Audit of Staffing: Compliance

Internal Audit Report
November, 2012

Table of Contents

• EXECUTIVE SUMMARY
• 1.0 INTRODUCTION
  • 1.1 BACKGROUND
  • 1.2 RISK ASSESSMENT
  • 1.3 AUDIT OBJECTIVE AND SCOPE
  • 1.4 APPROACH AND METHODOLOGY
  • 1.5 AUDIT CRITERION
  • 1.6 STATEMENT OF ASSURANCE
• 2.0 AUDIT OPINION
• 3.0 FINDINGS, RECOMMENDATIONS AND ACTION PLANS
  • 3.1 APPOINTMENT FILE COMPLIANCE
    • 3.1.1 OBSERVATIONS ON MERIT
    • 3.1.2 OBSERVATIONS ON RESPECTING GUIDING VALUES
  • 3.2 COMPLIANCE WITH THE SUB-DELEGATION FRAMEWORK
• APPENDIX A: Audit Criteria
• APPENDIX B: ADAI Extract
• APPENDIX C: List of Acronyms
• APPENDIX D: Glossary

EXECUTIVE SUMMARY

BACKGROUND

When the Canada Border Services Agency (CBSA or the Agency) was created in 2003, it incorporated resources from the Canada Customs and Revenue Agency, Citizenship and Immigration Canada, and the Canadian Food Inspection Agency. Consequently, the CBSA became subject to the Public Service Employment Act (PSEA).

The mandate of the Human Resources Branch (HRB) is to support the Agency in meeting its operational goals through the implementation of a comprehensive human resources (HR) management regime that is consistent with public service legislation, policies, practices and initiatives. HRB also supports the Agency in meeting its human resources stewardship responsibilities.

The Public Service Employment Act (PSEA) gives the Public Service Commission (PSC) exclusive authority to make appointments, based on merit, to and within the public service [1] which can be delegated to deputy heads of departments and agencies. The PSC reports annually to Parliament on the integrity of the public service staffing system including how delegated authorities have been exercised.

The PSC signed an Appointment Delegation and Accountability Instrument (ADAI) with the CBSA delegating appointment authorities to the President of the CBSA. The ADAI encourages the President to sub-delegate, in writing, appointment and appointment-related authorities to one or more persons to facilitate appointments and decisions. Certain conditions of delegation have been established in the ADAI that must be respected by the President and sub-delegated managers in making appointment-related decisions. Various remedial measures can be imposed for contravening or abusing delegated or sub-delegated authorities up to, and including, revocation of appointment authorities.

The CBSA has implemented a Staffing Sub-delegation Framework which sub-delegates staffing authorities, based on position title, for various stages of the appointment process. The roles and responsibilities for staffing are shared between sub-delegated managers and HR advisors (HRA). Sub-delegated managers have the authority to make, and are accountable for, staffing- related decisions and actions in accordance with relevant legislations and policies. Sub-delegated managers have access to HRAs who provide guidance, support and advice to assist managers in achieving their operational, financial and organizational objectives while meeting their HR stewardship responsibilities.

As part of the PSC's oversight role, audits are conducted to provide assurance and make recommendations for improvement. The PSC develops an Audit and Studies Plan on a cyclical basis of seven years, and all organizations that have signed an ADAI with the PSC, including the CBSA, are to be audited within those seven years.

In 2009, the PSC carried out an audit of CBSA HR staffing covering the period from January 1, 2006 through March 31, 2009. The audit resulted in six recommendations made to the Agency. The 2009 PSC audit had originally also included a component to assess the extent to which the Agency's appointments and appointment processes were in compliance with the PSEA and governing authorities. However, due to deficiencies identified as part of an internal file review undertaken by the HRB, the Commission decided to eliminate the compliance portion of its audit, and to do a separate follow-up audit of compliance later on.

In response to the Commission's October 2009 audit and its recommendations, the CBSA recognized the need for action. Accordingly, the Agency launched the Staffing Accountability Improvement Strategy (SAIS) in April 2011. It is a "collection of related initiatives designed to support both managers and HR practitioners in delivering staffing excellence." [2] SAIS includes a series of related initiatives to revise and clarify delegations, provide policy guidance, training and tools to managers, strengthen planning and file documentation, enhance monitoring, and ultimately, put in place mechanisms to better measure staffing performance and link delegations to performance.

Also in response to the Commission's October 2009 audit report findings, the CBSA committed to conducting a follow-up internal audit of the Agency's staffing processes. The internal audit has been conducted as two separate audits. Phase One, entitled 'Follow-up of the PSC's 2009 Audit of CBSA Human Resources Staffing', approved in March 2012, examined the implementation of management commitments made in response to the PSC's 2009 audit. The audit found that the CBSA had adequately addressed the recommendations; however, some opportunity for improvement still existed. Four of the recommendations had been fully or substantially addressed, and two, relating to conducting staffing planning and carrying out monitoring and oversight activities, had been partially addressed at the time of the Phase One audit.

The current audit (Phase Two) examines compliance of Agency appointments with the PSC requirements, that is, the application of the merit principle and the guiding values as well as compliance with the Agency's Staffing Sub-delegation Framework.

SIGNIFICANCE OF AUDIT

The audit is of significance because it provides assurance to senior management on the extent to which the Agency is in compliance with the PSEA and other authorities governing appointments and appointment processes during the period under audit.

