Public Accounts Committee — agar 2012

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Newfoundland and Labrador — Committees

REPORT OF THE AUDITOR GENERAL To the House of Assembly On Reviews of Departments and Crown Agencies 2012

Office of the Auditor General Newfoundland and Labrador The Auditor General reports to the House of Assembly on significant matters which result from the examinations of Government, its departments and agencies of the Crown. The Auditor General is also the independent auditor of the Province’s financial statements and the financial statements of many agencies of the Crown and, as such, expresses an opinion as to the fair presentation of their financial statements.

VISION The Office of the Auditor General is an independent Office of the Legislature which, through audit, adds credibility to information provided by Government to the House of Assembly so that the Members of the House of Assembly can hold Government accountable for the prudent use and management of public resources. Head Office Location 15 Dundee Avenue Suite 201 Mount Pearl Newfoundland and Labrador Canada Mailing Address P.O. Box 8700 St.

John’s Newfoundland and Labrador Canada A1B 4J6 Telephone: (709) 729-2695 Fax: (709) 729-5970 Email: oagmail@oag.nl.ca Website: www.gov.nl.ca/ag Regional Office Location 1 Union Street Corner Brook Newfoundland and Labrador Canada

Office of the Auditor General of Newfoundland and Labrador Head Office Auditor General Regional Office 15 Dundee Ave., Mount Pearl Terry Paddon, CA 1 Union St., Corner Brook Box 8700 ♦ St. John’s, NL ♦ A1B 4J6 T: 709-729-2700 Box 2006 ♦ Corner Brook, NL ♦ A2H 6J8 T: 709-729-2695 ♦ F: 709-729-5970 T: 709-637-2295 ♦ F: 709-637-2595 Email: oagmail@oag.nl.ca January 2013 The Honourable Ross Wiseman, M.H.A. Speaker House of Assembly Dear Sir: In complian ce with the Auditor General Act , I have the honour to submit, for transmission to the House of Assembly, my Report on Reviews of Departments and Crown Agencies for 2012. Respectfully submitted, TERRY PADDON, CA Auditor General

Auditor General of Newfoundland and Labrador Table of Contents, January 2013 TABLE OF CONTENTS

Chapter Part Page 1 Comments of the Auditor General 1 2 Our Office 3 3 Reviews of Departments and Crown Agencies Executive Council - Human Resource Secretariat  Occupational Health and Safety in Government 3.1 5 Department of Advanced Education and Skills  College of the North Atlantic  Income Support and Accounts Receivable 3.2 3.3 25 57 Department of Environment and Conservation  Pesticides Control 3.4 83 Department of Finance  Newfoundland and Labrador Liquor Corporation - Regulatory Services 3.5 113 Department of Health and Community Services  HealthLine  Newfoundland and Labrador Centre for Health Information  Western Regional Health Authority 3.6 3.7 3.8 149 165 201

Table of Contents, January 2013 Audito r General of Newfoundland and Labrador TABLE OF CONTENTS

Chapter Part Page 3 Department of Municipal Affairs  Monitoring of Municipalities  Special Assistance Grant Program 3.9 3.10 253 279 Department of Natural Resources  Forest Industry Diversification Program 3.11 293 Service NL  Government Purchasing Agency - Public Tender Act Exceptions  Insurance Adjusters, Agents and Brokers Regulation 3.12 3.13 319 339

CHAPTER 1 COMMENTS OF THE AUDITOR GENERAL

Auditor General of Newfoundland and Labrador

Chapter 1, January 2013 1 Comments of the Auditor General This is my first report as Auditor General on Reviews of Departments and Crown Agencies. This report reflects the work of the Of fice of the Auditor General over the past year which focuses on specific programs within Government departments and agencies. A separate report is issued related to the Consolidated

Summary Financial Statemen ts for the year ended March 31, 2012. The Auditor General Act requires that I report, at least annually, to the House of Assembly on the work of the Office. This report, and the report on the Consolidated

Summary Financial Statement of the Province, fulfill the requirements of the Auditor General Act. We plan our work based on a risk assessment of various programs administered by Government departments or through crown agencies. We also receive inform ation and requests from individuals outside our office which we evaluate to determine whether we will undertake work in a particular area.

This report provides recommendations resulting from our review of the following 13 different programs and crown agencies:  Occupational Health and Safety in Government  College of the North Atlantic  Income Support and Accounts Receivable  Pesticides Control  Newfoundland and Labrador Liquor Corporation - Regulatory Services  HealthLine  Newfoundland and Labrador Centre for Health Information  Western Regional Health Authority  Monitoring of Municipalities  Special Assistance Grant Program  Forest Industry Diversification Program  Government Purchasing Agency - Public Tender Act Exceptions  Insurance Adjusters, Agents and Brokers Regulation The information is provided to Members of the House of Assembly for their consideration.

Recommendations contained in this report ar e intended to strengthen the overall level of accountability within Government and help ensu re a greater level of stewardship of public money. I look forward to continued collaboration with the Public Accounts Committee as they consider the recommendations contained in this Report.

Chapter 1, January 2013 Auditor Ge neral of Newfoundland and Labrador Comments of the Auditor General I wish to acknowledge the coop eration and assistance that my Office has received from Government departments and agencies during the c onduct of our reviews. I also wish to thank the staff of the Office of the Auditor General for their support, dedication and professionalism throughout the year. TERRY PADDON, CA Auditor General

CHAPTER 2 OUR OFFICE

Auditor General of Newfoundland and Labrador

Chapter 2, January 2013 3 Our Office The Office of the Auditor General operates from two locations - Mount Pearl and Corner Brook. The staff of the Office contribute, as a team, in the preparation of the 2012 Report on Reviews of Departments and Crown Agencies.

The following is an alphabetical list of staff of the Office of the Auditor General as of December 2012: Nicole Abbott Melissa Lewis Marc Blake Ruochen Li Paul Burggraaf, CAPM Michael MacPhee, CA Greg Butler James Mallard, CGA Keith Butt, CA Adam Martin, CA John Casey, CMA Jayme Martin, CA Jeff Cook Leif Martin, CA Gertrude Critch Trevor McCormick, FCGA Tony Dingwell, CA Patrick Morrissey Lisa Duffy, CA Melissa Mullaly Robert George Jessica Nugent, CA Gregg Griffin Tracy Pelley, CMA Cayla Hillier Thomas Pritchard Jeremy Hynes Pauline Reynolds, CMA Claude Janes, CA Sandra Russell, CA Brenda Kavanagh Allison Simms Trena Keats, CA Lindy Stanley, CA Adam Kelloway Brad Sullivan, CA Aman Khanna Scott Walters, FCA Nancy King David White, FCGA Stephanie Leblanc, CA Tony Wiseman

Chapter 2, January 2013 Auditor Ge neral of Newfoundland and Labrador Our Office

CHAPTER 3 REVIEWS OF DEPARTMENTS AND CROWN AGENCIES

PART 3.1 EXECUTIVE COUNCIL - HUMAN RESOURCE SECRETARIAT OCCUPATIONAL HEALTH AND SAFETY IN GOVERNMENT

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 5 Occupational Health and Safety in Government Executive

Summary The Occupational Health and Safety Act (the Act) and Regulations require that employers establish and maintain written occupational health and safety (OHS) policies and programs at all provincial workplaces. In 2006, Government established Stra tegic Human Resource Management Units (SHRMUs) to, among other things, assist Departments in developing, implementing and managing their OHS programs.

On June 1, 2009, Government approved an OHS policy for departments and selected agencies (Departments) requir ing that they establish and maintain written OHS policies and programs and co mply with OHS legislation at all provincial workplaces. Our review indicated that OHS progr ams had not been established as required, Departments were not in comp liance with the requirements of the Act and Regulations and monitoring was not being carried out. Therefore, it is possible that government employees were not operating in a safe work environment.

OHS Programs Not Implemented Our review indicated that only 13 of the 28 (46.4%) Departments had developed and implemented writte n OHS programs as required under Government’s OHS policy. Departments Not Complying with the Occupational Health and Safety Act and Regulations Our review indicated that OHS committ ees and worker health and safety representatives (Worker Representatives ) were not always established and trained in the workplaces of Departme nts and that OHS committees did not always carry out their responsib ilities as required under the Act and Regulations.

During the calendar year 2010, we found instances where OHS committees:  were not established as required;  were not trained as required;  did not meet quarterly as required;

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government  did not meet at all; and  did not carry out workplace inspections to ensure that safe working conditions were being maintained. We also found instances where Worker Representatives were not established and trained as required.

We could not determine whether all Departments were complying with the Act and Regulations during the calendar year 2011 with respect to the establishment, training and responsibil ities of OHS committees and Worker Representatives, as the 2011 informa tion we requested in December 2012 could not be readily provided by some Departments. Occupational Health and Safety Not Monitored by SHRMUs SHRMUs are responsible for ensuring that OHS programs are effective and that Departments are complying with the Act and Regulations.

We asked the SHRMUs to provide us with the information we required to determine whether Departments were complying with OHS legislation during the calendar year 2010. We found that SHRM Us had to obtain some or all of the workplace information from their Departments and that several months had passed before we received the info rmation from some of the SHRMUs. SHRMUs cannot effectively monitor Department compliance with the Act and Regulations as they do not have ready access to the workplace information that is necessary to determine such compliance.

Monitoring activity includes conduc ting OHS compliance audits at Department workplaces. We found th at most SHRMUs did not carry out compliance audits at Department workplaces to ensure those workplaces were complying with their OHS programs and with OHS legislation. In addition, on March 31, 2011, once the Social Sector SHRMU had developed a draft OHS program for its Departments, it transferred full responsibility for occupational health a nd safety to the Departments, even though some Departments had not yet implemented their OHS programs.

Contrary to other SHRMUs, the Social Sector SHRMU indicated that its role in OHS was more coordination than monitoring. This may affect the Department’s ability to implement an effective OHS program.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 7 Occupational Health and Safety in Government Occupational Health and Safety Reporting is Inadequate Government policy requires that Depa rtments report to the Human Resource Secretariat (HRS) on an annual ba sis regarding OHS performance. Government policy also requires th at the HRS support OHS corporately within the public service by “…reviewing and reporting information regarding departmental programming and activities with respect to occupational health and safety”.

We found that some Departments did not report OHS information to the HRS for the fiscal years ended March 31, 2010 and March 31, 2011. Furthermore, the OHS information that was reported to the HRS was not complete, sufficient or appropriate for determini ng OHS performance, and therefore not useful to the HRS or Cabinet Secret ariat for planning and decision making purposes. For the fiscal year ended Marc h 31, 2012, only 9 of the 28 (32.1%) Departments had reported OHS information to the HRS.

This is contrary to Government policy which requires that Departments report annually to the HRS on OHS performance and that the HRS review such performance. Background The Occupational Health and Safety Act (the Act ) and Regulations require that employers establish and maintain written occupational health and safety (OHS) policies and programs at all provincial workplaces. Written OHS policies and programs increase workplace health and safety, demonstrate employer commitment and specify em ployer and employee accountability and responsibility for workplace health and safety.

OHS programs provide the plans and systems for such things as:  training workers and supervisors in safe work practices;  establishing and operating OHS committees;  recognizing, evaluating and controlling hazards; and  emergency responses.

