ARCHIVED - MAF Assessment: National Defence - 2006

The assessment of public service leadership in values and ethics examines only organizational results; it is not an assessment of leaders themselves or of the actual integrity of the organization. The objective is to provide senior managers with a tool to see where employees' perception of specific items related to public service values is progressing and where progress could be made. The assessment is based exclusively on the perceptions of employees from the 2005 Public Service Employee Survey (PSES), and Management Accountability Framework (MAF) ratings are relative to the performance of other federal public service organizations.  Where available, 2002 PSES results are also used as a basis of comparison. Notes from the 2005 MAF assessment, which reviewed departmental activities in values and ethics, are also sometimes included in order to provide context and additional guidance for interpreting the survey results.

PSES data covers only the civilian side of the Department of National Defence (DND).  The 2005 MAF assessment of DND indicated that the organization conducted two employee surveys on ethics in the workplace (1999 and 2003) to collect feedback from both military and civilian employees.  DND also appointed an Ethics Coordinator to advise assistant deputy ministers and to tailor the Defence Ethics Program to the needs of employees.  The 2005 PSES results for public service values indicate that such efforts appear to be achieving positive outcomes, as employee responses generally scored above or within the public service average. At the same time, the 2005 PSES results, indicated that further work needs to be undertaken. For instance, only 61% of employees felt the supervisor assesses work against goals and objectives, a score that is 5% below the public service average. The previous MAF assessment also described that in 2005, the Chief of Review Services prepared a comprehensive report on the state of DND in four areas: ethical climate, integrated risk management, information for decision-making and accountability, and internal control (stewardship). As a result, DND conducts regular audits and evaluations across its various sub-organizations and presents the results on a quarterly basis to the Audit and Evaluation committee.  Although such efforts work towards building a positive ethical climate, 40% employees felt that competitions for staff positions were run in a fair manner, which is 4% below public service average. Also, 63% of employees felt the selection process was fair, which is 5% below public service average. Overall, the Treasury Board Secretariat portfolio encourages DND to build upon the systems and processes identified in the 2005 MAF cycle, by focusing particularly on areas where the 2005 PSES results fall below or close to the public service average.

1.1 Organizational performance for each family of Public Service values, as defined in the Values and Ethics Code for the Public Service (Opportunity for Improvement)

DND is encouraged to improve Professional, Ethical and People Values across the organization, given that:

1. 61% of employees fetl their supervisor assessed work against goals and objectives (5% below  the public service average)
2. 73% of employees felt they could clearly explain to others the direction of the organization (6% below the public service average)
3. 63% of employees felt the process of selecting a person for a position was done fairly (5% below the public service  average)
4. 40% of employees felt the competitions were run in a fair manner (4% below the public service  average)

 However, DND continued to perform well in defining client service standards, as perceived by 74% of employees (6% above the public service  average).

1.2 Extent to which leaders foster a culture of respect and integrity (Strong)

DND is recognized for achieving strong performance in addressing the extent to which its corporate leaders foster a culture of respect and integrity throughout the organization, given that:

1. 73% of employees felt the department creates a workplace that prevents harassment and discrimination (9% above the public service average)
2. 86% of employees felt the organization treats them with respect (same as the public service average)
3. 21% of employees felt they had been a victim of harassment on the job (same as the public service  average)
4. 16% of employees felt they had been a victim of discrimination on the job (same as the public service  average)

1.3 Extent to which the organization maintains and promotes appropriate, accessible avenues for disclosure of wrongdoing (Strong)

DND is recognized for a strong performance in addressing the extent to which it maintains and promotes accessible avenues for disclosure of wrongdoing, given that: 

1. 62% of employees felt they could initiate a formal redress process without fear of reprisal (15% above the public service average)
2. 74% of employees knew where to go if faced with an ethical dilemma / value conflict (6% above the public service average)

The Department of National Defence has three strategic outcomes that are consistent with its mandate and provide a good indication of intended benefit to Canadians. One of the outcomes could more clearly articulate an outcome commitment. The Program Activity Architecture is consistent with the mandate of the department.

However DND continued to refine and develop its strategic outcome and Program Acitivity Architecture (PAA) performance measurement and has committed to having a robust performance measurement framework in place in Spring 2007.

2.1 Extent to which the organization's Strategic Outcomes and Program Activity Architecture are consistent with its mandate (Acceptable)

DND's strategic outcomes are consistent with the department's mandate to defend Canada and Canadian interests and values while contributing to international peace and security. The Program Activity Architecture (PAA) is also consistent with this mandate.

2.2 Clarity and measurability of the organization's strategic outcomes (Acceptable)

DND has three strategic outcomes that give a good indication of the long-term goals of the department. The third outcome, Good governance, Canadian identity and influence in a global community, is not worded as a clear outcome statement.  A clear outcome statement is a prerequisite for determining its measurability. However, this strategic outcome covers only a small part of DND's expenditures.

Performance measures have not yet been developed for the strategic outcomes.

* It has a rigorous project approval process in place that allows for internal review and challenge of departmental proposals, resulting in good-quality memoranda to Cabinet and the Treasury Board submissions. However, as reported last year, when timelines are compressed, the quality of memoranda to Cabinet and Treasury Board submissions suffers.  In 2006, an increased number of proposals were put forward with unrealistic deadlines.  While TBS acknowledges that there will be times when urgent requirements arise for missions such as Afghanistan, the long-term capital plan should assist the department's planning and prioritizing function to address this issue.    

The department is encouraged to further improve the quality of  its memoranda to Cabinet and Treasury Board submissions, especially in relation to the explanation of options, risks and risk mitigation strategies.  Sound analysis of risk factors will become increasingly important in the context of the proposed new Treasury Board policy on Investment Planning and Project Management, where delegation of authority will be granted according to project complexity and risk.  

5.1 Accuracy and reliability of supporting information in MCs and TB Subs (Acceptable)

* and reviewed a number of draft memoranda to Cabinet and submissions.  DND has a rigorous project approval process that allows for the internal review and challenge of departmental proposals and verification of the accuracy of supporting documentation.  The accuracy of supporting documentation and the easy accessibility of project staff for project briefings results in good-quality Treasury Board submissions with reliable data. DND is also very responsive to TBS requests for additional information.  However, memoranda to Cabinet and the Treasury Board submissions should, more clearly demonstrate how proposed initiatives are situated within departmental strategic plans and support the department's strategic outcomes.  In addition, links to related projects should be more clearly discussed.  

5.2 Quality, adequacy and soundness of analysis (including outcomes, factual analysis, performance history, options, business case, financial and non-financial performance projections, risk factors and mitigation strategies to address audit findings) (Acceptable)

The overall quality of memoranda to Cabinet and Treasury Board submissions was good.  The department, however, must be more consistent in providing a realistic explanation of all explored options and must ensure that the preferred option is fully justified.  Furthermore, given the high dollar-value of most memoranda to Cabinet and Treasury Board submissions, risks and their corresponding mitigation strategies must be adequately explained.  TBS also notes that DND's project approval process requires that a Project Profile and Risk Assessment be developed for all Treasury Board submissions.  Although this assessment is useful to TBS, the information in the Project Profile and Risk Assessment is not always adequately presented in Treasury Board submissions.  As a result, TBS is often required to seek additional information from the department to fully explain the risks and corresponding mitigation strategies to the Treasury Board.  Sound analysis of risk factors will become increasingly important in the context of the proposed new Treasury Board policy on Investment Planning and Project Management, where delegation of authority will be granted according to project complexity and risk.  

TBS further notes that when timelines were compressed, which frequently occurred this fiscal year, the quality of memoranda to Cabinet and Treasury Board submissions suffered, resulting in more conditions being placed on approvals.  Better planning through such mechanisms as a long-term capital plan should assist the department in prioritizing its initiatives to address this issue.  TBS acknowledges, however, that there will be times when urgent requirements arise for missions such as Afghanistan.      

The department advised that a new corporate submissions process will be implemented this fiscal year that will see all consultations, analysis and challenge functions undertaken early in the development of submissions.  The department is confident that this new approach will minimize compressed timelines and improve the quality of submissions.

