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2010-11
Departmental Performance Report

Public Service Commission of Canada

The original version was signed by
The Honourable James Moore, P.C., M.P.
Minister of Canadian Heritage and Official Languages

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Table of Contents

President's Message

Section I: Organizational Overview

• Raison d'être
• Responsibilities
• Strategic outcome and Program Activity Architecture
• Organizational priorities
• Risk analysis
• Summary of performance
• Strategic outcome
• Expenditure profile
• Estimates by vote

Section II: Analysis of program activities by strategic outcome

• Program activity: 1.1.0 – Appointment Integrity and Political Neutrality
• Program activity: 1.2.0 – Oversight of Integrity of Staffing and Political Neutrality
• Program activity: 1.3.0 – Staffing Services and Assessment
• Program activity: 2.1.0 – Internal Services

Section III: Supplementary Information

• Financial Highlights
• List of supplementary information tables

Section IV: Other items of interest

President's Message

I am pleased to present the 2010-2011 Departmental Performance Report of the Public Service Commission (PSC) of Canada. The PSC is an independent agency reporting to Parliament, mandated to safeguard the integrity of public service staffing system and the political neutrality of the public service. We also recruit qualified Canadians from across the country and living abroad.

This reporting period is the last for this Commission and, for the PSC, my final year as President. Three senior executives also retired and succession is under way as part of our transition planning.

Our first corporate priority, as set out in our Report on Plans and Priorities, was to play a leadership role in the review of the Public Service Modernization Act (PSMA) through an evidence-based assessment of the implementation of the Public Service Employment Act (PSEA), including recommendations for change. The PSC has worked in close partnership with the PSMA Review Team on the formal legislative review. Our Special Report, entitled "Merit and Non-partisanship under the Public Service Employment Act (2003)", was tabled in Parliament on March 22, 2011. The report provides the Commission's assessment based on five years of operation of the PSEA and it made recommendations on what we feel is required to improve the system and ensure that Canadians continue to benefit from a professional, merit-based and non-partisan public service.

Our second priority was to provide independent oversight and assurance to Parliament on the integrity of the staffing system and the non-partisanship of the Federal Public Service. Effective oversight is fundamental to the PSC's accountability to Parliament. An independent review committee examined the PSC's oversight activities and, in its January 2009 report, the committee made a series of recommendations such as improving stakeholder communications, streamlining its monitoring and audit functions and further engaging our partners. All recommendations have been addressed; some have been completely implemented, while others have been successfully integrated into ongoing operations. We have designed these initiatives to improve oversight in our highly-delegated staffing model and enhance the PSC's accountability to Parliament.

Our third priority was to provide integrated and modernized staffing and assessment services. In the four years since our increased authority for cost recovery, our cost recovery operations have nearly doubled. During 2010-2011, we revamped our Post-Secondary Recruitment campaign, targeting specific career streams that will facilitate the process for Canadians applying for federal jobs. In partnership with the Treasury Board of Canada Secretariat, departments and agencies, we secured permanent funding for the Public Service Resourcing System, our electronic recruitment system. We worked with Human Resources and Skills Development Canada on an approach to transfer the internal staffing component of Publiservice to the PSC, paving the way for the full integration of external and internal staffing systems. Moving forward, a new three-year business plan was developed to guide the evolution of the PSC as a centre of expertise in staffing and assessment services.

Our fourth priority was to build on the PSC as a model organization. Further progress was made in developing specific action plans based on our on-line employee engagement surveys and the setting of a 100% target for completion of Employee Learning Plans and Employee Performance Evaluations. Extensive preparatory work was undertaken with respect to the PSC's relocation to Gatineau in 2013.

During this reporting period, the PSC also implemented budget reductions resulting from the horizontal strategic review of human resources management and the freeze on operating budgets. Through prudent spending, realizing further operational efficiencies and extending our cost recovery operations, we were able to achieve the necessary budget reductions.

I would like to take this opportunity to recognize the progress that has been made in implementing the vision enshrined in the PSEA and the invaluable role that all stakeholders have played in achieving this aim.

Our impressive achievements would not have been possible without the steadfast support and dedication of PSC employees at all levels of the organization. I am confident that they will continue to uphold the mandate of the PSC, which is fundamental to maintaining a professional and non-partisan public service, recognized internationally for its excellence.

Section I: Organizational overview

Raison d'être

The Public Service Commission (PSC) is dedicated to building a public service that strives for excellence. We protect merit, non-partisanship and the use of both official languages, while ensuring respect for the values of fairness, access, transparency and representativeness.

We recruit talented Canadians from across the country and living abroad and renewed our recruitment services to meet the needs of a modern and innovative public service.

Responsibilities

On behalf of Parliament, the PSC safeguards the integrity of staffing and the non-partisan nature of the public service. In this respect, the PSC works closely with government but is independent from ministerial direction and is accountable to Parliament.

The PSC is mandated to:

• Administer the provisions of the Public Service Employment Act (PSEA) that are related to the political activities of employees and deputy heads;
• Oversee the integrity of the staffing system and ensure non-partisanship. This oversight role includes maintaining and interpreting data on the public service, carrying out audits that provide assurance and make recommendations for improvements, conducting investigations that can lead to corrective action in the case of errors or problems; and
• Appoint, or provide for the appointment of, persons to or from within the public service. This has been delegated to departments and agencies. The PSC provides staffing and assessment functions and services to support staffing in the public service.

Strategic outcome and Program Activity Architecture

The PSC Program Activity Architecture consists of one strategic outcome and four program activities.

Government of Canada Spending and Outcome Area	Government Affairs
	Safeguarding and fostering the integrity and political neutrality of public servants
PSC – Program Activity Architecture	Strategic Outcome	To provide Canadians with a highly competent, non-partisan and representative public service, able to provide service in both official languages, in which appointments are based on the values of fairness, access, transparency and representativeness
	Activities	1.1.0 Appointment Integrity and Political Neutrality	1.2.0 Oversight of Integrity of Staffing and Political Neutrality *	1.3.0 Staffing Services and Assessment	2.1.0 Internal Services
	Sub-activities	1.1.1 Policy, Regulation and Exclusion Approval Orders	1.2.1 Monitoring	1.3.1 Staffing Services	2.1.1 Governance and Management Support
		1.1.2 Delegated Appointment Authorities	1.2.2 Audit, Evaluation and Studies **	1.3.2 Assessment	2.1.2 Resource Management Services
		1.1.3 Non-delegated Authorities	1.2.3 Investigations		2.1.3 Asset Management Services
		1.1.4 Political Activities

* The name was changed to “Oversight of Integrity in Staffing” effective FY 2011-2012

** The name was changed to *Audit and Data Services* effective FY 2011-2012

Organizational Priorities

Performance/priority status legend

Priority I	Type*	Program Activity
Play a leadership role in the review of the Public Service Modernization Act (PSMA) through an evidence-based assessment of the implementation of the Public Service Employment Act (PSEA), including recommendations for change.	New	1.1.0 Appointment Integrity and Political Neutrality
Status: Met all
Progress in 2010-2011 against RPP planning key actions includes: Completing research and analysis on key issues related to merit, non-partisanship, recourse and other aspects of PSEA implementation and identifying recommendations for change – The PSC completed its assessment of the PSEA and tabled the results in a Special Report to Parliament in March 2011. The Report set out future direction on improving the staffing system, enhancing the non-partisanship of the public service, strengthening the governance and operation of the Commission and making recommendations for limited legislative change. Implementing the results of the review of the PSC’s Appointment Policy Framework – The PSC completed its comprehensive review of the Appointment Policy Framework (to come into force in 2011-2012) to ensure a values-based, harmonized suite of policies to respect the spirit of the legislation and a well-functioning delegated appointment system. It also updated appointment policies, policy guides and tools, including a PSC Glossary, and developed an outreach strategy. Completing outreach with stakeholders on key issues related to PSEA implementation, including collective staffing and non-advertised processes – The PSC consulted with public servants, departments and agencies, human resource (HR) professionals, academics, bargaining agents and other interested parties on a range of issues related to implementation of the Act and future directions, including non-partisanship and the choice of appointment process. It also held consultations on a proposal to amend the Public Service Employment Regulations (PSER) to accommodate the unique needs of spouses of employees and members of the Canadian Forces, Royal Canadian Mounted Police, Statistics Canada and the Office of the Governor General’s Secretary. Continuing to work with central agencies, including the PSMA Review Team, to ensure effective information exchange and co-ordination of efforts, where appropriate – The PSC continued to collaborate with the team conducting the formal legislative review of the PSMA. It served as an active member of the PSMA Review Partners Committee and shared its analysis of five years of operation under the PSEA with the Review Team, the results of which were presented in a PSC Special Report to Parliament in March 2011. The PSC also strengthened its relationship with the HR Council and established a liaison function to promote effective information exchange and dissemination.