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government In 2006, Government was aware that th ere were unacceptable levels of compliance with OHS legislation throughout most Departments and that OHS policy and program frameworks were not in place. Government established Strategic Human Resource Management Units (SHRMUs) to, among other things, assist Departments in deve loping, implementing and managing their OHS programs to ensure they included all the elements required under the Act and Regulations.

On June 1, 2009, Government approved an OHS policy which applies to all Departments and their employees. Res ponsibilities under the policy are as follows:  Departments must comply with the Act and Regulations and adhere to specific responsibilities identified in the legislation, including developing, implementing and eval uating OHS programs.

Departments must also report to th e Human Resource Secretar iat (HRS) on an annual basis regarding OHS performance;  managers, supervisors and employees must comply with the Act and Regulations and adhere to specific res ponsibilities identified in the legislation, including cooperating with each other in the interest of occupational health and safety; and  the HRS must support occupational hea lth and safety corporately within the Government, such as providing support for program development and training, as well as, reviewing and reporting OHS information obtained from Departments.

The HRS is responsible for all corpor ate human resource functions within Government, including occupational health and safety. There are 6 SHRMUs within the HRS that support 28 Departme nts in the area of compliance with the Act and Regulations. Table 1 shows the SHRMUs and the number of Departments, workplaces and employees they supported as at December 31, 2010.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 9 Occupational Health and Safety in Government Table 1 Occupational Health and Safety in Government SHRMUs and the Number of Departments, Workplaces and Employees Supported As at December 31, 2010 SHRMU Departments Number of Workplaces Employees Child, Youth and Family Services 1 Department of Child, Youth and Family Services 3 64 Sub Total Executive Council 1 2 3 4 5 6 7 8 9 10 11 12 Department of Business Department of Finance Department of Labrador and Aboriginal Affairs Cabinet Secretariat Communications Branch Government House Intergovernmental Affairs Secretariat Office of the Chief Information Officer Public Service Commission Public Service Secretariat Rural Secretariat Women’s Policy Office 2 6 2 5 1 1 1 6 1 7 3 1 35 428 27 59 9 13 17 318 56 66 17 10 Sub Total 36 1,055 Justice 1 Department of Justice 102 1,521 Sub Total Resource Sector 1 2 3 4 5 Department of Environment and Conservation Department of Fisheries and Aquaculture Department of Innovation, Trade and Rural Development Department of Natural Resources Department of Tourism, Culture and Recreation 36 21 24 52 34 405 129 205 802 480 Sub Total 167 2,021 Social Sector 1 2 3 4 5 6 7 8 Department of Education Department of Government Services Department of Health and Community Services Department of Human Resources, Labour and Employment Department of Municipal and Provincial Affairs Fire and Emergency Services Government Purchasing Agency Labour Relations Agency 7 25 4 31 5 4 1 3 269 520 239 786 128 27 12 36 Sub Total 80 2,017 Transportation and Works 1 Department of Transportation and Works 117 1,654 Sub Total Total 28 505 8,332 Source: Human Resource Secretariat

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government As indicated in Table 1, at Dece mber 31, 2010, the 6 SHRMUs supported 8,332 employees in 505 workplaces throughout 28 Departments of Government. We were unable to update Table 1 for the year ended December 31, 2011 as some Departments could not readily provide the information we required.

Objectives and Scope Objectives The objectives of our review were to determine whether:  Departments were complying with the Act and Regulations;  SHRMUs were supporting Department s in developing, implementing and managing their OHS programs; and  the HRS was reviewing and reporting the OHS performance of Departments. Scope Our review covered the period April 1, 2006 to December 31, 2011. Our review included an analysis of the occupational health and safety programs and information obtained from the SHRMUs and the HRS. In addition, we held discussions with officials of the HRS and the SHRMUs.

We completed our review in December 2012. Detailed Observations This report provides detailed findings and recommendations in the following sections: 1. Occupational Health and Safety Programs 2. Compliance with the Occupational Health and Safety Act and Regulations 3. Occupational Health and Safety Monitoring and Reporting

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 11 Occupational Health and Safety in Government 1. Occupational Health and Safety Programs Overview A written OHS policy is required at provincial workplaces where less than 10 workers are employed. A written OHS program is required at provincial workplaces where 10 or more workers are employed.

The Regulations state that an OHS Program “…shall be signed and dated by the employer…” and requires that the OHS program include elements such as:  a statement of the employer’s commi tment to cooperate with the OHS committee and workers in the workplace with respect to OHS;  a statement of the respective re sponsibilities of the employer, supervisors, OHS committee and workers with respect to OHS;  a plan for orienting and training work ers and supervisors in safe work practices necessary to eliminate, reduce or control hazards in the workplace;  provisions for establishing and operating an OHS committee, including employer and Worker Representatives;  a system for the recognition, evaluation and control of hazards;  written safe work procedures appropriate to the hazards in the workplace;  an emergency response plan; and  a provision for monitoring the implem entation and effectiveness of the OHS program.

SHRMUs are responsible for assis ting the Departments in developing, implementing and managing their OHS programs. We reviewed OHS policy and program information obtained fr om the SHRMUs that supported Government Departments. We held discussions with SHRMU and HRS officials. Our review identified the following:

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government OHS programs not implemented Only 13 of 28 (46.4%) Departments ha d implemented written OHS programs as required under Government’s OHS policy.

We found the following related to specific SHRMUs:  The OHS program provided by the CYFS SHRMU was implemented and included the elements required under OHS legislation and was approved by the Department in October 2012.  The OHS programs provided by the Resource Sector SHRMU were implemented and included the elements required under OHS legislation and were approved by the Departments in May and November 2012.  The OHS program provided by the Justice SHRMU was implemented and included the elements required under OHS legislation, however, the program had not been formally approved by the Department.  The Executive Council SHRMU provided us with a sector wide draft OHS program for the 12 Department s it supported.

Our review indicated that while the draft program incl uded elements required under OHS legislation, it was sti ll under review and had not been approved for implementation in the Departments.  The Social Sector SHRMU provided us with a sector wide draft OHS program for the 8 Departments it s upported. Our review indicated that, while the draft program included elements required under the OHS legislation, it had not been approve d for implementation in 3 of the 8 (37.5%) Departments.  The Transportation and Works SHRM U provided us with an OHS program that had been implemented since 2004.

Our review indicated that the OHS program did not include the legislative requirement that the program be reviewed and revised if n ecessary, every three years. At the time of our review, the SHRMU indicat ed they were in the process of carrying out their first re view and revision of th e OHS program since it was approved in 2004. OHS programs had not been fully established, therefore, it is possible employees were not operating in a safe work environment.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 13 Occupational Health and Safety in Government Recommendation SHRMUs and Departments should ensu re that OHS programs are developed and implemented as required under G overnment policy and in accordance with the Occupational Health and Safety Act and Regulations. 2. Compliance with the Occupational Health and Safety Act and Regulations Overview Departments are responsible for ensu ring that OHS committees and worker health and safety representatives (Worke r Representatives) are established in the workplace and carry out their res ponsibilities in accordance with the Act and Regulations.

The Act states:  “Where 10 or more workers are emplo yed at a workplace, the employer shall establish an occupational health and safety committee to monitor the health, safety and welfare of the workers employed at the workplace.”  “Where less than 10 workers are emplo yed at a workplace, the employer shall ensure that a worker not co nnected with the management of the workplace is designated as the worker health and safety representative to monitor the health, safety and welfare of workers at the workplace.” We reviewed workplace information obtained from the SHRMUs and held discussions with SHRMU officials.

We identified issues with: A. The Establishment and Training of OHS Committees and Worker Representatives B. OHS Committee Responsibilities 2A. The Establishment and Training of OHS Committees and Worker Representatives Introduction Where OHS committees and Worker Repr esentatives are established in the workplace, the Act and Regulations states that they be trained in accordance with requirements of the Workplace, Health and Safety Compensation Commission (WHSCC).

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government We reviewed information provided by the SHRMUs in connection with the OHS committees and Worker Representa tives established in Department workplaces during the calendar year 2010. Our review indicated the following: OHS committees and Worker Representatives not established and trained OHS committees and Worker Representa tives were not always established and trained in the workplaces of Departments as required under the Act and Regulations.

Table 2 shows the SHRMUs, the total number of workplaces they supported and whether there were OHS committees or Worker Representatives established and trained as required during 2010.

Table 2 Occupational Health and Safety in Government Number of OHS Committees/Representatives Required, Established and Trained For the Calendar Year 2010 SHRMU Number of Workplaces Supported OHS Committee (10 or more workers in workplace) Worker Representative (less than 10 workers in workplace) Total Required Established Trained Required Established Trained Child, Youth and Family Services 2 1 1 1 1 1 3 Executive Council 22 20 19 14 14 14 36 Justice 25 24 21 77 25 19 102 Resource Sector 44 43 36 123 87 38 167 Social Sector 42 40 29 38 38 30 80 Transportation and Works 65 65 58 52 52 41 117 Total 200 193 164 305 217 143 505 Source: Strategic Human Resource Management Units (SHRMUs) n/a: Information not available As Table 2 indicates, 200 of the 505 (39.6%) workplaces had 10 or more workers during 2010.

We found the following:  in 7 of the 200 (3.5%) workplaces, OHS committees were not established as required; and  in 29 of the 193 (15%) workplaces where there was an OHS committee in place, the committee members were not trained as required.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 15 Occupational Health and Safety in Government As Table 2 indicates, 305 of the 505 (60.4%) workplaces had less than 10 workers. We found the following:  In 88 of the 305 (28.9%) workplaces, Worker Representatives were not established as required. In 48 of the 88 (54.5%) workplaces where there was no Worker Representative, there was only one worker at the workplace and Departments indicated that, in these workplaces, the Workplace Health, Safety and Compensation Commission (WHSCC) had advised them that no Worker Representative was required.

However, our review indicated th at the position of the WHSCC on this matter contradicts the requirements of OHS legislation.  In 74 of the 217 (34.1%) workplaces where there was a Worker Representative established, the Worker Representative was not trained as required. We could not determine whether all Departments were complying with the Act and Regulations with respect to the establishment and training of OHS committees and Worker Representatives during the calendar year 2011 as the 2011 information we requested in December 2012 could not be readily provided by some Departments. 2B.

OHS Committee Responsibilities Introduction The Act and Regulations require that where an OHS committee is established in the workplace, the committee must:  meet at least once every 3 months;  record and provide minutes of committee meetings to the WHSCC; and  participate in workplace inspections that the employer is required to conduct to ensure safe working conditions are maintained. We reviewed information provided by the SHRMUs in connection with the responsibilities of OHS committees that were established in Department workplaces during 2010. Our review indicated the following:

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government OHS committees not carrying out responsibilities as required OHS committees did not always carry out their responsib ilities as required under the Act and Regulations. We found the following:  In 153 of the 193 (79.3%) workplaces where there was an OHS committee established, the committee di d not meet quarterly as required.

Furthermore, in 19 of the 153 (12.4%) workplaces where the committee did not meet quarterly, the committee had not met at all.  In 15 of the 174 (8.6%) workplaces where OHS committees held meetings, the OHS committee did not r ecord and provide minutes of the meetings to the WHSCC.  In 60 of the 193 (31.1%) workplaces where there was an OHS committee established, the committee did not carry out any workplace inspections to ensure that safe working conditions were being maintained.

We could not determine whether all Departments were complying with the Act and Regulations with respect to OHS comm ittee responsibilities during the calendar year 2011 as the 2011 information we requested in December 2012 could not be readily provided by some Departments. Departments were not complying with the Act and Regulations, therefore, it was possible government was not ensu ring employees were operating in a safe working environment. Recommendation Departments should comply with the Occupational Health and Safety Act and Regulations. 3.