5.3 Appropriate stakeholder consultations on MCs and TB Subs (Acceptable)

DND is diligent in its efforts to undertake stakeholder consultations and has the personnel and processes in place to carry out effective consultations.  It has excellent working relationships with central agencies.

5.4 Timeliness of consultations with central agencies on MCs and TB Subs (Opportunity for Improvement)

* These tight timelines have made it more difficult for TBS to perform its challenge function.  * consultation timelines were very short, despite TBS' repeated requests for information in order to begin consideration of the Strategy.   

5.5 Presence of a quality control process on MCs and TB Subs and the extent of its rigour and effectiveness (Acceptable)

Cabinet liaison services provides good quality control on memoranda to Cabinet. DND has a rigorous project approval process that allows for internal review and challenge of departmental proposals, which results in good quality Treasury Board submissions, except when timelines are compressed.  Every submission that is to be considered at the Treasury Board must go through a number of senior management committees that include representatives from across the department, including the resource manager and the chief financial officer.  DND has also implemented a unique database that tracks all project information in the department and is accessible to senior decision-makers at any time, thus increasing the accountability of project managers to the accuracy of project information.  DND has been working to ensure that Treasury Board submissions are written clearly and in plain language.  TBS commends the department for its efforts and encourages it to continue to improve in this regard.  

The Department of National Defence continued to maintain a neutral and centralized evaluation function with four evaluations noted as being completed and approved in 2005-06, with an additional 10 evaluations forecasted for completion and approval during 2006-07.  (Note: the level of evaluation report activity for 2005-06 is substantially lower than the 12 reports anticipated for completion and approval in the MAF 2005.)

Budget levels for 2006-07 for the evaluation function were lower than previously forecasted, at 13 full-time equivalents, and $207K in Operation and Maintenance  compared to last year's projected levels of 18.5 full-time equivalents with a combined Operation and Maintenance and Professional Services budget of approximately $473K. 

Reports reviewed by TBS, submitted by the Chief Review Services, continued to provide full coverage of evaluation requirements included in the Evaluation Policy, with the quality of report writing to be considered a "best practice" in the federal government.

6.1 Progress in moving toward full coverage of the organization's program base (both G&C and other programs) on a five-year cycle (Opportunity for Improvement)

DND produced and had approved four evaluations, three Results-based Management Accountability Frameworks and one review during 2005-06, with 10 more completed evaluation reports anticipated for 2006-07.  No expenditure information was provided to determine actual or forecasted program expenditure coverage in these evaluations.

The evaluation unit has been afforded a budget of 13 full-time equivalents and $207K in Operation and Maintenance.  No professional services funds were noted as being budgeted for 2006-07 and no forecasts were provided for future year budgets.

A risk-based audit and evaluation workplan for fiscal 2006-07 was provided to TBS and plans are to transform this document into a rolling five-year plan for 2008-09 planning.

6.2 Neutrality of evaluation and focus on program improvement and value for money – including program performance and relevance (Strong)

The four evaluations reviewed by TBS, all provide fair to high substantiation, given the Evaluation Policy requirements of success, program, cost-effectiveness and relevance.  As required, levels of management authorities provided and exercised in program implementation and resource allocation were also scrutinized.

Report information was well-presented and concise and included management action plans as well as environmental and risk impacts as appropriate. 

6.3 Extent to which evaluations are used to support decision-making in the organization (Acceptable)

A joint Audit and Evaluation Committee, chaired by the Deputy Minister, approves evaluation plans, evaluation reports and recommendations, and management action plans, and monitors their implementation status.

A Recommendation Management System tracks recommendations for completed evaluations and provides status reports to management.

The length of time for evaluation completion and approvals was not provided.

The Department of National Defence is developing a Financial Decision Support enterprise system that would track expenditures by Program Activity Architecture (PAA) strategic outcome.  A similar capability to extract planning information from the departments planning database (i.e. web measure system) is forecasted for implementation in 2007-08.  The department is investigating the development of a "single enterprise resource planning" environment that would provide a coordinated approach to financial and non-financial data management.  

With respect to performance reporting, it was difficult to track the performance expectations from the 2005-06 Report on Plan and Priorities (RPP) to the 2005-06 Departmental Performance Report (DPR), as they do not use the same basis of reporting.  With the development of its PAA, the department will be in a position to provide consistent performance reporting in 2006/2007.  The DPR aligned program activities to strategic outcomes, and discussed how the program activities support departmental priorities; however, the majority of the performance story addressed the outputs delivered at the lower levels of the PAA, with no discussion of how they contributed to the overall program activity.  As a result, it was difficult to assess the department's performance on its strategic outcomes.  The department could improve its performance reporting by focusing more at the program activity level of the PAA. 

7.1 Extent to which integrated management information from financial, HR, payroll, asset and real property and program performance information systems are readily accessible for corporate decision-making (Opportunity for Improvement)

The department's information systems are not yet organized to provide readily-accessible and integrated financial and non-financial information for corporate decision making.  It is recognized that a single enterprise resource planning system would require considerable investment and many years to implement.  DND is developing a Financial Decision Support enterprise system, based on the use of business intelligence tools (i.e. data mining) to extract data from the existing Financial Managerial Accounting System to aggregate expenditures by PAA strategic outcome.  A similar capability to extract planning information from the department's planning database (i.e. web measure system) is planned for implementation in 2007-08.  DND is also working to integrate the real property information systems that house the inventory, financial and environmental data needed to report on performance in managing real property and support strategic capital investment decisions.  The overall plan is to integrate, over time, Financial Decision Support with all other Enterprise Resource Planning  in the corporate data warehouse. This configuration will be overlayed with business intelligence tools that will give DND more flexibility to access data from many sources in order to combine financial and non financial data at an enterprise-level Decision Support System.

7.2 Extent to which clear and integrated performance expectations in the RPP are tracked and reported on in the DPR (Opportunity for Improvement)

The assessment of this measure was based on the 2005-06 RPP and the 2005-06 DPR, which are the reports of the most recently completed reporting cycle.

The RPP was developed using the Planning, Reporting and Accountability Structure, but the department indicated that it was in the process of developing its PAA when this report was being prepared.  As such, the department was not in a position to identify program activities or expected results at the program activity level in its 2005-06 RPP since the PAA was not fully developed.  The 2006/07 RPP corrected this issue.  The DPR was based on the PAA, but there was no explanation or crosswalk in the DPR that aligns the department's business lines under Planning, Reporting and Accountability Structures to strategic outcomes and program activities under the Management, Resources and Results Structure, so it was difficult to trace performance information in DND's DPR to planning information in its RPP.

DND's DPR does a good job of discussing its strategic context and operating environment.

7.3 Extent to which public performance reports integrate credible performance information (beyond activities and outputs to results) (Opportunity for Improvement)

The assessment of this measure was based on the 2005-06 RPP and the 2005-06 DPR,  which are the reports of the most recently completed reporting cycle.

The DPR indicates that the department was in the process of developing an internal performance framework, but did not indicate the current status of the framework. As a result, it is not clear if the internal performance framework was the basis and the source for the performance information contained in the DPR. In addition, the DPR did not cite sources of information, such as audits or evaluations, as recommended by the DPR guidelines.  The DPR mainly cites the experiences of departmental employees.

The DPR aligned program activities to strategic outcomes, and discussed how the program activities support departmental priorities.  However, there is little performance information at the program activity level.  The emphasis in the performance story is on the outputs delivered at the sub-activity and sub-sub-activity levels. There is no discussion of how each sub-activity contributed to the overall program activity.  The DPR could be improved by augmenting the results focus of the performance story at the PA level and how this contributes to the achievement of the strategic outcomes. DND could also consider reducing the amount of activity focused reporting at lower levels of the PAA.

It should be noted that the methodology for this indicator assessed a significant change management initiative in the Department of National Defence (DND) called Canadian Forces Transformation.  This assessment did not evaluate the department's capacity for systemic change management.