* “Type” is categorized as follows: Previously committed to—committed to in the first or second fiscal year before the subject year of the report; Ongoing—committed to at least three fiscal years before the subject year of the report; and New—newly committed to in the reporting year of the Departmental Performance Report (DPR).

Priority II	Type	Program Activity
Provide ongoing independent oversight and assurance to Parliament on the integrity of the staffing system and the non-partisanship of the federal public service.	Previously committed	1.1.0 Appointment Integrity and Political Neutrality 1.2.0 Oversight of Integrity of Staffing and Political Neutrality
Status: Met all
Progress in 2010-2011 against RPP planning key actions includes: Implement the Oversight Review recommendations – The PSC implemented an action plan further to recommendations of the 2008 Independent Review Committee which assessed the PSC’s oversight activities. It also developed a plan to review whether organizations are meeting expectations set out in the Appointment Delegation and Accountability Instrument and making decisions based on the core and guiding values, and whether appropriate indicators, based on accurate information, are used. The PSC continued to communicate its oversight framework to organizations to clarify expectations. Audit methodology has been posted on the Government of Canada's internal Web site, GCPEDIA, for organizations that wish to use the methodology proactively. The PSC streamlined and strengthened its audit methodology to ensure continuous improvement of the process. Various tools, sampling software and templates have also been developed. The PSC has developed a vision and a common set of priorities to implement a business intelligence and enterprise data warehouse (EDW) that will promote timely access to quality staffing data and information to support oversight and share with other organizations across government. Continuing to monitor departments and agencies to assess their compliance with legislative requirements of the PSEA and their staffing performance – The PSC holds deputy heads accountable for their delegated appointment and appointment related authorities via the Staffing Management Accountability Framework (SMAF). The SMAF sets out key areas of a well-managed appointment system and annually assesses those organizations to which the PSC has delegated staffing authorities via the Departmental Staffing Assessment Report (DSAR). In 2010-2011, the PSC assessed all DSARs that it received from the 78 organizations required to report on their 2009-2010 staffing performance. Deputy heads were informed of their areas of strength, opportunities for improvement and those requiring attention. Results are reported in the PSC's Annual Report to Parliament. Organizational assessment results were also considered in the PSC's development of future audit plans. Results are also shared with the Treasury Board of Canada Secretariat (TBS) for input into the people component of the Management Accountability Framework (MAF). Conducting independent audits and report to Parliament on the integrity of the appointment process – On October 5, 2010, the PSC tabled before Parliament the results of audits and studies undertaken in the year 2009-2010. The audit compendium included seven organizational audits and one follow-up audit. Supplementary reports were also tabled: one government-wide audit report, three studies and five updates on statistical studies. In total, 17 audits and studies were released or tabled to Parliament in the fall of 2010 to report on the integrity of the appointment process. Conducting investigations into errors, omissions or improper conduct in external appointment processes, into allegations of fraud or political influence in all appointment processes and into allegations of improper political activity by public servants – The PSC continues to use investigations (referred to as cases) into unique appointment processes and into allegations of improper political activities of public servants as a means to protect the overall integrity and non-partisanship of the public service staffing regime and to encourage compliance with the PSEA. In 2010-2011, the PSC completed a total of 492 cases, 97 by means of a full investigation related to irregularities in appointment processes. A further 12 cases related to improper political activities of public servants were completed, three of them through full investigations. Continuing to provide guidance and assistance to departments and agencies to ensure a common understanding of self-declaration in the appointment process, as well as promote the use of effective barrier-removal strategies – In May 2010, the PSC and the Office of the Chief Human Resources Officer issued a joint Letter to Heads of Human Resources on using self-declaration information for self-identification to obtain more accurate employment equity (EE) data and reduce the reporting burden. In the fall of 2010, the PSC provided explanatory notes on EE self-declaration in the appointment process to provide further assistance to departments and agencies. Monitoring compliance of the Public Service Official Language Exclusion Approval Order (PSOLEAO) and the application of the priority entitlements – The PSC continued to assess organizational compliance with the legislative requirements of the PSOLEAO as part of the DSAR process. It also administered priority entitlements under the PSEA and the PSER. The PSC conducted an internal evaluation of the priority administration program to assess the relevance of the program and its performance in terms of effectiveness, efficiency and economy and an action plan will be developed. Continuing to monitor separate agencies approved for deployment to PSEA organizations – The PSC reviewed the ongoing compatibility of the Canadian Food Inspection Agency’s staffing activities with the values of the PSEA. It concluded that the staffing program was compatible. Continuing to improve understanding of non-partisanship of the public service and continue to monitor political activities as defined under Part 7 of the PSEA, taking action as required – The PSC continued to improve understanding of non-partisanship by expanding dialogue with Parliamentarians. It also undertook work to explore options to manage and clarify political activities under Part 7 of the PSEA. In addition, it continued to monitor the conditions for granting permission to employees to seek nomination as, and be, a candidate in a federal, provincial, territorial or municipal election. Finally, it investigated situations of possible improper political activity by public servants and monitored corrective actions. Continuing to enhance the PSC's Annual Report to Parliament – The PSC's Annual Report for 2009-2010 emphasized the integrity of the staffing system and the non-partisanship of the public service in an international context; notably, by highlighting experiences from other countries.

Priority III	Type	Program Activity
Provide integrated and modernized staffing and assessment services.	Previously committed	1.3.0 Staffing Services and Assessment
Status: Mostly met
Establishing the right infrastructure, in accordance with PSEA values, to support and operate successfully in a cost recovery environment – The PSC continued to align its resources to support a combined, appropriated and cost recovery environment. A project management approach to service delivery activities was introduced to ensure timely, high quality service to clients and a workload distribution protocol was established among service delivery units across the country to better manage resources. Continuing to support our people in adopting the right service philosophy, developing business acumen and facilitating change management – Employees continued to benefit from continuous learning activities, including in-house information sessions on PSC products and services, project management training, one-on-one peer and other coaching assignments, talent management opportunities and the Learning Passport. Learning Plans and mid-year reviews were also completed. Continuing to deliver innovative staffing and assessment services in line with the needs of the public service – Elements of Extreme Hiring Makeover are now integrated into PSC recruitment and staffing activities. The PSC redesigned its Post-Secondary Recruitment (PSR) program in order to meet client needs and manage expectations of job-seeking Canadians. Advancing the development and implementation of the Public Service Staffing Modernization Project (PSSMP) – Much effort has been put into enhancing the Public Service Resourcing System (PSRS) to improve features for both applicants and hiring managers. Examples of improvements introduced in 2010-2011 include: implementation of the Unsupervised Internet Testing functionality; allowing candidates to log in to the system with their e-mail address rather than system-generated alphanumeric codes; reducing the incidence of multiple accounts and facilitating access and the e-communication feature, allowing for more efficient and timely communication between the hiring manager and applicants. Meeting our revenue and program targets while providing quality products and services that are in line with PSEA values – The PSC continued to deliver a range of staffing and assessment services to meet the needs of our clients. Quality assurance and file reviews, supported by strategic consultation, were provided to ensure PSEA values were met at all times.