Occupational Health and Safety Monitoring and Reporting Overview SHRMUs monitor the OHS performance of Departments to ensure that OHS programs and services are effective and comply with the Act and Regulations. Departments are required to report a nnually to the HRS regarding their OHS performance. Up until July 30, 2012, each SHRMU reported administratively to one Department of Government. Figure 1 shows the Departments to which the SHRMUs reported.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 17 Occupational Health and Safety in Government Figure 1 Occupational Health and Safety in Government Departments to which the SHRMUs Reported As of July 30, 2012 SHRMU ADMINISTRATIVE REPORTING Source: The Human Resource Secretariat On July 31, 2012 the SHRMUs began reporting to the Assistant Deputy Minister responsible for the HRS Clie nt Services Division, however, they continue to communicate with the Deputy Ministers of Departments on administrative matters. We reviewed OHS information reporte d to the HRS by Departments and we held discussions with HRS and SHRMU officials.

We identified issues with: A. Monitoring the Effectiveness of OHS Programs B.

OHS Information Reported by Departments Deputy Minister of CYFS / Assistant Deputy Minister of CYFS Child, Youth and Family Services (CYFS) Justice Deputy Minister of Justice / Assistant Deputy Minister of Justice Executive Council Clerk of the Executive Council / Assistant Deputy Clerk of the Executive Council Resource Sector Deputy Minister of Innovation, Business and Rural Development Social Sector Deputy Minister of Service Newfoundland and Labrador Deputy Minister of TW / Assistant Deputy Minister of TW Transportation and Works (TW)

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government 3A. Monitoring the Effectiveness of OHS Programs Introduction SHRMU Integrated Disability Mana gers (IDMs) are responsible for monitoring the Departments they serv e to ensure that OHS programs and services are effective and comply with the Act and Regulations . OHS consultants were hired by some SHRMUs to assist the IDMs in carrying out their responsibilities.

Monitori ng activity includes conducting OHS compliance audits at Department workpl aces to ensure compliance with the Act and Regulations, including whether:  OHS programs contained the required elements;  OHS committees and workers were established and trained;  OHS committees met regularly and kept minutes; and  Departments were complying with orde rs that were issued by the OHS Branch of Service NL.

Our review indicated the following: OHS information was not readily available We asked the SHRMUs to provide us with the information we required to determine whether Departments were complying with OHS legislation during the calendar year 2010.

Informati on we requested from the SHRMUs included:  the number of workplaces and the number of workers at each workplace;  the names and OHS training certificate numbers for OHS committee members and Worker Representatives at each workplace;  the dates of OHS committee meetin gs and whether minutes were forwarded to the WHSCC; and  the dates of workplace inspections and whether there was documentation supporting the workplace inspections that were carried out.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 19 Occupational Health and Safety in Government We found that the SHRMUs had to obtain some, or all, of this information from their Departments and that several months had passed before we received the information from some of the SHRMUs. SHRMUs cannot effectively monitor Department compliance with the Act and Regulations when they do not have ready access to the information that is necessary to determine such compliance. In December 2012, we requested that SH RMUs provide us with the same information for the calendar year 2011.

However, some SHRMUs could not readily provide us with the required information. In addition, on March 31, 2011, once the Social Sector SHRMU had developed a draft OHS program for its Departments, it transferred full responsibility for occupational health a nd safety to the Departments, even though some Departments had not yet implemented their OHS programs. Contrary to other SHRMUs, the Social Sector SHRMU indicated that its role in OHS was more coordination than monitoring. This may affect the Department’s ability to implement an effective OHS program.

Compliance audits were not carried out During the calendar year 2010, 4 of the 6 (66.7%) SHRMUs indicated that they did not carry out compliance audits at Department workplaces to ensure the workplaces were complying with the Act and Regulations. Only the Justice SHRMU and the Transportation and Works SHRMU indicated that they had carried out compliance aud its at Department workplaces during 2010. 3B. OHS Information Reported by Departments Introduction Government policy requires that Departments report to the HRS on an annual basis regarding OHS performance.

Gove rnment policy requires that the HRS support OHS corporately within th e public service, such as “ …reviewing and reporting information regarding depar tmental programming and activities with respect to occupational health and safety”.

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Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government Each year, Departments provide the HRS with an annual Human Resource Accountability Report (Accountability Report). The Accountability Report provides the HRS with information rega rding key human resource activities occurring in the Departments, including activities in the area of occupational health and safety.

Accountability Reports prepared by the Departments are based on standardized templates provi ded by the HRS which are meant to guide Departments in the information they should be collecting and providing to the HRS. Information provided in the Accountability Reports is used by the HRS for planning purposes and

summary reports are provided to Cabinet Secretariat in support of their decision making. Our review indicated the following: OHS information reported in 2009-10 was not complete or useful As at March 31, 2010, 25 of the 28 (89.3%) Departments reported information to the HRS regarding thei r OHS performance, as required by Government’s OHS policy. The OHS information reported to the HRS by the 25 Departments for the fiscal year ended March 31, 2010 was not complete.

Furthermore, the OHS information that was reported was not sufficient or appropriate for determining OHS performance, and therefore not useful to the HRS or Cabinet Secretariat for planning and decision making purposes. We found that:  11 of the 25 (44%) Departments that did report to the HRS, did not provide information with regard to the status of their OHS programs.  While Departments reported the number of OHS committees that were in place, they did not report the number of workplaces where OHS committees were required to be in place.

As a result, the information reported was not useful to the HRS for the purpose of determining OHS performance in this area.  9 of the 25 (36%) Departments that did report to the HRS, did not provide information to indicate whether their OHS committees were complying with the Act and Regulations.  11 of the 25 (44%) Departments that did report to the HRS, did not provide information to indicate whether the OHS committees were trained in occupational health and safety; and

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 21 Occupational Health and Safety in Government  11 of the 25 (44%) Departments that did report to the HRS, did not provide information to indicate th e number of inspections their OHS committees had carried out. Furthermore, when Departments did provide the number of inspections carried out, there wa s no indication as to whether those inspections were sufficient or appropriate to reduce the health and safety risk in the workplace.

OHS information reported in 2010-11 was not useful As at March 31, 2011, 26 of the 28 (92.9%) Departments reported information to the HRS regarding thei r OHS performance, as required by Government’s OHS policy. The completeness of OHS information reported to the HRS by the 26 Departments for the fiscal year ended March 31, 2011 had improved over 2009-10. However, the information repo rted was still not sufficient or appropriate for determining OHS performance, and therefore not useful to the HRS or Cabinet Secretariat for plan ning and decision ma king purposes.

We found that:  While Departments reported the number of OHS committees that were in place, they did not report the number of workplaces where OHS committees were required to be in place. As a result, the information reported was not useful to the HRS for the purpose of determining OHS performance.  While Departments did provide the nu mber of inspections carried out, there was no indication as to whether those inspections were sufficient or appropriate to reduce the health and safety risk in the workplace.

OHS information not reported in 2011-12 The HRS indicated that the template for the Accountability Report had changed for the March 31, 2012 report in that OHS-related information was reported only if occupational health a nd safety was identified by Departments as one of their top three priorities or challenges. The HRS indicated that only 9 of the 28 (32.1%) Depart ments identified occupational health and safety as one of their top three priorities and therefore included OHS information in their March 31, 2012 Accountability Reports.

This is contrary to Government policy which requires that Departments report annually to the HRS on OHS performance and that the HRS review such performance. Monitoring of OHS programs was not be ing carried out, therefore, it is possible government was not ensuring employees are operating in a safe working environment.

22 Annual Report,

Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government Recommendations SHRMUs should monitor the Department s they support to ensure that OHS programs are effective and that there is compliance with the Occupational Health and Safety Act and Regulations. Departments should provide the HRS with sufficient and appropriate information for determining OHS performance. Secretariat’s Response The report primarily contains inform ation for the calendar year 2010 which had been submitted to the Office of the Auditor General (OAG) in 2011-12.

A request for additional information, for the calendar year 2011, was made by the OAG on December 20, 2012, and due on January 4, 2013. Information was forwarded to the OAG by Stra tegic Human Resource Management (SHRM) units, however, due to the restri cted timeline, the information could not be fully confirmed by the 28 departments/agencies. As a result, the OAG determined this information would not be included in the report. The Human Resource Secretariat and the Provincial Government departments and agencies recognize the si gnificance of the issues related to Occupational Health and Safety.

It concurs with the information outlining the status of activities relating to OHS in 2010. Since the original data was collected, there have been improvements in the areas outlined by the report. 1. Since 2010, there has been considerable effort in developing and revising OHS programming within the Provincial Government. Over the last two years, many of the departments and agencies outlined in the report have developed or completely revised th e program manuals which existed in 2010. As an example, the report indi cated that 15 departments had not implemented written OHS programs.

The Executive Council SHRM unit which supports 12 of those 15 departm ents and agencies revised their OHS programming in the third quarter of 2012 and is currently going through the final stages of approval. 2. Since 2010, there has been a concer ted effort to improve committee training, membership and meeting requirements as outlined in the report. For example, over the last two years , SHRM units have implemented the best practice of providi ng training to individuals where they are the sole employee.

As was indicated in the OA G report, it is the opinion of the OHS Division of Service NL that this initiative exceeds th e intent of the OHS Act and Regulations.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.1, January 2013 23 Occupational Health and Safety in Government 3. Since 2010, there have been changes to monitoring efforts in the area of Occupational Health and Safety. a. In 2012, the Human Resource Secretaria t, in partnership with SHRM units, Departments and the WHSCC, developed a strategy to complete OHS audits on an annual bas is or as recommended by the WHSCC auditor. This initiative is currently in the final stages of executive review and if appr oved will be implemented in the coming months. b.

In 2011-12, the annual Human Resour ce Secretariat accountability report required departments/agencies to identify its top three human resource issues and challenges. Th e template for the accountability report had changed from prior years and the 2011-12 report reflected a state of transition w ith respect to collecting human resource information. As such, in 2011-12, OHS-related information was reported in this context only if occupational health and safety was identified by the department as one of their top three priorities or challenges.

To compliment this report, the de partments and agenc ies were also provided with a detailed OHS quarterly reporting template in 2011- 12 which provides detailed OHS information in preparation for the 2012-13 accountability report. 4. Since 2010, there have been a number of OHS related efforts completed in the departments and agencies of the Provincial Government, not outlined in the OAG report.