AUDIT OBJECTIVE AND SCOPE

The objective of the audit was to provide assurance on the extent to which the Agency's appointments and appointment processes comply with the requirements of the Public Service Employment Act (PSEA); the Public Service Commission's Appointment Framework, including the Appointment Delegation and Accountability Instrument signed with the PSC; and other applicable legislation and related Agency policies.

The scope of the audit included testing a sample of medium- and high-risk appointments that were made between August 1, 2011 and December 31, 2011. Executive group appointments and the National Border Services Officer collective process were not within the scope.

AUDIT OPINION

For the appointments made that were within the audit's scope for the period under audit (August 1, 2011 to December 31, 2011), the findings indicate that the Agency has not always complied with certain requirements of the PSEA, the ADAI, and other applicable legislation as they pertain to the core value of merit and the guiding values of fairness, access, transparency and representativeness. Deficiencies were also noted in compliance with the Agency's Staffing Sub-delegation Framework.

This translates into a moderate risk exposure for the Agency. Risks include the Agency's delegated authority for staffing; the capability of the Agency's workforce; and the long-term financial implications of staffing decisions. In addition, these risks are in an environment where the staffing process is decentralized.

KEY FINDINGS

The PSEA and the ADAI require that all appointments respect the merit principle and the guiding values of fairness, transparency, access and representativeness. They also require appointments and appointment-related decisions to be fully documented. Failure to comply with these requirements could result in, for example, the partial or complete withdrawal of the President's delegated staffing authorities.

Of the 46 appointment files that we reviewed, 31 (67%) demonstrated that candidates for the position had met the requirements of the position and had been appointed on the basis of merit. In the other 15 cases, there were some instances that did not demonstrate that all qualifications used in making the appointment decision had been assessed. There were also instances in which the assessment of one or more qualifications was inadequate, and others where some assessment documents were not all on file and could not be located.

In 34 out of 46 (74%) of the appointment files audited, the documentation in the files did not demonstrate that managers had respected one or more of the guiding values of fairness, transparency, access and representativeness at certain stages of the appointment process. We also noted indicators of preferential treatment of candidates in 5 (11%) of the 46 appointment files.

A significant proportion, 27 of 46 (59%), of appointment files in our sample had one or more compliance issues with the Agency's Staffing Sub-delegation Framework. More specifically, approvals of key staffing documents, such as the Statement of Merit Criteria, were either not obtained or not in line with the Agency's sub-delegation instrument's requirements (i.e. a lower level of authorization was obtained than required by the Framework). In turn, if the Agency does not respect its own Sub-delegation Framework, the staffing process may be at risk as important oversight controls are not operating effectively.

While the audit identified areas that need to be addressed, HRB management recognized that staffing in the Agency required attention prior to the commencement of the audit. In response, the Staffing Accountability Improvement Strategy (SAIS) was developed and was launched in April 2011 by HRB management to address these gaps. Because of these timelines, we recognize that the full impact of SAIS has not yet fully materialized or translated into improved staffing practices.

RECOMMENDATIONS

The audit made recommendations on:

1. Implementing controls at the entity level and transactional level to ensure that staffing documentation, provided by sub-delegated managers and placed in the staffing files, fully demonstrates that appointments are based on merit and respect guiding values.
2. Addressing issues related to non-compliance with the Staffing Sub-delegation Framework through monitoring and controls.

STATEMENT OF ASSURANCE

This audit was conducted in accordance with the Treasury Board Internal Auditing Standards for the Government of Canada which incorporate the International Standards for the Professional Practice of Internal Auditing. Sufficient relevant evidence was examined and information obtained to provide a high level of assurance on the reported opinion.

MANAGEMENT RESPONSE

Management agrees that the findings of the Audit are accurate and fair. Management accepts all the recommendations included in this report.

We have responded strongly to previous audits of the CBSA staffing program. In response to the PSC's 2009 Audit, the CBSA launched the Staffing Accountability Improvement Strategy (SAIS). In year one of SAIS, significant progress was made in, among other areas, providing policy guidance, training and tools for managers, improving staffing file documentation, planning and strengthening monitoring activities. In response to the Phase One audit, tabled in March 2012, the CBSA has improved documentation related to monitoring, strengthened its sampling methodology and confirmed sub-delegated managers who have successfully verified their staffing knowledge requirements. Remaining action items are on schedule to be completed.

We recognize that more needs to be done to strengthen staffing performance and to ensure the integrity of the CBSA staffing program. We have therefore identified specific actions to respond to the recommendations in this report. In general, the core elements of the Management Action Plan to respond to these findings are as follows:

1. ensure that sub-delegated managers and HR fully understand their roles and accountabilities in the staffing process through additional communications and training;
2. ensure that sub-delegation instrument and Performance Management Plan are revised to clearly explain expectations regarding the conduct of sub-delegated managers and HRAs and the consequences of not complying with principles of merit and staffing values;
3. further inform HRAs and HR directors (HRDs) to provide proactive and effective stewardship of the integrity of the CBSA staffing program through the exercise of functional authority for staffing when issues with respect to merit or values are evident; this will be incorporated in their Performance Management Agreements (PMAs) as expected performance, and HRAs and HRDs will be clearly informed of consequences of not addressing issues of merit and values in staffing;
4. target monitoring and reporting practices to better identify and report to senior management on areas of non-compliance;
5. strengthen staffing investigations practices, and proactively engage areas of non-compliance in a targeted manner and implement corrective measures as facts warrant; and
6. make compliance easier for sub-delegated managers and HRAs by standardizing, streamlining, and simplifying staffing authorities, processes and practices.