Priority IV	Type	Program Activity
Build on the PSC as a model organization.	Revised	2.1.0 Internal Services
Status: Mostly met
Progress in 2010-11 against RPP planning key actions includes: Continuing to ensure that strong financial management controls are in place – The PSC received successful audited financial statements, with clean audit opinions, for the sixth consecutive year. It also obtained a strong rating in the area of financial management in the MAF assessment for 2010-2011. The PSC also successfully implemented budget reductions and spending constraints for the current fiscal year and developed a plan to address future year reductions. Advancing the development and implementation of the Talent Management Project (now integrated into people management) – The PSC achieved 100% return of Performance Appraisal and Learning Plans and conducted an analysis of soft skills for managers that led to the new Manager 101 course and handbook. Activities during the year focused mainly on employee learning and development, resulting in 30 developmental assignments that support a succession planning vision. A Web page and a blog to inform and exchange views were also made available to employees. The PSC conducted the sixth successive bi-annual Employee Engagement Survey, the results of which were used to continue to build on the PSC as a “model organization”. The results of the two surveys on employee engagement continue to show very positive results in several respects, especially in the areas of sense of contribution and working relationships. Further strengthening integrated planning of HR, finance, information management/information technology (IT) and communication functions to provide the necessary information for decision-making and risk management – The PSC implemented more robust planning and documentation tools for the PSC Branch Management Forum and the PSC Integrated Operational Plan, which now includes the MAF Action Plans and the Enterprise Risk Management tool. Improvements recommended in the most recent SMAF and DSAR reports have been integrated into the development of our 2011-2014 Integrated HR Plan. A strong IT security program was developed to ensure the security of PSC information and assets. Support consultations/outreach and parliamentary processes for the PSC’s assessment of the PSEA – A Communications and Parliamentary strategy to produce, distribute and table the Special Report to Parliament was planned and implemented, including communications with Parliamentarians, media, stakeholders and employees. Two of the eight Parliamentary appearances in 2010-2011 were held following tabling of the Special Report. Media coverage in print, broadcast and on-line sources generated 84 news items in ten days.

Risk Analysis

The Corporate Risk Profile is developed each year as a key part of the PSC’s integrated risk management practice. An important decision-making tool, it provides information on risks confronting the PSC and appropriate responses to them.

In 2010-2011, the PSC made significant progress in documenting the integrated risk management process and improving results through risk identification, analysis, tracking and reporting.

Ten corporate risks, discussed in the 2010-2011 RPP, were identified and aligned with the PSC’s four priorities. The following outlines how these risks unfolded over the fiscal year, what was learned and what adjustments were made.

Understanding of the value of non-partisanship

The non-partisanship of the public service is a key tenet of the Canadian governance model. Under the PSEA, the PSC is responsible for independently safeguarding the non-partisanship of the public service and overseeing the regime established under Part 7 of the Act regarding political activities of public servants. In 2010-2011, the PSC engaged selected Parliamentarians in discussion about how the PSC implements its responsibilities to protect the non-partisanship of the public service. The PSC also examined the results of its 2009 and 2010 Surveys of Staffing (Candidates) regarding public servants’ level of awareness of their rights and legal responsibilities under Part 7, commissioned a study of existing surveys and other research on the perceptions Canadians have of the role of the public service and examined approaches used in other jurisdictions to help clarify the relationship between the political sphere and the public service.

Establishing effective working relationships with departments and key central agencies

In addition to its own Special Report to Parliament, which included the results of independent consultation with experts in the field of public management, the PSC also contributed to the TBS-led review of the PSMA. Both activities were supported by the PSC's evidence-based assessment of the PSEA and included recommended areas for attention. The effective working relationships with departments and key central agencies will ensure a common understanding of the progress made to date and the work left to do in order to fully realize the objectives of the PSEA, as stated in its preamble.

Provide integrated and modernized staffing and assessment services

With regard to its commitment to helping organizations meet their staffing and assessment needs, the PSC continued to look at ways to improve its product and service offerings, both mandatory and optional.

In particular, the Staffing and Assessment Services Branch (SASB) developed a three-year Business Plan for 2011-2014 that places emphasis on clients and the importance of delivering quality services to better support the needs of departments and agencies. It also takes into account the current fiscal environment and the need to integrate and streamline SASB processes and services, ensuring that, even if demand declines, the PSC service delivery model will remain viable.

A project management approach for service delivery activities was introduced to ensure timely, high quality service to clients. A national workload distribution protocol was established between service delivery units in order to better manage resources.

Another key to the success of SASB is ensuring confidence in the veracity of PSC testing materials, especially related to their currency and security. New measures to enhance the security of its testing instruments were introduced and a multi-year innovation project to develop and implement computer generated testing for its suite of Second Language Evaluation (SLE) tests was also launched.

Funding was secured for PSRS to ensure that the PSC can deliver and adequately maintain a national e-recruitment system for 2011-2012 and beyond. A strong and inclusive governance structure to guide PSRS decisions was also established. Steps were put in place in collaboration with Human Resources and Skills Development Canada to obtain approval to transfer the internal staffing component of Publiservice to the PSC.

Public Service Commission operating environment

The PSC successfully implemented budget reductions and the spending constraints for 2010-2011 and developed a multi-year plan to address future year reductions while maintaining the core activities required for meeting its mandate.

The PSC is establishing an Enterprise Datate Warehouse and implementing a set of standard approaches for access, manipulation and storage of key PSC data holdings used for analysis of the staffing system. These activities are improving the PSC’s capacity to provide complete and accurate reports to Parliament.

It is important that the PSC continue to engage and develop its workforce. Thus, the PSC developed action plans based on its on-line employee engagement surveys and set a 100 percent target for employee Learning Plans and Performance Evaluations. It also instituted a formal succession planning initiative at high risk levels of the Executive cadre and feeder groups.

Finally, there had been concern about the need to ensure an efficient transition from the current Commission to a new one. A detailed transition plan was developed in 2010-2011 for implementation in 2011-2012. This will ensure knowledge transfer and the continuity of core Commission business.

Corporate risk profile and mitigation strategies

The PSC’s Corporate Risk Profile and mitigation strategies are located in the publications section of the PSC Web site.

Summary of Performance

2010–2011 Financial resources (in thousands of dollars)

Planned Spending	Total Authorities	Actual Spending
98,962	105,022	100,975

The above numbers represent the utilization of the authorities on a cash basis. The Audited Financial Statements (page 32) present the information on an accrual accounting basis.

2010–2011 Human resources (full-time equivalents—FTEs)

Planned	Actual	Difference
1,030	968	62

Variance explanations

Overall, the PSC achieved the results it planned for 2010-11.

For the reporting period, PSC expenditures were $100,975 thousand against total authorities of $105,022 thousand, resulting in an under-expenditure of $4,047 thousand appearing in the Public Accounts of Canada. The under-expenditure is mainly due to delays in staffing and in the implementation of some projects. There were also reductions in the actual expenditures pertaining to the travel, telecommunications and professional services.

The following is a summary of expected results and financial resources associated with each program activity that contributes to the achievement of the PSC’s strategic outcome. The performance status of each expected result is indicated below.

Strategic outcome: To provide Canadians with a highly competent, non-partisan and representative public service, able to provide service in both official languages, in which appointments are based on the values of fairness, access, transparency and representativeness.

The PSC has one strategic outcome. The achievement of this strategic outcome has been measured through evidence-based performance information.

A selection of PSC performance information is provided in the table below. The indicators and targets are extracted from the Performance Measurement Framework that the PSC revised subsequent to the publication of the RPP 2010-2011.

A complete list of the Performance Information Related to the Public Service Values in Support of the PSC Strategic Outcome is included in Section IV. Additional information is contained in the PSC Annual Report 2010-2011.

Indicators	Target	2010-2011 Performance
		Staffing Management Accountability Framework (SMAF)
Composite assessment of three key success factors: delegation of staffing to deputy heads, planning for staffing and monitoring of results and organizational HR support	Increased or maintained percentage of organizations that have implemented the necessary infrastructure Baseline 2009-2010: 55% compliancy	Based on the 2010-2011 SMAF assessment results, 74% of organizations with more than 100 employees were compliant
		Merit
Managers’ satisfaction with the quality of hires	Baseline 2009-2010: 80%	Of managers who indicated, in the PSC Survey of Staffing – Managers: 2010 that they had sufficient opportunity to observe the performance of the appointee Eighty-five percent of managers were satisfied to a great extent with the quality of the hire for the last position that they staffed during the reporting period
		Non-partisanship
PSC investigations related to the political activities of public servants	Number of investigations compared to previous year	In 2010-2011, the PSC received a total of 10 new requests to investigate allegations related to improper political activities, as compared to 16 such requests in the previous year. Three cases were completed through full investigation and only one was determined to be founded
		Fairness
Percentage of indeterminate hires coming from: casual; and term positions within the same organization	Baseline 2009-2010: 10% 35%	Of the indeterminate hires in 2009-2010: 5% came from casual positions; and 35% came from term positions
		Access
Percentage of external appointments that are non-advertised: non-EX group; and EX group	Baseline 2009-2010: 27% 55%	Based on information from central sources: 26% of external appointments to non-EX positions; and 48% of external appointments to the EX group were non-advertised (in organizations of more than 100 employees)
		Transparency
Organizational staffing priorities and strategies are communicated on organizations’ Web sites and contents are clearly communicated to managers, employees and employees' representatives, where applicable	Baseline 2009-2010: 70%	Based on the 2010-2011 SMAF assessment results: Eighty-five percent of organizations with more than 100 employees clearly communicated organizational staffing priorities and strategies
		Representativeness
Staffing-related provisions or initiatives to increase representativeness	Baseline 2009-2010: 80%	Based on 2010-2011 SMAF assessment results: Eighty percent of organizations with more than 100 employees used EE provisions in staffing processes or staff related initiatives to enhance representativeness