These would include but not be limited to policy development and/or completion of :  Working alone policies  Accident investigations  Hearing Loss policies  Risk assessments  Workplace Violence Prevention Programming  OHS links on departmental websites  Confined space assessments  Ergonomic assessments  OHS Training including: Fall Arre st Training, WHMIS, First Aid, Use of Force, OHS Manual Famili arization, Fire Warden/Deputy Warden, Fire Extinguisher, Site Specific Safety Plan Training, Safety and the Supervisor Trainin g, Safety for All Training, and Knuckle Boom Training

24 Annual Report,

Part 3.1, January 2013 A uditor General of Newfoundland and Labrador Occupational Health and Safety in Government  Monitoring of OHS orders  Development of Communication Strategies  OHS Safety Moments  Onboarding/Student Orientation (OHS component)  NAOSH Week Initiatives  Inspection Program (including a revision to the Inspection Form)  Accident Investigation Program (including a revision to the Accident Investigation Form)  Safe Work Practice Development, Review and Updates  Prescription Safety Eyewear Program  Hearing Conservation Program  Marine Fatigue Management Program  H1N1 Pandemic Preparedness  Job Hazard Analysis  Principal Contractor Strategy in cluding revisions of the Master Safety Specifications and Contractor Safety Reporting Structure  Recruitment of the Fire Protection Officer position  Fire and Life Safety Inspections (ongoing)  Evacuation Planning  Fire and Life Safety Newsletters  Visitor Safety Policy  High Visibility Apparel Policy  Revision of forms including Hazard Assessment Form, Work Refusal Form and Tool Box Meeting Forms  Cell Phone Use and Driving Policy  Assessment of Traffic Control Manual  Creation and recruitment of OHS Officer III (Air Services Division) The Human Resource Secretariat would like to thank your office for its review of the OHS programming within government.

We will continue to work with our departments and agencies to ensure the environments in which our employees work are healthy and safe.

PART 3.2 DEPARTMENT OF ADV ANCED EDUCATION AND SKILLS COLLEGE OF THE NORTH ATLANTIC

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 25 College of the North Atlantic Executive

Summary During the 2012 fiscal year, the College of the North Atlantic (the College) employed 2,002 staff (1,265 instructiona l staff and 737 administrative and support staff) on a full or part-time basi s. Of these, 478 were employed at the Qatar campus. For the fiscal year 2012, the College spent $113.3 million on salaries and employee benefits.

The College Act, 1996 requires the College to ma ke policies to govern the organization, administration and operati on of the College that adhere to the personnel administrative procedures of the Province unless otherwise approved by the Minister of Advanced Education and Skills. In addition, the College is required to comply with the Public Service Commission Act which states that recommendations for appoin tments to and promotions within the public service shall be ba sed on merit principles.

Me rit principles guide the recruitment and selection process th rough fairness, equity, transparency, efficiency and effectiveness. Our review of compensation and recr uitment practices at the College identified issues relating to recr uitment, file documentation and compensation.

Recruitment Our review of job competitions identified instances where:  the required job analysis was not completed;  positions were not always classified;  positions were filled where the minimum qualifications were not met;  it appeared qualified candidates were screened out from the interview and job competition;  the Selection Board Repor t was not completed to support the decision; and  upscale hiring was not appropriately approved.

26 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic File Documentation Our review also identified instances where the required documentation was not always on file. For example:  assessment matrix forms not always completed or signed;  reference check forms not on file;  confidentiality statements not signed;  appointment letters or contracts not signed;  orientation checklists not completed;  certificates of conduct not on file; and  conflict of interest forms not complete.

Compensation Our review identified issues with employee compensation, including relocation expenses, and employee leave and overtime. Specifically:  relocation expenses were not always properly reimbursed to employees;  employees had overdrawn their leave and overtime balances;  documentation to support leave and overtime transactions were not always on file;  overtime was not always approved in advance of overtime worked; and  in one instance, termination benefits were paid out over 2 years to lessen taxes payable by an employee.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 27 College of the North Atlantic Background Overview The College of the North Atlantic (the College) is the Province's only public post-secondary college. For the 2 010-11 academic year, the College had a total student enrolment of 24,720 attendi ng 17 campuses in the Province and 2,481 attending the campus in the State of Qatar. The College offers over 100 full-time diploma and certificate progr ams, over 60 apprenticeship programs, various contract training and commun ity education courses, and over 200 distance education courses.

The College employs approximately 2,000 full and part-time employees. Figure 1 shows the location of the 17 Provincial campuses. Figure 1 College of the North Atlantic Location of Provincial Campuses

28 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Financial position Table 1 summarizes the financial positi on of the College for the fiscal years 2010 through to 2012.

Table 1 College of the North Atlantic Financial Position Fiscal Years Ended March 31 ($000s) 2010 2011 2012 Financial Assets Cash $ 41,765 $ 22,865 $ 11,335 Receivables 13,255 17,369 12,504 Liabilities Payables and accruals (13,718) (16,684) (11,450) Deferred revenue (6,451) (5,191) (5,907) Deferred capital contributions (6,573) (9,831) (13,406) Due to Qatar Campus (22,858) (8,603) (2,143) Vacation entitlement (7,805) (8,598) (9,474) Severance (13,640) (14,656) (15,376) Net financial assets (debt) (16,025) (23,329) (33,917) Non-financial assets Tangible capital assets 20,889 25,508 28,032 Prepaid expense 1,263 1,445 1,581 Inventory 1,336 1,366 1,387 Accumulated Surplus (deficit) $ 7,463 $ 4,990 $ (2,917) Source: Audited Financial Statements As at March 31, 2012, the College reported a net debt of $33.9 million and an accumulated deficit of $2.9 million.

Operating results Table 2 provides an overview of reve nue and expenses of the College for fiscal years 2010 through to 2012.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 29 College of the North Atlantic Table 2 College of the North Atlantic Revenues and Expenses Fiscal Years Ended March 31 ($000s) 2010 2011 2012 Revenue Grant-in-aid $ 80,395 $ 80,624 $ 84,106 Facilities 2,441 3,427 3,831 Administration 161 324 319 Instructional 25,681 29,405 24,871 Student services 671 735 711 Information technology 227 - - Resale 4,666 4,909 4,490 Apprenticeship 2,811 3,585 3,720 Continuing education 782 853 929 Contracts 7,891 6,731 5,509 International 979 1,155 1,156 Special projects 6,433 2,381 3,007 Qatar project 0 10,201 10,167 Total revenues 133,138 144,330 142,816 Expenses Facilities 11,239 12,491 13,080 Administrations 15,785 15,737 16,228 Instructional 71,703 75,346 79,611 Student services 10,585 10,368 11,271 Information technology 11,493 8,345 7,285 Resale 5,772 5,988 5,757 Apprenticeship 3,614 3,826 4,040 Continuing education 696 684 774 Contracts 7,219 6,185 5,342 International 688 629 620 Special projects 3,036 2,875 3,357 Qatar projects - 2,703 1,975 Total expenses 141,830 145,177 149,340 Deficit before unfunded adjustments (8,692) (847) (6,524) Severance pay (1,318) (984)

(781) Vacation pay (597) (643)

(601) Deficit $ (10,607) $ (2,474) $(7,906) Source: Audited Financial Statements The College has operated with a deficit in each of the last 3 years, totaling approximately $21 million.

30 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Salaries and benefits by program Table 3 provides information on the College's salary and benefit expenses by program.

Table 3 College of the North Atlantic Salaries and Benefits Fiscal Years 2010 to 2012 ($000s) Salaries and Benefits 2010 2011 2012 Facilities $ 1,551 $ 1,775 $ 1,827 Administration 11,427 11,866 11,965 Instructional 62,979 67,383 72,052 Student services 8,380 8,548 9,600 Information technology 5,077 5,304 5,124 Resale 1,833 1,995 1,952 Apprenticeship 2,759 2,970 3,036 Continuing education 528 520 560 Contract 5,029 4,569 3,900 International 358 352 322 Special projects 1,446 1,290 1,573 Qatar Project - 1,556 1,394 Total Salaries and Benefits $ 101,367 $ 108,128 $ 113,305 Source: Audited Financial Statements The table indicates that for the year ended March 31, 2012, salaries and benefits were $113.3 million.

In addition, during 2012, $1.4 million (2011 - $1.6 million) in vacation pay and severance entitlement was recorded. Human Resources Division The Human Resources Division of the College manages human resources. The Executive Director of Human Resources reports to the President and Chief Executive Officer and is responsible for 32 employees.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 31 College of the North Atlantic Objective and Scope Objective The objective of our review was to determine whether compensation and recruitment practices were in acco rdance with Government and College policies and procedures. Scope Our review commenced in February 2012 and covered the fiscal years March 31, 2011 and March 31, 2012. Our re view included interviews with College officials and an examination of College human resources policies and procedures, competition and personnel files, and payroll and leave data.

Detailed Observations This report provides detailed audit findings and recommendations in the following sections: 1. Recruitment 2. Compensation 1. Recruitment Overview The College Act, 1996 requires that the College make policies to govern the organization, administration and operati on of the College that adhere to the personnel administrative procedures of the Province unless otherwise approved by the Minister of Advanced Education and Skills.

In addition, the College is required to comply with the Public Service Commission Act which states that recommendations for appoin tments to and promotions within the public service shall be base d on the merit principles. Merit principles guide the recruitment and selection process th rough fairness, equi ty, transparency, efficiency and effectiveness. Public Service Commission guidelines do not apply to contractual arrangements. Our review identified issues in the following areas: A. Job Competitions B. Hiring and Personnel Documentation

32 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic 1A. Job Competitions Introduction The College carries out job compe titions for bargaining unit positions, non- bargaining positions and senior executive positions. Job competitions range from temporary, part-time, to permanent, full-time, positions. We reviewed 23 recruitment files, 7 of which were considered special hires by the College. These special hires included recalls, upscale hires, hard to fill positions, and retirees.

Our review identified the following: No job analysis or worksheet incomplete Government policy requires a job analysis be completed prior to the start of the competition process. The job anal ysis identifies the critical duties and qualifications required for the position as well as the selection criteria and evaluation tools to be used in the ranki ng of candidates, an important part of achieving fairness, equity and transparency. Our review identified that 2 files did not have a job analysis worksheet completed.

Positions not classified 7 of the 23 recruitment files reviewed re quired classifications to be approved by the Classification and Compensati on Division of the Human Resource Secretariat. Qatar positions are not requ ired to be classifi ed and instructor positions are classified by the faculty collective agreement. Our review identified that 3 of the 7 positions were not classified:  1 new position, Administrator of A pplied Research, was created for a research project and was filled th rough a secondment.

Our review identified that the position was not cl assified nor did the position have a position description approved. In addition, Government policy for secondments requires approval from the Public Service Commission for assignments beyond 12 months. This appointment was for 24 months; however, approval from the Pub lic Service Commission was not obtained.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 33 College of the North Atlantic  2 positions were classified in 1998, however, since 1998 the titles and duties of these positions had changed. College officials indicated that the two current positions of Campus Ad ministrator and Dean were both considered to be classified through the 1998 classification for the positions of Associate District Administrator/Chair of Trades. However, since 1998, this position had been split into the 2 new positions with different duties.

Given the significant changes in the positions since 1998, these positions should have been submitted for classification. In addition, the position descriptions were not updated. Minimum qualifications not met The College has established minimum qualif ications for instructional staff. Our review identified that 3 job postings for 5 instructional positions did not require the minimum established qualif ications. Specifically, the job postings required Bachelor degrees or Master s degrees with lesser qualifications considered instead of the required Masters degrees.

College officials indicated that permission was obtaine d from the respective profession’s accrediting organization to change th e minimum qualifications due to the hard-to-fill nature of the position, however, documentation of the approval was not provided. Our review identif ied that 2 candidate s with Bachelor degrees were hired from 2 competitions and 3 individuals that did not have Bachelor degrees were hired from the other competition. Confidentiality statement not signed Government policy requires that j ob competitions be administered by a selection board.

The board is a committee of officials acting within policies and processes approved by the Public Service Commission and normally consist of up to 3 members. Governme nt policy requires all members of the selection board to sign an Information and Confidentiality Statement for each job competition that indicates the res ponsibilities of the board, the merit principles, an oath of confidentiali ty and the penalties for committing an offense under the Public Service Commission Act.

