2014-2015 Annual Report - Chapter 4

Oversight: Monitoring, audits and investigations

4.1 The Preamble to the Public Service Employment Act (PSEA) emphasizes the importance of both delegation and accountability in successfully implementing a flexible staffing environment. The Public Service Commission (PSC) is ultimately accountable to Parliament for the overall integrity of the staffing system, while deputy heads are accountable to the PSC for how delegated authorities are exercised in their organizations. As a result, both deputy heads and the PSC are responsible for the overall success of the staffing system.

4.2 As the staffing system and capacity within delegated departments and agencies mature, the PSC continues to refine the way in which it undertakes oversight. This refinement involves developing and renewing the existing model as well as re-examining the oversight model moving forward.

4.3 The PSC assures itself of the integrity of the staffing system through its oversight framework as well as its regulatory authority and policy-setting function. The oversight framework provides information on the integrity of the staffing system by systematically examining the different parts of that system, and is comprised of three important and integrated oversight mechanisms: monitoring, audits and investigations.

4.4 Monitoring is an essential source of information to help deputy heads and the PSC gain a better understanding of the health and management of the appointment system. It identifies areas where action is required to improve staffing management and performance and contributes to improving the health of the public service staffing system.

4.5 The PSC conducts audits to inform deputy heads and Parliament of how delegated appointment authority is being managed in organizations and whether appointments are being made on the basis of merit. Audit results contribute to the deputy heads’ understanding of the governance, controls and staffing risks within their respective organizations. Where appropriate, recommendations are included in the audits to help organizations address issues and make improvements to their staffing practices, provide information on ongoing staffing issues, and contribute to learning and improving system-wide performance.

4.6 Investigations allow the PSC to protect merit and safeguard the integrity of appointment processes. The PSC conducts investigations into processes that may have included instances of error, omission, improper conduct, fraud or political influence. The PSC also conducts investigations into allegations of improper political activity by public servants in order to maintain political impartiality in the public service. In cases where PSC investigations are founded, the Commission may take any corrective action that it considers appropriate, which may include revoking an appointment or dismissing an employee, in cases of improper political activity.

4.7 Collectively, the integrated results of these three oversight mechanisms allow the PSC to report to Parliament on the overall integrity of the staffing system, as well as provide feedback to deputy heads and promote learning about staffing practices to strengthen staffing performance. The PSC also uses these integrated oversight results to refine its policy framework and related guidance and to support delegated departments and agencies.

4.8 In terms of improving the existing oversight model, the PSC, following broad consultation and discussion with small and micro organizations, revised its approach to auditing these organizations in a way that is adapted to their unique size, level of risk and context. In addition, the PSC is continuing to take action in response to the report submitted by the external panel that conducted a review of its investigation function in 2013.

4.9 At the same time, as a result of the examination of its policy and delegation frameworks, and the maturing of the staffing system and capacity within delegated departments and agencies over the past nine years, the PSC will continue to enhance and renew its oversight model in 2015-2016. The renewed approach will recognize the role of both the PSC and deputy heads in monitoring the health and integrity of the staffing system, and provide for monitoring that is more targeted to organizations.

Monitoring

4.10 Monitoring represents the first line of oversight and is a key way for deputy heads to detect and correct errors early, identify and mitigate risk, and improve staffing performance so organizational goals can be achieved. Monitoring enables both deputy heads and the PSC to gain valuable insights on the staffing activities and practices occurring within the public service. Further, it assists deputy heads to identify areas of concern within their own organizations, in order to take the preventive measures and actions needed to continuously improve their own staffing management and performance.

4.11 In 2014-2015, organizations were required to report to the PSC on three key areas that presented a risk to the overall integrity of the staffing system:

• Management of priority entitlements – Organizations were expected to monitor the effectiveness of their approach to ensuring that priority clearance was obtained before any other appointment process was initiated, and that the essential qualifications and conditions of employment used to make an appointment were the same as those used to obtain priority clearance;
• Official languages in the appointment process – The PSC expected organizations to monitor the use of the Public Service Official Languages Exclusion Approval Order and Regulations and the use of the Second Language Evaluation (SLE) confirmation period, as necessary, and to address cases to ensure the prescribed time periods were respected; and
• Ongoing improvement – Organizations were expected to improve their staffing management and performance by acting on the results of monitoring, audits and investigations.