Utilization of Authorities on a Cash Basis

Program Activity	2009–2010 Actual Spending ($ thousands)	2010–2011 ($ thousands)				Alignment to Government of Canada Outcome
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
1.1.0 Appointment Integrity and Political Neutrality	11,671	11,112	12,835	11,681	11,567	Government Affairs – Well-managed and efficient government operations.
1.2.0 Oversight of Integrity of Staffing and Political Neutrality	21,240	22,063	22,379	22,479	22,246
1.3.0 Staffing Services and Assessment	35,494	28,672	29,729	31,808	29,182
Total	68,405	61,847	64,943	65,968	62,995

Program Activity	2009–2010 Actual Spending ($ thousands)	2010–2011 ($ thousands)
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
2.1.0 Internal Services	38,363	37,115	34,019	39,054	37,980

The above numbers represent the utilization of the authorities on a cash basis. The Audited Financial Statements (page 32) present the information on an accrual accounting basis.

Expenditure Profile

Canada’s Economic Action Plan

As part of Canada's Economic Action Plan (CEAP), the PSC has spent the funding received to enhance federal public service student employment in the amount of $70K (horizontal item as part of Budget 2009).

Spending trend

The PSC’s spending trend from 2008-2009 through 2010-2011 is illustrated in Figure 1. Total spending consists of the net spending (appropriated) amount plus net voting revenues. The PSC has Treasury Board approval to use cost recovery for assessment services of up to $14 million.

Departmental Spending Trend ($ millions)

The CEAP expenditure was $70K in 2010-2011.
CEAP annual expenditures of less than $1,000,000 do not appear on this chart.

[text version]

Estimates by Vote

For information on our organizational Votes and/or statutory expenditures, please see the 2010–2011 Public Accounts of Canada (Volume II) publication. An electronic version of the Public Accounts is available on the Public Works and Government Services Canada Web site – see Public Accounts of Canada 2010.

Section II: Analysis of program activities by strategic outcome

Strategic outcome

To provide Canadians with a highly competent, non-partisan and representative public service, able to provide service in both official languages, in which appointments are based on the values of fairness, access, transparency, and representativeness.

Program activity: 1.1.0 – Appointment Integrity and Political Neutrality

Program activity description

The Appointment Integrity and Political Neutrality activity is focused on independently safeguarding merit and non-partisanship in the federal public service. This activity includes developing and advancing strategic policy positions and directions; conducting policy research; establishing PSC policies and standards; providing advice, interpretation and guidance and administering delegated and non-delegated authorities.

2010–2011 Financial resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
12,835	11,681	11,567

2010–2011 Human resources (FTEs)

Planned	Actual	Difference
118	98	20

Expected Results	Performance Indicators	Targets	Performance Status
Organizations have clear, comprehensive mechanisms in place to manage delegated staffing authority and accountability for results	Number of organizations that have implemented the Staffing Management Accountability Framework (SMAF) expectations and reported performance that meets the PSC’s performance expectations	Increased or maintained percentage of organizations with acceptable or higher performance Baseline 2009-2010: 82%	Exceeded
The use of both official languages within the public service is protected	Number of cases not yet past four years that are not compliant with the Public Service Official Language Exclusion Approval Order (PSOLEAO) and its Regulations	Reduced number of public servants who do not meet linguistic requirements without valid exemptions Baseline 2009-2010: 55	Exceeded, 22 in 2010-2011
Persons with priority rights have access to public service jobs	Number of persons with priority rights appointed to positions for which they meet the essential qualifications	Maintain percentage of indeterminate appointments made, compared to total number of priority persons removed from the system Baseline 2009-2010: 55%	Met all
Employees respect the provisions related to political activities pursuant to Part 7 of the Public Service Employment Act (PSEA)	Employees’ level of awareness of their rights and obligations regarding political activities	Target 1: No founded allegations of improper political activities Target 2: Increased or maintained percentage of Survey of Staffing (Candidates) respondents who are aware of their rights and obligations regarding political activities Baseline 2009-2010: 57%	Mostly met Target 1, only one founded allegation Target 2, 63% of respondents are now aware of rights and obligations

Performance summary and analysis of program activity

The Public Service Commission (PSC) completed its assessment of the PSEA and tabled the results in a Special Report to Parliament in March 2011. The Report concluded that significant progress had been made over the past five years to put the fundamentals of the PSEA in place. It also identified three areas – the effectiveness of the staffing system, the approach for safeguarding the non-partisanship of the public service and the governance and operation of the Commission – where additional efforts are needed to fully realize the potential of the Act. Where adjustments are required, the Commission concluded that these can be addressed through policy, regulatory and other measures and a limited number of legislative amendments.

The PSC further clarified its expectations for a well-functioning, delegated appointment system by reviewing the PSC’s appointment policies, enhancing outreach activities with the human resources (HR) community and providing timely policy advice and guidance. The number of requests for policy advice, guidance and authoritative interpretation therefore declined, from 327 the previous year to 256 in 2010-2011. The PSC processed 17 requests for exceptions to Assessment Policy requirements for Executive appointments (versus 29 in 2009-2010) and one request for an exception to the national area of selection requirement (compared to two the previous year).

The PSC also advanced its work on Exclusion Approval Orders (EAOs) and Regulations, the Designation of Certain Portions of the Public Service Order and the Public Service Employment Regulations (PSER). Four EAOs and their associated Regulations came into force in 2010-2011 and the PSER were amended.

The PSC continued to monitor and conduct trends analyses of Public Service Staffing Tribunal (PSST) decisions and strengthened its evidence-based policy development capacity. Over the year, the PSC analyzed 34 Tribunal decisions, an increase of more than 21% over the previous year (28). The PSC also reviewed 33 written submissions and conducted 74 policy risk assessments of complaints proceeding to hearing before the Tribunal, compared to 12 and 38, respectively. PSC representatives attended six PSST hearings this year versus nine in 2009-2010.

The PSC implemented a streamlined approach for reviewing municipal candidacy requests that was introduced in January 2010. Following a commitment in its 2009-2010 Annual Report, the PSC also reviewed its approach to candidacy requests for federal, provincial and territorial elections. The approach to monitoring political activities was also reviewed. The PSC continued to improve awareness of employees’ rights and legal obligations related to political activities.

Updates were made to the mobility provision for former ministers’ staff and the administrative framework was established for the mobility provision for persons formerly employed in certain excluded positions at the Office of the Governor General’s Secretary.

Lessons Learned

Non-partisanship

Public servants at all levels have important roles to play in promoting the integrity of the staffing system and the non-partisanship of the public service. In the five years of operation of PSEA, there has been a slight increase in employees’ awareness of their rights and legal obligations respecting political activities as defined in Part 7 of the PSEA. The PSC's two most recent Surveys of Staffing (Candidates) found that a total of 63% of employees indicated being aware of their rights and responsibilities to a moderate or great extent in the 2010 survey, up from 57% in the 2009 survey. Nonetheless, sustained communication is required to improve understanding of how to safeguard the non-partisan nature of the public service as a national institution. There is also an ongoing need to strengthen managers’ abilities to make and document their appointment decisions; for example, through better guidance and practical examples of appropriate demonstrations of the appointment values. Based on experience gained by streamlining candidacy requests for municipal elections, administrative changes will be made to forms to seek PSC permission to be nominated or serve as a candidate in municipal, as well as federal, provincial and territorial elections.

Program activity: 1.2.0 – Oversight of Integrity of Staffing and Political Neutrality

Program activity description

The Oversight of Integrity in Staffing and Political Neutrality activity provides an accountability regime for the implementation of the appointment policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring that staffing is free from political influence. This activity includes monitoring departments’ and agencies’ staffing performance and compliance with legislative requirements, conducting audits and studies, carrying out investigations and reporting to Parliament on the integrity of public service staffing.