DND continues to undergo significant change as a result of Canadian Forces Transformation.  The Canadian Forces is transforming to a multi-role, combat-capable military that can operate at home and abroad, adapt its capabilities and forces structure to meet the threats of an evolving security environment, deliver more capable and flexible forces able to respond quickly to crises in Canada and overseas as part of a "whole-of-government" approach, and provide forces for two land-based and one maritime-based operations with appropriate air support, capable of playing a leadership role. 

Canadian Forces Transformation continues to drive structural changes that enable an operational focus, provide effective and responsive decision support and align authorities, responsibilities and accountabilities.  The department is aggressively pursuing its Canadian Forces Transformation plan.  Senior management is actively engaged in this initiative and the necessary resources are committed.  Canadian Forces members and civilian employees are kept informed of Canadian Forces Transformation progress through written communication and Town Hall meetings.  The Canadian Forces Transformation vision is becoming clearer outside the department as DND acquires new military equipment.  The release and approval of the Canada First Defence Strategy will assist the external communication of the Canadian Forces Transformation vision.           

8.1 Level of organizational engagement on change management (Strong)

DND is following a traditional, military, top-down approach as it pursues Canadian Forces Transformation.  The Chief of the Defence Staff has developed a four-phased plan for implementing Canadian Forces Transformation that identifies key risks, mitigation strategies, and measurable objectives.  The plan is reviewed and modified quarterly and results are aggressively pursued.  The department has communicated this plan both internally and externally.   In addition, six key principles have been developed to guide the department through the transition.   Senior management across the department is engaged in Canadian Forces Transformation and their accountabilities are included in their performance management agreements.  Resources are identified and made available for this initiative through, for example, the business planning process and the capability development process.  Key stakeholder and employee input is obtained through the existing military chain of command and annual polling of employees.  A team of external advisors reviewed and validated the new command structure.   

8.2 Extent to which individual and organizational learning contributes to organizational change management strategy (Acceptable)

DND faces unique difficulties in fostering organizational learning as its Canadian Forces members are posted in and out of assignments every few years.  Canadian Forces Transformation involves the acquisition of new military equipment and the development of new roles and responsibilities, all of which require training.  For example, with respect to major military acquisitions (e.g. strategic airlift, medium-to-heavy lift helicopters), a major component of these procurement projects involves training Canadian Forces members on how to use these new capabilities.  In addition, training programs to deploy new troops to Afghanistan are continually being updated based on lessons learned.  TBS is unaware of civilian training linked to Canadian Forces Transformation; however, the department has instituted organization-wide training initiatives in response to broader change agenda issues such as financial management, values and ethics, harassment and accountability.

8.3 Clarity of corporate vision, and commitment to continuous improvement and innovation (Acceptable)

The Canadian Forces Transformation vision is clear to those within the department and becoming clearer to those outside the department. Canadian Forces Transformation is the focus of departmental priorities and initiatives as evidenced by the reorganization of the command structure of the forces and the pursuit of projects contributing to this new vision.  The Chief of Institutional Alignment was established to facilitate the coordination of departmental initiatives that support Canadian Forces Transformation.  Canadian Forces members and civilian employees are kept informed on the progress of Canadian Forces Transformation through existing communication methods such as Town Hall meetings, the Maple Leaf publication and CANFORGENs (department-wide messages).    

With respect to continuous improvement and innovation, the department collaborates with allied militaries to identify best practices.  Following organizational issues and crises, the department undertakes investigations and/or boards of inquiry and develops lessons learned.  It is departmental policy to conduct operational lessons learned to identify and correct deficiencies in Canadian Forces missions.  Senior management is responsible for ensuring that a lessons-learned process is adopted within their organizations.  

The Department of National Defence (DND) is making some progress in effective corporate risk management but it is slower than expected. DND has many pockets of risk management strength at operational and project levels across the department.  In order to build on this operational knowledge and capability and to improve the effectiveness of corporate risk management, DND should: 

1. Advance the implementation of Integrated Risk Management activity;
2. Update the Corporate Risk Profile;
3. Assign accountability for major risks including tracking progress on risk mitigation measures and;
4. Integrate the various risk management activities, processes and reporting formats to align to a common risk management perspective and approach. 

9.1 Level of engagement of the senior executive in corporate risk management (e.g. organizational focus, senior executive accountabilities, risk mitigation strategies, Business Continuity Plans, Emergency Preparedness Plans) (Opportunity for Improvement)

DND is making progress in implementing Integrated Risk Management (IRM). However, prograss has been slow and limited in 12 months since the Round III assessment based on the evidence available for review at the time of the Round IV assessment. For example, the extent of the department's progress in addressing the four major recommendations arising from the Deloitte 2005 study relating to corporate risk management were not evident during the TBS review.  It is, recognized however, that the multiple and various types of good risk management processes or activities are in place within operations, and certain functional areas (e.g. risk-based internal auditing, project risk management, etc.)  It is also noted that leadership for corporate risk management has been assigned and that some initial elements have been developed since 2005 (e.g. IRM Framework and Policy, Risk Smart training). However, implementation efforts and internal links between the corporate risk profile, business continuity planning and emergency preparedness were not evident at the time of the assessment.

9.3 Currency of the corporate risk assessment and profile (Opportunity for Improvement)

A current, approved Corporate Risk Profile (CRP) was not available at the time of the Round IV assessment.  Once completed, the Corporate Risk Profile will help decision makers consider risk factors from an organizational perspective.

9.4 Extent to which corporate planning is informed by risk (Opportunity for Improvement)

DND stated in the Departmental Performance Report for 2005-06 that it took an integrated approach to risk and performance management as part of Canadian Forces Transformation activity.  Progress is being tracked by means of several performance indicators.

9.5 Risk Mitigation strategies are in place for key program and corporate risks (Insufficient Information)

Information on risk mitigation strategies for key program and corporate risks, the assignment of accountabilities for mitigation or the tracking of their implementation was not available.  DND does point out that there is extensive operational risk assessment. As for corporate risks, mitigation strategies will be developed as part the ongoing effort to complete the Corporate Risk Profile.  In principle, accountabilities among senior management for monitoring risk mitigation will also be assigned.

The following assessment pertains only to the civilian employee population within the Department of National Defence.

This indicator is based on a roll-up of the various data according to the methodology shared with departments and agencies in December 2006. A key source for the assessment was the 2005 Public Service Employee Survey (PSES), which is the most recent comparable evidence of employee perceptions, and which provides insight into the respondents' attitudes towards the key workplace outcomes being measured

The Department of National Defence is rated as "acceptable" with respect to a workplace that is fair, enabling and healthy and safe.  Its PSES results demonstrate a favourable employee perception with respect to management-union relations in particular, as well as a good work-life balance.

The Public Service Commission recognized in its 2005-2006 Annual Report that this organization is a top performer with respect to governance, policy, communication and control, in assessing the establishment of staffing management frameworks.

Improvements are sought in the areas of official languages (availability of work in both official languages, and complaints related to language of work) and employment equity (representation and separation).

10.1 FAIRNESS OF EMPLOYMENT AND WORKPLACE PRACTICES AND EFFECTIVENESS OF LABOUR RELATIONS (Acceptable)

DND is rated as "acceptable" with respect to fairness in the workplace.

It performed well in relation to the implementation of Public Service Modernization Act practices, and employee perceptions of the workplace were consistently above the public service average.  In particular, employees perceived that management engages in meaningful consultations with unions, and they also felt that they could complete their work within regular working hours. 

DND is encouraged to improve in the area of employment equity (number and pattern of promotions), and may want to look at fairness in staffing. The rate of founded complaints, at 13%, coupled with employees' perception being less positive than the public service average, indicate an opportunity to improve in this area. It must be noted, however, that over the past couple of years, founded complaints in staffing have been steadily decreasing. 

The assessment for the measure Fair for MAF Round IV did not include sub-measure 10.1.4.

10.1.1 Number of founded complaints related to Staffing (Opportunity for Improvement)

Although only a little more than 1% of selection processes were appealed, over 13% of the appeals received were upheld.  However, it is acknowledged that the rate of complaints has been steadily declining since 2004, which indicates that DND has implemented practices and processes which has had a positive impact on its staffing processes.

