Audit report

Follow-up to 1997 audit report on pay and benefits function

January 2002

Objectives

The objectives for the follow-up review to the 1997 Audit Report on Pay and Benefits Function were to provide management with an objective report on the progress being achieved in areas such as:

1. the preparation of an action plan to implement the corrective action identified;
2. the preparation of periodic status reports to monitor and assess the extent of progress achieved in implementing the action plan;
3. the progress made by the Human Resources Directorate management towards addressing
4. recommendations and suggestions presented in the 1997 Pay and Benefits Functional Audit Report.

Scope

The follow-up review was conducted in the Passport Office's National Headquarters located at Hull, Quebec. Interviews were undertaken with the previous and current managers of the Compensation Services Unit. Agency documentation were available and relevant to the audit report recommendations was examined to establish the degree of implementation and action that
had been achieved.

It should be noted that this follow-up review was not conducted as a new audit exercise against specific pre-established audit criteria. The follow-up was also not undertaken to form an audit opinion on the adequacy of the current management practices within the Human Resources Directorate or the Compensation Services Unit. The results of the follow-up are based solely on interviews and pertinent documentation provided by the two managers of the Compensation Services Unit.

Because the organizational configuration and size of both the Passport Office and the Compensation Services Unit have changed substantially since the 1997 audit, some of the original recommendations have become somewhat redundant. In situations where this development has occurred, we have noted and commented upon this development in the report.

Background information

In accordance with the Internal Audit Plan for 2001/2002 a follow-up review was requested. The focus of the follow-up was to determine the extent of progress achieved in response to the recommendations presented in the 1997 Pay and Benefits Audit Report.

In 1996/97, an audit of the Pay and Benefits Function was conducted for the Passport Office, a Special Operational Agency within the Department of Foreign Affairs and International Trade. A final audit report was provided to the Passport Office in February of 1997 for management consideration and the preparation of managerial responses to the observations and recommendations presented. The audit report contained twenty-six (26) recommendations that focused on areas where improvements could be undertaken in various managerial practices over the Pay and Benefits Function. The specific areas addressed in the report were as follows: compensation management framework, pay administration, benefits administration, the administration of leave and extra duty pay and the overall provision of compensation information to managers and employees within the Passport Office.

The two main systems utilized for managing pay and benefits transactions are the Human Resources Information System (HRIS) and the Public Works and Government Services Canada (PWGSC) on-line pay system. The HRIS module for leave recording and reporting is also utilized. Input data to this module is now provided by both the Headquarters Compensation Advisors and Regional Administrative Assistants. The Passport Office's delegation instrument for Human Resources (HR) signing authorities was amended since the 1997 audit and has now been updated again as of January 2002. This delegation document is maintained in the Human Resources Manual.

Several developments have occurred since the conduct of the original audit in 1996/97. The Passport Office itself has nearly doubled its workforce size and the Compensation Services has recruited several experienced Compensation Advisors. These developments have modified many of the Management Practices that were originally discussed in the 1997 audit report.

Conclusion

The follow-up work consisted of reviewing actions taken and progress achieved with respect to the recommendations that were made in the internal audit of the Pay and Benefits Function 1997. Since the conduct of the audit, several organizational and workforce changes have occurred. It was possible to establish that actions had been undertaken on the majority of the recommendations presented in the 1997 audit report. In a few instances, management action was no longer required because of organizational and functional changes. In cases such as these it was noted in the report that circumstances had altered the recommendation to a degree. Basically, the follow-up review has established that the Compensation Services Unit achieved considerable progress in addressing the recommendations and the broad spectrum of management practices that were observed upon in the 1997 Audit Report.

Follow-up results

In conducting the follow-up review, it was anticipated that two processes would have been established by the Passport Office. The first process would have been the creation of an actionplan for addressing recommendations in the audit report and the second process would have been the establishment of an implementation plan identifying periodic progress reporting on the implementation activity identified in the action plan. Although the Passport Office had identified corrective strategies in some of its managerial responses to the recommendations, the majority of the responses contained very limited information on identified action and virtually no information as to the accountability centre for the action. It was not possible to clearly establish that either of these two processes were undertaken.

It should be noted that at the time of the audit, the Passport Office was in the process of initiating a workforce rationalization and reduction as part of the wider federal governments downsizing program. This exercise was extensive and may have contributed to the Human Resources Directorate not establishing a more formal response mechanism for managing the corrective actions. In addition, organizational and workforce changes that have occurred since the 1997 audit have made it more difficult to clearly identify and track the precise nature of corrective actions that may have been initiated. Despite these environmental and time length factors, it was possible to identify several actions that address the management practices/issues that were highlighted in the 1997 audit report. These new practices were identified and discussed with the managers(current and past) of the Compensation Services Unit.

Management response

No management response requested for follow-up on audit.