2010–2011 Financial resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
22,379	22,479	22,246

2010–11 Human resources (FTEs)

Planned	Actual	Difference
181	186	(5)

Expected Results	Performance Indicators	Targets	Performance Status
Enhanced risk-based oversight of the integrity of public service staffing	Oversight activities (monitoring, audits, and studies) by the PSC	Ongoing monitoring covers 100% of organizations Audits conducted on a five to seven year cycle for PSEA entities	Met all
Enhanced risk-based oversight of the integrity of public service staffing		In 2010-2011, the PSC assessed the DSARs submitted by all 78 organizations that reported in the 2009-2010 cycle and subsequently provided feedback to the deputy heads of these organizations All audits scheduled for 2010, as per the 2008-2009 Annual Report, plus one additional audit, were completed, tabled or released and published within the reporting period. With its improved methodology the PSC continued to gain audit efficiencies as it works towards its implementation of the five to seven year audit cycle	Met all
Enhanced risk-based oversight of the integrity of public service staffing		Studies conducted as identified in the Audit and Studies Plan	Met all

Performance summary and analysis of program activity

The PSC continued to monitor departments and agencies to assess their compliance with the legislative requirements of the PSEA and their staffing performance. To support a highly delegated staffing system, the PSC plays an oversight role that includes monitoring, audits, studies and investigations. Oversight results provide important information to Parliament, the PSC and deputy heads regarding the integrity of the staffing system.

As part of its oversight role, the PSC conducted seven organizational audits, one follow-up audit, one Government-wide audit, three studies and five updates on statistical studies as identified below:

• Organizational audits: Indian and Northern Affairs Canada, Canadian Grain Commission, National Parole Board, Atlantic Canada Opportunities Agency, Library and Archives Canada, Fisheries and Oceans Canada and the Public Service Labour Relations Board;
  
  
• Government-Wide Audit: Audit of appointments from collective staffing processes;
  
  
• Follow-Up Audit: Canadian Space Agency;
  
  
• Studies: Study on Casual Employment: Sources and Practices; Study on Use of Temporary Help Services in Public Service Organizations and, Study on Verification of Educational Credentials. Career Paths of Designated Group Members and Official Language Communities in the Federal Public Service will be released in 2011-2012;
  
  
• Statistical Studies Updates: New Indeterminate Employees - Who Are They?; To What Extent Do Casuals Become Employed Under the Public Service Employment Act?; Appointments under the Public Service Employment Act Following Participation in Federal Student Work Programs; Acting Appointments and Subsequent Promotions in the Federal Public Service and Study on Mobility of Public Servants.

The PSC also developed a common set of priorities to implement a business intelligence and enterprise data warehouse environment to facilitate the timeliness and sharing of quality staffing information used by the PSC and other organizations.

In 2008, the President of the PSC requested that an Independent Review Committee be formed to review the oversight function of PSC. A final report, produced in January 2009, contained 18 recommendations. The PSC has now addressed all of them. Some have been completely implemented, while others have been integrated into ongoing operations. Examples of changes resulting from the review recommendations include building audit capacity, streamlining audit methodology, strengthening consultation and communication with organizations and stakeholders, reducing reporting burden, improving performance measurement and introducing a consolidated audit report to Parliament to further improve reporting.

Lessons Learned

Audit methodology

The PSC developed a methodology to establish reliance on the audit and review work by organizations on their staffing activities and worked with one organization to establish reliance on its work, thus increasing effectiveness and reducing the time and effort required to undertake an audit. It will continue to share its audit methodology with organizations and communicate what is needed to establish reliance.

Staffing Management Accountability Framework

The SMAF is a key accountability mechanism, which must be regularly reviewed and updated. In 2010-2011, the PSC developed a tailored SMAF for micro-organizations (population of less than 100). It also recognized the need to provide support and to share information respecting best practices during the assessment period. During the review period, the PSC hosted two symposia attended by approximately 100 organizational representatives. Representatives from 18 departments and agencies made presentations and participated in panel discussions.

Program Activity: 1.3.0 – Staffing Services and Assessment

Program activity description

The Staffing Services and Assessment activity develops and maintains systems that link Canadians, including public servants, seeking employment opportunities in the Federal Public Service with hiring departments and agencies. It provides assessment-related products and services in the form of research and development, consultation, assessment operations and counselling for recruitment, selection and development throughout the public service. This activity also includes delivering staffing services, programs and products to all Canadians through client service units located across Canada.

2010–2011 Financial resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
29,729	31,808	29,182

2010–2011 Human resources (FTEs)

Planned	Actual	Difference
429	408	21

Expected Results	Performance Indicators	Targets	Performance Status
Staffing and assessment services and products that meet the needs of federal organizations operating within a more fully delegated staffing environment under the PSEA	Level of client satisfaction with PSC staffing and assessment products and services	"Satisfactory" consultation and survey results 75% of the time Baseline 2009-2010: SASB received an overall satisfaction rate for quality of services of 57%	Mostly met Continued adjustments to the survey process will be examined in an effort to increase the response rate and broaden the scope of feedback received

Performance summary and analysis of program activity

The PSC continued to offer staffing and mandatory and optional assessment services for public service organizations through its seven service delivery units located across the country.

A total of 73 PSC-led pools and 10 inventories were created and managed in 2010-2011 to meet recurring needs to fill similar positions across the Federal Public Service, providing client organizations with quick and efficient resourcing solutions.

Recruitment programs such as the Federal Student Work Experience Program (FSWEP), Recruitment of Policy Leaders (RPL) and Post-secondary Recruitment (PSR) continued to be important options for hiring managers in 2010-2011. Just over 35,000 students are in the FSWEP inventory and this year’s RPL program attracted 1 400 high calibre applicants. Other student hiring programs, including the Research Affiliate Program (RAP) and the Co-op/Internship Program, continued to be in high demand. Following client consultations, the fall 2010 PSR campaign was modified to better reflect client needs and support organizational recruitment objectives. The general inventory was eliminated and eight specific career streams were launched, providing even greater flexibility and high quality referrals to federal organizations. The introduction of the eight targeted career streams has resulted in a 53% increase in referrals from organizations, as compared to the use of the general inventory in the previous year.

The demand for Executive Resourcing Services increased slightly this year, due in part to the implementation of a marketing strategy and increased outreach visits. Clients continued to turn to the PSC for complex and/or sensitive files, volume management and for service in peak periods.

Strategic partnerships were developed and new service lines delivered to meet client needs, including Executive Counselling Services, restructuring services (selection for retention), Federal BC and Yukon Aboriginal Internship Pilots, leadership competency development within territorial governments and PSC Open Houses at our regional offices.

The PSC continued to seek the input of stakeholders through the Deputy Minister Public Service Commission Advisory Committee, the, External Advisory Committee on Assessment and the Client Advisory Committee. In 2010-2011, the client satisfaction survey continued to be used as the measurement vehicle for client satisfaction.

The PSC ensured its SLE instruments reflected best practices in the field by releasing a new Test of Reading Comprehension and completing the modernization of its entire suite of SLE tests. SLE testing services met established service standards.

In 2010-2011, Unsupervised Internet Testing (UIT) was successfully piloted, allowing the PSC to leverage technology to provide cost-saving, professional and innovative staffing and assessment solutions. Self-screening on second language abilities was used during the fall 2010 PSR campaign, allowing candidates to assess their second language abilities for bilingual positions.

New measures to enhance the security of its testing instruments were introduced and a multi-year innovation project to implement computer-generated testing for SLE tests was also launched.

Following a continued decrease in occupational test volumes, the PSC examined statistics on test usage to better understand this decline. Results suggested that occupational tests remain as pertinent as in previous years but that individual orders are smaller. Further analysis showed that, in proportion to external advertisements, test orders remain stable but that fewer exams are ordered per test as a result of cost recovery.

Through its electronic screening tools, the Public Service Resourcing System (PSRS) helps hiring managers target candidates in external appointment processes. Ongoing promotion of Direct Access* and its benefits raised the number of Direct Access Departments to 45 from the previous 32, increasing advertisements posted on-line by organizations from 39% to 65%.

Lessons learned

Public Service Resourcing System

In 2010-2011, the PSC introduced UITs for selection purposes, including an optional self-assessment of second language writing skills tool. This tool was initially used only in processes in which PSRS users formally selected it, limiting its potential access. Further enhancements to the tool were introduced to automatically include the tool in all bilingual appointment processes or processes with various language requirements. This has extended the tool’s accessibility to all applicants wishing to assess themselves for bilingual job opportunities.