10.1.2 Number and frequency of removal of delegation of authority related to staffing (Acceptable)

DND did not have any restrictions to or removal of its staffing delegation.

10.1.4 Number of classification grievances (Unrated)

The department was not part of the monitoring exercise this year; therefore no rating for this round of MAF's provided.

10.1.5 Development, promotion or adoption of PSMA practices (Acceptable)

The Public Service Modernization Act implementation team has now been replaced by a Service Delivery Integration Committee with a mandate to ensure Public Service Modernization Act  optimization and oversight to human resources reform initiatives. Extensive training and communication has taken place, but no specific reference to level of staffing delegation made.

10.1.6 Number and pattern of promotions (EE groups) (Opportunity for Improvement)

1. In 2005-06, women accounted for 46.0% (902/1962) of all promotions.
2. Aboriginal peoples represented 2.5% (49/1962) of all promotions.
3. Persons with disabilities represented 5.8% (114/ 962) of all promotions.
4. Visible minorities represented 6.5% (127/1962) of all the promotions.
5. It is worth noting that women, persons with disabilities and visible minorities were all promoted at a higher rate than their respective representions within the total employee population. Aboriginal peoples at 2.5% were promoted at an equal rate to their representation.

10.1.9 ICMS is in place (Acceptable)

Key components of the Informal Conflict Management System were in place during the assessment period.  The organization had consulted unions for the development/implementation of its Informal Conflict Management System, its system was completed, and staff was informed of it.

10.1.10 Effective LMCC in place (meet on a regular basis, effectiveness rated by both management and unions) (Acceptable)

A Labour Management Consultation Committee is in place.

10.1.12 Survey question index (Acceptable)

The PSES results indicated that employee perception of a fair workplace is "acceptable".

10.2 EXTENT TO WHICH THE FOLLOWING ARE EXHIBITED IN THE WORKPLACE: CLEAR DIRECTION; COLLABORATION; RESPECT AND SUPPORT FOR EMPLOYEES' LINGUISTIC RIGHTS, DIVERSITY AND PERSONAL CIRCUMSTANCES (Acceptable)

The department is rated as "acceptable" with respect to an enabling workplace.  There is room to improve in the area of official languages (availability of work in both official languages, and complaints related to language of work), as well as in the area of employment equity (representation in and separation from the workforce).

Employees felt they could balance work and personal life at a higher rate than the public service in general.  However, they felt they do not get as much recognition from their supervisors, compared with the public service average.

10.2.1 Organizational language capacity to provide personnel and central services in both official languages (Acceptable)

The language proficiency of incumbents of bilingual positions providing personnel and central services has improved over last year, rising from 81.3% to 84.4%, which is close to the average for the Public Service as a whole (89.7%).

Source: PCIS – Data to 31 March 2006.

10.2.2 Number and percentage of supervisors that meet the requirements of their position (Acceptable)

The proportion of supervisors required to be bilingual and who meet the language requirements of their position has improved over last year, rising from 80% to 83.5%, which is close to the average for the Public Service as a whole (85.9%).

Sources: PCIS – Data to 31 March 2006; 2005-2006 Annual Review.

10.2.3 Availability of work, information and communication tools in both official languages (Opportunity for Improvement)

An analysis of the review and an audit report of the Commissioner of Official Languages indicates that DND is having problems surrounding the availability in both official languages of work tools, computer systems and communications to employees. The Department has, however, put in place various initiatives designed to create a workplace conducive to the use of both official languages. The findings of surveys of federal public servants in 2002 and 2005 remained identical (88%) and indicate nevertheless that, overall, employees are able to use their official language of choice in the workplace.

Sources: PCIS – 2005-2006 Annual Review; 2006 Audit Report of the Commissioner of Offical Languages at National Defence Headquarters; 2002 and 2005 Surveys of Federal Public Servants.

10.2.4 Absence of complaints related to language of work (Opportunity for Improvement)

The Department of National Defence, both military and civilian personnel, received a total of 42 complaints in 2005-2006, ie, two more than in 2004-2005.

Source: 2005-2006 Annual Review

10.2.5 Evidence of targets in PMA's / planning documents (Unrated)

This sub-measure will be rated inthe next round of MAF.

10.2.6 EE representation and separation rate (Opportunity for Improvement)

1. 39.5% (505/1280) of those who left DND were women.
2. 2.5% (32/1280) of those who left were Aboriginal peoples
3. 5.1% (65/1280) of those who left were persons with disabilities
4. 4.3% (55/1280) of those who left were from designated visible minority groups.
5. More women and Aboriginal peoples left DND than those recruited.
6. Persons with disabilities at 5.1% vs. 2.9%; separated at a higher level than recruited.
7. Visible minoriy groups (at 4.3%) left DND at an equal rate rate of those recruited.

10.2.7 Number of discrimination complaints (based on race, colour, gender, person with disability) (Unrated)

This sub-measure will be rated in the next round of MAF.

10.2.10 Survey question index (Acceptable)

The PSES results indicated that employee perception of an enabling workplace is acceptable.

10.3 EXTENT TO WHICH THE WORKPLACE IS A HEALTHY AND SAFE PHYSICAL AND PSYCHOLOGICAL ENVIRONMENT (Acceptable)

The department is rated as "acceptable" with respect to a healthy and safe workplace.

As already noted, the perception that employees get adequate recognition from their supervisors is lower than the public service average.

10.3.4 Number of EAP usage (Acceptable)

DND met the requirements of the policy.

10.3.5 Percentage of employees who get adequate recognition from their immediate supervisor when they do a good job (Q21) (Opportunity for Improvement)

The department was 3% under the public service average, a 2% increase from 2002.

10.3.6 Survey question index (Acceptable)

The PSES results indicated that employee perception of a healthy and safe workplace is "acceptable". Employees felt they have a say in decisions and actions at about the same rate as the public service average. DND had a slight increase in employee perception with respect to getting recognition from supervisors, although the rate is slightly lower than the public service average.

The following assessment pertains only to the civilian employee population within the Department of National Defence.

This indicator is based on a roll-up of the various data according to the methodology shared with departments and agencies in December of 2006. A key source for the assessment was the 2005 Public Service Employee Survey (PSES) which is the most recent comparable evidence of employee perceptions, and which provides insight into the respondents' attitudes towards the key workforce outcomes being measured.

DND received a "strong" rating with respect to a workforce that is productive, principled, sustainable and adaptable.

It showed a "best practice" with respect to its performance management program, and demonstrated that it maintains and promotes appropriate, accessible avenues for the disclosure of wrongdoing (Measure 1.3 of the Values-based Leadership and Organizational Culture indicator). It is also to be commended on its integration of business and human resources planning.

Generally speaking, the department's employees perceive their workforce in a positive manner, as evidenced by the 2005 PSES results.

However,  the same Values-based Leadership and Organizational Culture indicator showed that there is an opportunity to improve with respect to "organizational performance for each family of Public Service values". 

11.1 CAPACITY OF THE WORKFORCE TO PERFORM ITS DUTIES (e.g. ITS SIZE, MIX OF SKILLS, AND DIVERSITY OF BACKGROUNDS) (Strong)

DND has demonstrated that it has a well-developed Performance Management Program.  A best practice has been identified whereby executives must develop a commitment to leadership competencies. The department plans to provide a one-hour training session for managers on developing performance agreements, which should further improve an already well functioning program.

PSES demonstrated that the employee perception of a productive workforce is positive and in step with the public service average.

11.1.4 The department has an effective Performance Management Program for executives, based on the annual and triennial scorecard (Strong)

The assessment below is based solely on information extracted from the organization's annual scorecard.

