PACP Committee Report
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Government Response to the Fifteenth Report of the Standing Committee on Public Accounts
Chapter 5, Relocating Members of the Canadian Forces, RCMP, and Federal Public Service of the November 2006 Report of the Auditor General
GOVERNMENT RESPONSE
Detailed Responses to the Recommendations
RECOMMENDATION 2
RECOMMENDATION 3
RECOMMENDATION 4
RECOMMENDATION 5
RECOMMENDATION 6
RECOMMENDATION 7
RECOMMENDATION 8
RECOMMENDATION 9
INTRODUCTION
The Government thanks the Standing Committee and is pleased to respond to the May 2007 Report on “ Chapter 5, Relocating Members of the Canadian Forces, RCMP, and Federal Public Service of the November 2006 Report of the Auditor General.”
The Integrated Relocation Program (IRP) is a mandatory program that provides a variety of administration and relocation services to members of the Canadian Forces, the Royal Canadian Mounted Police and public service employees. The IRP managed 17,425 relocations across the federal government in 2005-2006, at a total cost of $280 million.
In November 2005, SCOPA requested that the Auditor General (AG) conduct an audit of the IRP contracts. Chapter 5 of the AG’s November 2006 report was entitled “Relocating Members of the Canadian Forces, RCMP and Federal Public Service.”
Following a series of hearings held in December 2006 and January 2007 by SCOPA on Chapter 5 of the AG’s report, the Committee tabled its report on May 29, 2007, which included nine recommendations.
The Government accepts the recommendations and, as requested by the Committee, has developed a consolidated action plan to implement the Auditor General’s recommendations (see Annex A).
This Response demonstrates that the Government is committed to responding fully to SCOPA’s recommendations in order to demonstrate openness and transparency in its procurement and contracting practices.
Detailed Responses to the Recommendations
Recommendation 1
“That the contracts for the Canadian Forces, and for RCMP/Federal Public Service relocation services be re-tendered for commencement in November 2009, and that the current contracts not be extended.”
Response
The Government accepts this recommendation.
Recommendation 2
“That Public Works and Government Services Canada, Treasury Board Secretariat, the Department of National Defence, and the Royal Canadian Mounted Police develop detailed action plans for the implementation of each of the recommendations in Chapter 5 of the Auditor General’s Report of November 2006 that apply to them, and that “copies of these plans must be submitted to the Committee no later than 30 September 2007.”
Response
The Government accepts this recommendation and the consolidated action plan is attached as an Annex to this Response. The action plan indicates the progress to date in fully implementing all of the recommendations contained in Chapter 5 of the November 2006 Auditor General’s Report.
Recommendation 3
“That Public Works and Government Services Canada, Treasury Board Secretariat, the Department of National Defence, and the Royal Canadian Mounted Police report their progress in achieving commitments made in response to recommendations made by the Auditor General that apply to them to the Public Accounts Committee no later than 30 September 2007.”
Response
The Government accepts this recommendation, and the attached Action Plan contains the progress to date in addressing all of the recommendations of Chapter 5 of the Auditor General’s Report.
Recommendation 4
“That the recommendations made by the Auditor General and accepted by the departments be fully implemented prior to the initiation of a new tendering process for the Integrated Relocation- Program.”
Response
The Government accepts this recommendation, and as indicated in the attached Action Plan, the ten recommendations contained within Chapter 5 of the Auditor General’s Report have been addressed and will be fully implemented prior to the initiation of the new tendering process.
Recommendation 5
“That the Department of National Defence, the Royal Canadian Mounted Police, and Treasury Board Secretariat include, in their annual Departmental Performance Reports, references to the Integrated Relocation-Program as it relates to their employees. Information on the numbers of employees using the Program, the costs, and the extent to which the purposes of the Program are being achieved must be included. This performance information must be included in DPRs beginning with Reports for the period ending 31 March 2008.”
Response
The Government accepts this recommendation.
Recommendation 6
“That Public Works and Government Services use information generated by monitoring the performance of the Integrated Relocation-Program in the development of the next Request for Proposals issued for the Program’s contracts.”
Response
The Government accepts this recommendation.