4.12 The PSC uses the information received from organizations’ self-assessments, as well as information at its disposal, such as data on the time it takes to register and to assess persons with a priority entitlement, and incorporates the results of PSC audits and investigations into its assessment of the health of the public service staffing system.

4.13 The majority of organizations succeeded in demonstrating ongoing improvement by acting on their internal monitoring results, PSC’s audit recommendations and feedback from previous years, as well as the results of investigations. A total of 84% of organizations reported having a staffing plan and of these, 54% updated their staffing plan in 2014-2015 to support the future direction and strategic goals of the organization.

4.14 The overall monitoring results for 2014-2015 indicate continued strong results in terms of the percentage of organizations meeting each indicator. The results reinforce the importance of ongoing monitoring to maintain continuous improvement and the effectiveness of the staffing system.

Looking to the future

4.15 Over the past few years, the PSC has observed that, for the most part, organizations have put the key elements in place for effective management of staffing and their performance in this area has consistently continued to improve. Given the maturation of the staffing system in the public service, the PSC recognizes that it is the organizations themselves that are now best positioned for timely detection and correction of staffing issues, and will expect them to do so. Accordingly, to support organizations in this shift, the PSC will continue to develop new tools and approaches that better respond to the varying needs of organizations.

4.16 In order to enable organizations to continue to improve their own staffing management and performance, the PSC will offer more ongoing assistance and will increase interactions with organizations throughout the public service. Improvements to each individual organization’s unique staffing management practices will result in improvements to the public service staffing system overall.

Audits

4.17 Audits provide information to departments, agencies and Parliament on the integrity of the staffing system. PSC audits are an important part of the feedback loop that underpins deputy heads’ understanding of staffing risks, controls and governance within their organizations.

4.18 A total of 63 organizational audits have been completed over the past seven years on organizations under the PSEA. To ensure a balanced view of staffing in the federal public service, throughout the audit cycle, a mix of departments and agencies — selected based on size and identified risks — are audited each year.

4.19 The Audit Plan for 2014-2015, published in the PSC’s 2013-2014 Annual Report, identified a total of 16 organizational audits, and one follow-up audit. In 2014-2015, the PSC completed 13 organizational audits. Information on the PSC’s audit and engagement plan for 2015-2016 can be found in Appendix 4. This plan reflects a transition to the new oversight model resulting from the PSC’s review of policies and the delegation framework. An updated plan will be published in 2016-2017.

4.20 The organizational audits conducted in 2014-2015 are published as part of the PSC Annual Report. The PSC audit reports for 2014-2015 include the following organizations:

• Agriculture and Agri-Food Canada;
• Canadian Heritage;
• Citizenship and Immigration Canada;
• Treasury Board of Canada Secretariat;
• Veterans Review and Appeal Board;
• Office of the Registrar of the Supreme Court of Canada;
• Western Economic Diversification Canada;
• Office of the Commissioner of Lobbying of Canada;
• Farm Products Council of Canada;
• Military Grievances External Review Committee;
• Civilian Review and Complaints Commission for the Royal Canadian Mounted Police;
• Status of Women Canada; and
• Federal Economic Development Agency for Southern Ontario.

4.21 Relying upon the results of organizations’ internal reviews or audits – In some instances, the PSC may be able to rely upon and accept the results of an organization’s internal reviews or audits. In 2014-2015, the PSC found that an adequate basis existed to establish reliance on the comprehensive monitoring of appointments exercise performed by Citizenship and Immigration Canada. The PSC encourages organizations to undertake a periodic comprehensive, risk-based assessment of staffing activities that meets their unique requirements.

4.22 Approach to auditing small and micro organizations – In 2014-2015, the PSC undertook broad consultations with deputy heads of small and micro organizations on the renewal of its approach to these organizations. Given the nature, size and scope of small and micro organizations, it can be challenging for these organizations to meet requirements in the same way as larger ones.

4.23 Small and micro organizations often have highly specialized mandates, have few employees and undertake a low number of appointment activities. Some of these organizations have limited human resources capacity and many use external service providers. Given a limited number of staff to draw upon, they often need to act quickly to fill vacancies of experts in critical positions.

