Audit of the Treasury Board of Canada Secretariat within the context of the 2011–2012 Strategic and Operating Review

What we examined

The Office of the Commissioner of Official Languages conducted an audit of the Treasury Board of Canada Secretariat (the Secretariat) from March to December 2014 to determine how well the Secretariat is meeting its language obligations under Part VII of the Official Languages Act (the Act) during expenditure reviews. The audit focused specifically on the 2011–2012 Strategic and Operating Review (SOR), also known as the Deficit Reduction Action Plan. Our examination focused solely on the requirement to take positive measures that support and assist the development of official language minority communities.

The audit had two objectives: to determine whether the Secretariat, as the central agency responsible for the administration of expenditure reviews, had a planning strategy for the SOR that took into account its obligations under Part VII of the Act; and to determine whether the Secretariat could demonstrate that it took these obligations into account when conducting analyses in view of providing recommendations on proposals submitted by federal institutions during the SOR.

More details about the audit methodology are in the “About the audit” section at the end of this report.

Why this audit is important

Expenditure reviews are mechanisms used periodically to allow the government to review program spending and reallocate funding to programs that are a priority for Canadians, while also ensuring value for money in government spending. The SOR was a one-year, in-depth, government-wide exercise announced in Budget 2011. Its objective was to achieve at least $4 billion in ongoing annual savings in 2014–2015 so that the government could achieve its objective of returning to a balanced budget.

When considering major changes, such as budget cuts or the creation or elimination of programs, decision makers must not proceed blindly. They must ensure that they meet their obligations under the law, including those obligations under the Act. Failing to take the Act and its obligations into account during these types of reviews can have a severe impact on Canadians, especially those in minority groups like official language minority communities. The Commissioner of Official Languages has noted the adverse effects that previous government expenditure reviews have had on these communities, and he has urged the federal government to take the necessary corrective measures to comply fully with the Act by understanding the needs of official language minority communities and taking them into account during expenditure reviews.

What we found

• There was little evidence of any strategy to help the Secretariat meet its Part VII obligations during the SOR. For instance, the Secretariat’s official languages action plan did not include any SOR-related measures or activities.
• There was a lack of clarity and some internal confusion regarding who was responsible for ensuring compliance with Part VII during the SOR. A clear official languages accountability framework would help the Secretariat to define these roles and create specific accountabilities.
• During the SOR, the Secretariat provided no specific guidance to federal institutions on their obligation to analyze and mitigate the potential negative impacts on official language minority communities. Its guidance referred to official languages only in a general manner.
• During the SOR, the Secretariat had sufficient capacity, with respect to the number of analysts, to ensure that potential impacts on official language minority communities were taken into full account during the analysis of proposals. Analysts were provided with clear information on official languages to assist with their analyses and received sufficient support from specialists. However, this information was not provided early enough in the process to help analysts when they were interacting with institutions in the proposal-drafting phase.
• We were not able to gain access to certain documents, including institutional proposals, because the Secretariat claimed that they were protected under Cabinet confidence. We were therefore unable to conclude as to whether the Secretariat took measures to ensure that federal institutions participating in the SOR took the needs of official language minority communities into account in their own analysis. We were also unable to conclude as to whether the Secretariat took the institutions’ analysis into account when preparing recommendations to the Treasury Board.

The Commissioner of Official Languages has made three recommendations to the Secretariat to help it meet its Part VII obligations during expenditure reviews.

We are satisfied with the measures proposed for recommendations recommendation 1 and recommendation 2. However, we are only partially satisfied with the measures proposed in response to recommendation 3. These recommendations, the Secretariat’s comments and action plan for implementing the recommendations, and the Commissioner’s comments all appear in Appendix B of this report. We maintain that the Secretariat must implement all of the recommendations to meet its obligations under Part VII of the Act.

Obligations of the Secretariat under the Official Languages Act

Under subsection 46(1) of Part VIII of the Official Languages Act (the Act), “the Treasury Board has responsibility for the general direction and coordination of the policies and programs of the Government of Canada relating to the implementation of Parts IV, V and VI in all federal institutions.” The Secretariat supports the Treasury Board in these functions.

