ARCHIVED - Risk Management Guide (Review Guide) - November 1, 1994

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(6) VOLUNTEERS

Objective

6.0 To ensure that volunteers, the Crown and third parties are protected against financial and other risks resulting from activities engaged in by volunteers acting within volunteer programs.

Note: Specific areas of risk management such as the activities of volunteers, are implied and referred to as part of the general framework for risk management. In this sense, they are covered in sections one through four of this guide. This section contains the criteria which are specific to auditing the policy on volunteers. When auditing risk management it is necessary to refer to sections one through four above and, in addition, to those sections between five and nine which are applicable to the particular audit being undertaken.

Criteria

6.1 The organization has used volunteers appropriately and has undertaken measures to reduce the risks associated with the use of volunteers.

Detailed Criteria/Audit Procedures

6.1.1 Determine whether or not the organization evaluated the potential liability that volunteer activity could place upon the Crown.

6.1.2 Assess whether or not the organization determined what would be adequate materiel and support for volunteers consistent with the cost-effective use of government resources, the needs of the task and attendant risks.

6.1.3 Determine whether or not the organization selected the most appropriate means of underwriting volunteer risks and provided for related costs in its appropriations.

6.1.4 Verify that the organization assessed the potential for being vicariously liable for the actions of volunteers.

6.1.5 Determine whether or not the organization has held volunteers responsible for acting honestly and without malice and has not absolved them from exercising due caution and care of any Crown property entrusted to them.

Criteria

6.2 The organization has underwritten the volunteers' third party liability risks.

Detailed Criteria/Audit Procedures

6.2.1 Where an organization has chosen to allow the volunteers' personal insurance to cover liability, verify that the organization has assessed whether or not the existing insurance coverage of volunteers was adequate in relation to the risks of the volunteer activity.

6.2.2 Where an organization has determined that it will defray volunteers' insurance expenses, assess whether or not the additional insurance paid for was reasonable within the scope of the identified project and was purchased in a cost-effective manner.

6.2.3 Where an organization has determined that it would purchase the insurance for volunteers, verify that the insurance purchased was in conformity with the Contracting Policy and that the level and type of protection provided was similar to that in place for departmental employees facing comparable risks.

6.2.4 Where an organization has chosen to self-underwrite the volunteers' third party liability risks, determine whether or not the criteria specified in the policy on volunteers was met.

a) Determine that there was effective risk management.

b) Verify that there was an agreement between the organization and the volunteers. Verify that, except in unforeseen or emergency conditions, this agreement was in writing and that it described the volunteer activity, risk management (including insurance) provisions and the related conditions under which organizational resources were made available. Verify that preparations have been made for cases where volunteers can be called to respond to emergency situations promptly and without benefit of prior documentation.

c) Determine that the risks involved were within the organization's control.

d) Verify that the volunteers had the necessary qualifications and training.

e) Determine that, where relevant, the work environment met safety and health

6.3 The organization maintains records of actual costs of insurance premiums and deductions, claims and court awards paid by the Crown or to third parties.

6.3.1 Verify that the minimum level of recording incidents has been undertaken. This minimum level includes the name(s) of volunteer(s), name(s) of other parties involved, the official language used, type of claim, date of incident, dollar amount claimed, date of payment, legal opinion, authority for payment and any other information required for investigation and assessment of incidents.

(7) CLAIMS AND EX GRATIA PAYMENTS

Objective

7.0 To ensure the efficient and effective resolution of claims by and against the Crown arising from government operations.

Note: Specific areas of risk management, such as claims and ex gratia payments, are implied and referred to as part of the general framework for risk management. In this sense, they are covered in sections one through four of this guide. This section contains the criteria which are specific to auditing the policy on claims and ex gratia payments. When auditing risk management it is necessary to refer to sections one through four above and, in addition, to those sections between five and nine which are applicable to the particular audit being undertaken.

Criteria

7.1 The organization has undertaken investigations of incidents which could lead to a claim against the Crown or against a servant as soon as the organization became aware of an incident.

Detailed Criteria/Audit Procedures

7.1.1 Determine whether or not the investigation was conducted as soon as the organization became aware of the incident.

7.1.2 Determine whether or not the level of spending on investigations was commensurate with the amount involved in the claims.

