Management Response – Internal Audit of Three Third Party Service Level Agreements
The Office of the Public Sector Integrity Commissioner of Canada (PSIC) entered into three service level agreements with other Government of Canada departments for the procurement of internal support services. Shared Human Resources Services – Public Services and Procurement Canada (SHRS-PSPC) is providing Human Resource (HR) workforce and workplace services as well as compensation services. The Canadian Human Rights Commission (CHRC) is providing financial management, information management / information technology (IM/IT) administration, procurement and My GCHR support services (My GCHR Help Desk and reporting). Compensation services were transferred from CHRC to SHRS-PSPC effective June 11, 2018.
In May 2019, in accordance with the PSIC 2018–23 Integrated Risk-Based Internal Audit and Evaluation Plan, KPMG was engaged to conduct an audit of the three third party service level agreements. In that regard, the audit was undertaken to determine whether the terms of the memoranda of understanding (MOUs) with the third parties in question are being respected and that services are delivered in an effective and efficient manner and represent value for money.
PSIC accepts the results of the Internal Audit of Three Third Party Service Level Agreements – Final Report (Final Report) submitted by KPMG on September 3, 2019 and agrees to implement each of the eight recommendations provided therein.
Management is pleased with the finding that the services delivered by the three third party organizations are effective overall and acknowledges the following observations which were identified as management processes that could be improved for efficiency and value for money:
- Clarity of roles and responsibilities as described in the MOU is key to effective and efficient service delivery by the third party delivery organization. Changes to the services delivered by CHRC that occurred in FY 2018–19 have not been documented or reflected in the MOU, and may not be clearly understood by the service provider.
- Additional information or explanation in regards to the fees charged to PSIC by CHRC and SHRS-PSPC for services delivered has not been requested and/or reviewed to ensure value for money of the services being delivered to PSIC.
- Services for My GCHR support and reporting are currently delivered by CHRC for a fee, but the same services could be delivered by SHRS-PSPC under a fixed fee arrangement and optimize value for money.
- Key operational processes are not documented or formalized. Formalized processes with clear roles and responsibilities will create efficiencies when staff turnover or prolonged absences occur and provide guidance to PSIC management and employees.
- An IT Strategic plan has not been documented and formalized to ensure that IT infrastructure and applications are aligned with PSIC needs, and IM/IT internal services are effective and delivered efficiently.
The following is Management’s response to the eight recommendations identified in the final report. Details on the implementation of each of the recommendations will be laid out in a separate action plan.
Recommendation No. 1
The Deputy Commissioner, PSIC, should enter into discussion to amend the MOU with CHRC to reflect the changes to the roles and responsibilities that have occurred to the compensation and IM/IT service delivery.
PSIC will share the audit results with CHRC and discuss related amendments to the MOU.
Recommendation No. 2
The Manager, Financial Services, PSIC, should request a report that compares the fees charged to the incremental cost incurred by SHRS-PSPC; perform an assessment of the fixed fee structure compared to a variable fee structure and consider negotiating other fee arrangements to help ensure value for money of the service provided by SHRS-PSPC. This review could be performed once a year before the agreement is renewed.
PSIC will review the reporting structure and explore other fee arrangements in order to ensure value for money for services provided by SHRS-PSPC. This exercise will be undertaken on an annual basis.
Recommendation No. 3
The Manager, Financial Services, PSIC, should request additional information that supports the forecasted fees charged on a monthly basis for Financial, HR and IM/IT services by CHRC, perform an assessment of the forecasted fees and consider negotiating other fee arrangements to help ensure value for money for the services provided by CHRC. This exercise could be performed annually or anytime a significant change in roles and responsibilities occurs.
PSIC will review the reporting structure and explore other fee arrangements in order to ensure value for money for services provided by CHRC. This exercise will be undertaken on an annual basis.
Recommendation No. 4
The Deputy Commissioner, PSIC, should contact the Director, Integrated Services Branch, Shared Services Integrated Sector, PSPC, to discuss the possibility of transitioning the My GCHR support services and reporting to SHRS-PSPC and negotiate any associated cost.
PSIC will discuss with SHRS-PSPC the possibility of transitioning My GCHR support services and reporting to them.
Recommendation No. 5
The Manager, Executive Services, PSIC, should document the key HR processes, identifying the roles and responsibilities and share this information with key PSIC Management.
PSIC will document key HR processes and make this information available to PSIC management.
Recommendation No. 6
The Deputy Commissioner, PSIC, should identify and coordinate training for a second individual within the current PSIC structure that would act as a back-up to the Manager, Executive Services, PSIC.
PSIC will ensure that appropriate back-up is identified.
Recommendation No. 7
The Deputy Commissioner, PSIC, should procure the service of an IT consultant to help the Manager, Financial Services, PSIC, draft an IT strategic plan. The IT strategic plan should include an evaluation of the service delivery options available to PSIC.
PSIC will procure the services of an IT consultant to help complete the IT Strategic Plan.
Recommendation No. 8
The Deputy Commissioner, PSIC, should seek to participate in client satisfaction surveys and, in the absence of client satisfaction surveys, initiate regular discussions with the service provider to highlight best practices, issues needing resolution and areas for improvement to promote possible process efficiency.
PSIC will ensure that regular and ongoing discussions take place with service providers with the view of improving process efficiency.