Report on the Audit of Timekeeping Compliance – February 2014
7. The Department of Justice uses a variety of tools to plan, manage and report on departmental activities. One of the key tools is iCase, a web-based national application that supports the practice of law and the management and delivery of legal services to Government with the following functions: case management; document management; operational reports and time management. All counsel and paralegals who provide litigation, advisory, and legislative/drafting services, as well as designated policy employees are required to record time in iCase. At the time of the audit, there were 3597 timekeepers in the Department.
8. The Business Practices Division (BPD) of the Office of Strategic Planning and Performance Management, Management Sector has an operating budget of approximately $1.9 M (salary and operations and maintenance). BPD is responsible for, among other activities, the support and maintenance of iCase, departmental authorities for timekeeping such as the National Timekeeping Protocol (NTP) and guidance documents that support timekeepers and managers.
9. BPD gathers business requirements related to iCase functionality from emerging departmental priorities. BPD also tracks suggested iCase functionality enhancements from a national network of iCase administrators, and collaborates with the Information Solutions Branch for implementation. iCase administrators also assist BPD in providing timekeepers and departmental managers with iCase training, advice and support on timekeeping. This is supplemented by a variety of reference material, videos and tools.
10. The NTP is the key framework that governs timekeeping practices in the Department. The NTP includes national standards applicable to all timekeepers to support complete and reliable timekeeping information in support of decision making. The NTP also includes a National Timekeeping Tasks and Activities List which provides more detailed information for classifying how time is recorded and data standards.
Uses of timekeeping information
11. The Department of Justice recovers costs for the provision of legal services based on a funding model that includes a mix of appropriation (A-Base) and cost recovery from client departments and agencies. The charge-out rates, established and approved by Treasury Board each fiscal year, are applied to all types of legal services including advisory, litigation, and legislative/regulatory drafting. Since 2012-13, revenues from cost recovery account for over a third of the Department's operating budget, with billable hours derived from iCase accounting for 35% of this revenue. Complete, timely and accurate timekeeping is critical in the context of cost recovery and for cash management of the Department.
12. The Department's monthly billing cycle for legal services involves the following steps in iCase: timekeepers review time entered in iCase to ensure accuracy; and, managers or supervisors review and validate timekeeping in iCase. Timekeeping information is uploaded in IFMS-SAP for the preparation of monthly invoices to client departments and agencies.
13. In addition, timekeeping data from iCase is used to support a variety of departmental planning initiatives. This includes annual estimates reporting to Parliament through the Departmental Performance Reports and Reports on Plans and Priorities as well as supporting Departmental compliance with the Treasury Board Policy on Management, Resources and Results Structures.
1.2 Audit Objective and Scope
14. This audit was identified in the Long-Term Internal Audit Plan 2011-12 to 2013-14. The objective of the audit was to assess the level of compliance with the NTP, to establish whether adequate and effective practices have been put in place to enable effective resourcing decisions, priority setting and cost recovery practices. The audit team examined and assessed:
- the adequacy of the management framework in providing oversight, direction and accountability for the management of timekeeping;
- compliance with and monitoring of the NTP and related requirements;
- timekeeping practices among the different Regional Offices, Portfolios and DLSUs; and,
- timekeeping information as a corporate resource and its use in supporting performance measurement and mandated initiatives.
15. Documentation and transactions reviewed were from 2011-12 and 2012-13. Transaction testing was limited to assessing compliance with the NTP and supporting departmental authorities. Testing did not assess the integrity of the timekeeping data, that is data accuracy (whether or not inputted data is correct) or data reliability (whether or not the system records and maintains data as intended).
16. The audit team reviewed timekeeping practices at headquarters and in two Regional Offices: Quebec and Atlantic. Six DLSUs were also included: Health Canada; Canadian Security Intelligence Service; Citizenship and Immigration Canada; Industry Canada; Aboriginal Affairs and Northern Development Canada; and, Department of Foreign Affairs and International Trade. Three portfolios were included: Public Safety, Defense and Immigration; Business and Regulatory Law; and, Aboriginal Affairs.
1.3 Risk Assessment
17. The initial risk assessment conducted during the planning phase identified the following potential risks in the management of timekeeping:
- an absence of established effective oversight bodies with a clearly communicated mandate, including clear roles with respect to governance, risk management and control could lead to ineffective management practices;
- a lack of compliance monitoring with the NTP and related requirements could result in inadequate departmental-wide monitoring practices/oversight of timekeeping;
- a lack of necessary training, tools, resources and information to support legal counsel in recording their time in iCase in a consistent and timely manner could result in unreliable timekeeping information;
- inaccurate or untimely timekeeping information could impact the Department's cost recovery process and prevent Portfolios, Sectors and Regions from accurately forecasting and reporting on the costs of the legal services provided; and,
- inaccurate or untimely timekeeping information does not support management needs of mandated initiatives such as those related to cost recovery, and strategic and budget review initiatives.
18. Audit criteria were developed in consideration of the risks identified during the planning phase of the audit and were derived from Treasury Board Secretariat guidance on auditing management frameworks provided in the Audit Criteria related to the Management Accountability Framework: A Tool for Internal Auditors (March 2011).
19. For an overview of the audit criteria, see Appendix A.
1.5 Approach and Methodology
20. The approach and methodology used for the audit followed the Internal Auditing Standards for the Government of Canada, which incorporates the Institute of Internal Auditor's International Standards for the Professional Practice of Internal Auditing.
21. A detailed description of the approach and methodology is outlined in Appendix B.
1.6 Good Practices Identified
22. The audit team observed the following areas where management practices were properly designed and applied effectively:
- BPD provided training, tools, resources and information to support both timekeepers and managers in their timekeeping responsibilities. (criterion 2.1)
- BPD was responsible for keeping the NTP and other timekeeping authorities up to date. This responsibility was clearly identified, communicated and understood. There was evidence that that the review and revision of the NTP and other authorities were regularly undertaken and communicated to timekeepers and managers through the departmental intranet. (criterion 2.2)
23. The audit also identified areas where opportunities exist to strengthen management practices in the administration of timekeeping. These opportunities are discussed in greater detail in section 2.0 of this report.
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