Tool

Status:

validation and deployment stage

Internal Audit’s observations:

OAG recommendation 5.62:

ESDC should ensure that the additional labour market information on job vacancies and wages is available and used by the TFWP. The Department should also develop clear and detailed guidance for program officers on how to use the information in their assessments of employer applications for temporary foreign workers.

Overall assessment: partially implemented

Actions:

1. integrate Job Vacancy data into existing Labour Market Information (LMI) tools (Employment Outlooks posted on Job Bank) used by the TFWP

Status:

completed

Actions:

2. integrate Wage Survey data into existing LMI tools (Prevailing Wages posted on Job Bank) used by the TFWP

Status:

completed

Actions:

3. implement a new RLMA tool (that will integrate EI and other LMI data) to assist POs in assessing the existence of a labour shortage

Status:

validation and testing of RLMA tool is in final stages

Actions:

4. implement updated guidance in support of the RLMA tool for POs

Status:

the operational guidance is pending the pilot of the RLMA tool   

Internal Audit’s observations:

OAG recommendation 5.71:

ESDC should develop and implement a comprehensive risk-based framework to identify enforcement activities for all categories of temporary foreign workers. The framework should include investigating specific sectors where higher levels of risk may exist.

Overall assessment: implemented

Actions:

1. implement a comprehensive risk-based model for inspection activities

Status:

completed

Internal Audit’s observations:

OAG recommendation 5.75:

ESDC should ensure that its investigators have access to and use Record of Employment and Employment Insurance information that could be pertinent to their investigations.

Overall assessment: partially implemented

Actions:          

1. expand availability of RoE data

Status:

completed

Actions:          

2. expand use of EI data and employer data (other than ROE)

Status:

EI data is being integrated in the predictive model

Internal Audit’s observations:

OAG recommendation 5.76:

ESDC should work with provinces and territories to develop and finalize information-sharing agreements (ISA) and use the information obtained to inform its enforcement activities.

Overall assessment: implemented

Actions:

1. develop engagement plan

Status:

completed

Actions:

2. compile provinces and territories stakeholder feedback

Status:

completed

Internal Audit’s observations:

OAG recommendation 5.83:

ESDC should use its expanded powers to increase the scope of its inspections by ensuring that all the relevant conditions are covered. It should also conduct more on-site inspections and explore the option of conducting some without notice, to further enhance its ability to detect non-compliance.

Overall assessment: implemented

Actions:

1. update appropriate procedures to clarify when an onsite inspection is required 

Status:

completed

Actions:

2. complete the risks and benefits assessment and, if appropriate, revise inspector guidelines and protocols and launch the implementation of new unannounced onsite inspections

Status:

completed

Internal Audit’s observations:

OAG recommendation 5.87:

ESDC should explore options to streamline and speed up its process of approving findings that identify employers as non-compliant.

Overall assessment: implemented

Actions:

1. implement new national process

Status:

completed

Internal Audit’s observations:

OAG recommendation 5.99:

ESDC should finalize and implement its performance measurement strategy. It should conduct analyses to determine the TFWP’s impact on the labour market.

Overall assessment: implemented

Actions:

1. develop Performance Information Profile (PIP)

Status:

completed

Actions:

2. commence program evaluation

Status:

completed

Actions:

3. collect performance data and analyze results

Status:

completed

Internal Audit’s observations:

3. Conclusion

The audit concluded that the actions included in the Department’s MAP related to the 2017 OAG Audit on the TFWP have been implemented for 6 of the 10 recommendations. Actions for the remaining four recommendations have been partially implemented as access to labour market information, assessment tools and the TFW program evaluation are not complete.

Notwithstanding the MAP implementation progress, risks remain related to the operating effectiveness of many actions to implement an evidence-based assessment of employer-provided information and consideration of labour market information in LMIA decisions.

4. Statement of assurance

In our professional judgement, sufficient and appropriate audit procedures were performed, and evidence gathered to support the accuracy of the conclusions reached and contained in this report. The conclusions were based on observations and analyses at the time of our audit. The conclusions are applicable only for the Follow-up Audit on the TFWP. The evidence was gathered in accordance with the Treasury Board Policy on Internal Audit and the International Standards for the Professional Practice of Internal Auditing.

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