As a federal institution, the Secretariat has obligations under Parts IV, V, VI and VII of the Act. This audit focused solely on its obligations under Part VII of the Act. Under subsection 41(2) of Part VII of the Act, federal institutions are required to take positive measures that support and assist the development of official language minority communities and that foster the full recognition and use of English and French in Canadian society. This audit focused solely on the requirement to take positive measures that support and assist the development of official language minority communities. The obligation to take positive measures means that institutions must adopt a proactive and systematic approach that takes into account the needs and interests of official language minority communities. It also means that if an institution sees the possibility of its decisions or activities having a negative impact on official language minority communities, it must take measures to mitigate this impact.

For example, as federal institutions develop spending proposals and submissions, review their policies and directives, or assess their programs, they need to conduct these activities in accordance with the obligation set out in subsection 41(2) of the Act. This obligation applies to the Secretariat during all activities or exercises it is responsible for administering, including updating directives and policies or overseeing and providing support, guidance and advice during budgetary expenditure reviews or operational reviews.

The Secretariat would therefore be expected to do the following during expenditure reviews in order to take into account its obligations under Part VII of the Act in the context of the role and responsibility accorded to it as the administrative arm of the Treasury Board:

• Provide federal institutions with guidance and support, including the information they need to help them determine whether their proposals have an impact on the vitality of official language minority communities in Canada and on the full recognition and use of both English and French in Canadian society;
• Analyze and challenge federal institutions’ proposals to determine whether the program changes suggested in the proposals could have potential repercussions on the vitality of official language minority communities;
• Inform the Treasury Board or the Strategic and Operating Review Committee (SORC) of the results of this analysis and present the options provided by the institutions that could mitigate or eliminate any potential negative impact of SOR-related decisions on the vitality of official language minority communities;
• If the implementation of decisions is being monitored, analyze whether there have been negative effects on the vitality of official language minority communities and report any potential negative impact to the Treasury Board. (Note that this action was not examined during the audit.)

It is important to note that the obligations the Secretariat must fulfill as the administrative arm of the Treasury Board during the oversight of government-wide initiatives, such as expenditure reviews, do not diminish or negate other federal institutions’ obligations under the Act. All federal institutions are responsible for ensuring that the proposals they submit during expenditure reviews comply with the Act.

It is also important to make the distinction between the responsibilities of the Secretariat and the responsibilities of Canadian Heritage in relation to Part VII of the Act. Under Part VII, the Minister of Canadian Heritage is required to encourage and promote a coordinated approach to federal institutions’ implementation of the commitments set out in section 41 of the Act. Generally, Canadian Heritage has a coordination role under Part VII that is characterized by awareness-raising and monitoring, whereas federal institutions, including the Secretariat, are responsible for meeting their own Part VII obligations in the course of their activities, as previously stated.

Context

Since the beginning of his mandate in 2006, the Commissioner of Official Languages has intervened three times with the Secretariat regarding expenditure reviews. In his 2012–2013 annual report, the Commissioner commented on the potential negative impacts that might arise as a result of cutting or changing programs in reaction to expenditure reviews. In that report, he committed to monitoring issues related to budget cuts very closely over the coming years. This audit is one of the initiatives included in this ongoing monitoring. As well, the Commissioner wrote to the Secretary of the Treasury Board in May 2010 to ensure that obligations under Part VII of the Act would be factored into the decision-making process for the upcoming expenditure reviews. The Secretary at the time responded in July 2010, stating that while the current round of expenditure reviews was well underway, the Secretariat would consider ways to adjust the expenditure review process in the next cycle of reviews, which would begin in 2011. The Commissioner also recommended in his 2007–2008 annual report that the Secretariat (the lead federal institution for expenditure reviews) take the necessary steps to ensure expenditure and similar reviews within the federal government are designed and conducted in full compliance with the commitments, duties and roles prescribed in Part VII of the Act.