For civilian executives only, DND reported in its Annual Performance Management Program Scorecard that it has processes in place to ensure equity and consistency:

1. DND has review mechanism to ensure a consistent approach in determining performance ratings
2. DND uses leadership competencies and the public service values and ethics to assess how results were obtained
3. DND has a communications plan and program to ensure that executives understand the Performance Management Program

DND plans for improving specific areas of the Performance Management Program include:

1. Development of a one-hour training session for managers in developing performance agreements

Best practice:

1. Requirement that all executives develop a commitment in leadership competencies

Correlation between ratings and performance pay:

1. The percentage of executives who were rated in the highest category was 20.4% in comparison with the rest of the core public administration percentage of 17.7%
2. The percentage of executives who received a bonus was 21.3% in comparison with the rest of the core public administration percentage of 22.3%
3. The expenditure for lump-sum payments as a percentage of payroll was 6.9% in comparison with the budget of 7.0%

11.1.7 Survey question index (Acceptable)

The 2005 PSES results indicate that employee perception of a productive workforce is acceptable. Of particular note is that employees feel the organization is a good place to work at a higher rate than the public service overall.

11.2 EXTENT TO WHICH THE WORKFORCE REFLECTS CANADA'S POPULATION, RESPECTS OFFICIAL LANGUAGES AND IS GUIDED BY PUBLIC SERVICE VALUES AND ETHICS (Acceptable)

The department was rated as "acceptable" with respect to a principled workforce.

In particular employee perception of knowing where to get help for an ethical dilemma was higher than the public service average.

DND should look to improve in the area of employment equity (representation and hiring gaps).

11.2.1 Representation, Hiring, Gaps (Opportunity for Improvement)

Based on departmental workforce availability  estimates, DND met its minimum representation for Aboriginal peoples, and persons with disabilities. Women at 38.8% vs. 40.1%, and visible minority groups, at 5.3% vs. 6.1%, remain underrepresented in the total employee population.

Given the amount of hiring activity, DND is expected to be a high performer in improving representation and filling gaps.

At the executive level, Persons with Disabilities are well represented,  Women (40.2% vs. 41.6%), Aboriginal peoples at (1.0% vs. 2.6%), and visible minority groups (6.2% vs. 6.9%) are underrepresented in the total executive population.

11.2.2 Participation rate of Anglophones and Francophones (Acceptable)

Anglophones:     78.4%
Francophones:   21.6%

The participation rate of English-speaking and French-speaking public servants is acceptable given the mandate of the institution, the location of its offices and the public it serves.

Source: PCIS – Data to 31 March 2006.

11.2.3 Absence of complaints with regard to equitable participation (Acceptable)

The Department of National Defence, both military and civilian personnel, received a total of three complaints in 2005-2006.

Sources: Annual Review for 2005-2006; Reports of the Commissioner of Official Languages.

11.2.4 Respect for Treasury Board's official languages policies (Acceptable)

According to the data available on 31 March 2006, DND had 5,186 incumbents of designated bilingual positions. Of 20,980 employees, 83.1% of incumbents of bilingual positions met the language requirements of their positions.

According to data from the 2005 survey of federal public servants, 81% of respondents indicated that training was offered to them in their official language of choice, which approaches the average for the Public Service (85%) as a whole. These results are higher than the results of the 2002 survey (79%).

Generally speaking, the institution is capable of meeting its obligations in terms of service to the public: the institution should continue its efforts to improve the active offer of service in both official languages and to deliver communications and service to the public in both official languages.

Work environment conducive to the use of both official languages in designated bilingual regions: the institution must continue its efforts to fulfill its obligations in terms of language of work, focusing particularly on the availability in both official languages of work tools, computer systems and employee communications.

Sources: PCIS – Data to 31 March 2006; Annual Review for 2005-2006; 2006 Report of the Commissioner of Official Languages to National Defence Headquarters; 2002 and 2005 Surveys of Federal Public Servants.

11.2.5 Survey question index (Acceptable)

The 2005 PSES indicated that employee perception of a principled workforce is acceptable.

In particular, employee perception of knowing where to get help for an ethical dilemma is higher than the public service average.

11.3 EXTENT TO WHICH THE WORKFORCE IS RENEWABLE AND AFFORDABLE (Strong)

The department was rated as "strong" for this measure as a result of its ability to integrate business and human resources planning.

11.3.1 Is there a process in place to integrate HR and business planning? (Strong)

DND planned for 87,630 full time equivalents in 2006-07 (combined military and civilian components). The Report on Plans and Priorities reflects the integration of human resources planning elements by clearly aligning key human resources planning initiatives with identified program activities which,  in turn, are associated with specific corporate priorities.

11.3.2 Does the department have an HR plan? (Acceptable)

 The Corporate Civilian Human Resources Strategy and Plan has now been received.

11.4 EXTENT TO WHICH THE WORKFORCE IS VERSATILE, INNOVATIVE AND CONTINUOUSLY LEARNS (Acceptable)

DND's workforce was adaptable at an "acceptable" level, as evidenced by the results of the 2005 PSES.

DND's employees perceived in general that they have opportunities to develop their skills, and are encouraged to be innovative.  They felt the department supports their career development.  These results are all in line with the public service results in general.

Sub-measures 11.4.1, 11.4.4 and 11.4.5 will be rated in the next round of MAF.

11.4.1 Percentage of managers accountable for the learning plan of their employees (Unrated)

11.4.4 Percentage of deployments in relation to number of employees (Unrated)

11.4.5 Participation in development programs (MTP, CAP, AETP, AEXDP, Interchange Canada) (Unrated)

11.4.7 Survey question index (Acceptable)

The 2005 PSES indicated that employee perception of an adaptable workforce is acceptable. 

This perception is in step with the public service average.

The Assistant Deputy Minister of Information Management at National Defence is responsible to the Deputy Minister for ensuring that information management services support the department's objectives and missions and are clearly identified in the governance structure. DND clearly described responsibilities for information management, and provided substantial supporting documentation outlining governance for the function. There is a departmental information management Strategy entitled "Defence Information Management Strategy 2020" developed by DND's information management stakeholders.

The privacy and confidentiality of information is dependent on good security practices. DND is compliant with most of the Management of Information Technology Security Standard, with no significant deficiencies.

Transparency and accountability in privacy and access to information practices are essential to good information management. This year's assessment of this dimension was primarily limited to the department's compliance with public reporting requirements. DND's public reporting did not contain all the required elements necessary to fully inform parliamentarians and the public on certain aspects of its management of privacy and access to information. Specifically, DND's chapter in the TBS Info Source publication requires revisions to its information holdings. The TBS Info Source publication is used to inform the public about government information holdings, including personal information. In addition, the Departmental Annual Report to Parliament on the administration of the Access to Information and Privacy Acts did not include the required information on the extent of any data matching activities, and authorized disclosures of personal information under the Privacy Act. 

12.1 Level of corporate engagement in information management (integrated departmental management framework and governance structure that ensures IM strategies support departmental outcomes) (Strong)

The Assistant Deputy Minister of Information Management is responsible to the Deputy Minister for ensuring that information management services support DND objectives and missions and is clearly identified in the departmental governance structure. The Assistant Deputy Minister of this position is responsible for Internet and Intranet Management and Information Architecture, and shares responsibility for Records and Documentation Management. Library Services and Access to Information are the responsibility of other DND organizations.

12.2 Degree of implementation of an IM strategy which, for large departments, is based upon a capacity assessment (Strong)

There is a departmental Information Management strategy entitled "Defence Information Management strategy 2020". This statement of strategic direction was developed by Defence Information Management stakeholders, with leadership from the Information Management Functional Authority, the Assistant Deputy Minister of Information Management. It complements Defence Strategy 2020 and reflects important conclusions and recommendations from the Information Management Strategic Review in 2002, from the Minister's Advisory Committee on Administrative Efficiency in 2003 and from wide consultation within the department.

12.3 Timeliness and completeness of reporting in support of access and privacy requirements (Acceptable)

Measure 12.3 assessed an institution's timeliness and completeness in terms of public reporting on access to information and privacy activities through annual reports to Parliament and descriptions of information holdings through the TBS Info Source publication. The key elements of this measure included an assessment of the institution's timeliness in meeting the legislated deadlines for submission of its annual reports to Parliament on access to information and privacy, input for the institution's chapter of the TBS Info Source publication, and the completeness of the reported information. This included whether or not the institution fulfilled specific requirements for reporting that were outlined in TBS Implementation Reports for preparing such documents.

