Internal Audit of Three Third Party Service Level Agreements

(Click to read the Management Response and Action Plan.)

---

Final Report – September 3, 2019

Disclaimer
This Internal Audit report of Three Third Party Service Level Agreements has been prepared on a confidential basis for the internal use of PSIC. No representation or warranty is provided that the information contained in this report is accurate, complete, sufficient or appropriate for use by any person or entity other than PSIC. This Internal Audit report of Three Third Party Service Level Agreements may not be relied upon by any person or entity other than PSIC, and any and all responsibility or liability to any such person or entity in connection with their use of this Internal Audit report of Three Third Party Service Level Agreements is hereby disclaimed.

---

Acronyms

• CHRC: Canadian Human Rights Commission
• IM/IT: Information Management / Information Technology
• FAA: Financial Administration Act
• HR: Human Resources
• MOU: Memorandum of Understanding
• PSIC: Office of the Public Sector Integrity Commissioner of Canada
• PSPC: Public Service and Procurement Canada
• SHRS: Shared Human Resources Services
• TBS: Treasury Board Secretariat of Canada

---

Executive Summary

The Office of the Public Sector Integrity Commissioner has entered into three service level agreements with other Government of Canada departments for the procurement of internal support services. SHRS-PSPC is providing HR workforce and workplace services as well as compensation services. CHRC is providing financial management, IM/IT administration and procurement and My GCHR support services (My GCHR Help Desk and reporting). Compensation services were transferred from CHRC to SHRS-PSPC effective June 11, 2018.

The objective of the audit of three third party service level agreements was to determine whether terms of MOUs are being respected and that services are delivered in an effective and efficient manner and represent value for money.

Although the services delivered by third party organizations were found to be effective overall, the following observations were identified as management processes that could be improved for efficiency and value for money:

• Clarity of roles and responsibilities as described in the MOU is key to effective and efficient service delivery by the third party delivery organization. Changes to the services delivered by CHRC that occurred in FY 2018–19 have not been documented or reflected in the MOU, and may not be clearly understood by the service provider.
• Additional information or explanation in regards to the fees charged to PSIC by CHRC and SHRS-PSPC for services delivered has not been requested and/or reviewed to ensure value for money of the services being delivered to PSIC.
• Services for My GCHR support and reporting are currently delivered by CHRC for a fee, but the same services could be delivered by SHRS-PSPC under a fixed fee arrangement and optimize value for money.
• Key operational processes are not documented or formalized. Formalized processes with clear roles and responsibilities will create efficiencies when staff turnover or prolonged absences occur and provide guidance to PSIC management and employees.
• An IT Strategic plan has not been documented and formalized to ensure that IT infrastructure and applications are aligned with PSIC needs, and IM/IT internal services are effective and delivered efficiently.

The following eight recommendations were identified to help improve the effectiveness, efficiency and value for money of the service delivery as described in the three third party service agreements:

1. The Deputy Commissioner PSIC, should enter into discussion to amend the MOU with CHRC to reflect the changes to the roles and responsibilities that have occurred to the compensation and IM/IT service delivery.
2. The Manager Financial Services PSIC should request a report that compares the fees charged to the incremental cost incurred by SHRS-PSPC; perform an assessment of the fixed fee structure compared to a variable fee structure and consider negotiating other fee arrangements to help ensure value for money of the service provided by SHRS-PSPC. This review could be performed once a year before the agreement is renewed.
3. The Manager Financial Services PSIC should request additional information that supports the forecasted fees charged on a monthly basis for Financial, HR and IM/IT services by CHRC, perform an assessment of the forecasted fees and consider negotiating other fee arrangements to help ensure value for money for the services provided by CHRC. This exercise could be performed annually or anytime a significant change in roles and responsibilities occurs.
4. The Deputy Commissioner PSIC should contact the Director, Integrated Services Branch, Shared Services Integrated Sector, PSPC to discuss the possibility of transitioning the My GCHR support services and reporting to SHRS-PSPC and negotiate any associated cost.
5. The Manager, Executive Services PSIC should document the key HR processes, identifying the roles and responsibilities and share this information with key PSIC Management.
6. The Deputy Commissioner should identify and coordinate training for a second individual within the current PSIC structure that would act as a back-up to the Manager Executive Services.
7. The Deputy Commissioner PSIC should procure the service of an IT consultant to help the Manager Financial Services draft an IT strategic plan. The IT strategic plan should include an evaluation of the service delivery options available to PSIC.
8. The Deputy Commissioner PSIC should seek to participate in client satisfaction surveys and, in the absence of client satisfaction surveys, initiate regular discussions with the service provider to highlight best practices, issues needing resolution and areas for improvement to promote possible process efficiency.