1.0 INTRODUCTION

1.1 BACKGROUND

When the Canada Border Services Agency (CBSA or the Agency) was created in 2003, it incorporated resources from the Canada Customs and Revenue Agency, Citizenship and Immigration Canada, and the Canadian Food Inspection Agency. Consequently, the CBSA became subject to the Public Service Employment Act (PSEA) and was obliged to implement its requirements.

The mandate of the Human Resources Branch (HRB) is to support the Agency in meeting its operational goals through the implementation of a comprehensive human resources (HR) management regime that is consistent with public service legislation, policies, practices and initiatives. HRB also supports the Agency in meeting its human resources stewardship responsibilities.

The PSEA gives the Public Service Commission (PSC) exclusive authority to make appointments, based on merit, to and within the public service [3] which can be delegated to deputy heads of departments and agencies. The PSC reports annually to Parliament on the integrity of the public service staffing system including how delegated authorities have been exercised.

The PSC signed an Appointment Delegation and Accountability Instrument (ADAI) [4] with the CBSA delegating appointment authorities to the President of the CBSA. The ADAI encourages the President to sub-delegate, in writing, appointment and appointment-related authorities to one or more persons to facilitate appointments and decisions. Certain conditions of delegation have been established in the ADAI that must be respected by the President and sub-delegated managers in making appointment-related decisions. Various remedial measures can be imposed for contravening or abusing delegated or sub-delegated authorities up to, and including, revocation of appointment authorities.

The CBSA has implemented a Staffing Sub-delegation Framework which sub-delegates staffing authorities, based on position title, for various stages of the appointment process. The roles and responsibilities for staffing are shared between sub-delegated managers and HR advisors (HRA). Sub-delegated managers have the authority to make, and are accountable for, staffing- related decisions and actions in accordance with relevant legislations and policies. Sub-delegated managers have access to HRAs who provide guidance, support and advice to assist managers in achieving their operational, financial and organizational objectives while meeting their HR stewardship responsibilities.

As part of the PSC's oversight role, audits are conducted to provide assurance and make recommendations for improvement. The PSC develops an Audit and Studies Plan on a cyclical basis of seven years, and all organizations that have signed an ADAI with the PSC, including the CBSA, are to be audited within those seven years.

In 2009, the PSC carried out an audit of CBSA HR staffing covering the period from January 1, 2006 through March 31, 2009. The audit resulted in six recommendations made to the Agency. The 2009 PSC audit had originally also included a component to assess the extent to which the Agency's appointments and appointment processes were in compliance with the PSEA and governing authorities. However, due to deficiencies identified as part of an internal file review undertaken by the HRB, the Commission decided to eliminate the compliance portion of its audit, and to do a separate follow-up audit of compliance later on.

In response to the Commission's October 2009 audit and its recommendations, the CBSA recognized the need for action. Accordingly, the Agency launched the Staffing Accountability Improvement Strategy (SAIS) in April 2011. It is a "collection of related initiatives designed to support both managers and HR practitioners in delivering staffing excellence." [5] SAIS includes a series of related initiatives to revise and clarify delegations, provide policy guidance, training and tools to managers, strengthen planning and file documentation, enhance monitoring, and ultimately, put in place mechanisms to better measure staffing performance and link delegations to performance.

Also in response to the Commission's October 2009 audit report findings, the CBSA committed to conducting a follow-up internal audit of the Agency's staffing processes. The internal audit has been conducted as two separate audits. Phase One, entitled 'Follow-up of the PSC's 2009 Audit of CBSA Human Resources Staffing', approved in March 2012, examined the implementation of management commitments made in response to the PSC's 2009 audit. The audit found that the CBSA had adequately addressed the recommendations; however, some opportunity for improvement still existed. Four of the recommendations had been fully or substantially addressed, and two, relating to conducting HR planning and carrying out monitoring and oversight activities, had been partially addressed at the time of the Phase One audit.

The current audit (Phase Two) examines compliance of Agency appointments with the PSC requirements, that is, the application of the merit principle and the guiding values as well as compliance with the Agency's Staffing Sub-delegation Framework.

1.2 RISK ASSESSMENT

If CBSA appointments do not comply with relevant legislative and policy requirements, there is a risk that appointments will not respect either the merit principle or the guiding values of fairness, access, representativeness and transparency. In turn, this translates to a risk that the Agency could be subject to additional conditions or limitations to the delegation or lose all or part of its delegated authority for staffing.

1.3 AUDIT OBJECTIVE AND SCOPE

The objective of the audit was to provide assurance on the extent to which the Agency's appointments and appointment processes comply with the requirements of the PSEA; the PSC's Appointment Framework, including the ADAI signed with the PSC; and other applicable legislation and related Agency policies.

The scope of the audit included testing a sample of medium- and high-risk appointments that were made between August 1, 2011 and December 31, 2011. The sample included appointments made in Headquarters and in the Regions and excluded non-appointments (i.e., acting appointments less than four months, deployments, assignments), low-risk appointments (i.e., Federal Student Work Experience Program and Special Assignment Programs), reclassifications, executive appointments and appointments made from the National Border Services Officer (NBSO) collective process. Executive appointments were excluded because they had been audited as part of a government-wide audit conducted by the PSC in 2008, with plans for a follow-up audit in 2013. NBSO collective processes were excluded because at the time of the audit, a new appointment process had been launched in February 2012. The new collective process will be considered for inclusion in next year's Risk-Based Audit Plan.