DND met the legislated deadlines for submission of its annual reports to Parliament on access to information and privacy, input for the institution's chapter of the TBS Info Source publication, and most of the reporting requirements concerning completeness of that information. However, data matching activities, as well as authorized disclosures under the Privacy Act were not reported as required by the TBS Implementation Report. As well, DND's chapter of the annual TBS Info Source publication requires some revisions to its descriptions of information holdings to facilitate the right of access under the Access to Information Act.

12.5 Extent to which critical information is secure and an effective privacy regime is in place, monitored, and managed (Strong)

Measure 12.5 assessed the key elements required to maintain an effective privacy regime. This measure included an assessment of the accuracy of Personal Information Banks; an assertion that an appropriate delegation of authority is in place at the institution, as required under the Privacy Act; and, finally, that the institution demonstrated that it was successful in protecting personal information through effective information technology security measures.

Deficiencies were noted in the descriptions of DND's Personal Information Banks in the TBS Info Source publication.

DND was compliant with most of the Management of Information Technology Security Standard, with no significant deficiencies.

The fundamentals of information technology governance, information technology planning, and measurement of information technology value are in place.

There is a Chief Information Officer who has full scope of responsibility for information technology within the organization. This indicates an appropriate span of control for ensuring that standards and processes are in place for consistency of design, development, implementation, operation and maintenance of information technology solutions and services across the organization. The level of information technology planning is considered acceptable through the existence of an information technology plan, which is aligned with the organization's strategic plans and priorities. DND signed a Memorandum of Understanding with Public Work and Government Service's Information Technology Shared Services Branch to form a significant strategic partnership for the use of selected shared services. 

Evidence of demonstrated value from information technology investments included consolidation of call centres and a Government Technology Exhibit and Conference (GTEC) Gold Medal for Information Management Group work on the Tele-radiology Engineering Initiative in support of e-government objectives.

13.1 Level of corporate engagement in IT management (senior executive accountability, integrated corporate and IT governance, IT planning) (Strong)

There is a Chief Information Officer, and an Assistant Deputy Minister (Information Management), reporting to the Deputy Minister.

The Chief Information Officer has significant influence over the Computer Science function in the organization.  

There is an information technology plan and a DND Business Plan (2005-06/2007-08).

13.2 Demonstrated value from IT investments and, where appropriate, plans for appropriate use of IT shared services (Strong)

Evidence of demonstrated value from information technology investments is the consolidation of DND/CF information technology support call centres to reduce the number of centres and improve "24/7" coverage. A pilot project is presently underway in the Quebec Region. Additionally, value was acknowledged through the awarding of a Government Technology Exhibit and Conference (GTEC) Gold Medal for Information Management Group work on the Tele-radiology Engineering Initiative in support of e-government objectives.

DND is participating in discussions with Public Works and Government Services Canada's Information Technology Shared Services Branch to form a significant strategic partnership for the use of shared services.

The Department of National Defence generally demonstrated effective life-cycle management in specific asset categories. The rationalization of legacy information systems will further strengthen its effectiveness in this area. However, the Treasury Board Secretariat remains concerned about the lack of progress in the development of an integrated long-term capital plan on a department-wide basis. As one consequence, the department has lost the opportunity to seek access to proceeds of property sales which could be used for much needed re-investment in that specific asset category.  

In order to receive an overall indicator rating of acceptable, there can be no significant deficiencies warranting "attention required" or "opportunity for improvement" in any of the measures.  In order to attain an acceptable rating in the extent to which long-term capital planning is in place, the department must have a current long-term capital plan, approved by Treasury Board, that complies with Treasury Board policy and is used to support ongoing management of capital assets.

14.1 Extent to which appropriate long-term capital planning is in place (e.g. adequacy of asset information on condition/use, inclusion of all asset classes (real property, material, IM/IT), alignment with program delivery) (Opportunity for Improvement)

DND has not submitted a long-term capital plan to Treasury Board for approval since 1997.  Discussion took place between Treasury Board Secretariat and DND in July 2005 and it was agreed that the DND would submit a capital investment plan, consistent with the direction proposed in the draft Treasury Board policy on investment planning.  It is also noted that *

14.2 Extent to which an appropriate real property management framework is in place for custodians and tenants (e.g. accountability/decision-making structures, information systems, certified completeness and accuracy of national inventory data) (Acceptable)

DND, is one of the largest holders of real property in the federal government with 673 properties and, as such has tremendous challenges in managing its massive asset base. It has a real property management framework in place that includes clear accountabilities, policies and directives, and appropriate delegations. The department continues to develop and assess innovative approaches to the specific management challenges through master realty asset development plans although it is noted that a number of projects are on hold pending clarification of future needs through the long-term strategic planning cycle.  

Significant improvements were made in meeting the reporting requirements to the Directory of Federal Real Property.  The department last certified its data for completeness and accuracy in January 2006. 

With respect to contaminated sites, the department has 1555 sites listed on the Federal Contaminated Sites Inventory. While past Contaminated Sites Management Plans have met expectations,  the 2006-07 plan has been delayed. DND has not yet submitted its 2005-06 annual data to the Federal Contaminated Sites Inventory. 

Because the department has not yet submitted an up-to-date integrated long-term capital plan (indicator 14), TBS continues to restrict the department from accessing proceeds from land sales pending compliance with this policy requirement.

14.3 Extent to which an appropriate material management framework is in place (e.g. clarity of accountabilities, consistency with organizational capabilities, reliability of life-cycle costs and performance information) (Acceptable)

This year's assessment focused on the two areas identified as needing improvement in the 2005-06 assessment. 

Significant progress was made in the materiel management community to address the pressing recruitment and retention issues that have been plaguing the department for years.  Human resources planning exercises are underway to meet future year intake requirements.

It is expected that the current strategy to progressively rationalize and integrate the multitude of existing departmental materiel management systems into a single department-wide system will in time resolve the issues surrounding the quality of materiel management information.

For the purposes of this assessment, a project is defined as a set of activities required to produce certain defined outputs, or to accomplish specific goals or objectives, within a defined schedule and resource budget.

The Department of National Defence (DND) provided evidence of an acceptable approach to effective, efficient and economical project management.

In light of an aging workforce and changing demographics within the department's project management community; DND is encouraged to assign priority to its recruitment, development and retention of a competent cadre of project managers.

It should be noted, however, that DND continues to be an active participant in the Project Management Institute and participated in the development of the Organizational Project Management Capacity standard which underpins part of the Secretariat's (TBS's) work in renewing the project management policy suite.  Throughout 2007, Treasury Board Secretariat will continue to seek the important support of DND in this regard.

There was an increase in the frequency of occurrences where DND proponents put pressure on Treasury Board Secretariat  to consolidate and overlap key steps in the project management approval process in an effort to streamline Treasury Board approvals and expedite the delivery of military equipment.  In response, the Secretariat has needed to strengthen its oversight and follow-up mechanisms to ensure the department complies with TB policies.   

15.1 Presence of an explicit project management accountability framework that addresses decision-making and oversight and effective monitoring and ongoing review (Acceptable)

Among all federal departments, DND is one of the most active in terms of project management. It currently manages approximately 200 approved projects, both simple and complex, ranging in cost from $5M to billions of dollars. This total does not include other departmental projects below $5M that fall under the delegated authority of the Level One Advisors and Commanding Officers. As the department pursues Canadian Forces Transformation, the number of projects will continue to rise.

DND has an established project management framework and governance structure as identified in the Defence Management System Manual Replacement - Project Approval Summary process. This framework is equally applicable to projects within and exceeding their Minister's project approval authorities. 

With regard to information management / information technology projects, DND previously had a decentralized decision-making oversight structure in place which catered to divisional needs but did not facilitate a coordinated enterprise approach. It should be noted that this deficiency is being addressed but the new governance framework has not yet been implemented.