Audit objective

The main objective of this audit was to verify how the Secretariat complied with Part VII of the Act during the SOR, also known as the Deficit Reduction Action Plan. The audit examined the planning and analysis phases of the SOR. It specifically sought to determine how well the Secretariat met its language obligations during the SOR in terms of confirming that federal institutions took concrete measures to ensure that they did not adversely affect the vitality of official language minority communities under Part VII of the Act.

More details about the audit methodology are in the “About the audit” section at the end of this report. Appendix A provides information on the audit objectives and criteria.

Official languages accountability framework

An official languages accountability framework establishes the guiding principles for the effective management of an institution’s official languages program. It also establishes and defines the roles and responsibilities of the official languages champion, senior executives, managers, team leaders and all employees who have obligations under the Act. The Secretariat does not have an official languages accountability framework. It submitted an excerpt from its Official Languages Action Plan for 2012-2015 as a substitute for an accountability framework. This document outlines the roles related to official languages for members of the Secretariat’s Executive Committee, managers, employees and members of the Departmental Advisory Committee on Official Languages.

The analysis of this document showed that it does not include all the information that would be expected in an official languages accountability framework. There are no references to roles such as an official languages champion or a national coordinator for the implementation of section 41 of the Act. Interviews revealed that the Secretariat has named individuals to fulfill these two roles. The document does not contain information related to the coordination of the official languages program or how the various individuals with responsibilities will be held accountable.

An official languages accountability framework would be expected to include references to obligations under all parts of the Act under which the institution has responsibilities. The information on roles and responsibilities provided in the Official Languages Action Plan for 2012-2015 primarily references responsibilities that deal with the internal official languages program, such as duties under Part V of the Act. The only reference to responsibilities under Part VII of the Act relates to promoting awareness of the two official language groups among the Secretariat’s employees. There are no references to other responsibilities under Part VII of the Act, such as taking positive measures that support and assist the development of official language minority communities.

An official languages accountability framework would also be expected to cover official languages responsibilities related to all of the institution’s key activities. During this audit, it was a challenge to understand which part of the Secretariat was accountable for ensuring that official languages were part of the decision-making process during the SOR. After a number of interviews, it was still unclear as to which part of the Secretariat was responsible for providing institutions with the necessary guidance and support during the SOR to be able to determine whether the initiatives in their proposals would have an impact on the vitality of official language minority communities.

The challenges related to clarifying official languages accountabilities at the Secretariat were compounded by the fact that the institution is responsible for supporting the Treasury Board in meeting its obligations under Part VIII of the Act. Under this part of the Act, the Treasury Board is responsible for the general direction and coordination of the federal government’s policies and programs relating to the implementation of Parts IV, V and VI of the Act. This responsibility primarily consists of two roles: helping federal institutions to understand and meet their obligations, and monitoring federal institutions and reporting on the results. Interviews confirmed that the Official Languages Centre of Excellence (OLCE) is the part of the Secretariat responsible for administering the official languages program as it relates to supporting the Treasury Board in its responsibilities under Part VIII of the Act. However, interviews also revealed that the OLCE does not have any responsibilities related to the administration of Part VII of the Act in support of the Secretariat’s programs, activities or exercises.

Given the OLCE’s role to provide advice and support to all federal institutions in terms of Parts IV, V and VI of the Act, some Secretariat representatives who were interviewed stated that official languages-related guidance for institutions, including Part VII of the Act, would have been provided by the OLCE during the SOR. However, the OLCE representative repeatedly maintained that the OLCE was responsible only for providing ongoing guidance to institutions with respect to Parts IV, V and VI of the Act. Although Part VIII of the Act sets out the Treasury Board’s responsibilities, the roles outlined in the Official Languages Action Plan for 2012-2015 make no mention of which part of the Secretariat, as the administrative arm of the Treasury Board, is responsible for administering the program related to the obligations under Part VIII of the Act, nor does it mention any of the OLCE’s other responsibilities. To clarify the various roles and responsibilities within the Secretariat, a full and complete official languages accountability framework at the Secretariat would be expected to make a clear distinction between the roles and responsibilities for administering the Treasury Board’s obligations under Part VIII of the Act and its obligations as a regular federal institution under all parts of the Act, including Part VII.