4.24 Taking these factors into consideration and with a desire to provide greater support to deputy heads of small and micro organizations, the PSC has been reviewing its expectations of these organizations. As an immediate step, the PSC renewed its audit methodology, including the scope and frequency of its audits, to ensure that it is adapted to the size, level of risk and unique context of these organizations.

4.25 The PSC’s renewed approach to auditing small and micro organizations, which was piloted in 2014-2015, focused on the most commonly reported risk areas for organizations of this size. The audits reviewed the management of sub-delegation, organizational capacity to support staffing, whether the organization was able to demonstrate that appointments were based on merit, and whether persons with a priority entitlement were considered prior to appointments being made.

Audit observations

4.26 The objectives of the audits are to determine whether the organization has an appropriate framework, practices and systems in place to manage its appointment activities, and to determine if appointments and appointment processes in the organization comply with the PSEA, any other applicable statutory and regulatory instruments, the PSC’s Appointment Framework, including the Appointment Delegation and Accountability Instrument, and the organization’s own appointment policies.

4.27 Similar to the findings in previous years, the 2014-2015 audits found that most of the key elements of the appointment framework were in place and, in the majority of appointments, organizations demonstrated that the person appointed met the qualifications established by the deputy head. However, a few areas for improvement were identified. These areas are outlined in the following section to support learning and continuous improvement across the staffing system.

Observations on appointment frameworks

4.28 Sub-delegation of appointment authorities – A clear and well-managed sub-delegation instrument and process are important for organizations to ensure that hiring managers meet the conditions of sub-delegation as established by the deputy head, that they are adequately trained and that they fully understand their sub-delegated authorities. Effective controls can help ensure that the conditions surrounding sub-delegation of authority are respected.

4.29 The 2014-2015 audits found that nearly all of the organizations audited had established sub-delegation instruments and had identified the conditions that hiring managers had to meet to exercise their sub-delegated appointment authority. As in previous years, one area for improvement identified among some organizations is in the implementation of controls surrounding sub-delegation.

4.30 For example, deputy heads are responsible for establishing the training requirements that managers must satisfy prior to receiving sub-delegated appointment authority. While most organizations established controls to ensure that this training was completed, there is room for improvement in some organizations in how the controls are implemented as they were not always effective in helping the organization ensure that managers had completed the training prior to receiving sub-delegated authority.

4.31 The PSC will continue to work with departments and agencies to help them assess the effectiveness of the controls that have been put in place that govern the sub-delegation of appointment authorities.

4.32 Monitoring – Monitoring is an ongoing process that allows deputy heads to assess staffing management and performance related to appointments and appointment processes. Monitoring makes it possible to identify what is working well, to detect issues that should be corrected, to manage and minimize risk and to improve staffing performance.

4.33 The 2014-2015 audits found that all medium and large organizations had implemented monitoring mechanisms, such as reviews of appointment processes and practices. This monitoring was undertaken to help ensure that the exercise of delegated and sub-delegated authorities and appointment decisions were compliant with legislation, regulations, and policy requirements. Organizations also demonstrated that the results of monitoring activities were communicated to senior management, and that actions were taken to address any issues.

4.34 The PSC recognizes the important role that ongoing monitoring of staffing can play in detecting and correcting staffing issues. Going forward, the PSC will continue to support organizations to monitor their staffing management frameworks and appointments based on their context and capacity, while minimizing requirements for delegated organizations to report to the PSC.

Observations on appointments

4.35 Merit – In approximately 93% of appointments audited this year, the organization was able to demonstrate that the person appointed met the qualifications established by the deputy head. Overall, six of the organizations audited this year were able to demonstrate in all of their appointments that the person appointed met the qualifications. In the remaining organizations, there were a few instances where merit was not demonstrated. The term “merit not demonstrated” is used where there is insufficient evidence to determine whether some, or all, of the merit criteria used to make the appointment have been met.

4.36 While merit was demonstrated in almost all of the appointments reviewed this year, some of the reasons why merit could not be demonstrated include: missing information, such as proof of educational credentials, resulting in essential qualifications not being fully assessed; essential qualifications being assessed several months after an appointment was made; and second language evaluation results not being valid at the time of the appointment.

4.37 Although the audits found that merit was demonstrated in most cases, it remains important that the results of the assessment of the merit criteria be documented and made available to substantiate the appointment decision. To assist departments and agencies in documenting their appointment decisions, the PSC is proposing to clarify the minimum documentation requirements as part of the renewal of its policy framework.

