Audit of Management of Leave & Overtime
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378-1-206 CORRECTIONAL SERVICE CANADA Audit of Management of Leave & Overtime April, 2006 By Samson & Associates 85, rue Victoria Hull, Quebec J8X 2A3 TABLE OF CONTENTS EXECUTIVE SUMMARY ...........................................................................................................I 1.0 INTRODUCTION.............................................................................................................. 1 2.0 AUDIT OBJECTIVES & SCOPE.................................................................................... 2 2.1 AUDIT OBJECTIVES............................................................................................................ 2 2.2 SCOPE OF THE AUDIT ......................................................................................................... 2 2.3 AUDIT CRITERIA................................................................................................................ 2 3.0 APPROACH AND METHODOLOGY ........................................................................... 3 4.0 OBSERVATIONS AND RECOMMENDATIONS ........................................................ 6 CONTEXT...................................................................................................................................... 6 4.1 OVERTIME ......................................................................................................... ...
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| Publié par | Nuzong |
| Nombre de lectures | 21 |
| Langue | English |
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378-1-206
CORRECTIONAL SERVICE CANADA Audit of Management of Leave & Overtime April, 2006
By Samson & Associates 85, rue Victoria Hull, Quebec J8X 2A3
TABLE OF CONTENTS
EXECUTIVE SUMMARY ...........................................................................................................I 1.0 ....................................................................................1ODTRIN ........................NO..CUIT 2.0 AUDIT OBJECTIVES & SCOPE.................................................................................... 2 2.1 AUDITOBJECTIVES............................................................................................................ 2 2.2 SCOPE OF THEAUDIT......................................................................................................... 2 2.3 AUDITCRITERIA................................................................................................................ 2 3.0 APPROACH AND METHODOLOGY ........................................................................... 3 4.0 OBSERVATIONS AND RECOMMENDATIONS ........................................................ 6 CONTEXT...................................................................................................................................... 6 4.1 OVERTIME......................................................................................................................... 7 4.1.1 Roles and Responsibilities ......................................................................................... 7 4.1.2 Controls.................................................................................................................... 11 4.1.3 Compensatory Time Off .......................................................................................... 13 4.1.4 Controls over the Overtime System......................................................................... 15 4.1.5 Financial Controls.................................................................................................... 16 4.2 LEAVE............................................................................................................................. 17 4.2.1 Unscheduled Leave .................................................................................................. 17 4.2.2 Excess Vacation Leave ............................................................................................. 19 4.2.3 Sick Leave................................................................................................................ 20 4.2.4 Family Related Leave (FRL) ................................................................................... 21 4.2.5 Leave Without Pay (LWOP).................................................................................... 22 4.3 OTHERISSUES.................................................................................................................. 22 4.3.1 Human Resources Management System (HRMS).................................................... 22 4.3.2 Records Management................................................................................................ 23
Appendix AAction Plan Appendix B Audit Criteria Appendix CInstitutions Visited Appendix D Interview Schedule Appendix E Mapping Process
Correctional Service Canada
Audit of Overtime & Leave
EXECUTIVE SUMMARY In accordance with the departmental audit plan for 2004-05, the audit of Leave and Overtime was conducted from February to March 2005. The objectives established for this audit were as follows: yadequacy of CSC’s systems and controls for the management of leave, To determine the and identify means for improving the efficiency and effectiveness of these systems and accuracy of the data (including annual, sick, compensatory leave, family, volunteer, personal, leave without pay). y determine the adequacy of CSC’s systems and controls for the management of To overtime/compensatory time-off and identify means for improving the efficiency and effectiveness of these systems. yadequacy of the organizational structure for the management of leave and To assess the overtime. The scope of the audit included the overall process in place for the management of leave and overtime, based on the objectives defined above. Audit coverage was national in scope which included NHQ, five regions and selected institutions in each region. A total sample of 270 overtime/compensatory time off and leave transactions covering the five regions and National Headquarters for the period April 1, 2003 to December 31, 2004 were selected for review. Leave transactions included vacation leave, sick leave, family related leave and leave without pay. The audit was conducted in accordance with the standards set out in the TBPolicy on Internal Audit. These standards require that the audit is planned and performed in a manner that allows the audit team to determine assurance of the audit findings. The audit team's conclusions are based on the