During the audit, we received a draft copy of the Secretariat’s Official Languages Roles and Responsibilities to be included in its 2015–2018 official languages action plan. In this document, the Secretariat included responsibilities related to the OLCE as well as the division responsible for the official languages program within the Secretariat. This is a positive first step; however, we believe accountability mechanisms and further clarifications on roles related to official languages in all Secretariat activities are required to ensure that Part VII obligations are met.

Policies, guidelines and standards

During interviews, representatives of the Secretariat stated that no specific policies, guidelines or standards had been developed to help ensure that the Secretariat takes its Part VII obligations into account during expenditure review exercises. When guidance for each expenditure review process takes Part VII obligations into full account, separate policies and guidelines are not necessarily required. However, without an overarching policy, guideline or accountability framework that sets out obligations during expenditure reviews, there is a risk that institutions will not consistently ensure that their Part VII obligations are taken into account in every exercise. We encourage the Secretariat to create guidelines on proposal writing for expenditure reviews that include information, guidance, advice and explanations on applying Part VII of the Act during an expenditure review process.

b) Verify that the Treasury Board of Canada Secretariat, when assisting institutions in preparing their Strategic and Operating Review proposals, had developed and provided institutions with policies, tools and directives that provided specific guidance on the institutions’ obligation to analyze the potential impact on official language minority communities.

Secretariat activities verified

The Secretariat has a dual mandate of supporting the Treasury Board and fulfilling its responsibilities as a central agency.

When working with federal departments, agencies and Crown corporations, the Secretariat plays three central agency roles:

• A leadership role in driving and modeling excellence in public sector management and in identifying and launching government-wide horizontal initiatives that target administrative efficiencies;
• A challenge and oversight role that includes reporting on the government’s management and budgetary performance and developing government-wide management policies and standards; and
• A community enabling role to help organizations improve management performance.^{Footnote 1}

The audit focused primarily on the Secretariat’s first two central agency roles, specifically on those functions in the context of the SOR. The purpose of the SOR was to improve the efficiency and effectiveness of government operations and programs so that the federal budget could be balanced in 2014–2015. The SOR was announced in Budget 2011, and the results of the SOR were presented in Budget 2012. Budget 2011 also announced that the SOR would be led by the President of the Treasury Board, who would chair the committee responsible for assessing departmental proposals. As the administrative arm of the Treasury Board, the Secretariat was responsible for the administration and organization of the SOR.

Scope and approach

This audit of the Secretariat was conducted from March 2014 to December 2014. Although the initial meeting with the institution, including the presentation of objectives and criteria, took place in March 2014, the Office of the Commissioner had initiated exchanges with the Secretariat as early as August 2013 in order to determine what types of information it might be able to access in the context of the audit.

The audit sought to evaluate the Secretariat’s obligations under Part VII of the Act during the SOR. During the audit, we examined the information and documents that had been developed and used in the context of the SOR. In particular, SOR-related guidelines, templates, action plans and other documents and processes were reviewed, as well as processes related to official languages. We also planned to review documents referring to the Secretariat’s analysis process, such as file notes, meeting minutes, analysis grids and any portions of proposals that referred to official languages in the context of the SOR. However, this information was not provided, because the Secretariat cited Cabinet confidence. During the audit, we met with more than a dozen Secretariat representatives, including executives, managers, analysts and specialists, who were involved either in the SOR analysis process or in the Secretariat’s official languages program.

We would like to thank the Secretariat’s internal audit unit for its ongoing cooperation and assistance during this audit.

Audit Team

Pierre Coulombe
Director, Performance Measurement

Johanne Morin
Assistant Director, Audit and Evaluation Unit

Chantal Bois
Senior Auditor

Tracy Ferne
Senior Auditor

Objective 1

Objective 2: No recommendations