Management response
PSIC accepts the Final Report submitted by KPMG on September 3, 2019 pertaining to the Internal Audit of Three Third Party Service Level Agreements and agrees to implement each of the eight recommendations provided therein. Details on the implementation of each of the recommendations will be laid out in a separate action plan which will form part of PSIC’s formal Management Response to the Internal Audit of its Three Third Party Service Level Agreements.

Background

The Public Sector Integrity Commissioner is an Agent of Parliament with approximately 30 employees reporting directly to Parliament. Due to the size of the organization and to improve efficiencies within the government of Canada Department, PSIC has entered into MOUs with other Government departments to provide Finance, HR, Administrative and Information Technology internal support service. There are currently three agreements in place as follows:

1. MOU between SHRS-PSPC and the PSIC for the provision of Shared Human Resource Services – Workforce and Workplace services for the period of April 1, 2018 to March 31, 2019 and April 1, 2019 to March 31, 2020.
2. MOU between SHRS, PSPC and PSIC for the provision of Shared Human Resource Services – Compensation Services for the period of June 11, 2018 to March 31, 2019 and April 1, 2019 to March 31, 2020.
3. MOU between CHRC and PSIC for the provision of Financial Management, IM/IT, Administration and Procurement and Human Resources Services for the period of July 1, 2017 to June 30, 2020.

Audit Objective and Scope

The objective of the audit of three third party service level agreements was to determine whether terms of MOUs are being respected and that services are delivered in an effective and efficient manner. More specifically, the key areas covered by this internal audit included:

• to assess compliance of service providers with the terms and conditions of the MOUs;
• to assess the effectiveness of services provided by CHRC and SHRS-PSPC; and
• to assess the efficiency of services provided by CHRC and SHRS-PSPC.

The scope of this audit covered the timeframe from April 2018 to July 2019. The audit focused on processes and results of services delivered to PSIC and excluded processes and controls in place at the third party delivery organizations’ locations.

Approach and Methodology

The internal audit of three third party service level agreements, as stated in PSIC’s 2018–23 Integrated Risk-Based Audit and Evaluation Plan was conducted in accordance with the audit plan. The principal audit techniques used included:

• Interviews with key individuals at PSIC, CHRC and SHRS-PSPC. See Appendix B for a detailed list of interviewees;
• Review of relevant documentation related to the three MOUs in place including the MOUs, sample of invoices received from the service providers, sample communication between PSIC and the service providers; and
• Assessment of the compliance, effectiveness and efficiency of the MOUs and the management practices related to the MOUs.

The approach used to address the audit objective included the development of audit criteria against which observations, assessments, and conclusions were drawn. The audit criteria developed for this audit are included in Appendix A.

Findings and Recommendations

Audit findings and related recommendations are presented below.

Management of the MOUs

Changes to services offered by CHRC

Internal audit reviewed the services listed in the MOUs with PSIC Management and third party service delivery organizations and found that services listed in the MOUs with CHRC and SHRS-PSPC are offered as described to PSIC except for the following:

• Compensation services are no longer offered by CHRC but by SHRS-PSPC since June 2018.
• IT hotline services are no longer offered by CHRC, they are now provided in-house by the IM/IT Program Support Analyst since May 2018.
• Network and e-mail account creation and set-up are no longer offered by CHRC, they are now provided in-house by the IM/IT Program Support Analyst since May 2018.
• Set-up of remote access services (Mobil keys) and IT Security are no longer offered by CHRC, they are now provided in-house by the IM/IT Program Support Analyst since May 2018.

CHRC advised PSIC that they could no longer offer compensation services due to a lack of internal resources, and consequently PSIC entered into an MOU with SHRS-PSPC to provide the services no longer being offered by CHRC. Documentation to the effect that these services were no longer being offered could not be provided since the decision was verbally communicated to the previous Deputy Commissioner.

Consultation with PSIC Management identified that PSIC was unhappy with CHRC’s response time to service requests for IM/IT services. It was explained that the response time by CHRC varied based on the internal organization of CHRC’s IM/IT group. Following a strategic decision by PSIC, an IM/IT resource that is on-site and dedicated 100% to PSIC needs was hired in May 2018. Historically, CHRC assigned one IM/IT Program Support Analyst dedicated to PSIC. When this changed and when CHRC reorganized the duties and responsibilities of its service delivery team for IM/IT services response time to PSIC requests increased.

Observation
Changes to the roles and responsibilities in regards to compensation services and for IM/IT services occurred in 2018 and these changes are not reflected in the MOU with CHRC that ends June 30, 2020. Lack of documentation to clarify the roles and responsibilities can increase the risk of inefficiencies in the form of redundancy or delays. Although the MOU with CHRC was not amended, the fee forecasted and invoiced effective September 5, 2018 reflects that compensation and IM/IT support services by CHRC were no longer being provided.