1.4 APPROACH AND METHODOLOGY

From a total population of 661 appointments within scope, the audit team selected a statistically representative random sample [6] of 45 appointment files from Headquarters and the Regions. The audit also selected one additional file for review involving the indeterminate appointment of a long-term acting employee.

For the 46 appointments, the audit team obtained the related files and assessed them against the compliance audit program developed by the PSC (the 'Staffing Audit Tool' or SAT). The SAT contains guidance and a series of questions to assist the auditor in determining whether or not a given appointment, and its process, have respected the merit principle and the guiding values of fairness, transparency, access and representativeness. Questions were added to the PSC's SAT that pertain specifically to compliance with CBSA policies. To ensure that audit findings were factually correct, they were presented for validation to the appropriate individuals in the HRB.

The audit did not compare the results of appointments made before the implementation of the Staffing Accountability Improvement Strategy (SAIS) to those appointments made post-SAIS in order to determine the impact of the SAIS initiatives. The audit is therefore unable to comment on the impact of or the improvements made as a result of SAIS.

1.5 AUDIT CRITERION

Audit criterion was as follows: Appointment files demonstrate that appointments have been made in compliance with the requirements of the PSEA; the PSC's Appointment Framework, including the ADAI signed with the PSC; and other applicable legislation, and related Agency policies.

Appendix A lists our sub-criteria.

1.6 STATEMENT OF ASSURANCE

This audit was conducted in accordance with the Treasury Board Internal Auditing Standards for the Government of Canada which incorporate the International Standards for the Professional Practice of Internal Auditing. Sufficient relevant evidence was examined and information obtained to provide a high level of assurance on the reported opinion.

2.0 AUDIT OPINION

For the appointments made that were within the audit's scope for the period under audit (August 1, 2011 to December 31, 2011), the findings indicate that the Agency has not always complied with certain requirements of the PSEA, the ADAI, and other applicable legislation as they pertain to the core value of merit and the guiding values of fairness, access, transparency and representativeness. Deficiencies were also noted in compliance with the Agency's Staffing Sub-delegation Framework.

This translates into a moderate risk exposure for the Agency. Risks include the Agency's delegated authority for staffing; the capability of the Agency's workforce; and the long-term financial implications of staffing decisions. In addition, these risks are in an environment where the staffing process is decentralized.

3.0 FINDINGS, RECOMMENDATIONS AND ACTION PLANS

3.1 APPOINTMENT FILE COMPLIANCE

3.1.1 OBSERVATIONS ON MERIT

Section 30 of the Public Service Employment Act (PSEA) establishes that an appointment is made on the basis of merit if the person to be appointed meets the essential qualifications of the position, including the official language requirements, and any other applicable criteria. An appointment is not merit-based if the appointee lacks one or more of the essential qualifications or does not meet other applicable criteria. Whether or not an appointment has been merit-based can be demonstrated only if the appointment file documentation clearly demonstrates that the candidate meets all of the essential qualifications, including official language requirements, and any other applicable criteria required for the position.

The PSEA and the Appointment Delegation and Accountability Instrument (ADAI) require that appointments and appointment processes respect the core value of merit, and that appointment files contain adequate documentation, which includes all of the required assessment information.

In 67% (31 out of 46) of files in our sample, appointments had been based on merit. However, 33% (15 out of 46) of the appointments did not demonstrate merit. More specifically, assessment information in the appointment files demonstrating how the candidates met the qualifications of the position was either weak or incomplete, and in two instances, the assessment documentation could not be located.

The findings in Table 1, below, illustrate audit observations related to merit. Appointments for which merit cannot be demonstrated pose a risk to the Agency. The ADAI signed by the President provides conditions of delegation, which include the requirements that delegated officials respect the core appointment value of merit and ensure that appointment and appointment-related decisions are fully documented and are accessible for a period of five years from the last administrative action. Contravention or an abuse of delegated or sub-delegated authorities puts the Agency's delegated staffing authority at risk and could include additional conditions or limitations, or the partial or complete withdrawal of delegated authorities. It could also result in corrective action up to and including revoking an appointment.

Table 1: Observations on Merit

Observations		Number of appointments
Total appointments audited		46
Appointment was merit-based	The person appointed had the essential qualifications and met the other merit criteria for the position.	31 (67%)
Appointment file did not demonstrate merit	The appointee was not assessed against all qualifications and appointment criteria for the position. (See examples, Exhibit 1.)	8 (17%)
	Assessment of one or more essential qualifications was weak.	5 (11%)
	Assessment documents were not on file or could not be located.	2 (4%)
Appointment was not merit-based	The person appointed did not meet all of the essential qualifications and other merit criteria required for the position.	0 (0%)

Table 1, above, highlights weaknesses in the quality and, to a less extent, completeness of the assessment information found in the files that we reviewed. Appointment files are to contain a reliable, documented record of assessment decisions and activities that have led to the appointment. This documentation is central to demonstrating that appointments have been merit-based.