4.38 Consideration of persons with priority entitlements – The PSEA and the Public Service Employment Regulations provide entitlements for certain persons who meet specific conditions to be appointed in priority to others, if qualified. As part of this year’s audits, the PSC continued to verify whether these entitlements and the PSC’s policy expectations were respected.

4.39 The audits assessed whether organizations obtained a priority clearance number prior to making an appointment; that persons with a priority entitlement who were referred were assessed by the hiring manager; and whether the same criteria, such as essential qualifications, position requirements and tenure that were used in the request for priority clearance were also used to make the appointment. In addition, the PSC also reviewed whether persons with a priority entitlement were considered for positions before an organization initiated an appointment process.

4.40 All of the organizations audited in 2014-2015 were found to have considered persons with a priority entitlement prior to making an appointment. This is the first time that the PSC has observed full compliance among all appointments reviewed and this finding could indicate that the system is performing very well in understanding and respecting both legal and policy requirements. However, the audits did find specific situations where organizations did not seek priority clearance before proceeding with an appointment process, for example, for appointments from a pre-existing pool. It is important that hiring managers consider persons with a priority entitlement and seek priority clearance as early as possible and before proceeding with an appointment process, as it helps ensure that optimal consideration has been given to individuals with a priority entitlement. As a result of these audit findings, the PSC will work in 2015-2016 to clarify its expectations of how this policy requirement should be implemented.

4.41 In four organizations, the audits identified differences between the statement of merit criteria used for the appointment decision and the merit criteria that were used for the priority clearance request. Deputy heads should continue to ensure that information used to obtain priority clearance (e.g. merit criteria, tenure) is the same information that is used to make an appointment to a position.

4.42 Information on appointment processes – Inaccurate information can have an impact on the decision of potential applicants to apply, or of persons in the area of selection to avail themselves of their recourse rights. In four organizations, the audits identified appointments where there were significant differences between the English and French versions of the statement of merit criteria used in job advertisements. Deputy heads should continue to ensure that information about appointments is the same in both official languages.

4.43 Additional terms and conditions on delegation – Depending on the conclusions drawn from an audit, the PSC may provide an organization with recommendations for improving its staffing practices and ensuring compliance with legislative, regulatory and policy requirements. Further, depending on the issues raised, the PSC may take additional action, including working with the organization to address the issues or imposing additional terms and conditions on the delegation to these organizations.

4.44 The deputy heads of the departments and agencies that were audited this year have provided the PSC with an action plan in response to its audit recommendations, where recommendations had been issued.

4.45 The PSC also supports departments and agencies audited by providing them with advice and ongoing assistance in implementing their action plans. The PSC assists organizations in the following ways:

• Developing clear and comprehensive action plans further to an oversight activity (e.g. audit, investigation, monitoring);
• Building their capacity in various aspects of staffing management such as monitoring and reporting on staffing to senior management;
• Addressing recurrent issues raised in monitoring reports; and
• Developing/refining and implementing a staffing monitoring program, tools and other control mechanisms.

Looking to the future

4.46 Evolution of audit approaches – Over the coming year, the PSC will be developing an approach to conducting a government-wide compliance audit which could provide system-wide intelligence on how the staffing system is performing. The PSC will also be updating its audit methodology to integrate changes resulting from the renewal of its appointment and delegation frameworks. These updates are expected to help ensure that PSC audits continue to focus on key risk areas and support continuous system-wide improvement in staffing.

4.47 Publishing audit reports – Currently, audit reports are published at the same time as the tabling of the PSC’s Annual Report. By linking audits to the Annual Report, which is confidential until it is tabled in Parliament, the audit reports themselves must also be treated as confidential. This can mean that some organizations are not able to formally act on the audit’s recommendations until the Annual Report has been tabled. To enable more timely feedback to organizations and Parliament and to support improvements to the staffing system, the PSC is currently exploring alternative approaches to publishing its audit reports.

Investigations

4.48 The investigations function plays an important role in the PSC’s accountability to Parliament by helping safeguard the integrity of appointments and oversee the political impartiality of the federal public service.