Our review identified that:  2 competition files did not have a signed confidentiality statement; and  2 competition files had a confidentiality statement, however, the statement was not signed by all 3 memb ers of the selection board. For 1 competition, the department representative and the technical representative had not signed the statement and for another competition, the chair had not signed the statement.

34 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Candidates not adequately screened The Government staffing manual requires a ll applicants to be fairly screened by comparison, first, to the advertised re quirements and, then, to the education and experience of the other applicants . Government practices also require screening be completed based on the requirements advertised for the position and not to lower qualifications. If no qualified candidates apply, the position is required to be re-advertised at the lower level.

Our review identified 5 competitions where, in our opinion, candidates were not properly screened or documentati on was not adequate to support the screening process as follows:  For 1 competition, 3 candidates were sc reened out but appeared to meet the qualifications in the job advertis ement and had more experience than the individual hired. The reason given on the screening worksheet was the applicants lacked the required experience, however, no explanation was provided on file to support the reason s given.

For example, one applicant had 6 years of similar experience with a Government agency and 7 years of similar experience in the private sector, a second applicant had 15 years of similar experience with Government, and a third applicant had 11 years of similar experience with Government and the private sector. This screening process resulted in only 2 applicants being interviewed for the position. One of the applicants interviewed had 21 years experience at a Government agency, however, the applicant was not scored in the assessment matrix.

The document noted the applicant was not ranked but no explanation was provided to suppor t why the applicant was not scored. The hired candidate was a current employee of the College with 5 years experience.  For 2 competitions, candidates were screened using qualifications that were lower than that required in the j ob advertisement. In 1 file, the job advertisement required a bachelor de gree, however, candidates that did not have a bachelor degree were select ed for interviews.

In the other file, candidates who had a bachelor degree were selected for interviews, however, the job advertisement required a masters degree but did indicate that other education qualifications may be considered.  For 1 competition, 1 of the 7 candidate s was screened ou t for lacking the required experience although they app eared to meet the qualifications described in the advertisement. The position required 2 years senior management experience preferably in a post-secondary environment.

Our review identified that the candidate had 4 years senior management experience in a post-secondary envir onment and 7 years in industry. The screening process resulted in 2 candi dates being interviewed, both current employees of the College.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 35 College of the North Atlantic  For 1 competition , one candidate was screened out as College officials indicated that the candidate did not have a required safety certificate, however, a review of the applicant’s resume indicated that the applicant did have the certificate requested in the advertisement. Interview answers not on file The Government staffing manual states that interview questions should include preferred answers that suppor t the job analysis.

Our review identified that 9 competition files did not include the pref erred answers to the questions asked during the interview process. Assessment Matrix Form issues The Government staffing manual prescrib es that an Applicant Assessment Matrix form should be completed im mediately after each candidate is interviewed. The matrix is used as a scoring guide to measure the knowledge, abilities and personable suitability of each candidate and supports the selection of the recommended candidate. A su mmary of the matrices with the recommended candidate score is included in the Selection Board Report.

Our review identified that 4 files had issu es with the Applicant Assessment Matrix form as follows:  for 2 competition files, the matrix was not prepared;  for 1 competition file, the form was not signed as being prepared immediately after the interview. Specifically, interviews were held on the December 14 and 15, 2010, however, the form was not dated until February 8, 2011; and  for 2 competition files, the matrix was not dated and the score of the recommended candidate on the matrix did not agree to the score on the Selection Board Report.

Delays in competition process For 1 competition, the process extended beyond 16 months. The initial posting for the position was August 11, 2011, however, as of December 2012, the position was still not filled because the competition was on hold as the current employee had decided not to retire. Our review of the competition process identified that 3 applications were r eceived in response to the first internal posting. Of the 3 applicants, 2 met the requirements of the job posting which included a preference for candidates with a Chartered Accountant or Certified General Accountant designation.

On N ovember 1, 2011, all 3 applicants were sent letters that the competition was cancelled.

36 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic On November 2, 2011, the position was again advertised internally, and on April 2, 2012 it was advertised publicly but a candidate has not yet been hired. In both postings, a change was made in the qualifications to now require a Chartered Accountant designation instea d of a preference for a Chartered Accountant or Certified General Accountan t.

In addition, the requirements in the approved position description from the Classification and Compensation Division of the Human Resource Secr etariat indicated that an accounting designation was required for the position, and did not specify any particular designation. By specifying the particular designation, not only did the College not abide by the approved position de scription qualificat ions, it may have limited the number of qualified candida tes.

Furthermore, changing the requirements for a position after the receip t of qualified applicants, may affect the perception of fairness and objectivity of the competition process. References forms not on file The Government staffing manual indicates two references are required for each recommended candidate, not only the successful candidate. A lack of reference checks could result in the hire of unsuitable staff.

Our review identified 10 candidates that did not have two reference forms or documentation that references were checked for either the successful candidate or the other recommended candidates as follows:  6 competition files did not have two reference forms completed or other documentation for the successful candidate. 3 of the files did not have any reference forms or documentation that references were checked and 3 files had only one reference form completed for the successful candidate.  4 of the 5 competition files that had candidates recommended, other than the top ranked candidate, did not have any reference forms or documentation that a reference check was made for the recommended candidates.

Selection Board Report not adequate Government policy requires the sel ection board submit a recommendation package for the appointment of candidates. The package must include a Selection Referral Certificate, a Selec tion Board Report, an Interview Matrix and copies of the applications for the recommended candidates. The merit principles include the concept of fairness and that the competition process be free of bias.

Therefore, there should be documentation that the selection and approval process is dis tinct from the recommendation process and that the competition was reviewed and approved by staff independent from the selection board.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 37 College of the North Atlantic In our sample of 23 competitions, 5 co mpetitions did not require a Selection Board Report as there was no competition process due to recalls, secondments, or cancellation of the comp etition.

Our review of th e 18 files that required a Selection Board Report identified that 10 reports were not adequate as follows:  2 files did not have a Selection Board Report;  1 file for 5 positions did have a Selection Board Report, however, it did not include the names of 2 of the successful candidates; and  7 files did not have a signature for the approval of the recommendations of the Selection Board.

Rule of three The Public Service Commission Act states “In respect of each appointment or promotion, the board of examiners shall recommend 3 candidates in order of merit and this list shall be submitted to the chief executive officer concerned for final selection provided that the board may recommend less than 3 if it is considered that fewer than 3 candidates are qualified.” Therefore, we would expect the majority of job competitions to result in 3 recommended candidates. Our review identified that 10 of the 17 files that had a Se lection Board Report did not have 3 recommended candidates for the position.

In 8 of the 10 competitions, only one candidate was recommended in the Selection Board Report. Upscale hires not approved appropriately The Technical and Vocational Instructors Salary Scale at the College is based on classes one to six, and the salary for each instructor is determined based on their education and experience. An ups cale hire occurs when an external candidate is hired at a step above step 1 on the pay scale of a position. The faculty agreement indicates th at the maximum upscale salary employees may be paid is as follows:

i) Classes one and two - up to Step 4; ii) Classes three, four and five - up to Step 7; and iii) Class six - up to Step 8. In addition, Government policy for ups cale hiring indicates that the Chief Executive Officer may approve ups cale hires within the normal minimum/maximum of the applicable salary scale and where this criterion is not met, Treasury Board approval is required.

38 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Our review of 5 files where the competition resulted in upscale hires identified the following:  5 employees in 3 competition files were paid a salary that was higher than the maximum allowed in the faculty collective agreement, however, Treasury Board approval was not obtained.

Specifically:  In 1 file, an employee was hired in 2010 on class 5, Step 11 of the instructor scale and was paid a salary of $71,494, when the maximum allowed under the collec tive agreement was Step 7 at $59,650;  In another file, an employee wa s hired in 2009 and was paid a negotiated salary of $65,000 when the maximum allowed under the collective agreement was Step 7 at $57,356; and  In the third file, 3 employees were hired in 2011 and were paid a negotiated part-time salary ba sed on an annual salary of $72,026 when the maximum allowed under the collective agreement was Step 4 at $51,501.  There was no documented approval from the President to pay an upscale salary to one employee who was paid a part-time salary based on $75,005 per year when the salary on Step 1 of the applicable scale was $59,742. 1B.

Hiring and Personnel Documentation Introduction Once an applicant is successfully recr uited, the College enters into an employment contract with the empl oyee either through the collective agreements in place for support and faculty staff, an employment contract for Qatar employees or signed letters of hire for ma nagement employees. The College maintains personnel files fo r each employee which is used to consolidate hiring and employment documents. Our review of a sample of 65 personnel files identified issues with file documentation.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 39 College of the North Atlantic Signed letter of hire/contract not obtained The letter of hire/contract was not signed by the employee in 10 files. Orientation checklists not completed Effective September 8, 2010, College policy provided specific employee orientation procedures such as offe ring regularly scheduled orientation sessions for new employees, the completi on of an orientation checklist and orientation follow-up. The policy applied to all new employees with contracts of at least 6 months and included an overview orientation and a job specific orientation.

Our review identified that there were no orientation checklists completed for any of the 9 employees in our sample that were hired after the effective date. Certificates of conduct not obtained The job advertisements for the College require a successful candidate to provide a certificate of conduct. Our review identified 6 employees did not have a certificate of conduct on file. Conflict of interest forms not obtained The College has an extensive conflict of interest policy.

The policy requires all employees of the College to sign a conflict of interest form and to acknowledge they have receiv ed and read the conflict of interest policy. It indicates the consequences of failing to inform their supervisor and the President of real, apparent or poten tial conflict of interest.

Employees are required to disclose, in writing, to th e President any situation where an association, proprietorship, partnership or company, in which the employees or relatives of the employees have an intere st, plan to bid on a contract with the College for the supply of goods or services , or purchase of goods or services from the College. It prohibits the use of the College facilities, equipment, or information obtained in their employme nt unless written approval from the President is obtained.

It also prohibits the acceptance of gifts (other than gifts of nominal value) by the employee or their relatives, or the acceptance of other benefits arising out of ac tivities associated with their employment. College policy requires all employees to comple te a form on their annual anniversary date confirming the employees are not engaged in any activity that would constitute a conflict of interest.

40 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Our review identified the following issues:  50 employees did not have a conflict of interest form in their personnel file. A review of these 50 employees identified the following:  26 employees were working in Qatar of which 6 were in executive or senior management positions. College officials indicated that the conflict of interest form was not used for Qatar employees because there was a paragraph related to conflict of interest in their contracts.

However, this paragraph does not include all issues covered by the College policy. For example, th e paragraph does not include any requirements for relatives, gifts, or the use of College facilities, equipment or information. College policy requires all existing policy and procedures to appl y to Qatar to the fullest extent possible.

Where this is impractical an ame nded policy is to be prepared and approved by the President of the College.  24 of these employees were working in Newfoundland of which 9 were in executive or senior management positions.  For the employees who had conflict of interest forms on file, the form was only signed for the original hire date. There were no additional forms signed on the anniversary date of the employee. College officials indicated that they were not aware that an annual form was required to be completed.