assessment of findings against the objectives and criteria as defined in Section 2.0 and reflect the audit work conducted between February and March 2005. In the audit team's opinion, sufficient audit work has been performed and the necessary evidence has been gathered to support the conclusions contained in this audit report. Debriefings were conducted by audit team members at which time audit findings were discussed. Some regions have already taken action to address specific areas requiring improvement. In order to ensure the care and custody of inmates, Correctional Services institutions operate 24 hours a day, seven days a week. This operational requirement poses complex resourcing and scheduling demands for the management of its institutions. Resource changes often result in the need for overtime. Overtime costs totalled $34,387M in 2004-05 and $28,095M in 2003-04. There are a number of factors that impact on managements’ ability to effectively control leave and overtime. These include the effectiveness of the Rostering Process, unscheduled leaves,
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Correctional Service Canada
Audit of Overtime & Leave
requirements for transportation and custody of inmates outside the institutions, and delays in the staffing process resulting in long term position vacancies (acting situations) at the institutions. Management has little control over exceptional circumstances, such as incidents at institutions, which generate overtime, and thus management’s ability to effectively budget for overtime expenditures is limited. Overall, although we found that management is concerned about reducing overtime expenditures, and was actively monitoring the use and reasons for overtime, a consistent department-wide approach or strategy to analysing the drivers of overtime in an effort to reduce overtime does not exist. Presently, overtime worked is managed and reviewed in isolation within institutions/regions. This has resulted in regions and institutions implementing their own unique overtime and leave processes. These processes are not efficient and are cumbersome, which in some regions have led to serious control weaknesses. The department is at risk for potential overpayments. There is a risk that the benefits to be gained from a unified approach to managing leave and overtime are not being realized. However, we did note good practices in some institutions which had processes in place providing effective controls over overtime and leave. The results of this audit can be summarized as follows: Overtime • defined the roles and responsibilities of all individualsThe Department has not clearly involved in the processing of overtime claims. • payments are weak. As a result, errors mayControls to ensure the accuracy of overtime be occurring that remain undetected. • Compensatory Time Off In Lieu of Pay is being granted without the requisite authority. Also, for some occupational groups compensatory time is generating additional overtime; • Controls over the Overtime System (OTMS/OPRS) are not adequate. Financial controls for the verification and payment of overtime transactions are not • consistently in place across the department. Leave • The unscheduled leave process lacks consistent procedures for the adequate reporting, recording and monitoring of leave. • The Department does not have in place a consistent process to ensure that excess vacation leave balances are maintained within limits established by collective agreements • There is no consistent approach in applying additional sick leave credits for CX shift workers. • audit, to restrict the use of FRL, weWhile a system control was in place at the time of the found that this control is being circumvented through the recording of FRL under HRMS codes other than 220. Overall, significant improvements are needed to improve the overall effectiveness and efficiency of the management of leave and overtime. Implementation of the following recommendations
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Correctional Service Canada
Audit of Overtime & Leave
will contribute significantly to ensuring that overtime is kept to a minimum, its cost is justified and that leave is managed effectively. Action will therefore be required in the following areas: Human Resources Management Sector Overtime • Develop and communicate consistent department-wide procedures and guidelines, including the definition of roles and responsibilities, for the processing of overtime claims. • Develop and implement a consistent monitoring & reported regime to ensure the effective management of overtime. Anomalies identified and addressed at a departmental level • place in each region and NHQ and adopt aAssess the current overtime systems in consistent national system. • Ensure that all staff that have a role in the overtime process are appropriately trained in their respective roles and responsibilities. • Ensure that pay verification occurs and is evident against overtime payments. Ensure that a mechanism is in place to monitor and eliminate the occurrences of CX’s • being allowed compensatory time off for overtime worked. • eysei ngne pmolOS the NU Hnitnoc fo tcapmitisaenmpcoy lluaignoeRthe ess assally occupational group for compensatory time off versus payment of overtime worked. • assessed for its adequacy as an acceptable tool forEnsure that the OTMS/OPRS is tracking and monitoring overtime expenditures. Leave Ensure that appropriate consistent guidelines and procedures are developed for the • recording, reporting and monitoring of unscheduled leave. • Ensure that a national monitoring process is implemented to ensure that the requirements of the various collective agreements regarding excess vacation leave are respected. • 999, 699 etc to ensure that additional sick leaveMonitor the use of HRMS codes such as credits, in accordance with the Correctional Service collective agreement (CX) are recorded consistently. • Ensure that adjustments to employee sick leave entitlements, for exceptional instances, are well documented and placed on appropriate files. • within HRMS and restrict usage ofAssess the utilization of the various codes undesignated codes to exceptional situations. • Develop a checklist to ensure that employees’ files contain the necessary information to support overtime/leave actions taken. Corporate Services Sector • in the overtime process to ensure that theReview the role of the Financial Officer requisite approvals are being carried out in accordance with the FAA. • Provide supervisors with guidelines outlining their role in the authorization of overtime under Section 34 of the FAA.