Securing funding for the Public Service Resourcing System

The PSC proposed a cost sharing approach to departments and agencies using the PSRS services. A user fee concept was proposed and accepted by user departments and agencies with 500 or more full time employees. The PSC set up a novel governance structure that now ensures that stakeholder views are reflected in the PSRS.

*Departments that have Direct Access to the PSRS can manage and post their own advertisements on the jobs.gc.ca Web site.

Program activity: 2.1.0 – Internal Services

Program activity description

The Internal Services program activity develops and monitors corporate management planning frameworks and policies related to the MAF, finance, HR management, IT, library services, communications and other administrative and support services; provides central services, legal services and systems in support of all PSC programs, including the offices of the President and Commissioners and formulates and implements policies, plans, guidelines, standards, processes and procedures to support the decision-making process of the Commission.

2010–2011 Financial resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
34,019	39,054	37,980

2010–11 Human Resources (FTEs)

Planned	Actual	Difference
302	276	26

Expected Results	Performance Indicators	Targets	Performance Status
Sound and effective management practices and support functions for the delivery of the PSC’s mandate	Unqualified audit opinion from the Office of the Auditor General on PSC financial statements	Maintain or surpass 2009-2010 performance with regard to the PSC’s audited financial statements	Met all
	Sound independently assessed management systems for the PSC are maintained	Maintain or surpass 2009-2010 performance with regard to independently assessed management systems such as MAF	Mostly met*
	Organizational performance measurement framework supporting decision making (e.g., monthly reports, quarterly reporting on operational plans, ongoing financial reporting and risk management)	Maintain or surpass 2009-2010 performance with regard to the Project Management Framework and decision making support tools	Met all
	Improved integrated planning, as indicated in the SMAF and the DSAR and the Integrated HR/Operational Plan and Quarterly Reports	Build and improve upon 2009-2010 performance with regard to integrated HR and business planning	Mostly met*
	Improved people management, as indicated by the quality of placements and the effectiveness of succession planning, etc.	Build and improve upon 2009-2010 performance with regard to people management	Mostly met*
	Increased employee engagement as measured by the results of the Employee Engagement Survey	Build and improve upon 2009-2010 performance with regard to employee engagement	Mostly met*
	System implementation is successfully completed within the reporting period	Implementation of a streamlined cost recovery billing process and renewed Revenue Management System	Met all

*These are “continuous improvement” activities.

Performance summary and analysis of program activity

The PSC’s financial management and controls were effective as shown by the strong MAF rating and the clean audit opinions granted from the audited financial statement.

The PSC committed to rationalize IT infrastructure to reduce both cost and risks. In 2010-2011, many components were streamlined, resulting in substantial savings.

As evidenced by the MAF Round VIII assessment, the PSC performed well in the area of people management with respect to learning and commitment to performance management. We also improved our workload and workforce planning with regard to overtime and reducing long-term acting appointments. The PSC strengthened people management by developing policies, gathering information and performing analyses on engaging and developing its workforce. In addition, it increased its capacity to develop leadership and manage talent by providing developmental assignments. Senior management committees reviewed the results of the Employee Engagement Surveys, leading to the development of an action plan for 2011-2012.

Internal Services provided vital logistics support to the President and Commission as they planned and initiated the move of the PSC’s headquarters and National Capital Region offices to new facilities in 2013.

Internal Services maintained proactive communications tactics and tools in support of the PSC's core program activities and key initiatives by developing an annual Corporate Communications Plan for 2010-2011.

A key PSC corporate priority for the past few years has been becoming a "model organization" and one of our initiatives this past year was the introduction of our "PSC Health Challenge". The goal is to better encourage a culture of health, well-being, performance and productivity in the workplace. Over 30 percent of our employees participated in at least one of our health challenge areas: weight management, stress management, physical activity and smoking cessation programs.

Lesson learned

Advancement in integrated business and human resources planning

The PSC continued to aim to fully integrate business and HR planning in its Integrated Resources and Budgeting Process. The 2010-2011 exercise enabled us to improve information gathering and analysis within the planning cycle that have both had a positive impact on developing HR strategies that respond to the identified risks and challenges.

Advance Contract Award Notice process

Early in the year, four PSC service contracts for members of an advisory committee received media attention, questioning whether the use of the Advance Contract Award Notice (ACAN) process was appropriate. To address this question, the President requested that an internal audit be conducted. The audit, which is available on the PSC's Web site, determined that the use of the ACANs was not the appropriate procurement vehicle and that process improvements were needed to help prevent such errors in the future. As a result of the findings, the PSC did not renew the contracts. To meet future needs for expert advice, the PSC is examining alternative instruments for identifying qualified candidates.

Section III: Supplementary Information

Financial Highlights

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements of the Public Service Commission (PSC) for the year ended March 31, 2011 and all information contained in these statements rests with PSC’s management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of PSC's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the PSC's Departmental Performance Report is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the PSC; and through conducting an annual assessment of the effectiveness of the system of internal control over financial reporting (ICFR).

An assessment for the year ended March 31, 2011 was completed in accordance with the Policy on Internal Control and the results and action plans are summarized in the annex. The system of ICFR is designed to mitigate risk to a reasonable level and may not prevent or detect misstatements. It is based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The effectiveness and adequacy of the PSC’s system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the PSC's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the President of the PSC.

The Office of the Auditor General, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of PSC which does not include an audit opinion on the annual assessment of the effectiveness of PSC’s internal controls over financial reporting.

Ottawa, Canada
August 04, 2011

Independant Auditor’s Report

To the Speaker of the House of Commons and the Speaker of the Senate

Report on the Financial Statements

I have audited the accompanying financial statements of the Public Service Commission, which comprise the statement of financial position as at 31 March 2011, and the statement of operations, statement of equity of Canada and statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Public Service Commission as at 31 March 2011, and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Report on Other Legal and Regulatory Requirements

In my opinion, the transactions of the Public Service Commission that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Public Service Employment Act.

John Wiersema, FCA
Interim Auditor General of Canada

4 August 2011
Ottawa, Canada

Statement of Financial Position
As at March 31
(in thousands of dollars)

Assets	2011	2010
Financial assets
Due from the Consolidated Revenue Fund	3,822	5,163
Accounts receivable and advances (Note 4)	1,123	953
	4,945	6,116
Non-financial assets
Prepaid expenses	614	601
Tangible capital assets (Note 5)	15,072	17,449
	15,686	18,050
Total assets	20,631	24,166
Liabilities
Lease obligation for tangible capital assets (Note 6)	18	18
Accrued salary	1,855	1,837
Accrued vacation leave	3,652	3,847
Accounts payable and accrued liabilities (Note 7)	3,194	6,251
Employee future benefits (Note 8)	17,367	17,396
	26,086	29,349
Equity of Canada (Note 9)	(5,455)	(5,183)
Total liabilities and Equity of Canada	20,631	24,166
Contingent liabilities (Note 10)
Contractual obligations (Note 11)

The accompanying notes form an integral part of these financial statements.

Ottawa, Canada
August 04, 2011

Statement of Operations
For the year ended March 31
(in thousands of dollars)

Expenses (Note 12)	2011	2010
Staffing services and assessment
Staffing services	25,414	28,716
Assessment	22,735	27,273
	48,149	55,989
Oversight of integrity of staffing and political neutrality
Audits, evaluation and studies	18,713	16,663
Investigations and early intervention mechanisms	4,181	4,351
Monitoring	3,222	3,428
	26,116	24,442
Appointment integrity and political neutrality
Policy, regulation and exclusion approval orders	6,532	6,695
Non-delegated authorities	3,176	2,601
Delegated appointment authorities	2,945	2,835
Political activities	1,099	1,238
	13,752	13,369
Internal services
Resource management services	27,804	28,017
Governance and management support	14,316	13,015
Asset management services	2,810	3,173
	44,930	44,205
Total expenses	132,947	138,005
Revenues
Assessment and counselling services and products	12,095	12,399
Activities on behalf of:
Canada School of Public Service	41	53
Less: Costs recovered	(41)	(53)
Net cost of operations	120,852	125,606

The accompanying notes form an integral part of these financial statements

Statement of Equity of Canada
For the year ended March 31
(in thousands of dollars)

	2011	2010
Equity of Canada, beginning of year	(5,183)	(2,111)
Net cost of operations	(120,852)	(125,606)
Net cash provided by Government of Canada	102,445	108,698
Change in Due from the Consolidated Revenue Fund	(1,341)	(4,894)
Services provided without charge from other government departments and agencies (Note 14)	19,476	18,730
Equity of Canada, end of year	(5,455)	(5,183)

The accompanying notes form an integral part of these financial statements.