Recommendation 7
“That Public Works and Government Services Canada work closely with Treasury Board Secretariat and its client departments to develop a certification process designed to ensure the accuracy of data provided for inclusion in Requests for Proposals and ensure that such a process is in place prior to the tendering of the next contracts for the Integrated Relocations Program.”
Response
The Government accepts this recommendation.
Recommendation 8
“That the Department of National Defence and the Canadian Forces establish a target date of no later than 30 September 2007 for the completion of the review of relocation files and for full compensation for all CF members who have been inappropriately charged for property management services. That the Government of Canada take steps to fully recover funds from Royal LePage Relocation Services and that Public Works and Government Services report progress in this effort in its departmental performance report.”
Response
The Government accepts this recommendation and a review of all property management transactions since November 2004 has been completed. These transactions occurred under the current contract. The review found that 16 members were charged a rate in excess of the ceiling rate for this service. These members have been fully reimbursed by RLRS. A review of all property management transactions under the previous contract has also been completed. The results of this review need to be discussed with various stakeholders before follow-on action is taken. The work will be substantially completed by September 2007. DND/CF is committed to ensuring that any over or under expenditures are actioned appropriately.
Recommendation 9
“That Treasury Board Secretariat provide the Standing Committee on Public Accounts with a full explanation for the failure to provide the Auditor General and her Office with information on the logic model used to generate estimated business volumes for property management services during the audit of the Integrated Relocations Program. This explanation must be given to the Committee no later than 30 September 2007.”
Response
TBS has reviewed all documentation and minutes in the sharing of the information with the Office of the Auditor General. The documentation on file indicates that the Office of the Auditor General was informed at all times that the numbers used for the section on Property Management Services of the Request For Proposal were constructed in the absence of complete or relevant data and were based on a number of assumptions (logic) made by the interdepartmental group. The assumptions made by the interdepartmental group were based on the knowledge and data available during the development of the RFP. The Treasury Board of Canada Secretariat also confirms that the numbers used in the Request for Proposal were not actual business volumes but rather estimates for the sole purpose of bid evaluation.
Appendix A:
Response to SCOPA’s Recommendation three
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CONSOLIDATED ACTION PLAN - CHAPTER 5 OF THE AUDITOR GENERAL’S REPORT ON RELOCATING MEMBERS OF THE CANADIAN FORCES, RCMP AND FEDERAL PUBLIC SERVICE
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AUDIT RECOMMENDATION |
EXPECTED OUTCOME/RESULT |
EXPECTED COMPLETION DATE |
ACTION TAKEN |
CURRENT STATUS |
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OAG 5.40: For significant and high-risk proposals, Public Works and Government Services Canada should ensure that more than one person evaluates the financial component of bids. |
PWGSC: |
December 6, 2006 |
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Completed |
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OAG 5.48: When recommending a contract award for significant and high-risk proposals, Public Works and Government Services Canada contract officers should ensure that briefing material prepared for senior management contains sufficient detail to allow appropriate management oversight and review. |
PWGSC: |
December 6, 2006 |
Completed |
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OAG 5.77. The CF and the RCMP should systematically collect information from members who have been relocated to measure their satisfaction with the benefits and incentives of the IRP and the performance of the Royal Lepage Relocation Services. This information should be used to guide any changes in policy. |
DND:
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Ongoing
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DND/CF will collect feedback from members and stakeholders through a new survey tool and through visits to Bases/Wings. This feedback will be used to inform policy changes and address service delivery concerns. |
Survey tool has been developed and is undergoing testing. Staff augmentation is underway to facilitate Wing/Base visits.
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RCMP: |
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Completed |
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OAG 5.78: The Treasury Board Secretariat, as project authority, should establish mechanisms to systematically measure and report on the effectiveness of the Integrated Relocation Program.