15.2 Extent to which projects are properly resourced (e.g. project management capacity, appropriately trained officials) (Acceptable)

As reported last year, training, guidance and supporting processes are established and continue to evolve within the department.  However, despite the established framework, a lack of experienced resources continues to be a growing problem and an acknowledged risk factor for all major projects. 

A lack of knowledge and capacity issues were observed in a growing number of submissions that were received in Treasury Board Secretariat during the reporting period. While DND complied with approved policies, in some cases, it was only after extensive coordination and input from TBS officials. With highly knowledgeable and competent project management staff this would not normally be an issue. Based on comments received from the department regarding proposed changes, it is expected that the early policy compliance issues will be addressed in time for the 2007 MAF assessment, as the changes were not fully implemented as of this MAF exercise.

For instance, DND advised that the Assistant Deputy Minister of Materiel  established the Director General Major Project Delivery in response to Canadian Forces transformation objectives and mitigate capacity-related risks. The establishment of a division focused on complex projects will allow for centralization of generic project management support services, etc. In addition, the Equipment Program Management Optimization Initiative will standardize processes for project management and training will be aligned accordingly.  Also, efforts continue to enhance the project management training program and to develop a strategy to professionalize project management personnel.  

Information management / information technology projects managed by DND/CSE appear to have no issues with capacity. However, in light of an aging workforce and changing demographics within the department, when it comes to effective project management across DND, the department is encouraged to develop learning tools for its inexperienced staff that would take advantage of lessons learned from known successful projects.

It should be noted that DND continues to be an active participant in the Project Management Institute and participated in the development of the Organizational Project Management Capacity standard which underpins part of TBS's work in renewing the project management policy suite, providing a foundation for the assessment of organizational capacity related to the level of complexity and risks in projects. Throughout 2007, TBS will continue to seek the important support of DND in this regard.

15.3 Extent to which the organization has demonstrated compliance with delegated project approval and contracting authority requirements and conditions identified by TB (Opportunity for Improvement)

There was an increase in the frequency of occurrences where DND proponents put pressure on TBS to consolidate and overlap key steps in the project management approval process (Preliminary Project Approval and Effective Project Approval) in an effort to streamline Treasury Board (TB) approvals and expedite the delivery of military equipment.

It is also recognized that increased Government support to DND and the military operations in Afghanistan resulted in fast-tracking a number of large projects through the system. In response, the Secretariat has needed to strengthen its oversight and follow up mechanisms to ensure the department complies with TB project approval policies and TB decisions, especially where the Treasury Board has decided to impose specific conditions to ensure the Crown is not exposed to undue risk.    

An interdepartmental ADM Committee (MCP IOC) has been struck to monitor and oversee the implementation of five major military equipment acquisitions recently approved by this government.  This strengthening of oversight has cost both the department and TBS a great deal of effort and resources.  

TBS recognizes the challenges faced by the department. Nevertheless DND is obligated to comply with the existing suite of TB project policies. TBS will however support consolidations and exemptions to TB project policies on a case by case basis, where it makes sense to do so.  In response, the Secretariat has needed to strengthen its oversight and follow-up mechanisms to ensure the department complies with TB policies. 

Although information management/information technology (IM/IT) projects managed by the Communications Security Establishment (CSE) appear to have no issues, *

Treasury Board Secretariat (TBS) recognizes that the department of National Defence (DND) operates a large and complex procurement system and that a number of initiatives are underway to modernize the acquisition process and to improve recruitment and retention of qualified procurement staff. 

It should be noted that acquisitions of major military equipments also involve Public Works and Government Services Canada (as Contract Authority) and Industry Canada (as Industrial and Regional Benefits Authority). The procurement strategy for these acquisitions must therefore consider the responsibilities and policy obligations of these other departments, thus adding an increased degree of complexity to the oversight and contracting process. 
 
DND is encouraged to continue to expand the use of the acquisition card as it is much cheaper and faster than the traditional procurement process. DND met its reporting obligations for the proactive disclosure of contracts over $10,000.

16.1 Level of oversight of procurement and contracting functions (e.g. presence of a Contracts Review Committee, quality of contracting data, timely completion of disclosure information for contracts over $10,000, implementation of audit recommendations where applicable, etc.) (Acceptable)

As noted last year, the department has a decentralized procurement system across Canada and in deployed units. Policy advice, procurement and overall management oversight resides with DND Headquarters. Delegated contracting authority is managed within headquarters and delegations are controlled through departmental directives and instructions. 

DND has an online testing procedure to certify all personnel with delegated FAA Section 32, 33, 34 understand FAA requirements.  A Departmental Oversight Committee on Contracting provides strategic oversight of contracting and related contract and financial management practices and controls.  This committee reports directly to the Deputy Minister to provide assurance that a sound-risk management framework is in place and functioning.  Limited contract authority has been delegated to the field and all services contracting between $25,000 and $2,000,000 is managed centrally.

16.2 Cost-effectiveness of end-to-end procurement processes (Acceptable)

DND audit activity continues to point to improvements necessary in terms of contracting information and integration of management improvements across the organization.  TBS continues to have concerns about long-term professional services contracts in the Information Management Group, namely with regard to the contracting controls that will ensure contracting practices are sound and compliant with applicable policy and regulations related to ill-defined, fluid statements of work; contract splitting; contracting outside the scope of standing offer agreements; inappropriate selection methods; administrative tasks being performed by  expert consultants; and, long-term on-site contractor presence (creating potential employer-employee relationships). When taken in the context of the overall DND procurement budget, TBS recognizes that although this area needs some attention, this procurement activity is easily manageable within DND's resources.

Cost-effectiveness of end-to-end procurement process; DND advised that it is finalizing the review of the DND policy on the use of acquisition cards, and has developed an acquisition card user guide describing the products that can be bought with the card, the financial restrictions and the purchasing process, with a view to standardizing how the cards are used.  The department is encouraging the use of acquisition cards for all procurement under $5K and is looking at possibilities for increasing the use of the acquisition such as for mandated standing offers when terms and conditions allow payment by acquisition cards. The increased usage is already being witnessed as stated in TBS rating and should continue as the new policy and associated procedures become more widely known.

In 2005, DND contract activity included 15,747 contracts valued at $6.1 billion, 10,895 (69%) of which were under $25K. Public Works and Government Services awarded 14,637 contracts on behalf of DND, 91% of the activity. DND also made 397,763 acquisition card purchases valued at $160.8M; a higher amount than last year.  DND met its reporting obligations for the proactive disclosure of contracts over $10,000.

The Departmentof National Defence (DND) continues to provide timely financial reporting information.  Overall the quality of information provided is adequate with few errors on trial balance submissions.

The department has demonstrated leadership and established an Assistant Deputy Minister Committee for the purposes of overseeing the application of accrual accounting principles including mapping existing funding and reporting processes taking into consideration new accrual type requirements.

With respect to the quality of internal financial management reporting, three significant errors were found by the Office of the Auditor General and included on the overall Government of Canada's summary of unadjusted audit differences.

The department's financial statement package was prepared in a timely fashion and was based on Treasury Board Accounting Standard 1.2 and Canadian generally accepted accounting principles.  The department demonstrated leadership in preparing its financial statements as evidenced by the high quality and related notes of its financial statements.

Two audit reports including one report of the Office of the Auditor General noted a number of deficiencies in the area of certification of payments in accordance with Section 34 of the Financial Administration Act, payment verification process and other financial controls for payments.   Various audit findings indicate that the system of account verification and related financial controls is not satisfactory and, as a result, does not comply with the Treasury Board Policy on Account Verification.

Similarly, a horizontal audit on the delegation of financial authority noted care is required to ensure the department is meeting key elements of the Treasury Board Policy on Delegation of Authorities (e.g. timely delegation instruments).

17.1 Compliance with approved financial management legislation, policies and directives, including the Transfer Payment Policy (Opportunity for Improvement)

A)   Risk Analysis Report: Risk Analysis of the Defence Research and Development Canada Contracts, dated June 2006 (Scope: 1,338 contracts valued at $261 million that were initiated between 1995 and 2005 and expired after December 31,2004) (Financial Administration Act).