Given that the College operates internationally, in varying cultures, compliance with this policy would reduce the risk of a negative impact on the reputation of the College. Recommendations The College should:  obtain all documentation for recruitmen t files as required by Government policies and practices;  ensure all positions are classified;  hire only staff that meet the minimum qualification requirement guidelines;

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 41 College of the North Atlantic  screen all job competitions in accordance with the merit principle and Government practices;  obtain at least two references fo r both successful and recommended candidates;  review the job competition proce ss to determine the reason for the majority of competitions not obtaining the rule of three;  ensure employees comply with the conflict of interest policy; and  obtain Treasury Board approval for upscale hires where required. 2.

Compensation Overview Compensation is governed by the co llective agreement for unionized employees (NAPE and CUPE) and G overnment personnel policies and procedures for non-unionized and management employees. During the 2012 fiscal year, the College employed 2,002 staff (1,265 instructional staff and 7 37 administrative and support staff) on a full or part- time basis. Of these, 478 were employed at the Qatar Campus. For the fiscal year 2012, the College spent $113.3 million on salaries and employee benefits.

Our review of compensation identified errors in the application of both Government policies and the requiremen ts of the collective agreements as follows: A. Employee Compensation B. Employee Leave C. Employee Overtime

42 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic 2A. Employee Compensation Introduction Our review identified issues with employee compensation, including relocation expenses related to the recruitment of employees. Position classification not approved We reviewed the classifications for 9 positions from listings obtained from the College of new positions added and positions recently sent for classification to the Classification a nd Compensation Division of the Human Resource Secretariat of the Provincial Government.

Our review identified that 1 position was not sent for classifi cation. College officials indicated that the employee was being paid the rate for another position but the job duties were not the same as that position. Reimbursement of relocation expenses The College spent approximately $140,000 in fiscal 2011 and $88,000 in fiscal 2012 on relocat ion expenses. The College has approved policies and procedures covering relocation expens es. Prior to the commencement of employment, the employee must submit for approval a Request for Relocation Expenses form, which provide s details of the relocation plan and costs.

The employee must also comp lete a Relocation Expense Agreement, which provides the return in service arrangements of the employee. Once these forms are completed by the employee and approved by the Executive Director of Human Resources, the empl oyee submits a travel claim(

s) with supporting documents for any relocation expenses to the Human Resources Division for review and approval. Once approved, it is forwarded to the Finance Division for payment. Our review of relocation expense claims totaling $137,989 for 6 employees identified two issues with claimed expenses as follows:  1 employee claimed relocation expenses of $4,063 related to their former principal residence, including le gal expenses of $2,211, a mortgage penalty of $1,428 and a house appraisal of $424.

Our review identified that the employee did not sell their fo rmer residence but re-financed the mortgage on the former residence. College and Government relocation policy do not provide for the reimburse ment of refinancing expenses and therefore, these costs should not have been approved for reimbursement.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 43 College of the North Atlantic  1 employee included airfare costs for their spouse and a dependent in their Request for Relocation Expenses that was approved in January 2010. Based on information provided by the employee, College officials prepared the employee’s relocation cl aim in November 2010. A review of this claim identified that $711 was claimed for only one family member’s airfare even though the information provided noted “travel for spouse & dependent child” and the a ttached airfare invoice supported 2 amounts of $711 for the employee’s spous e and dependent.

As a result, the employee was underpaid $711. 2B. Employee Leave Introduction As at March 31, 2012, the College reported $9.5 million (2011 - $8.6 million) in unpaid vacation entitlements for approximately 2,000 employees. Management are required to comply w ith Government’s Paid Leave policy while bargaining unit employees are require d to comply with leave articles in their respective collective agreements . Qatar employees are governed by leave policies as described within th e Terms, Conditions, and Benefits of Employment for Employees of CNA - Qatar.

Employees requesting leave must submit a standard leave form to their supervisor for approval. Once approved, the leave form is forwarded to the employee’s respective Regional Human Resource Division for approval and input into the College leave information system. Our review included an overview of the leave process, a review of internal and external auditor reports, an analys is of the leave data bases and a sample of 42 employee leave records.

Our review identified the following: Leave procedures not documented The College does not have documented procedures for employee leave including procedures for requesting, approving, processing and monitoring employee leave. The College does have a standard leave form, and College officials indicated that they follow th e leave articles within the respective collective agreements and Government Paid Leave policy, however, specific procedures to be followed to ensure compliance with these policies are not documented.

With approximately 2,000 employees located at 26 campuses submitting leave requests to four re gional human resources divisions throughout the Province for processing, doc umented procedures would ensure leave is consistently and adequate ly requested, approved, processed and monitored.

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Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Leave issues raised in auditor reports The College’s internal auditor and the College’s external auditor reported a number of significant issues with employee leave as follows:  The internal auditor conducted an audit on leave entitlements and the monitoring of absences re lated to severance, annual leave and time off in lieu.

The October 2010 internal audit re port raised significant issues with the processing of annual leave including a lack of segregation of duties, inadequate reviews by Human Resource Managers, no documentation of a reconciliation of attendan ce records with data en tered, and a lack of documentation to support data entries.  The external auditor’s management report for the fiscal year 2010 identified that adequate controls had not been implemented to ensure that system generated reports were complete and accurate.

Also, in the 2011 management report, the external auditor reported that employees’ entitlements to vacation were not be ing tracked appropriately in the system which resulted in inaccurate information for financial reporting purposes. Leave forms not always on file Our review identified 1 instance where employee leave forms were not on file to support the leave that was recorded in the leave system. Specifically, 3 leave forms for a total of 31 annual leave days were not provided. As a result, we were unable to verify that the leave was accurate and properly approved.

Leave forms do not include approval date Leave forms do not provide for the approval date of the employees’ supervisor. Without the date of the supervisor’s a pproval, our review could not determine if annual and paid leave was approved pr ior to the leave be ing taken or that sick leave was approved in a timely manner. Excess annual leave carried forward Our review identified instances where leave balances were carried forward in contradiction to the terms and conditions of employment.

Specifically:  The College support staff collective agreement allows an employee to carry forward unused annual leave up to th e employee’s annual entitlement, the maximum of which is 25 days. Our review of the College’s leave database identified 27 employees with annual leave balances as at March 31, 2012 ranging from 25.5 days to 81.3 days.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 45 College of the North Atlantic  Contracted employees at the Qatar ca mpus are required to have their unused annual and paid leave balances paid to the employ ee at the end of their employment contract. Unused balances are not allowed to be carried forward to any future contract. Our review identified one employee hired under a 2-year contract at the Qatar campus who was paid 61 annual leave days on July 31, 2010 when their contra ct expired. However, 29.5 of the 61 annual leave days paid out were car ried forward from an employment contract that expired on August 31, 2008.

The College should have paid out the 29.5 days in August 2008 at the salary rate at that time. Doctor notes not always on file to support sick leave 13 of our sample of 42 employees had si ck leave which required a doctor note to support the leave taken. Our revi ew identified 2 employees who did not always have the doctor note required to support the sick leave they had taken. Specifically:  1 employee took 42 days from October 2010 to December 2010 and 16 days from May 2011 to June 2011; and  1 employee took 8 days from May 2010 to February 2011.

Leave overdrawn Our review identified that leave bala nces were overdrawn by employees on a number of occasions during the period of our review, April 1, 2010 to March 31, 2012. Specifically: Annual Leave:  6 instances were identified where em ployees’ annual leave balances were overdrawn.

Specifically:  one employee was overdrawn 16 days as at July 31, 2011;  one employee was overdrawn 12.5 days as at August 31, 2010;  one employee was overdrawn 11.5 days as at August 31, 2011;  one employee was overdrawn 10.5 days as at August 31, 2011;  one employee was overdrawn 3.9 days as at April 1, 2010; and  one employee was overdrawn 2 days as at August 31, 2011.

46 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic  An analysis of the College’s leave database identified that as at March 31, 2012, 35 employees had overdrawn thei r annual leave balance ranging from 1 day to 19.5 days. Sick Leave:  1 instance was identified where an employee’s sick leave balance was overdrawn by 7.03 days as at March 31, 2012.  An analysis of the College’s leave database identified that as at March 31, 2012, 19 employees had overdrawn their sick leave balance ranging from 1.25 days to 51.73 days.

As a result, employees have accessed a benefit they have not earned and are not entitled to. This is also contri buting to issues in the calculation and management of leave. Recalculation of leave identified errors Our review of leave included a reca lculation of employee leave using information provided by the College including opening leave balances, entitlements and leave forms. Our reca lculations identified that 5 employee annual and paid leave balances were not calculated properly or adequately supported and 3 employee sick leave balan ces were not calcul ated properly or adequately supported.

Other leave issues 1 employee retired on June 30, 2010 and, as part of the employee’s termination benefits, the employee was owed $93,734 for 266.75 unused annual leave days. The employee requested that the termination benefits be paid out over two taxation years to lessen tax conseque nces. Our review identified that the College paid the employee $43,536 in July 2010 upon retirement and the remaining $50,198 was not paid until January 2011. Government or College policy does not provide for the splitting of termination payments. 2C.

Employee Overtime Introduction The College paid employees $2.7 milli on for overtime worked in fiscal 2011 and $1.2 million for the period April 1, 2011 to January 31, 2012. In addition, as at March 31, 2012, the College reported $778,694 owing for 21,942 hours (2011- $817,121 for 24,793 hours) in time off in lieu of overtime pay (TOIL).

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 47 College of the North Atlantic The College requires each employee to complete and submit an overtime report, providing details of the purpose and times of the overtime to be worked, to their supervisor for approva l. Supervisors submit these reports to the Human Resources Division for pro cessing. We identified the following issues with overtime: Approval of overtime The College recognizes that excessive ove rtime can contribute to a significant increase in operating costs for the Colle ge.

As a result, the College requires that all overtime worked must have th e prior authorization of an employee’s supervisor.

Our review of overtime for a sample of 19 employees who submitted 260 overtime forms between April 1, 2010 and March 31, 2012, identified the following:  2 employees on 2 occasions were comp ensated for overtime worked that was not approved by a supervisor.  1 employee was compensated for overt ime worked that was approved by the supervisor, however, there was no approval date to indicate that the approval was prior to the overtime worked.  14 employees were credited for overti me worked that was approved by a supervisor after the overtime was worked.

For example, 1 employee worked 2 days of overtime in March and April 2010, however, the overtime form was not prepared a nd approved by the employee’s current supervisor until April 2012.  1 employee had overtime recorded in the database, however, the related overtime forms could not be located. As a result, we could not determine if the supervisor approved the overtime. Errors in overtime records The College overtime policy states th at supervisors are responsible for maintaining a system of recording and tracking overtime.

The College’s Human Resources Division maintains a co mputerized database for tracking all leave and other statistics related to employees. Based upon information provided by the Co llege, our review of the overtime leave bank disclosed differences for 4 employees as follows:  1 employee had a TOIL balance understated by 1.5 days;  1 employee had a TOIL balance understated by 27.5 days;

48 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic  1 employee had a TOIL balance overstated by 2 days; and  1 employee had a TOIL balance overstated by 13.25 hours. The differences were a result of overti me forms not on file to support the overtime worked, leave forms not on fi le to support the TOIL taken or unsupported adjustments. Overdrawn overtime banks As at March 31, 2012, our review disclo sed that 23 employees had overdrawn their overtime leave banks. These employees owed a total of 246 hours ranging from 1 hour to 94.

This overdrawn TOIL totaled approximately $10,131. The College overtime policy does not allow ove rtime leave to be taken in advance of overtime earned. Other overtime issues 1 employee was credited with 94.5 hours of earned TOIL in June 2010, however, in April 2012, the College id entified that the TOIL for another employee with the same name had been en tered into the employee bank at that time in error. Subsequent to June 2010, the employee used this balance that had been credited in error.