4.49 Authority of the Commission – Part 5 of the PSEA provides the Commission with the authority to conduct investigations into appointment processes. This includes:

• Section 66: Merit, errors, omission or improper conduct in external appointment processes;
• Subsections 67(1) and (2): For non-delegated appointments, or errors, omission or improper conduct in internal appointment processes at the request of a deputy head;
• Section 68: Suspicion of political influence in any appointment process; and
• Section 69: Suspicion of fraud in any appointment process.

4.50 Volume of investigations – As indicated in Table 25, the PSC’s Investigations Branch received 254 new requests to investigate appointment processes in 2014-2015. This is only slightly lower than 2013-2014.

Source: Public Service Commission Investigations Management Information System

^(a) It is possible for files to be opened under one section of the Public Service Employment Act (PSEA) but later be investigated under another.

^(b) These other sections include section 17, subsections 67(1) and 15(3), internal appointments and cases that do not clearly fall into a specific category (other).

^(c) Cases closed for reasons that include no mandate, no possibility of corrective action or other policy or regulatory considerations.

^(d) Early Intervention is not offered other than for cases under sections 66, 67(1), or 67(2) of the PSEA.

Investigations under specific authorities

4.51 Section 66: External appointment processes (merit, error, omission or improper conduct) – The largest percentage of investigation files received were related to whether merit was met or whether errors, omission or improper conduct occurred in an external appointment process.

4.52 A total of 12 files resulted in founded investigations under section 66 in 2014-2015. There were also 26 files which resulted in unfounded investigations. Two section 66 cases were resolved during this period through Early Intervention, a voluntary and confidential process to resolve issues related to the appointment process that may be offered prior to the investigation phase (for investigations under section 66, subsections 67(1) or 67(2), as appropriate) where a PSC investigator acts as a facilitator to help the persons concerned reach a mutually satisfactory resolution.

4.53 Separate from Early Intervention, the PSC encourages dialogue between candidates and the departments and agencies conducting the appointment processes, where errors or omissions may have occurred, particularly where an appointment has not yet been made. In such cases, where the error or omission can be corrected, the PSC can work with the department or agency and the person who has concerns, to resolve issues and potentially prevent the need for an investigation.

4.54 Subsection 67(2): Investigations on behalf of an organization – Under this subsection of the PSEA, the PSC continues to offer its experience and expertise to departments and agencies by offering to conduct investigations on their behalf where the issues fall under the sub-delegated authority of the deputy head and where it is their responsibility to investigate before taking corrective action. In this fiscal year, five investigations were completed by the PSC on behalf of organizations; in four cases, the allegations were founded. Investigation reports and recommended corrective actions were provided to the deputy heads for further action.

4.55 Section 68: Political influence – This section of the PSEA provides the Commission with the authority to investigate allegations of political influence in appointment processes. These investigations are an important tool to help ensure that political impartiality is respected in the system. In 2014-2015, there were no allegations of political influence in appointment processes.

4.56 Section 69: Fraud – A total of 76 investigations were completed during this period, of which 54 (71%) were determined to be founded and 22 (29%) were determined to be unfounded. The overall number of fraud cases completed this fiscal year reflects an increase from last year. This may be attributed to outreach activities conducted by the PSC for departments and agencies on the grounds for investigations and general increased awareness. In addition, many of the investigations completed this fiscal year under section 69 are as a result of investigations that were requested and commenced in 2013-2014, where there was a return to higher levels of staffing activity following Spending Review 2012.

4.57 As in previous years, the types of fraud files investigated included instances where individuals cheated or copied responses during an assessment process or failed to disclose personal relationships within the context of an appointment process. In addition, candidates who provided false educational or professional credentials, or falsified or altered documentation such as language test results, continued to be of concern.

4.58 In 2014-2015, the number of allegations of fraud remained low (78) in the context of the over 83 000 staffing activities that took place within the federal public service. The Commission has the sole jurisdiction to investigate incidences of fraud in appointment processes. It is the expectation of the Commission that, should a department or agency have reason to believe that fraud may have occurred in an appointment process, they refer such matters to the PSC Investigations Branch, even in instances where the process did not result in an appointment. This allows the Commission to help ensure the overall integrity of the system.