Recommendation No. 1
The audit recommends that the Deputy Commissioner, PSIC should enter into discussion with the objective to amend the MOU with CHRC to reflect the changes to the roles and responsibilities that have occurred to the compensation and IM/IT service delivery.

Management comments
Management accepts this recommendation.

Fees charged by SHRS-PSPC

The fee charged to PSIC by SHRS-PSPC for HR workforce and workplace services as well as for compensation services is a fixed annual fee invoiced monthly. Per discussion with the service provider, these fees were negotiated with the previous Deputy Commissioner and were based on actual historical costs incurred by SHRS-PSPC to provide the services to PSIC.

SHRS-PSPC Management explained that SHRS-PSPC has a time tracking system in place and monitors closely the cost incurred in comparison to the fees charged to PSIC. It was also explained that PSIC is the only client organization of SHRS-PSPC that has a fixed fee agreement. All other client organizations pay a fee of $900/day, with time starting to be accumulated after 15 minutes of service. The $900/day fee is for all types of services.

SHRS-PSPC Management explained that this fee structure agreement was acceptable to both parties when negotiated, as PSIC believed that they had in the past spent more than the fixed fee as proposed by SHRS-PSPC, and SHRS-PSPC could plan on a minimum revenue to justify hiring personnel.

SHRS-PSPC Management stated that the last meeting to discuss fees and review the actual cost of the services delivered for the agreed fees was held with the former Deputy Commissioner PSIC before the start of the March 31, 2018 MOU. This could not be confirmed by PSIC Management; the former Deputy Commissioner retired June 27, 2018.

Observation
PSIC has not requested any additional information in the form of actual cost compared to the fee charged for services when renewing the MOUs with SHRS-PSPC April 1, 2019. It was also noted that this information is available on request and that in accordance with the TBS directive SHRS-PSPC is not allowed to charge more than incremental cost for the services provided to other government organizations.^[1] Even though the MOU is a fixed fee arrangement and SHRS-PSPC is not allowed to charge more than the incremental cost, it is good management practice for PSIC to ensure that the cost incurred by the service provider for the services offered per the MOU is equal or higher than the fee charged.

Recommendation No. 2
The audit recommends that the Manager Financial Services PSIC should request a report that compares the fees charged to the incremental cost incurred by SHRS-PSPC; perform an assessment of the fixed fee structure compared to a variable fee structure and consider negotiating other fee arrangements to help ensure value for money of the service provided by SHRS-PSPC. This review could be performed once a year before the agreement is renewed.

Management comments
Management accepts this recommendation.

Fee charged by CHRC

CHRC does not have a time tracking system in place, and relies on sample period time tracking exercises and on the volume of transactions or e-mail requests to estimate the level of effort required to provide various services to PSIC. Invoicing for the Financial, IM/IT and My GCHR support and reporting services offered by CHRC is based on estimates of annualized level of effort per person involved in the service offering. The fees invoiced are updated when a change in service level occurs, and the information provided to PSIC in regards to level of effort and fee structure has, in the past, been limited to a table similar to the tables included in the MOU showing number of days per CHRC staff estimated.

The following table illustrates the change in forecasted fees for the change in service level for compensation and IM/IT services:

	Forecasted fees charged on signature of MOU, April 2017	Forecasted fees charged effective February 2018	Forecasted fees charged effective September 2018
Total fees forecasted for HR services including compensation	$45,397	$51,552	$35,635
Total fee forecast for IM/IT services including the services for the IT Hotline support now performed in-house	$144,931	$151,843	$153,189

Based on the table above internal audit observed that:

• CHRC has reduced their total HR fee by $15,917 ($51,551 – $35,635) when they ceased to perform the compensation services. SHRS-PSPC charged a fixed fee of $3,125/month ($37,500/year) to perform the compensation services for the period of June 11, 2018 to March 31, 2019.
• CHRC has increased their total IM/IT fees by $1,346 ($153,189 – $151,843) since May 2018, even though the IT hotline support services are mostly performed by the in-house IM/IT Program Support Analysis.
• Effective September 2018, CHRC charges $35,635/year to provide My GCHR Help Desk available to all employees and reporting on a need-to-be basis and at year-end to the Manager, Executive Services.