7.1.3 Verify that the investigators collected the information required for a legal opinion to be obtained. The investigation report should include:

a) a full statement of the duties of any servants or volunteers involved;

b) where Crown property was involved, detailed information on that property;

c) statements from servants and other persons who had any knowledge of the circumstances surrounding the claim;

d) reports made to the police in connection with the incident;

e) a description of the incident including such plans, sketches or photographs as might have been required to understand the exact nature of the incident; and

f) any further information and material as might be required for a legal opinion.

Criteria

7.2 The organization has responded to a claim against the Crown in a manner which follows the procedures and dollar-threshold levels set out in the Policy.

Detailed Criteria/Audit Procedures

7.2.1 Verify that claims have been referred to the Justice Department as appropriate.

7.2.2 Determine whether or not the organization has followed the general guidelines specified in the policy for the various types of claim (i.e. claims in tort, claims associated with a contract, claims against servants of the Crown, claims between Crown organizations and claims under the Canadian Human Rights Act).

a) Verify that the documentation required was complete.

b) Verify that the activities specified for claims which exceeded specified dollar-thresholds have been carried out.

c) Where legal opinions are to be obtained, verify that they are obtained from the appropriate source.

7.2.3 Determine whether or not all claims against the Crown were supported by detailed statements of fact and copies of supporting documents.

7.2.4 Verify that the legal opinions obtained addressed the liability of the Crown, what steps should be taken to resolve the claim and the terms and conditions on which it would be advisable to resolve the claim.

a) Determine whether or not legal opinions addressed the cost-effectiveness of taking a selected course of action.

7.2.5 Assess whether or not, in deciding to make a liability payment, deputy heads considered the legal and other merits of the claim and the administrative expediency and cost-effectiveness of making the payment. Verify that a release was obtained when payment was made.

7.2.6 Assess whether or not, in deciding to make an ex gratia payment, deputy heads considered any other reasonable means of compensation.

7.2.7 Verify that compensation for loss servants' effects was based on the full cost of replacing the effects or the reasonable cost to repair them and that the payment(s) covered only those items related to the servants' duties at the time of the incident.

7.2.8 Verify that the monies used to make payment of claims against the Crown were taken from the appropriate fund and that the organization against which the claim was made has been required to account for these funds.

7.2.9 Verify that the expenses associated with defending an organization against a claim were charged to the appropriation of that organization.

Criteria

7.3 The organization has acted on claims by the Crown in a manner which follows the procedures and dollar-threshold levels set out in the Policy.

Detailed Criteria/Audit Procedures

7.3.1 Assess whether or not the deputy head made every reasonable effort to obtain satisfaction of claims by the Crown while taking into account administrative expediency and cost-effectiveness.

7.3.2 Verify that the deputy head sought a legal opinion where substantial sums are at stake or where there is uncertainty as to the relevant facts or applicable legal principles.

7.3.3 Where the Crown has a claim against a servant and the deputy head intends to authorize retaining the amount of the claim by deduction from, or set-off against, any money that may be due or payable by the Crown to the servant, verify that the deputy head has notified the servant of the proposed retention his or her right to make representation to the deputy head within 30 days of such notification and that the servant's representation, if any, was considered before making a final decision.

7.3.4 Verify that monies collected from a claim by the Crown were deposited to the credit of the Receiver General and were not credited back to an appropriation.

Note: There are exceptions to this general rule as in the case of insurance proceeds arising from construction contracts.

Criteria

7.4 Claims under the Canadian Human Rights Act are dealt with in accordance with provisions in the policy on claims and ex gratia payments.

Detailed Criteria/Audit Procedures

7.4.1 Assess whether or not the organization respects the investigation and conciliation procedures set out in the Canadian Human Rights Act.

7.4.2 Verify that the organization has treated a complaint of discriminatory practices lodged under the Canadian Human Rights Act as if it were a tort.

7.4.3 Verify that payments for Tribunal Orders which were made Federal Court Orders were treated as a statutory charge against the Consolidated Revenue Fund.

7.4.4 Where deputy heads have designated payment approval authorities within their departments, determine whether or not this was done with discretion and whether or not it was done in a manner that was consistent with departmental practices and the sensitive nature of human rights issues.

Criteria

7.5 Claims within and between Crown organizations are dealt with in accordance with provisions in the policy on claims and ex gratia payments.