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Correctional Service Canada
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Audit of Overtime & Leave
Ensure that a process is in place that provides the supporting documentation for overtime claims to financial officers to meet their obligations under Section 33 FAA. Based on the results of the assessment of the OTMS/OPRS, endorse the OTMS/OPRS as a departmental overtime system and provide the requisite security, maintenance and support necessary.
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Correctional Service Canada
Audit of Overtime & Leave
1.0 INTRODUCTION A salary management risk-based preliminary audit survey was conducted by Samson & Associates, in March 2004, to provide Correctional Service Canada (CSC) with an independent assurance that administration of pay and benefits is controlled, has effective and efficient processes, complies with applicable policies, Acts and regulations, and identify best practices in the area of pay and benefits. The preliminary audit was performed at National Headquarters, and in the Ontario and Quebec Regions. The results were presented to Performance Assurance and Human Resources Management Sector at National Headquarters as well as the Regional Administrators of Human Resources. Following discussions with the Human Resource Management Sector (HRMS), and further examination of the issues identified during the preliminary survey, the Performance Assurance Sector determined that due to the high risk areas identified, further audit attention was required to assess the extent of risk existing in the compensation and benefits function. The audit of Leave and Overtime was included in CSC’s internal audit plan for 2004-05. Samson & Associates was contracted to conduct the audit in February and March 2005. The audit consisted of a review of overtime/compensatory time off and leave transactions between April 1, 2003 and December 31, 2004. Leave transactions included vacation leave, sick leave, family related leave (FRL) and leave without pay. This report presents the results of the audit. As required by Treasury Board’s (TB) Management of Overtime Policy, “it is the responsibility of departments to manage overtime in a way that will ensure that its use is kept to an appropriate minimum and its cost is justified. CSC overtime costs totalled $34,387M in 2004-05 and $28,095M in 2003-04. Table 1 provides a breakdown of overtime costs and the relation to salary costs, by region. Table 1 Overtime Costs by Region REGIONS 2004-2005 % OF OVERTIMEREGIONS 2003-2004 % OF OVERTIME SALARY TRANSACTIONS SALARY TRANSACTIONS 04/05 03/04 Pacific $4,799,160 4.61 16,531Pacific $5,250,811 5.27 19,880 Prairies $6,800,591 4.39 21,250Prairies $6,697,133 4.27 21,618 Ontario $8,939,272 5.59 34,539Ontario $6,840,604 4.41 33,599 Quebec $9,133,361 5.50 37,513Quebec $6,456,293 3.84 37,129 Atlantic $4,375,226 6.06 13,983Atlantic $2,512,148 3.55 13,047 HQ $339,358 0.59 830 HQ $338,141 0.69 834 TOTAL $34,386,968 124,646TOTAL $28,095,130 126,107
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Correctional Service Canada Audit of Overtime & Leave
2.0 AUDIT OBJECTIVES & SCOPE 2.1 Audit Objectives The objectives of the audit are: • CSC’s systems and controls for the management of leave,To determine the adequacy of and identify means for improving the efficiency and effectiveness of these systems and accuracy of the data (including annual, sick, compensatory leave, family, volunteer, personal, leave without pay). • To determine the adequacy of CSC’s systems and controls for the management of overtime/compensatory time-off and identify means for improving the efficiency and effectiveness of these systems. • To assess the adequacy of the organizational structure for the management of leave and overtime. 2.2 Scope of the Audit The audit examined the overall process in place for the management of leave and overtime, based on the objectives defined above. Audit coverage was national in scope which included NHQ, five regions and selected institutions in each region. A sample of overtime and leave transactions for the period April 1, 2003 to December 31, 2004 were selected for review. Transactions selected were based on sampling criteria as outlined in Section 3.0. 2.3 Audit Criteria Audit criteria were derived from the various collective agreements applicable to the department including the Correctional Services Non-Supervisory and Supervisory (CX), Health Services, Program & Administrative Services, Operational Services, Financial Administration, etc. Criteria were also based on Treasury Board and CSC policies and Commissioner’s Directives. These include but are not limited to: Treasury Board • Management of Overtime • Pay Administration guidelines and directives • Annual Leave Policy • Account Verification • Maximum Hours of Work