Managers with sub-delegated staffing authority are responsible for ensuring that appointment files adequately document the assessment of candidates and their appointment decisions, and that these files provide sufficient evidence that the merit principle has been respected. This is required by the ADAI and the Agency's Sub-delegation Framework. Exhibit 1 below provides examples in which assessment information in appointment files was deficient.

Exhibit 1: Examples related to merit not demonstrated

A recommendation, which addresses the above observations related to merit, is provided at the end of section 3.2.

3.1.2 OBSERVATIONS ON RESPECTING GUIDING VALUES

Adequate file documentation provides evidence that the process of selecting and appointing an individual is objective, and that the guiding values of fairness, access, representativeness, and transparency have been respected.

The PSEA and the ADAI require that the Agency's appointments and appointment processes respect the guiding values of fairness, access, representativeness and transparency.

In 34 (74%) of the 46 appointments that we reviewed, one or more of the guiding values was not respected at certain stages of the appointment process. The most common situations where the guiding values had not been respected were as follows:

• Rationale for non-advertised processes. Pursuant to the Public Service Commission's (PSC) Choice of Appointment Process Policy and the CBSA's Non-Advertised Appointment Policy, the rationale for choosing to make non-advertised appointments should be fully documented. This documentation is intended to demonstrate how the process has both met the Agency's established criteria for non-advertised appointments, and respected the guiding values. While the audit did find the non-advertised rationale forms on file in all but one instance, the content of the forms did not adequately explain how one or more of the guiding values had been respected for 12 of the 24 non-advertised appointments reviewed.
• Screening and assessments. In 4 out of 20 files applicants had not been screened consistently or appropriately at the first stage of the assessment process. In 5 out of 20 files, there appeared to be inconsistencies in marking for candidates and in 3 out of 20 files there were documents missing from the appointment file, therefore preventing the audit team from concluding on the consistency of the assessment process.
• Right Fit decisions. The justification for the reasons for an appointment decision ('Right Fit') must be adequately documented, based on merit and respect the guiding values. The Right Fit decision must demonstrate how the candidate was selected, among others, and must meet all of the qualifications used in the appointment decision. For 5 out of the 19 files audited that required a Right Fit, the justification had either not been documented at all or it did not adequately document why that particular appointee was selected.
• Other situations noted. In 12 out of 46 cases (26%), the letters of offer did not set out all advertised conditions of employment and in 2 out of 19 cases the job advertisements were not identical in French and English, which could impact one or more guiding values.

However, there were other areas in which the Agency demonstrated strengths. These included:

• Priority entitlements. The PSEA states that certain persons, who meet specific conditions, must be given priority over all others when applying for positions for which they meet the essential qualifications. The priority clearance was obtained in all but one out of 22 cases that were audited.
• Notifications. When appointment decisions have been made as a result of an internal advertised or an internal non-advertised process, notifications are required to both inform individuals in the area of selection of the appointment decision, and to provide an opportunity for recourse. The notification requirements had been met in all but one out of 12 cases that were audited. The audit team also found that in all cases, Notifications of Consideration had been posted in compliance with CBSA and PSC policy and Information Regarding Acting Appointments had been posted in all cases when required.
• Area of selection. In terms of area of selection, in all of the files reviewed the appointee was in the area of selection as required, and in all of the files reviewed, the area of selection was compliant with the CBSA Area of Selection Policy.

Some appointments had indicators of potential preferential treatment

Of the appointment files reviewed, 11% (5 out of 46) had indicators of potential preferential treatment. The files where we identified these indicators were as follows:

• In two cases, despite not qualifying for the advertised process to fill the positions, the appointees continued to act in the positions for over two years.
• In one case, the official language requirements of the position appeared to be tailored in favour of the appointee.
• In one case (see Exhibit 2, Example 1), the HR advisor (HRA) sought the advice of the PSC which recommended against a second student bridging as it could put the staffing values at risk. Because of the choice of appointment process (i.e., an external advertised), there was no posted recourse mechanism required. In addition, there was a break in the employee's service in order to make the appointment possible. For these reasons, the audit team concluded that there was a risk of preferential treatment.
• In one case (see Exhibit 2, Example 2), the HRA had provided management with sound advice regarding the risks associated with making a particular appointment. However, management chose not to follow this advice. Moreover, the file did not indicate why this was the case. Because of the choice of appointment process (i.e., an external non-advertised), there was no posted recourse mechanism required. For these reasons, in combination with the effort required on the part of the sub-delegated manager to make the appointment, the audit team concluded that there was a risk of preferential treatment, which indicates that the guiding values, particularly the value of fairness, had not been respected.

Exhibit 2: Appointments with indicators of preferential treatment

Staffing authority is sub-delegated to managers with HRAs providing expert and strategic advice as well as a challenge role with regard to potential staffing outcomes. Where there is potential for real or perceived preferential treatment, action is required as respect for the guiding values is critical to the integrity of the staffing system. The audit team is concerned about the instances it observed where the sub-delegated manager did not follow the appointment-related advice that HRAs provided. In the other three files where potential for preferential treatment was observed, there was no documentation on file to verify whether or not the HRA identified the risks or played an appropriate challenge role.

The findings noted above represent a "flag" for management, indicating that these cases are worth further scrutiny.