1. Improvements are required to facilitate appropriate certification of payments in accordance with section 34 of the Financial Administration Act. Of the 95 contracts determined as high-risk (valued at $88.9 million), 47 contracts (valued at $42.5 million) had insufficient supporting documentation in the sample invoices for departmental staff to properly certify payments in accordance with section 34 of the Financial Administration Act.          

Planned management actions in response to the risk analysis are consistent with the Chief Review Services (CRS) recommendations.

B) In Chapter 5 of the 2006 Report of the Auditor General to the House of Commons which audited the Integrated Relocation Program for members of the Canadian Forces, the Royal Canadian Mounted Police and the federal public service, revealed that financial controls for payments made to the contractor were not satisfactory.  

Within the department, the necessary review and post-verification of advance payments was not completed in compliance with section 34 of the Financial Administration Act and with the Treasury Board Policy on Account Verification. 

C) An internal audit titled "Audit of Wheeled Light Armoured Vehicle Life Cycle Support Contracts" published in December 2006 (Scope: two contracts valued at $264 million over a nine-year period) found that the payment verification process for half of the payments reviewed by the auditors did not comply with the Financial Administration Act due to insufficient documentation available to those responsible for the verification process.

17.2 Extent to which accounting and reporting, including external reporting, of financial activities are compliant with Government policies, directives and standards (accuracy, timeliness, completeness) (Acceptable)

On the Public Accounts scorecard, DND obtained a grade of A with 92% of plates on time, compared to 90% in the prior year. There were 20 errors on trial balance submissions in 2005-06, which was stable compared to the prior year.

17.3 Timeliness, accuracy and frequency of departmental forecasts, as demonstrated by:

1. Forecasting reports; and
2. History and size of unplanned lapses and carry-forwards

(Unrated)

The methodology for assessing this measure is under development for application in future reviews.  As such, this measure is unrated at this time.

In the context of financial planning and analysis, the department is congratulated for the work it has done in collaboration with Treasury Board Secretariat and the Department of Finance over the past year to establish systems, procedures and reports to effectively manage the accrual-based funding it received in the 2005 and 2006 Budgets.  With very little precedent to draw upon in this area, the department has worked diligently and collaboratively with central agencies to ensure effective stewardship of this funding.

The Office of the Comptroller General has been informed that variance reporting and budget forecasts are provided to senior management monthly; a complete budgetary review process occurs quarterly. Budget forecast information is considered accurate as of period 1.

17.4 Progress in achieving readiness for reasonably efficient audit, and obtaining unqualified audit opinion, of departmental financial statements, as applicable (Strong)

The financial statement package was prepared in a timely fashion, and was based on Treasury Board Accounting Standard 1.2 and Canadian generally accepted accounting principles.   The department demonstrated leadership in preparing its financial statements as evidenced by the high quality and related notes of its financial statements.  An audit assessment is currently underway.

17.5 To be measured when possible this Round:
Quality of internal financial management reporting, as demonstrated by:

1. Completeness, frequency, timeliness and accuracy of internal monthly reports of operations (expenses, revenues)
2. Completeness, frequency, timeliness of analysis and reconciliation of material balance sheet accounts
3. Size and nature of year-end adjusting entries

(Acceptable)

The Office of the Auditor General found three significant errors, which were included in the overall Government of Canada's summary of unadjusted audit differences.

17.6 To be measured when possible this Round: Quality and effectiveness of delegation of financial authorities, as demonstrated by:

1. Delegation of authority instruments
2. Training in place to upgrade and maintain knowledge & skills of those with delegated financial authority
3. Horizontal audit on delegation of authorities, where applicable

(Opportunity for Improvement)

The Office of the Comptroller General's ongoing Horizontal Audit of Delegation of Financial Authority is examining the level of compliance with the Treasury Board Policy on Delegation of Authority.   Preliminary results were shared within the Office of the Comptroller General for the following three elements used in the Management Accountability Framework assessment:

Timely delegation instrument: Not met
Training programs: Met
Ongoing or active monitoring: Met

The Department of National Defence (DND) advised that it is developing an implementation plan for the new Internal Audit Policy. The key elements of an internal audit function are in place, but improvements in internal audit planning and in report productivity are required.  

In addition to the implementation plan, the Audit Committee Charter is being modified to reflect changes in the new Internal Audit Policy. *The Chief Audit Executive reports to the Deputy Head and Chief of Defence Staff, who jointly chair the Audit Committee.

DND has an approved risk-based internal audit plan, that was received in the third quarter. The internal audit plan could be improved by providing rationale for carry-over projects, and providing detailed descriptions and resources for audit projects.  

Draft internal audit reports included management action plans but were not timely, nor were internal audit reports made available for public disclosure on a timely basis.  

Internal audit resources have increased, but indications are that audit report productivity has not.

18.1 Quality of audit plans (risk-based, appropriate approvals, methodology, continuity with previous years, adequacy of detail on activities and costs) (Acceptable)

DND has an approved risk-based internal audit plan, that was received in the third quarter.   The internal audit plan would be improved by: providing a rationale for carry-over projects, and providing detailed descriptions and resources for internal audit projects.  

18.2 Quality of Internal Audit Reporting (adequacy of contextual information, adequate support for 'expression of opinion', timeliness of delivery and public disclosure and follow-up) (Acceptable)

Overall quality of internal audit reports is acceptable. Improvements are required in the timeliness of draft internal audit reports with management action plans; the timeliness of internal audit results for public disclosure; and, in internal audit report productivity.   

18.3 Quality of internal audit resources (qualified CAE, mix and level of experience of professional staff) (Unrated)

*

18.4 Progress in implementing the Internal Audit Policy (evidence of sustained management engagement, appropriate approval of Audit Committee terms of reference or charter and strategic plan, Audit Committee with appropriate chair and DM/OCG approved membership) (Opportunity for Improvement)

An Implementation Plan is currently under development and the Audit Committee Charter is being modified to reflect changes in the new Internal Audit Policy.  The Chief Audit Executive reports to the Deputy Head and Chief of Defence Staff, who jointly chair the Audit Committee.

The Department of National Defence's (DND's) level of participation in whole-of-government service solutions and the extent to which public/client views/needs are considered when developing new services were not assessed as they were not applicable in DND's can.  The overall indicator score reflects a "strong" performance in setting service standards (based on the few external services offered by DND) and an acceptable performance in providing services in both official languages.

19.1 Extent to which client satisfaction and service standards are in place and published, performance against standards is assessed (using the Common Measurements Tool for client satisfaction) and findings are acted upon to achieve high levels of client satisfaction (Strong)

A review of DND's services (primarily via websites and DPRs) found that all have set standards and/or measured client satisfaction.  The rating for this measure is based on very few external services.

Next year, Treasury Board Secretariat (TBS) will also look for evidence that departments are assessing performance relative to standards and acting on the results of client satisfaction measures.

19.2 Extent of participation, where appropriate, in whole of government service solutions that provide citizens with easy access to seamless service (Not Applicable)

Not applicable due to the organization's mandate.

19.3 Extent to which public/client views/needs are considered when developing new services/programs/policies (Not Applicable)

DND does not consult with the public in the development of its policies and programs.

19.4 Accessibility to government services in both official languages (Acceptable)

The Department of National Defence has a total of 69 designated bilingual offices to deliver service to the public.

Linguistic capacity: The proportion of encumbents who meet the language requirements of their positions in the Department of National Defence is 83%. The project to review the language designations of Canadian Forces units, civilian positions and military functions should give us a better idea of the linguistic capacity of the Department of National Defence. 

Availability of communications and services: The analysis of the audit report on all of DND prepared in British Columbia in 2005 by the Official Languages Directorate of the Public Service Human Resources Management Agency of Canada revealed that services had been provided in both official languages but that weaknesses had been noted with respect to the availability of the tools to be put at the disposal of the public. The Commissioner of Official Languages also referred to similar problems. 

( Sources: PCIS – Data to 31 March 2006 (Public Servants only); Annual Review for 2005-2006; 2006 Report of the Commissioner of Official Languages.)