In April 2012, the College corrected the posting error, which resulted in the employee having a negative TOIL balance of 94.25 hours as at March 31, 2012. Our review of the circumstances surr ounding the error disclosed the following weaknesses in the system:  The overtime form did not have a place where the employee could enter his employee number which could have been used for data entry purposes; and  The time between when the error was made until it was detected was 21 months.

Recommendations The College should:  compensate its employees in accordance with signed employment contracts; and  monitor and record employee leave and overtime in accordance with its policies and collective agreements.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 49 College of the North Atlantic College’s Response General Comments The Auditor General’s report identifies issues related to recruitment, file documentation and compensation. The College acknowledges gaps exist within its processes due to a variety of challenges over the past two fiscal years. Substantive steps to close those gaps have already been made and will continue over the next several months .

The College also notes some issues within this report relating to emplo yees of a separate entity, CNA-Q, which CNA has been contracted to administer on behalf of the St ate of Qatar but which is not governed by either the Human Resource policies of the Government of Newfoundland and Labrador or the Public Service Commission Act. Response to Specific Observations Recruitment The College acknowledges there were weakness in some of its recruitment activities and documentation procedures during the period audited.

Since that time considerable effort has been m ade to deal with those weaknesses including creating a new Talent Ac quisition Division wi thin the Human Resources Department. As a result, incons istencies that existed within the old structure are now being addressed pr ovincially through new business processes, reassignment of account abilities and clear role definition.

Specifically, the Division is implemen ting changes that will address many of the concerns noted in the audit as follows: 1.A JOB COMPETITIONS No Job Analysis or Worksheet Incomplete The College acknowledges inconsistenc ies with up-to-date job analysis and worksheets and agrees such documents are necessary for effective recruitment. The College is committed to ensuring these documents are completed.

As of February 1, 2013 the ta lent acquisition specialists will not conduct any recruitment activities unless prerequisite documents are received from the hiring managers which will allo w for the subsequent completion of job analyses and worksheets.

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Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Positions Not Classified The College acknowledges the positions in question have not been submitted to the Classification and Compensati on Division of the Human Resource Secretariat for classification. The Co llege is committed to ensuring all positions are classified as per government policy and assigned this responsibility to the Co llege’s Manager of Compensation and Benefits for compliance.

In addition, since Decemb er 2012 the College has re-profiled some positions with the Human Res ources division and one manager is now responsible for all classification actions. Minimum Qualifications Not Met The College agrees the formal, written permission from the accrediting organization was not in the audited file for these hard-to-fill positions. As is often the case with hard-to-fill recruitm ent competitions, th ere is an urgent need to fill a position in order to meet our educational obligations to students.

The College will request and ensure formal, written responses from the appropriate accrediting associations are contained within the file. Confidentiality Statement Not Signed The College agrees selection board chai r confidentiality statements were either not signed at all or not signed by all three members of the selection board. Confidentiality is an important component of the Selection Board member’s role and is covered for each employee by the College’s mandatory confidentiality statements.

Selec tion board chairs will make a concerted effort to ensure confidentiality statem ents are signed by all selection board members for each competition file. Candidates Not Adequately Screened The selection board is comprised of certified selection board chair, a departmental representative and a technical advisor. They work as a team to ensure adequate screening occurs. The College will work with the Public Service Commission (PSC), which is res ponsible for certification of selection board chairs, to ensure fair screening practices are maintained and properly documented.

Interview Answers Not on File The College acknowledges the Go vernment staffing manual requires interview questions with corresponding preferred answers be completed prior to the commencement of interviews and that audited files did not contain such documentation. Communication will occur with selection boards to ensure full compliance with policy.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 51 College of the North Atlantic Assessment Matrix Form Issues The College agrees the assessment matrix form should be completed immediately after each candidate is interviewed. The college will communicate with its selection board chai rs to ensure this important step is conducted in a timely manner. Delays in Competition Process The College followed its normal recru itment process for this competition however the qualifications for the positio n were reviewed during the process which did contribute to a delay.

Th e revised qualificat ions determined through this process were deemed by th e College to be necessary to ensure the best candidate was recruited. Reference Forms Not on File The College acknowledges for certain competition files the minimum two references for all recommended candidates is not always on file. The selection board chairs will ensure two references are completed for all recommendable candidates.

When considering existing College em ployees who have been identified as recommended candidates for a competiti on it is College practice not to conduct reference checks provided the recruitment for the positions were within a reasonable period of time. It is also College practice that at least one reference should be from the candidate’ s immediate supervisor, however, as the supervisor is often the tec hnical advisor or the departmental representative on the selec tion board; in those case s they cannot act as a referee. This often results in only one available reference.

Selection Board Report Not Adequate The College acknowledges that sel ection board reports were not adequate prior to April 2012. Selection board c hairs have been instructed by the College in conjunction with the PS C to ensure selection board reports contain all necessary recommendation documentation for the appointment of candidates. This package includes a sele ction referral certi ficate, selection board report, interview ma trix and copies of the applications for the recommended candidates.

52 Annual Report,

Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Rule of Three The College is aware of the Rule of Three policy and adheres to it whenever possible, however there are many competitions where there are few applicants who meet the minimum qualific ations often resulting in less than three recommendable candidates.

As the Ru le of Three also provides that “…the board may recommend less than 3 if it is considered that fewer than 3 candidates are qualified” , it is the College’s position that it is in compliance with the rule in all of the instances cited in the report. The College will, in the future, request selection board chai rs to document inst ances/reasons of less than three applicants or less t han three recommendable candidates for specific competitions where this occurs.

Upscale Hires Not Approved Appropriately The College notes the concerns as raised and will work with Human Resource Secretariat officials to develop a policy on upscale hiring specific to the College’s that is matched to curre nt labour market salary scales and conditions. To ensure consistency in its upscale hire processes and decisions, the College has implemented a special upscale hire form that requires the President’s review and signature before it can be processed. 1B.

SIGNED LETTER OF HIRE/CONTRACT NOT OBTAINED, ORIENTATION CHECKLISTS NOT COMPLETED, CERTIFICATES OF CONDUCT NOT OBTAINED, CONFLICT OF INTEREST FORMS NOT OBTAINED The College acknowledges critical doc umentation such as signed contracts, orientation checklists, certificates of conduct and conflict of interest forms for personnel files have not always been obt ained in the most efficient manner with appropriate follow up.

Within the recent restructuring of the human resources department, the business processes of both compensation and benefits and talent acquisition have been revised to address the documentation concerns cited by the AG. Compensation/Policies The new Compensation and Benefits Division of the HR Department is a consolidation of all comp ensation and benefits activ ities derived from the former regional based system . As a result, inconsistenc ies that existed within the old structure are now being addresse d from a provincial perspective with new business processes, accountabilities and role definition.

While a number of processes are still manual, the Colle ge is working toward an automated solution that will address the concerns noted in the audit.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 53 College of the North Atlantic 2.A POSITION CLASSIFICATION NOT APPROVED The College acknowledges the position in question has not been submitted to the Classification and Compensation Division of the Human Resource Secretariat for classification. The Co llege is committed to ensuring all positions are classified as per government policy and assigned this responsibility to the Co llege’s Manager of Compensation and Benefits for compliance.

Since December 2012 the College has re-profiled some positions with the Human Resources division and one manager is now responsible for all classification actions. Reimbursement of Relocation Expenses The employee was required to relocate as a condition of her employment with CNA.

While the Auditor General has corr ectly stated that relocation expense policies of government and the College contemplate reimbursement of costs associated with the sale of the employee ’s principal residence, given that the relocation policies strive to achieve lo west cost relocation options, and given that the costs incurred by the employee to lease the principal residence were lower than the costs which would have been incurred had the employee sold the principal residence, her relocation claim was approved.

In the case of the second employee id entified the College will review the claim and take appropriate action regarding the identified underpayment. 2.B EMPLOYEE LEAVE Leave Procedure Not Documented The College follows the leave policy as documented on the Human Resource Secretariat website and the relevant co llective agreements governing College employees. The College is presently developing its own policy and procedure consistent with Government policy to addr ess the issues raised in the auditor report in addition to implementing a PeopleSoft module to track employee leave.

Leave Issues Raised in Auditor Reports The introduction of the PeopleSoft modul e will enable the College to address the segregation of duties, managerial oversight, documentation and reconciliation issues identified by th e College’s internal audit staff. The module will also aid the College in producing accurate employee leave entitlement financial reports.

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Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic Leave Forms Not Always on File The introduction of the PeopleSoft m odule will eliminate the paper leave documents and track leave requests, approvals and usage reducing the likelihood of these types of errors. Leave Forms Do Not Include Approval Date Once the new PeopleSoft module is impl emented the process will be fully automated. In the mean time the current leave forms will be revised to include the date of approval by the supervisor as noted in the AG report.

Excess Annual Leave Carried Forward The College acknowledges there ar e a number of employees who have accumulated and carried forward more than their annual entitlement. There are a number of employees who accumulated excess annual leave while on long term sick leave as permitted unde r their collective agreement. These employees were unable to take the required amount of leave. The College will work with these employees to eliminat e any leave in exce ss of the normal annual entitlement.

Contract employees assigned to the Qatar campus are paid from project funds in Qatar and do not carry annual le ave liabilities over to CNA. All leave is paid out to employees at the end of their final contract in Qatar. The employee in question has been paid as not ed in the audit report at no expense to the College. Doctor Notes Not Always on File to Support Sick Leave The College will review all sick leave balances and take appropriate action to ensure notes are on file in complian ce with sick leave policy and respective collective agreements.

Leave Overdrawn Annual Leave The leave balances noted were fo r 2010 and 2011. Once the employees have been identified to the College, a revi ew of their current balances will be conducted. Sick Leave There are instances of employees being overdrawn however balances are normally recovered in the following yea r or upon termination if no new leave is earned.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.2, January 2013 55 College of the North Atlantic Recalculation of Leave Identified Errors The College is conducting a review of leave balances including entitlement and balances as part of the implementation of its new PeopleSoft module. Other Leave Issues The College acknowledges the splitting of termination benefits was incorrect and will take necessary action to ensure full compliance in the future. 2.C.

EMPLOYEE OVERTIME, APPROVAL OF OVERTIME, ERRORS IN OVERTIME RECORDS, OVERDRAWN FROM THEIR OVERTIME BANKS, OTHER OVERTIME ISSUES The College acknowledges there have been issues with the approval and recording of overtime and is taking step s to improve its pr ocesses. Employee Overtime is a concern that involves a ll departments of the College. First of all, the College’s Hours of Work an d Overtime Policy is now under review. Both the NL and Qatar operations are developing parallel policy and procedure documents.

The issue of pr e-approvals is being addressed and any incomplete forms are being returned immediately to the supervisor for appropriate action. College supervisors will ensure that the policy is strictly adhered to and communicate that this ty pe of practice is unacceptable. HR staff will also be more diligent in addressing issues related to overtime documentation. The PeopleSoft module will provide a system to allow better management of overtime with the preapproval as a requirement for submission of overtime for payment.

The overdrawn overtime banks will be reviewed and individual files will be adjusted as required.