Sub-delegated managers, HRAs and their respective managers all play a key role in ensuring that the staffing process functions as intended in that appointments made respect the merit principle, the guiding values, and are free from preferential treatment. The audit results indicate that supporting documentation or the required documents were present in the majority of files audited; however, it did not always substantiate that merit was met and that guiding values were respected throughout the appointment process (i.e., quality was an issue). The audit noted that control mechanisms at the transactional level (i.e., during the conduct of staffing processes) were not sufficient to ensure the compliance of appointments and the accuracy of the documentation to support appointment decisions.

A recommendation, which addresses the above observations related to guiding values, is provided at the end of section 3.2.

3.2 COMPLIANCE WITH THE SUB-DELEGATION FRAMEWORK

The CBSA has established an official Staffing Sub-delegation Framework. This Framework includes three related components: the management principles (outline the President's expectations of sub-delegated managers); the levels of management he has sub-delegated authorities to in the Regions and Headquarters; and the staffing-related authorities delegated at each key stage in the staffing process (including stages such as preparation, assessment, appointment, etc.). This last component is called the "instrument of delegation". Compliance with key stages in the instrument of delegation portion of the Framework was tested as part of the audit.

A significant proportion, 27 out of 46 (59%), of the appointment files in our sample did not comply with the sub-delegation instrument in its entirety to the extent that there was no evidence in the staffing files that the appropriate level of sub-delegated manager had authorized key decisions required or the decisions on file were made by a lower level of manager than is required by the instrument. The objective of the audit was not to review the effectiveness of the sub-delegation instrument or determine whether or not it is appropriate. However, the high rate of non-compliance is of concern because it puts the Agency's staffing processes at risk as the instrument is an important oversight control mechanism. The importance of compliance with the sub-delegation instrument is comparable to the importance of compliance with sections 32 and 34 of the Financial Administration Act.

The audit tested compliance with key stages in the sub-delegation instrument as part of the appointment file reviews. For each key stage in the appointment process, the approval by the appropriate level of sub-delegated manager should be obtained, and documentation to that effect should be on file. The audit found that the appropriate level of approval had not always been obtained or documented on file. For example, at the appointment initiation stage, 9 of the 46 (20%) of files reviewed did not include a staffing action request form signed by the appropriate level of sub-delegated manager. The staffing action request form initiates the staffing process and includes key position information such as language and security requirements, process type, and position number. It is a key document to initiate a staffing process.

For 23 of the files (50%) reviewed, the Statement of Merit Criteria (SoMC) was either approved by a manager who was not authorized to do so (in 13 cases or 28%) or there was no evidence that the SoMC had been approved at all by the appropriate level of sub-delegated manager (in 10 cases or 22%). The SoMC is a key document in the initial stages of the staffing process as it outlines the position requirements such as key competencies, experiences and qualifications necessary for performing the job. If not reviewed and approved by the appropriate level of management, there is a risk that the staffing process may not address the organization's needs.

The letter of offer is the official appointment document outlining the terms and conditions of employment and the duration of the appointment. The PSC Policy on Selection and Appointment requires that the offer of appointment be in writing and be extended by someone delegated to do so on behalf of the organization. In 1 of the 46 appointments audited (2%), the letter of offer was signed by a manager who did not have the authority to do so.

The high rate of non-compliance with the sub-delegation instrument could be a result of various issues, including:

• The level of awareness and understanding of the instrument by managers involved in staffing;
• Misalignment of delegation with operational staffing practices;
• The lack of clarity on what steps in the staffing process, as delineated in the instrument, require documented approval by the sub-delegated manager; or
• Training on the instrument for either HRAs or sub-delegated managers. The audit noted that, of the 46 appointment files reviewed, in only five instances had the sub-delegated manager taken the required post-Staffing Accountability Improvement Strategy (SAIS) sub-delegation training at the time of appointment, and only one manager had received a certificate.

The results of this compliance audit should be considered jointly with those of the Phase One audit, entitled 'Follow-up of the PSC's 2009 Audit of CBSA Human Resources Staffing'. The compliance deficiencies identified in the appointment files and appointment decisions, coupled with the weaknesses identified as part of the Phase One audit, which related to the overall human resources framework (including planning, monitoring, and reporting), indicate that controls need to be addressed at both the entity and the transactional levels. This will ensure that the Agency's staffing activities are well managed, are functioning as intended, and respect the guiding values and merit criteria.

RECOMMENDATION 1:

The Vice-President, Human Resources Branch should implement control mechanisms at the entity level and the transactional level to ensure that staffing documentation, provided by sub-delegated managers and placed in the staffing files, fully demonstrates that appointments are based on merit and respect guiding values.

RECOMMENDATION 2:

The Vice-President, Human Resources Branch should implement controls to ensure that the required level of approvals, as per the Sub-delegation Framework, are obtained, documented in the staffing files, and monitored.

Management Action Plan

We agree with the above recommendations. The Management Action Plan below addresses both recommendations.