Detailed Criteria/Audit Procedures

7.5.1 Where no other Crown organization or non-government organization was involved in an incident resulting in damage to public property, verify that the compensation and restoration were dealt with by the organization responsible.

7.5.2 Where there were claims between Crown organizations, verify that damages were dealt with on a basis of mutual forbearance of claims.

7.5.3 Where there were claims between departments and Crown corporations:

a) determine whether or not the parties voluntarily supplied each other with all of the information in their possession;

b) assess whether or not the parties attempted to come to a negotiated settlement either through correspondence or through the use of their legal officers; and

c) where negotiation failed, determine whether or not the issues of fact and law on which there is disagreement were submitted to the Deputy Attorney General of Canada, and verify that arbitrators were appointed in conformity with the policy on claims and ex gratia payments.

(8) FIRE PROTECTION, INVESTIGATION AND REPORTING

Objective

8.0 To ensure that the Crown's employees and property are protected from fire risks.

Note: Specific areas of risk management such as fire protection, investigation and reporting are implied and referred to as part of the general framework for risk management. In this sense, they are covered in sections one through four of this guide. This section contains the criteria which are specific to auditing the policy on fire protection, investigation and reporting. When auditing risk management it is necessary to refer to sections one through four above and, in addition, to those sections between five and nine which are applicable to the particular audit being undertaken.

Criteria

8.1 The organization has conformed to the fire safety standards issued under the authority of the Treasury Board's personnel policies on occupational safety and health, and the provisions for fire investigations and the reporting of fires.

Detailed Criteria/Audit Procedures

8.1.1 Determine whether or not the organization has advised, within 12 hours, the Fire Commissioner of every fire meeting any of the following criteria:

a) involving a fire death or fire injury

b) of suspicious origin

c) causing a loss of $250,000 or more

d) causing a significant interruption of essential federal services

e) necessitating immediate action to prevent a recurrence

f) Involving a prestige or heritage building

8.1.2 Determine whether or not the organization has performed the following actions within 14 days of the occurrence of a fire or alarm:

a) conducted a preliminary examination of the fire and submitted a report to the applicable Labour Canada regional or district office;

b) submitted a fire casualty report for every fire death or injury;

c) submitted reports of any formal fire investigations undertaken subsequent to the preliminary examination stage; and

d) investigated and recorded fire alarms not triggered by fire.

8.1.3 Verify that the organization co-operated with and assisted authorized fire investigators in performing their duties associated with this policy.

8.1.4 Determine whether or not the organization implemented any recommendations resulting from fire investigations.

8.1.5 Verify that the organization estimated any fire losses in accordance with policy guidelines.

8.1.6 Verify that the organization consulted with the fire commissioner's office regarding the need for a building inspection after a fire.

Criteria

8.2 The Fire Commissioner of Canada has administered and enforced the provisions of this policy. (This criteria applies only to the Department of Labour.)

Detailed Criteria/Audit Procedures

8.2.1 Verify that the fire commissioner has made suitable arrangements with other authorities regarding investigations and reporting of fire losses including:

a) Investigating or ensuring investigation by qualified fire investigators, of the cause, origin and circumstances of any fire.

b) Reviewing and processing all fire reports.

c) Monitoring and reporting to organizations on the implementation of recommendations contained in reports such as those on fire investigations and coroners, and reporting to the Treasury Board Secretariat instances of non-compliance that are deemed in conflict with Treasury Board's fire-protection policy or standards. Comments of the organizations concerned should be attached to reports to the Treasury Board.

d) Assessing and applying the qualification criteria for fire investigators and determining the need to undertake formal fire investigations.

e) Correlating and disseminating national and federal fire-loss statistics.

f) Submitting to Treasury Board Secretariat within 90 days of the fiscal year end, a consolidated fiscal-year summary report of Fire Losses in Government of Canada Properties indicating:

- any perceivable major trends in fire losses;

- fire prevention measures recommended to minimize such losses in future years;

- the total number of fires, deaths and injuries and total property-loss values; and

- a summary of major fire losses, including the locations and descriptions of the properties, the dates and causes of the fires and the estimated losses.