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TBS:
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September 2007 |
TBS has accepted the findings of the Auditor General and is in the final stages of implementing a survey of transferees. TBS will generate quarterly reports on employee levels of satisfaction level with the Integrated Relocation Program, the Policy in effect and service providers. This additional feedback from transferees will be collected, measured and applied in future development of relocation assistance, contract letting and policy development. The survey will supplement existing mechanisms such as discussions with Bargaining Agents at the National Joint Council and outreach sessions with departmental relocation coordinators. |
It is anticipated that the survey instrument will be launched in September 2007. |
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OAG 5.81: The Treasury Board Secretariat, National Defence (Canadian Forces), and the RCMP should establish formal mechanisms to measure and report on the contractor's performance. |
TBS: |
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TBS has accepted the Auditor General's recommendation. TBS is working with DND, the RCMP and PWGSC on implementing an overarching performance management framework that includes: performance objectives in terms of service delivery; contractor accuracy in policy application; contractor compliance with the terms and conditions of the contract. |
A clause by clause review of the contract has been completed, identifying the responsible departments and potential performance measures. Discussions are now underway between TBS, the CF, RCMP and PWGSC on data collection where required. This will include quarterly discussions on compliance, possible variances if any, quality assurances, survey feedback and program correction, development and policy enhancement. Based on the feedback received from the users, departmental coordinators and monthly review of financial statements, a review will be conducted in the specific areas and action will be taken. At quarterly meetings, this will be brought forward for general discussion on the report, the action taken and the results. |
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OAG 5.81 (cont’d) |
RCMP: |
December 31, 2007
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A template outlining contractual requirements has been developed. Input from Royal Lepage Relocation Services has been received. |
Ongoing
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DND: |
Ongoing |
The key elements of the performance management framework include: establishing performance objectives in terms of service delivery to members; confirming contractor accuracy in applying the policy; and ensuring contractor compliance with terms and conditions of contract. |
Initial elements of the performance management framework have been developed and these will be refined through ongoing consultation with PWGSC and the contractor |
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OAG 5.93. The CF should take steps to comply with the FAA and to develop a plan to ensure that expenditures made under the CF IRP are valid and accurate |
DND:
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Ongoing
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DND/CF will put appropriate processes in place to ensure full compliance with FAA Section 34.
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A framework has been developed and implemented to ensure compliance with Section 34 of the Financial Administration Act. Efforts are ongoing to strengthen our processes, including the establishment of a verification cell that will oversee policy compliance and review high-risk transactions. |
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OAG 5.94 The CF should analyze a sample of CF IRP transactions from previous years to assess the risk that amounts spent on the program do not comply with the policy or contractual terms and conditions. If amounts identified are significant, the extent of testing should be increased. If necessary, the CF should develop a strategy to recover funds. |
DND: |
End of December 2007 |
DND/CF will undertake a review of previously Closed Files to confirm members are receiving appropriate reimbursement and that the contractor is accurately applying the policy. |
A sample of Closed Files will be completed using contracted resources. The results of this review will inform additional steps/measures to be undertaken.
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OAG 5.95: The RCMP should ensure that it complies more rigorously with account verification policies and procedures for validating expenditures for the Integrated Relocation Program.
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RCMP:
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Completed
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OAG 5.98: The CF should complete a review of all relocations involving property management services to determine the full extent of overpayment and ensure that CF members are reimbursed for property management fees paid in excess of contracted rates. |
DND: |
September 2007 |
DND/CF will complete a review of property management fees paid during the period 1999-2006 and implement corrective measures where required. |
A review of all property management transactions under the current contract has been completed and members have been reimbursed accordingly. A review of all files under the previous contract has also been undertaken; however, these results are being discussed with various stakeholders before follow-on action is taken. |
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OAG 5.99: Public Works and Government Services Canada should ensure that all ceiling rates are in accordance with the terms and conditions of the contract. |
The Government agrees with this recommendation. Under section 34 of the Financial Administration Act, it is the responsibility of user departments to confirm that the invoiced rates comply with the terms and conditions of the contract. PWGSC, as an ongoing activity, is supporting the user departments as they conduct detailed investigations to ensure that the rates charged by the contractor are in accordance with the terms and conditions of the contract. In the event of any overpayments PWGSC will assist departments with the recovery of these amounts from the Contractor. PWGSC and TBS will continue to work collaboratively with departments in this regard.
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September 30, 2007
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Ongoing |
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