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Correctional Service Canada
Audit of Overtime & Leave
• Relevant Terms and Conditions of Employment The Human Resources Management Sector was provided with the audit criteria. The audit criteria for each objective are presented in Appendix B. 3.0 APPROACH AND METHODOLOGY In order to ensure an equitable distribution amongst the regional offices, and to respect the time constraints of the audit to have field work completed by March 31st, 17 sites including NHQ, were selected for on-site work. The sites are listed in Appendix C, attached. Interviews were held with key individuals and detailed testing as outlined below on a sample of leave and overtime transactions were conducted. Interviews and/or debriefs were held with Wardens, Deputy Wardens, Coordinators Correctional Operations (CCO’s), Correctional Supervisors, Compensation Managers, Compensation Advisors, etc., and a variety of administrative staff throughout the institutions. An interview schedule is attached in Appendix D. At each region and at NHQ, a sample of 45 leave and overtime transactions, for a total of 270, were selected for detailed testing. Transactions were selected based on sampling criteria as outlined below. The sampling criteria was developed from the audit teams previous knowledge and experience in conducting leave and overtime audits and from an analysis of leave and overtime data, using a data analysis software, Audit Command Language (ACL).Considering the total population of overtime and leave transactions and a 95% confidence level, it was determined that 270 transactions would provide a representative sample for detailed testing. Overtime data was obtained from the Salary Management System (SMS) from April 1, 2003 to February 28, 2005. Leave data was obtained from the departmental Human Resources Management System (HRMS) for the same period of time. The sampling criteria are provided below in Table 2.
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Correctional Service Canada Audit of Overtime & Leave
Table 2 Sampling Criteria lemen amplin Criteria Overtime - 15 transactions Extra-duty pay (overtime) five highest total overtime expenditures by region ten randomly selected total overtime expenditures Compensatory time-off - 8 transactions Compensatory time-off used >120 hrs balance >120 Vacation Leave - 8 transactions Vacation Leave leave used >320 hrs Vacation Leave advance >320 hrs Vacation Leave year end balance >320 hrs Vacation Leave year end balance = 0 Vacation Leave year end balance <0 Sick Leave - 8 transactions Sick Leave leave used >1000 hrs uncertified sick leave used >160 hrs uncertified used = 0 amily Related - 4 transactions(random sample) eave without Pay - 2 transactions (random sample) Total transactions - 45 Detailed testing was carried out based on the established criteria as described below. Overtime • detailed record of overtime worked, including dates, and to and from hours has beena completed; • record of overtime has been approved by the appropriate supervisor/manager;the • evidence exists that overtime has been pre-approved (call-in logs); • is based on the appropriate rate (e.g. 1.0/1.5/2.0) as per the collectivecompensation agreement; • compensation is based on the correct rate of pay in accordance with the collective agreement; • input to the on-line pay system; andevidence exists on file of • evidence of pay verification exists. Excess Vacation Leave • evidence that excess vacation leave was paid out; • evidence of manager’s approval for vacation leave paid out ; • >$5K for leave paid out exists;evidence of compensation manager’s review for payments • evidence of Section 34 approval; • that compensation was based on employees correct rate of pay in accordance withevidence the appropriate collective agreement; • of input into online pay system; andevidence on file • evidence of pay verification. Leave Samson & Associates
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Correctional Service Canada
Audit of Overtime & Leave
• evidence that scheduled leave was approved in advance of leave taken; • evidence that unscheduled leave was called in to leave co-ordinator; • evidence that leave was accurately recorded in the HRMS; and • evidence that the employee had not exceeded leave entitlements. Detailed process flowcharts were also developed for the leave and overtime processes. The processes were validated during the conduct of on-site audit work at each institution. The resulting process flowcharts are attached in Appendix E.
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