MANAGEMENT ACTION ITEM	COMPLETION DATE
1. Clarify staffing expectations
a) Brief HR Program Management Table, Corporate Management Committee, and Executive Committee on the results of the Audit, this Management Action Plan, and the President's direction to provide proactive and effective stewardship for the integrity of the staffing program.	December 2012
b) Implement Online Assessment Board training for assessment board members.	December 2012
2. Better equip HR advisors and HR directors
a) Re-issue escalation procedures and protocols for HR advisors (HRA) and HR directors (HRD) that provide clear direction for managing staffing issues where there is a risk to merit or values and how unresolved issues will be escalated to more senior levels for resolution.	November 2012
b) Engage all HRDs and HRAs on the results of this Audit, this Action Plan, and the role that HRAs and HRDs must play in identifying and managing staffing issues during the staffing process.	December 2012
c) Brief HR Program Management Table and VP HR on status of HR Community engagement and address issues as they arise.	December 2012
d) Review and update the President's Instrument of Delegation with the view of further sub-delegating the staffing Assessment process.	January 2013
e) Develop and implement quality control measures in each Region to improve quality control of staffing during the staffing process.	January 2013
f) Review monitoring results with HRDs/HRAs on a monthly basis, targeting higher risk areas based on monitoring findings and identify training needs.	Monthly
3. Target Monitoring and Reporting
a) Refine current monitoring methodology by moving to a more targeted approach, focusing on areas of identified risk.	January 2013
b) Maintain and report on statistics on issues and actions taken in response to all issues of merit or potential preferential treatment escalated to the DG of Corporate HR Programs.	November 2012
c) Report monitoring findings to the HR Program Management Table, Corporate Management Committee, and Executive Committee (through the Agency Performance Report) on a quarterly basis.	December 2012 and ongoing
d) Refine monitoring strategy to take broader cross-sections of information from various sources (Public Service Staffing Tribunal complaints, Corporate HR and Training complaints, PSC Investigations, Public Service Employee Survey (PSES), etc.) to provide a more comprehensive report to senior management on compliance within the Agency.	January 2013
4. Strengthen Investigations & Corrective Measure Practices
a) Target areas of non-compliance identified by monitoring activities, follow up with accountable Directors General and HRDs, and implement appropriate corrective measures for all instances of non-compliance (corrective measures may range from improved documentation, training, removal of delegations, revoking appointments, discipline, to performance pay as warranted).	November 2012 and ongoing
b) Strengthen investigations capacity, including providing additional training for staffing monitoring personnel.	January 2013
c) Implement a standardized approach for conducting internal investigations related to staffing.	January 2013
5. Make Compliance Easier
a) Review and update associated HR guidance, with particular attention on Assessment Board training and reference tools.	January 2013
b) Streamline staffing processes, procedures, tools, and related documentation requirements with a view to standardizing more simplified processes and reducing paper /compliance burden in consultation with the PSC.	April 2013
6. Supplemental Action Specific to Audit Findings
a) Complete a review of all files identified in the Audit where issues of potential for preferential treatment were identified.	November 2012
b) Based on the evidence, implement appropriate corrective measures.	December 2012

APPENDIX A: Audit Criteria

Criterion

Appointment files demonstrate that appointments have been made in compliance with the requirements of the Public Service Employment Act (PSEA); the Public Service Commission's (PSC) Appointment Framework, including the Appointment Delegation and Accountability Instrument (ADAI) signed with the PSC; other applicable legislation, and related Agency policies.

Sub-Criteria

• 1.1 Appointment files demonstrate that appointments have been made on the basis of merit.
• 1.2 Appointment files demonstrate that the guiding values of fairness, access, representativeness, and transparency have been respected.
• 1.3 Appointment files demonstrate compliance with the Agency's Staffing Sub-delegation Framework.

APPENDIX B: ADAI Extract

The following is an extract from the Appointment Delegation and Accountability Instrument (ADAI) that was signed between the President of the CBSA and the Public Service Commission (PSC) in November 2010:

"Conditions of Delegation

In exercising delegated authorities, you and your sub-delegated officials will:

• respect the core appointment values (merit and non-partisanship) and the guiding values (fairness, access, transparency and representativeness);
• ensure that appointment decisions adhere to the requirements of the Public Service Employment Act, the Public Service Employment Regulations (PSER), and any other applicable statutory instruments as they pertain to the integrity of appointments, the core appointment values and the guiding values;
• adhere to the PSC's appointment policies;
• when developing and applying departmental appointment policies and practices, consider and balance the organization's business needs, employment equity and human resources management goals, the interests of the public service, and the career aspirations of employees;
• consult with all stakeholders, including bargaining agents, in developing and revising departmental appointment policies and practices;
• respect the terms and conditions that apply to specific delegated appointment and appointment-related authorities (Annex A);
• respect the accountability requirements;
• make the ADAI and all departmental policies, as well as sub-delegation terms and conditions, accessible to all sub-delegated officials, employees and bargaining agent members;
• ensure that appointment and appointment-related decisions are fully documented and are accessible for a period of five years from the last administrative action; and
• recognize that the personal information collected by the PSC and shared with your organization is done so in respect of sections 4 to 8 of the Privacy Act, the Treasury Board Secretariat Info Source publications and the PSC's Chapter of Personal Information Bank descriptions, which address the collection, correction, retention, use, disclosure, and disposition of personal information. When exercising appointment and appointment-related authorities, delegated organizations are responsible for respecting the Privacy Act, the Policy on Government Security and other applicable policies, and are responsible for their respective Info Source publications.

In addition, it is expected that you and your sub-delegated officials will follow the policies of the Employer, as well as the regulations of the Public Service Staffing Tribunal, as they pertain to the integrity of appointments, the core appointment values and the guiding values.

Remedial Measures

If the PSC concludes that there has been a contravention or an abuse of delegated or sub-delegated authorities, it will take remedial measures. These could include additional conditions or limitations, or the partial or complete withdrawal of your delegated authorities."