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Part 3.2, January 2013 A uditor General of Newfoundland and Labrador College of the North Atlantic

PART 3.3 DEPARTMENT OF ADV ANCED EDUCATION AND SKILLS INOME SUPPORT AND ACCOUNTS RECEIV ABLE

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.3, January 2013 57 Income Support and Accounts Receivable Executive

Summary The Income Support Division of the De partment of Advanced Education and Skills (the Department) delivers programs, services and benefits to residents of Newfoundland and Labrador who require assistance. Our review identified concerns with accounts receivable and income support payments as well as other issues. Accounts Receivable The outstanding balance of income support overpayments has increased between March 31, 2009 and March 31, 2012. The number of clients with receivable balances has consistently increased from March 31, 2010 to March 31, 2012.

Our review of the accounts receivable information has indicated that:  overpayments that have been detected are not being evaluated on a timely basis;  the action memo process, which results in the recording of accounts receivable, was not being completed in a timely manner, which delayed the initiation of recovery and collection efforts;  evidence received in overpayment investigations was not being reviewed in a timely manner; and  accounts receivable were not being wr itten off in accordance with the Department’s Collections Policy Guide.

Our review also noted that the acco unts receivable bala nce includes amounts that the Department does not have the au thority to collect and credit balances exist due to processing errors. Income Support Payments Individuals and families who may be eligible for the Income Support Program can apply to the Department in order to receive financial benefits and other services to assist in meeting daily living expenses.

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Part 3.3, January 2013 A uditor General of Newfoundland and Labrador Income Support and Accounts Receivable Our review found that:  all allowable benefits were not paid to clients; and  stale-dated cheques and direct de posit rejections were not being investigated.

Other Findings Our review identified that:  the electronic Income and Employment Support Policy and Procedure Manual is not easy to navigate;  there are inefficiencies caused by the incompatibility of systems used by the Department; and  the system used by the Department to collect overpayments through the Federal Set-off Program limits the recovery of those overpayments as a result of only allowing one client with in a family unit to be set up in the system at a time.

Background Overview The Income, Employment and Youth Serv ices Branch (the Branch) of the Department of Advanced Education and Skills (the Department) is responsible for four divisions, includi ng the Income Support Division (the Division). The Division delivers programs, servic es and benefits to residents of Newfoundland and Labrador who requi re assistance. The policies and programs of the Division are guided by the Income and Employment Support Act (the Act) and the Income and Employment Support Regulations (the Regulations). Income Support Division The Division has 17 positions.

Figure 1 shows the organizational structure of the Division.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.3, January 2013 59 Income Support and Accounts Receivable Figure 1 Advanced Education and Skills Income Support Division Organizational Structure Source: Department of Advanced Education & Skills Assistant Deputy Minister ‐ Income, Employment and Youth Services Director of Income Support Division Manager of Income Support Program Coordinator ‐ Inquiries Unit Manager Income Support ‐ Eligibility Assurance Unit Telephone Eligibility Confirmation Interviewers

(3) Management Analyst II Canadian Pension Disability Project Clerk Typist III Policy & Program Development Specialist

(4) Management Analyst II Manager Emergency Social Services Clerk Steno II

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Part 3.3, January 2013 A uditor General of Newfoundland and Labrador Income Support and Accounts Receivable Income Support Program The Income Support Program (the Progr am) provides low income individuals and families with financial benefits and other services designed to assist in meeting their basic living requirements.

The services offered by the Program include:  basic assistance for food, clothing, shelter and other personal needs;  special allowances such as medical transportation, special diets, blind persons allowance and special needs assistance;  emergency and disaster services when required;  prescription drugs and medical equi pment and supplies provided through the Department of Health and Community Services;  services of Support App lication Social Workers who assist clients or members of the general pub lic to obtain support or ders or agreements on behalf of dependent children; and  referrals to other divisions, departme nts or agencies when clients are identified as having a specific need such as employment services and personal or family counselling.

The Corporate Services Branch and the Labour Market Development and Client Services Branch assist the Divi sion in its delivery of the Program. The Corporate Services Branch provides fi nancial and administrative services. The Labour Market Development and Client Services Branch provide regional services to clients. In instances where income support reci pients receive higher payments than they are entitled to, the overpayment must be repaid to the Department.

Table 1 shows the number of Income Support offices, by region, operating in the Province as at March 31, 2012, as well as related income support benefits paid in the year and receivable balances.

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.3, January 2013 61 Income Support and Accounts Receivable Table 1 Advanced Education and Skills Income Support Information by Region As at and for the Year Ended March 31, 2012 Source: Department of Advanced Education and Skills Region District Offices Income Support Benefits Accounts Receivable Balances Amounts Paid Number of Cases Avalon 8 $118,808,742 15,655 $22,637,564 Central 11 58,719,692 8,365 5,764,936 Western 7 6,378,647 1,108 4,074,333 Labrador 6 42,708,516 6,179 1,531,333 Total 32 $226,615,597 31,307 $34,008,166 During the year ended March 31, 2012, income support benefits totaling $226.6 million were paid to 31,307 income support cases.

Cases represent single individuals and also families who may have more than one client within the family. There were 18,985 clients who had an out standing receivable balance as at March 31, 2012. Some clients may no longer be receiving income support. Objectives and Scope Objectives The objectives of our review were to determine whether:  overpayments were recorded as ac counts receivable and collected on a timely basis; and  payments to recipients were in accordance with the Act and Regulations and Department policy.

Scope Our review was completed in Novemb er 2012 and covered the period April 2010 to November 2012. It included interv iews with Department officials, an examination of Department policies an d procedures, and testing to ensure compliance with the Act and Regulations and Department policy.

62 Annual Report,

Part 3.3, January 2013 A uditor General of Newfoundland and Labrador Income Support and Accounts Receivable Detailed Observations This report provides detailed findings and recommendations in the following sections: 1. Accounts Receivable 2. Income Support Payments 3. Other Findings 1. Accounts Receivable Overview The outstanding balance of income support overpayments has increased between March 31, 2009 and March 31, 2012. Table 2 shows the accounts receivable ba lance for the fiscal years ended March 31, 2009 through to March 31, 2012.

Table 2 Advanced Education and Skills Income Support - Accounts Receivable For the Years Ended March 31 2009 2010 2011 2012 Total accounts receivable, opening $29,514,057 $29,116,558 $28,901, 935 $31,024,871 New overpayments arising during year 5,278,119 4,312,564 6,090,845 7,752,090 Collections during year (4,502,559) (4,241,624) (3,808,763) (3,788,307) Write offs (1,575,379) (692,269) (208,959) (1,062,436) Other adjustments 402,320 406,706 49,813 81,948 Total accounts receivable, closing $29,116,558 $28,901,935 $31,024, 871 $34,008,166 Allowance for doubtful accounts (16,937,389) (17,048, 978) (18,165,082) (19,598,227) Net receivable $12,179,169 $11,852,957 $12,859,789 $14,409,939 Source: Department of Advanced Education and Skills

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.3, January 2013 63 Income Support and Accounts Receivable As shown in Table 2, the accounts rece ivable balance has increased from $29,116,558 as at March 31, 2009 to $34,008,166 as at March 31, 2012, an increase of $4,891,608, or 16.8%. Table 3 stratifies the account receivab le balances based on amounts owing by clients.

Table 3 Advanced Education and Skills Income Support - Accounts Receivable Stratification of Balances Owing For the Years Ended March 31 Source: Department of Advanced Education and Skills The number of clients in each strata , as well as balances owing, has increased over the past three years. The average balance owing overall has also increased over the past three years. As of March 31, 2012, there were 8 accounts with a balance owing in excess of $50,000. These 8 accounts totaled $452,836 and had an average balance per client of $56,605.

Amount 2010 2011 2012 # Balance Average # Balance Average # Balance Average > $50,000 5 $287,751 57,550 7 $404,935 57,848 8 $452,836 56,605 $25,000- 50,000 45 1,440,916 32,020 50 1,616,893 32,338 54 1,744,737 32,310 $10,000- 25,000 405 5,876,203 14,509 467 6,791,815 14,544 532 7,729,932 14,530 < $10,000 17,343 21,297,065 1,228 18,052 22,211,228 1,230 18,391 24,080,661 1,309 Total 17,798 $28,901,935 $1,624 18,576 $31,024,871 $1,670 18,985 $34,008,166 $1,791

64 Annual Report,

Part 3.3, January 2013 A uditor General of Newfoundland and Labrador Income Support and Accounts Receivable Reasons for overpayments Overpayments can arise for a variety of reasons. Table 4 summarizes the main reasons for overpayments outstanding as of March 31, 2012.

Table 4 Advanced Education and Skills Income Support Receivable by Type As at March 31, 2012 Type # of Instances % of total Balance % of total Average receivable Overlap of income support and other income 14,304 40.1% $19,486,251 57.3% $1,362 False pretenses 1,463 4.1% 5,392,302 15.9% 3,686 Overpayment resulting from change in client circumstances 3,323 9.3% 2,367,113 7.0% 712 Security deposit 6,579 18.5% 1,240,176 3.6% 189 Client incarcerated 1,624 4.6% 1,137,469 3.3% 700 Other reasons 8,340 23.4% 4,384,855 12.9% 526 Total 35,633 $34,008,166 $954 Source: Department of Advanced Education and Skills Overlap of income support and other income occurs when a recipient receives income support benefits at the same tim e they receive other income, such as employment earnings, employment insura nce or CPP.

In excess of 50% of the cases where there was an overlap in income support and other income was due to undeclared earnings. False pretenses overpayments occur wh en a recipient knowingly receives income support benefits to which they were not entitled. False pretenses had the highest average receivable as at March 31, 2012 at $3,686. During our review, we identified issu es in the following areas related to income support accounts receivable: A. Detection of Overpayments B. Action Memos C. Collections

Auditor General of Newfoundland and Labrador Annual Report,

Part 3.3, January 2013 65 Income Support and Accounts Receivable 1A. Detection of Overpayments Introduction Overpayments arise for a variety of r easons. One of the to ols utilized by the Department to detect overpayments is a computer interface with various Federal and Provincial programs. Interface results not being evaluated on a timely basis An interface allows different comput er systems to share or exchange information with each other.

The Department interfaces with various Federal and Provincial entities or programs, su ch as the Canada Revenue Agency, Workplace Health, Safety and Comp ensation Commission and Employment Insurance. The Department sends an electronic file of income support recipients to the organizations responsible for those programs. The organization compares the Department file against its own files based on social in surance numbers. The organization then returns a file containing comparison information for each of the income recipients in the Department’s electronic file.

The interface results are then distributed to regional Department offices for action. We reviewed a sample of 20 overpayme nts which arose in the fiscal year ended March 31, 2012. In 6 of the 20 items we reviewed, over a year had elapsed between the date the Department received the results of the interface and the date the receivable was created. In 1 of these 6 instances, a receivable totaling $14,971 was created in December 2011 rela ted to earnings in 2006, 2008, and 2009. However, these earnings were reported to the Department in 2008, 2009 and 2010, respectively.

Furthermore, the result s of the client’s 2007 earnings also resulted in an overpayment which was recorded as a receivable in 2010. If the review of results had been performed on a more timely basis, the payments to this client could potentially have been adjusted earlier, resulting in a lower receivable. Int

Document details

Collection	Newfoundland and Labrador — Committees
Citation	business_electronicdocuments_agar2012
Type	committee
Volume / chapter	business_electronicdocuments_agar2012.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	da2b05d8cd3acee940aa3226943c5d94d936ebe9

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