Statement of Cash Flow
For the year ended March 31
(in thousands of dollars)

	2011	2010
Operating activities
Cash received from:
Assessment and counselling services and products	11,938	13,091
Cash paid for:
Salaries and employee benefits	92,872	95,980
Professional and special services	10,571	13,491
Transportation and telecommunications	2,304	2,784
Repair and maintenance	2,633	1,565
Informatics, office equipment, furniture and fixtures	1,710	2,573
Rentals	1,015	830
Utilities, materials and supplies, and other payments	713	537
Printing and publications services	451	721
	112,269	118,481
Cash used by operating activities	100,331	105,390
Capital investment activities
Acquisitions of tangible capital assets	2,108	3,304
Proceeds from disposal of tangible capital assets	-	-
Cash used by capital investment activities	2,108	3,304
Financing Activities
Lease payments for tangible capital assets	6	4
Cash used in financing activities	6	4
Net cash provided by Government of Canada	102,445	108,698

The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements

For the year ended March 31, 2011

1. Authority and objectives

The Public Service Commission (PSC) is an independent agency established under the Public Service Employment Act (PSEA) and listed in schedules 1.1 and IV of the Financial Administration Act (FAA). It is dedicated to building a public service that strives for excellence by protecting merit, non-partisanship, and representativeness of Canadian society and the use of both official languages. This responsibility is performed in the best interests of the public service as part of Canada’s governance system, by administering and applying the provisions of the PSEA and by carrying out responsibilities as provided for in the Employment Equity Act and the Official Languages Act. The current PSEA came into force in December 2005. This legislation emphasizes the PSC’s accountability to Parliament and provides authority to the PSC to delegate staffing authority to deputy heads who in turn are accountable to the PSC for exercising this power. The PSC also carries out audits and investigations and administers measures under the PSEA regarding political activities of public servants.

The PSC, from its head office in Ottawa and its seven regional offices, offers recruitment services that allow talented Canadians, drawn from across the country, to join the public service and continually renews staffing services to meet the needs of a modern and innovative public service. The PSC has four program activities that contribute to the achievement of its objectives:

The Appointment Integrity and Political Neutrality activity develops and maintains a policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring political neutrality. This activity includes establishing policies and standards, providing advice, interpretation and guidance, administering delegated and non-delegated appointment authorities, and allowing exceptions as appropriate.

The Oversight of Integrity of Staffing and Political Neutrality activity provides an accountability regime for the implementation of the appointment policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring political neutrality. This activity includes monitoring departments’ and agencies’ compliance with legislative requirements, conducting audits, studies and evaluations, carrying out investigations, and reporting to Parliament on the integrity of public service staffing.

The Staffing Services and Assessment activity develops and maintains systems that link Canadians and public servants seeking employment opportunities in the federal public service with hiring departments and agencies. It provides assessment-related products and services in the form of research and development, consultation, assessment operations and counselling for use in recruitment, selection and development throughout the federal public service. This activity also includes delivering staffing services, programs and products to departments and agencies, to Canadians and public servants, through client service units located across Canada.

The Internal Services activity represents a group of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These activities include: Communications and Parliamentary Affairs; Corporate Management Practices and Evaluation; Human Resources Management; Finance and Administration; Information Technology Services; and Internal Audit. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles, except as disclosed in Note 15 – Net Debt Indicator.

1. Parliamentary appropriations
   The PSC is financed by the Government of Canada through Parliamentary appropriations. Financial reporting of authorities provided to the PSC do not parallel financial reporting according to Canadian generally accepted accounting principles for the public sector since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a reconciliation between the basis of reporting.
   
   
2. Net cash provided by the Government
   The PSC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the PSC is deposited to the CRF and all cash disbursements made by the PSC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.
   
   
3. Due from the Consolidated Revenue Fund
   Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the PSC is entitled to draw from the CRF without further appropriations to discharge its liabilities.
   
   
4. Accounts receivable
   Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
   
   
5. Tangible capital assets
   All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. Similar items under $5,000 are expensed in the Statement of Operations. The cost of assets under development by the PSC includes material, direct labour and related overhead. Amounts included in assets under development are transferred to the appropriate class of asset upon completion, and are then amortized. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
   
   

   Asset class	Amortization period
   Office equipment	3 and 10 years
   Informatics hardware and infrastructure	4 and 5 years
   Computer software	3 years
   In-house developed software	Lesser of 12 years or useful life
   Furniture and fixtures	15 years
   Vehicles	6 years
   Leasehold improvements	Lesser of 10 years or term of lease
   Leased equipment	Lesser of term of lease/useful life

   
   
6. Salaries and benefits, and vacation leave
   Salaries and vacation leave are expensed as the salary and leave accrue to employees under their respective terms of employment. The employee’s accrued salaries and benefits liability is calculated based on the respective terms of employment using the employees' salary levels at year end, and the number of days remaining unpaid at the end of the year. The liability for vacation leave is calculated at the salary levels in effect at March 31^st for all unused vacation leave benefits accruing to employees. Employee vacation pay liabilities payable on cessation of employment represent obligations of the PSC that are normally funded through future years’ appropriations.
   
   
7. Employee future benefits
   
   
   1. Pension benefits
      The PSC’s eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The PSC’s contributions to the Plan are charged to expenses in the year incurred and represent the total pension obligation of the PSC. The PSC is not required under current legislation to make contributions with respect to any actuarial deficiencies of the Plan.
      
      
   2. Severance benefits
      Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
      
      
   3. Other benefits
      The Government of Canada sponsors a variety of other benefit plans, which cover the employees of the PSC. These include health care, dental and insurance plans for which no costs are charged to the PSC. In these cases, an estimated cost is recorded as an operating expense under the item “Services provided without charge”. The Government of Canada also sponsors workers’ compensation benefits available across Canada. The PSC is charged for its share of the annual benefit payments incurred under this Plan. These amounts represent the PSC’s contribution to the Plan and they are recorded by the PSC as an expense in the period incurred. As a participant, the PSC has no other obligation to any of these plans in addition to its annual contributions.
      
8. Revenues
   Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenues takes place. The PSC currently has a net voting authority for the provision of some of its services. This gives the PSC the authority to respend revenues received in a fiscal year to offset expenditures incurred in that fiscal year arising from the provision of assessment and counselling services and products.
   
   
9. Services provided without charge Services provided without charge from other federal government departments and agencies are recorded as operating expenses at their estimated cost. A corresponding amount is reported directly in the Statement of Equity of Canada.
   
   
10. Measurement uncertainty
    The preparation of these financial statements in accordance with Treasury Board accounting policies requires management to make estimates and assumptions that affect amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the estimated useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary appropriations

The PSC receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the PSC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a. Reconciliation of net cost of operations to current year appropriations used:

	(in thousands of dollars)
	2011	2010
Net cost of operations	120,852	125,606
Adjustments for items affecting net cost of operations but not affecting appropriations:
Services provided without charge	(19,476)	(18,730)
Amortization of tangible capital assets	(4,483)	(7,178)
Revenue not available for spending	1,596	1,671
Decrease in Employee future benefits	29	1,878
Decrease (increase) in vacation leave	195	(217)
Other	136	217
	98,849	103,247
Adjustments for items not affecting net cost of operations but affecting appropriations:
Acquisitions of tangible capital assets	2,108	3,304
Decrease in lease obligations for tangible capital assets	6	4
Increase in prepaid expenses	13	213
	2,127	3,521
Current year appropriations used	100,976	106,768

(b) Appropriations provided and used:

	(in thousands of dollars)
	2011	2010
Parliamentary appropriations provided:
Vote 105 - Operating expenditures	91,629	98,833
Statutory contributions to employee benefit plans	13,340	13,958
Spending of proceeds from disposal of surplus assets	1	1
Refund of previous year revenue	53	126
	105,023	112,918
Less: Lapsed appropriations - operating expenditures	(4,047)	(6,150)
Current year appropriations used	100,976	106,768

4. Accounts receivable and advances

	(in thousands of dollars)
	2011	2010
Receivables - Federal government departments, agencies and crown corporations	1,067	910
Receivables - External parties	50	37
Advances to PSC’s Employees	6	6
Total	1,123	953