4.59 Corrective actions following founded investigations – In cases of founded investigations conducted under the PSEA, the Commission may take any corrective action that it considers appropriate, up to revocation of the appointment. Corrective actions are determined on a case-by-case basis. Some examples of corrective actions taken since the PSEA was introduced include revocations of appointment, reassessment, mandatory training and removal of staffing sub-delegation, as well as the requirement for individuals to request the Commission’s permission before accepting any position within the federal public service for a specified period.

4.60 In 2014-2015, corrective actions following founded investigations included the revocation of six appointments. In addition, some individuals were required to seek permission from the PSC prior to accepting any work within the federal public service for periods of one to three years; training was ordered for managers and staff, such as values and ethics training, followed by a discussion with their manager; and candidates were ordered to be re-assessed or removed from a process. In one case, a candidate was removed from the Federal Student Work Experience Program Inventory. In another case, it was ordered that a summary of the investigation be sent to professional associations.

4.61 Table 26 provides a breakdown of corrective actions ordered by the Commission during the last three years:

Source: Public Service Commission Investigations Management Information System

^(a) The number of corrective actions may not necessarily match the number of founded investigations as multiple corrective actions can be ordered for a single file or a file may not require corrective actions.

^(b) Section 73 of the Public Service Employment Act allows for a person to be re-appointed to another position for which they meet the essential qualifications, following revocation of their appointment pursuant to an investigation conducted under sections 66 to 69.

^(c) For a specified period, the requirement to obtain the Commission’s written approval before accepting any position or work within the federal public service.

^(d) In 2014-2015, a new element was added to this corrective action that requires persons to have a discussion with a senior official following the values and ethics training to ensure that the training was understood.

4.62 Disclosure of investigation summaries – The PSC may use its authority under section 19 of the Public Service Employment Regulations and section 14 of the Political Activities Regulations to disclose personal information obtained in the course of an investigation, if it determines that the public interest in disclosure outweighs the privacy interests of the individual. The PSC posts anonymous and disclosure summaries of select investigations on the PSC Web site periodically throughout the year. While there are no specific timeframes for which an anonymous summary may be posted, disclosure summaries are posted for defined periods of time at the discretion of the Commission.

4.63 External Review Panel – As reported in 2013-2014, an external review panel on the PSC’s investigations function observed that overall, the investigations function accomplishes its mandate effectively, is valued by organizations and is seen to reflect competence and diligence. A management response and action plan was developed to address the review panel recommendations, each varying in complexity and scope.

4.64 One of the recommendations was for the PSC to improve the ease of use and overall relevance of the Investigations Branch Web site. In consultation with the organizational liaisons for the Investigations Branch, the PSC has developed new Web content on the investigations function and is examining more effective ways of presenting the information on-line. It is anticipated that the enhancements, including revisions to the site design and more complete information on the investigations process, will improve transparency, facilitate organizations’ work, and enhance individuals’ understanding of the investigations conducted by the PSC. In addition, the panel recommended that the Web site include relevant working tools and guidance documents for persons affected by an investigation. The updates to the Web site have incorporated working tools using various media, as well as guidance material for such persons.

4.65 The PSC was asked by the external review panel to examine the full range of options for corrective actions at its disposal, taking into account the impact that such actions can have on the integrity of the system and on individuals. Accordingly, the PSC has completed a comprehensive review of past and current corrective actions and will hold consultations within the PSC and with organizations in 2015-2016.

4.66 In response to the recommendation that the PSC conduct investigations as expeditiously as possible, the Investigations Branch has committed to achieving a 10% reduction in time to complete an investigation. For example, fraud cases can be accelerated when the person admits to the fraudulent behaviour. The PSC has also delegated its authority to order corrective action in low-risk cases.

4.67 Another recommendation was that the PSC establish a structured training and development program for new Investigations employees and a professional development regime for existing staff. The PSC is providing customized training to investigators and other personnel to help them meet their responsibilities.

Looking to the future

4.68 In 2015-2016, the PSC will also focus on building relationships with organizations who have similar investigations mandates, to exchange best practices and expertise. This was a common element suggested in several of the recommendations from the review panel. Topics for discussion include quality assurance regimes, efficiency in procedures and practice, corrective action and training for investigators. In addition, the PSC will continue to examine and implement sound practices with respect to privacy and the disclosure of personal information in the context of an investigation. The PSC will also ensure that investigations activities and tools continue to be aligned with other PSC initiatives and activities.