APPENDIX C: List of Acronyms

ADAI

Appointment Delegation and Accountability Instrument

CBSA or the Agency

Canada Border Services Agency

HRA

Human Resources advisor

HRB

Human Resources Branch

HRD

Human Resources director

PSC or the Commission

Public Service Commission

PSEA

Public Service Employment Act

SAIS

Staffing Accountability Improvement Strategy

SAT

Staffing Audit Tool

SoMC

Statement of Merit Criteria

APPENDIX D: Glossary

Note that the following definitions were obtained from the Public Service Commission's Web site.

Access

One of the guiding values of the Public Service Employment Act requiring that persons from across the country have a reasonable opportunity, in their official language of choice, to apply and to be considered for public service employment.

Acting appointment

The temporary promotion of an employee.

Appointment

An action taken under the Public Service Employment Act to hire or promote someone.

Appointment Delegation and Accountability Instrument (ADAI)

The formal document by which the PSC delegates its authorities to deputy heads. It identifies authorities, any conditions related to the delegation and sub-delegation of these authorities and how deputy heads will be held accountable for the exercise of their delegated authorities.

Appointment policy

Under the Public Service Employment Act, the PSC can establish policies on making and revoking appointments and taking corrective action. The PSC has a number of policies on specific subjects that correspond to key decision points in appointment processes and should be read in conjunction with the Public Service Employment Regulations.

Area of selection

The geographic, occupational, organizational and/or employment equity criteria that applicants must meet in order to be eligible for appointment that provides reasonable access to internal and external appointments and a reasonable area of recourse for internal non-advertised appointments. A national area of selection is prescribed by the PSC for certain external appointment processes.

Audit

An objective and systematic examination of activities that provide an independent assessment of the performance and management of those activities.

Classification

The occupational group, sub-group (if applicable) and level assigned to a position.

Corrective action

A process aimed at correcting an error, omission or improper conduct that affected the selection of the person appointed in an appointment process, or to address situations where an employee has engaged in an inappropriate political activity.

Employee

A person employed in the part of the public service to which the PSC has exclusive authority to make appointments.

Essential qualifications

Qualifications necessary for the work to be performed and that must be met in order for a person to be appointed. These include education, experience, occupational certification, knowledge, abilities and skills, aptitudes, personal suitability and official language proficiency.

External appointment process

A process in which persons may be considered whether or not they are employed in the public service.

Fairness

One of the guiding values of the Public Service Employment Act requiring that decisions be made objectively and free from political influence or personal favouritism, that policies and practices reflect the just treatment of persons, and that persons have the right to be assessed in their official language of choice.

Internal appointment process

A process for making one or more appointments for which only persons employed in the public service may be considered.

Merit

One of the core values of the Public Service Employment Act. An appointment is made on the basis of merit when a person appointed meets the essential qualifications for work to be performed, as established by the deputy head, including official language proficiency. The sub-delegated manager may also take into account any current or future asset qualifications, operational requirements and organizational needs.

Merit cannot be demonstrated

(Appointment file did not demonstrate merit) - In the context of this audit, whether or not an appointment has been merit-based can be demonstrated only if the appointment file documentation clearly demonstrates that the candidate meets all of the essential qualifications, including official language requirements, and any other applicable criteria required for the position.

Merit criteria

Essential qualifications as well as other merit criteria. Essential qualifications are those necessary for the work to be performed; they must be met in order for a person to be appointed. The other merit criteria can include any additional current or future asset qualifications, operational requirements or organizational needs, as established by the deputy head. The sub-delegated manager decides whether to apply the other criteria when making an appointment.

Merit met

(Appointment was merit-based) - In the context of this audit, merit is met when the person to be appointed meets the essential qualifications for the work to be performed, as established by the President, and if applicable, any other asset qualifications, operational requirements or organizational needs established by the President.

Merit not met

(Appointment was not merit-based) - In the context of this audit, merit is not met when the person appointed did not meet all of the essential qualifications and other merit criteria required for the position.

Non-advertised appointment process

An appointment process that does not meet the criteria for an advertised appointment process.

Public service

As defined by the Public Service Employment Act, the departments named in Schedule I to the Financial Administration Act, the organizations named in Schedule IV to that Act, and the separate agencies named in Schedule V to that Act.

Representativeness

One of the guiding values of the Public Service Employment Act requiring that appointment processes be conducted without bias and without creating systemic barriers in order to help achieve a public service that reflects the Canadian population it serves.

Sub-delegated manager

A person to whom a deputy head has sub-delegated, in writing, the authority to exercise specific appointment and appointment-related authorities which have been delegated to the deputy head by the PSC.

Transparency

One of the guiding values of the Public Service Employment Act, requiring that information about strategies, decisions, policies and practices be communicated in an open and timely manner.

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[1] Source: Public Service Employment Act; Preamble

[2] Source: CBSA Intranet, Frequently Asked Questions About SAIS, Question 1

[3] Source: Public Service Employment Act; Preamble

[4] Refer to Appendix B for extracts from the ADAI.

[5] Source: CBSA Intranet, Frequently Asked Questions About SAIS, Question 1

[6]  The calculation of the sample size was based on the following parameters: Confidence level 90%; Confidence interval 10%; Expected error rate 20%; and Tolerable error rate 30%.