5. Tangible capital assets

	(in thousands of dollars)
	Cost					2011	2010
	March 31, 2010	Acquisitions	Disposals, write-offs	Transfers	March 31, 2011	Net book value	Net book value
Office equipment	699	5	(86)	-	618	248	298
Informatics hardware and infrastructure	9,016	650	(1,507)	-	8,159	2,153	2,571
Software	29,966	108	(187)	415	30,302	8,953	11,595
Furniture and fixtures	1,465	-	-	-	1,465	1,047	1,129
Vehicles	30	-	-	-	30	20	24
Leasehold improvements	1,157	-	-	-	1,157	642	757
Assets under development	1,055	1,345	-	(415)	1,985	1,985	1,055
Sub-Total	43,388	2,108	(1,780)	-	43,716	15,048	17,429
Leased equipment	22	6	-	-	28	24	20
Total	43,410	2,114	(1,780)	-	43,744	15,072	17,449

	(in thousands of dollars)
	2011
	Accumulated amortization
	March 31, 2010	Amortization	Disposals, write-offs	March 31, 2011
Office equipment	401	47	(78)	370
Informatics hardware and infrastructure	6,445	1,068	(1,507)	6,006
Software	18,371	3,165	(187)	21,349
Furniture and fixtures	336	82	-	418
Vehicles	6	4	-	10
Leasehold improvements	400	115	-	515
Sub-Total	25,959	4,481	(1,772)	28,668
Leased equipment	2	2	-	4
Total	25,961	4,483	(1,772)	28,672

6. Lease obligation for tangible capital assets

The PSC has entered into agreements for photocopier rentals under capital lease with a cost of $27,800 and accumulated amortization of $4,187 as at March 31, 2011 ($22,000 and $2,000 at March 31, 2010). The obligations for the upcoming years include the following:

	(in thousands of dollars)
	2011	2010
2012	7	4
2013	7	5
2014	5	5
2015 and thereafter	0	5
Total future minimum lease payment	19	19
Less: imputed interest (2.12% to 3.01%)	(1)	(1)
Balance of obligations under leased tangible capital assets	18	18

7. Accounts payable and accrued liabilities

	(in thousands of dollars)
	2011	2010
Federal government departments, agencies and crown corporations	489	3,057
External parties	2,705	3,194
Total	3,194	6,251

8. Employee future benefits

1. Pension benefits
   
   The PSC eligible employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with the Canada and Quebec Pension Plan benefits and they are indexed to inflation.
   
   Both the employees and the PSC contribute to the cost of the Plan. The 2010-2011 expense amounts to $9,364,000 ($10,077,000 in 2009-2010), which represents approximately 1.9 times the employees’ contributions.
   
   The PSC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
   
   
2. Employee severance benefits
   
   The PSC provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
   
   

   	(in thousands of dollars)
   	2011	2010
   Accrued benefit obligation, beginning of year	17,396	19,274
   Expense for the year	1,717	140
   Benefits paid during the year	(1,746)	(2,018)
   Accrued benefit obligation, end of year	17,367	17,396

9. Equity of Canada

The deficit represents liabilities incurred by the PSC, net of assets, which have not yet been funded through appropriations. Significant components of this amount are employee future benefits and vacation pay liabilities. These amounts are expected to be funded by appropriations in future years as they are paid.

10. Contingent liabilities

Claims are made against the PSC in the normal course of operations. There are currently claims outstanding at March 31, 2011, none of which are expected to result in payment ($0 at March 31, 2010)

11. Contractual obligations

The nature of the PSC's activities can result in some large multi-year obligations whereby the PSC will be obligated to make future payments when the services are received. Significant contractual obligations other than the lease obligation for tangible capital assets that can be reasonably estimated are summarized as follows:

	(in thousands of dollars)
	2012	2013	2014	2015 and thereafter	Total
Service contracts	2,633	347	245	19	3,244
Operating leases	121	84	39	1	245
Total	2,754	431	284	20	3,489

12. Segmented information

	(in thousands of dollars)
					2011	2010
	Staffing services and assessment	Oversight of integrity of staffing and political neutrality	Appointment integrity and political neutrality	Internal Services	Total	Total
Salaries and employee benefits	36,154	21,166	11,613	28,720	97,653	98,062
Professional and special services	3,337	1,658	710	5,745	11,450	13,556
Accommodation	4,119	2,237	1,178	3,848	11,382	10,547
Amortization of tangible capital assets	2,015	203	7	2,258	4,483	7,178
Transportation and telecommunications	1,138	262	136	797	2,333	2,729
Repair and maintenance	666	178	4	1,007	1,855	2,037
Informatics, office equipment, furniture and fixtures	139	341	2	1,077	1,559	1,698
Utilities, materials and supplies, and other	243	27	51	439	760	851
Rentals	156	25	29	807	1,017	825
Printing and publications services	182	19	22	232	455	522
Total	48,149	26,116	13,752	44,930	132,947	138,005

13. Related party transactions

The PSC is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The PSC enters into transactions with these entities in the normal course of business and on normal trade terms.

During 2010-2011, the PSC incurred expenses of $38,718,000 ($39,274,000 in 2009-2010) and earned revenues of $12,083,000 ($12,385,000 in 2009-2010) from transactions in the normal course of business with other federal government departments, agencies and Crown corporations. These expenses include services received without charge as described in Note 14.

14. Services provided without charge

During the year, the PSC received services that were obtained without charge from other government departments and agencies. These services without charge have been recognized in the PSC's Statement of Operations as follows:

	(in thousands of dollars)
	2011	2010
Public Works and Government Services Canada - accommodation	11,382	10,547
Treasury Board Secretariat - employer's share of insurance premiums	6,714	6,904
Justice Canada - legal services	1,137	1,039
Human Resources and Skills Development Canada - employer's portion of Worker's compensation payments	133	133
Office of the Auditor General of Canada - audit services	110	107
Total	19,476	18,730

15. Net Debt Indicator

The presentation of the net debt indicator and a statement of change in net debt are required under Canadian generally accepted accounting principles.

Net debt is the difference between a government’s liabilities and its financial assets and is meant to provide a measure of the future revenues required to pay for past transactions and events. A statement of change in net debt would show changes during the period in components such as tangible capital assets, prepaid expenses and inventories. The PSC is financed by the Government of Canada through appropriations and operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by PSC is deposited to the CRF and all cash disbursements made by PSC are paid by the CRF. Under this government business model, assets reflected on the PSC’s financial statements, with the exception of the Due from the CRF, are not available to use for the purpose of discharging the existing liabilities of the PSC. Future appropriations and any respendable revenues generated by PSC’s operations would be used to discharge existing liabilities.

	(in thousands of dollars)
	2011	2010
Liabilities
Accounts payable and accrued liabilities	3,194	6,251
Accrued salary	1,855	1,837
Accrued vacation leave	3,652	3,847
Employee future benefits	17,367	17,396
Lease obligation for tangible capital assets	18	18
Total Financial Liabilities	26,086	29,349
Financial Assets
Due from Consolidated Revenue Fund	3,822	5,163
Accounts receivable and advances	1,123	953
Total Financial Assets	4,945	6,116
Net Debt Indicator	21,141	23,233

16. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.

List of Supplementary Information Tables

All electronic supplementary information tables found in the 2010–2011 Departmental Performance Report (DPR) can be found on the Treasury Board of Canada Secretariat (TBS) Web site.¹

• Green Procurement
• Internal Audits and Evaluations
• Response to Parliamentary Committees and External Audits
• Sources of Respendable and Non-respendable Revenue
• Status Report on Projects Operating With Specific Treasury Board Approval
• User Fees Reporting

Supplementary table from the Public Service Commission (PSC)

• Expected Results Related to Public Service Values in Support of the Strategic Outcome

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Section IV: Other Items of Interest

Organizational Contact Information

E-mail address:
infocom@psc-cfp.gc.ca

Mailing address:
Public Service Commission
L’Esplanade Laurier
300 Laurier Avenue West
Ottawa, Ontario K1A 0M7

Additional Information

Supplementary information on the following subjects can be found in the publications section of the PSC’s Web site.

• Information by sub-activities
• Assessment of Internal Control over Financial Reporting for the fiscal year ended March 31, 2011

This document is available on the TBS Web site and on the publications section of the PSC’s Web site.

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Footnotes

1 See 2010–2011 Part III—Departmental Performance Reports: Supplementary information (tables). Very first Treasury Board Expenditure Authority decision for total project cost.