(9) PROVISION OF LEGAL ASSISTANCE TO CROWN SERVANTS

Objective

9.0 To ensure that servants, if they have acted within the scope of their duties and have met reasonable departmental expectations, receive legal assistance in any of the following circumstances:

a) they are required to appear before, or be interviewed in connection with, a judicial, investigative or other inquest or inquiry;

b) they are sued or threatened with a suit;

c) they are charged or likely to be charged with an offense; or

d) they are faced with other circumstances that are sufficiently serious as to require legal assistance.

Note: Specific areas of risk management such as the provision of legal assistance to Crown servants are implied and referred to as part of the general framework for risk management. In this sense, they are covered in sections one through four of this guide. This section contains the criteria which are specific to auditing the policy on provision of legal assistance to Crown servants. When auditing risk management it is necessary to refer to sections one through four above and, in addition, to those sections between five and nine which are applicable to the particular audit being undertaken.

Criteria

9.1 The organization has followed the procedure outlined in the Policy when determining whether or not to provide legal assistance and the type of legal assistance to be provided.

Detailed Criteria/Audit Procedures

9.1.1 Verify that servants requesting legal assistance have made a complete report to the organization's management of the incident leading to the requirement.

9.1.2 Verify that servants have informed their supervisors whenever an incident took place that could give rise to the need for legal counsel or which might occasion a claim against the Crown.

9.1.3 Verify that the organization has ensured that servants received timely advice on their possible entitlements under this policy.

9.1.4 Verify that the deputy head or the deputy head's delegate sought the advice of the Department of Justice on the need for legal counsel and the appropriateness of a Department of Justice agent, or if required, private counsel to provide the legal assistance.

9.1.5 Verify that servants who have been denied legal assistance have been informed that they may ask for reconsideration of the request at subsequent stages of the legal proceedings.

9.1.6 Where private counsel has been engaged, verify that the payment of legal fees and disbursements had been authorized in accordance with the policy's dollar thresholds.

Criteria

9.2 The payment of any judgment has been made in accordance with the Policy.

Detailed Criteria/Audit Procedures

9.2.1 Verify that servants for whom payments were made were eligible for indemnification under the policy for indemnification of servants of the Crown.

9.2.2 Verify that the payment on a claim and the costs associated with defending a servant of the Crown were taken from appropriate accounts.

9.2.3 Verify that the organization has not reimbursed legal fees and expenses where a servant has been denied legal assistance regardless of whether or not there has been an acquittal or dismissal of the case.

9.2.4 Where a servant has engaged private counsel prior to receiving approval by the deputy head, verify that consideration has been given to having the servant pay for the resulting legal fees. As a new request for payment of legal fees must be made and assessed at each stage of the judicial process, such consideration may occur several times in one case.

9.2.5 Where a servant has engaged private counsel when, in the opinion of the Department of Justice, there was no conflict of interest or other factors preventing the conduct of the defence by the Department of Justice, then verify that the payment of legal fees, costs and of any judgment were made by the servant unless the employing organization had submitted a request for partial or full reimbursement.

9.2.6 Where a servant has engaged private counsel and the deputy head has not been satisfied that the choice of counsel was reasonable and the servant has decided to retain this counsel, verify that the servant has been made personally responsible for any part of the fee deemed excessive.

9.2.7 Where a servant has been given leave to engage private counsel, verify that the organization has informed the servant and the counsel in writing of the limits of the Crown's commitment in terms of both total expenditures and approved fee schedules and of the requirement for the reviewing of accounts by the Department of Justice.

9.2.8 Where a case involved offences, verify that payments by the Crown did not include any fine or costs of prosecution.

9.2.9 As a new request for payment of legal fees must be made and assessed for each stage of the judicial process, ensure that such requests are being made.

Criteria

9.3 The organization has provided counsel in accordance with the Policy.

Detailed Criteria/Audit Procedures

9.3.1 Where there have been civil cases and the Department of Justice has assumed the provision of legal assistance including the conduct of the litigation, verify that the Department rather than the servant has selected and instructed counsel.

9.3.2 Where the Department of Justice has determined that there is a conflict of interest and the servant is given leave to engage his or her own private counsel, verify that the name and fee schedule of the private counsel have been approved by the deputy head before the servant engaged counsel.

Criteria

9.4 The organization has maintained records of the actual amounts paid in legal fees and related expenses.

Detailed Criteria/Audit Procedures

9.4.1 Ensure that the organization has maintained an appropriate set of records documenting the amounts paid in legal fees, related expenses, cases involved and any lessons learned which will prevent recurrence.

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