Observation
Fees forecasted that are charged to PSIC by CHRC are based on estimates, without supporting documentation or explanations to substantiate the level of effort charged to PSIC. The following was noted during the analysis of fees charged by CHRC for IM/IT and HR services:

1. The Manager Financial Services could not provide additional context to explain why the total fee has remained stable for IM/IT, while many of the IM/IT services are being performed in-house since May 2018.
2. Per discussion with the Manager, Executive Services, compensation services used to represent approximately two thirds (67%) of the HR services previously provided by CHRC. Effective September 2018, CHRC reduced the fees by 30% ($15,917 / $51,552) to reflect that they no longer provide compensation services.
3. The forecasted fees effective September 2018 charged to PSIC by CHRC for IM/IT services does not appear to be reasonable given the changes in roles and responsibilities for the IT Hotline Support services since May 2018.
4. The forecasted fees effective September 2018 charged to PSIC by CHRC for HR services consisting of My GCHR Help Desk and reporting does not appear reasonable considering that compensation services were approximately 67% of the total HR services provided by CHRC, and fees were only reduced by 30%.
5. PSIC has not requested additional supporting documentation or explanation concerning the underlining justification for the forecasted fee adjustments that occurred September 2018.

It is good management practice for PSIC to ensure that the cost incurred by the service providers for the services offered per the MOU is equal or higher than the fee charged. PSIC should request additional information to help ensure that the services have been delivered and that the fee charged is reasonable. Without appropriate supporting documentation for the forecasted fees charged by CHRC, there is a risk that CHRC is overcharging PSIC.

Recommendation No. 3
The audit recommends that the Manager Financial Services PSIC, should request additional information that supports the forecasted fees charged on a monthly basis for Financial, HR and IM/IT services by CHRC; perform an assessment of the forecasted fees and consider negotiating other fee arrangements to help ensure value for money for the services provided by CHRC. This exercise could be performed annually or anytime a significant change in roles and responsibilities occurs.

Management comments
Management accepts this recommendation.

Duplication of service offer for My GCHR support and reporting

Internal audit compared the services offered as described in each of the MOU agreements and found that services related to My GCHR support and reporting was offered by both CHRC and SHRS-PSPC. The following table provides a description of the services offered in relation with My GCHR support and reporting and the organization currently delivering the service:

Description of Service	Delivered by CHRC	Delivered by SHRS-PSPC
Provide help desk assistance and Self-Service functionalities	X
Provide My GCHR reports	X
Perform data transfers as required		X
Perform data analysis and resolve data discrepancies/problems on error reports	X	X
Perform year-end activities related to the leave module	X
Provide access authorities when required (SACO)	X
Perform data transfers to TBS/PSPC (Position Classification Information System-PCIS, Leave Reporting System-LRS)	X	X

When the compensation services were transferred to SHRS-PSPC in June 2018, it was understood that SHRS-PSPC could not offer My GCHR support and reporting services and CHRC agreed to continue the provision of the services as identified above. Per discussion with SHRS-PSPC’s HR group, they provide these services to other organizations. SHRS-PSPC stated that they wanted to transition the compensation services before performing the My GCHR services as described above. The Manager Executive Services was told, as of the end of March 2019 that SHRS-PSPC did not have the capacity to offer reporting services, but when internal audit met with SHRS-PSPC in August 2019, they stated that they can perform all of the services as described in the MOU between SHRS-PSPC and PSIC.

Observation
PSIC is currently paying CHRC for My GCHR support services and reporting that could be delivered under the fixed fee agreement with SHRS-PSPC at no or minimal extra charge. CHRC invoices the equivalent of $35,635 for My GCHR services that they provide to PSIC. Therefore a potential maximum saving of approximately $35,635/year exists if SHRS-PSPC provide the services as described in the MOU and PSIC discontinues the My GCHR services that they still receive from CHRC.

Recommendation No. 4
The audit recommends that the Deputy Commissioner contact the Director, Integrated Services Branch, Shared Services Integrated Sector, PSPC to discuss the possibility of transitioning the My GCHR support services and reporting to SHRS-PSPC and negotiate any associated costs.

Management comments
Management accepts this recommendation.

Formalization of practice and documentation

Per discussion with PSIC Management, the audit found that procedures for financial, HR and IM/IT processes are undocumented except for the year-end financial close process provided annually by CHRC. Without documented procedures, delays and inefficiencies can occur when staff turnover or when an employee needs to be replaced for a prolonged absence. It is best practice for an organization to document its key operational processes. The HR process and IM/IT management process were identified as key and present a higher risk to the achievement of PSIC’s mandate by PSIC Management.

HR processes

All HR action requests are coordinated by the Manager Executive Services. She is the pivotal individual responsible for coordinating all HR actions with the service provider, SHRS-PSPC. She is also the person responsible for monitoring and reporting the HR actions in progress to the Executive Management Committee.

The audit found that when hiring, once the hiring process has been initiated and that SHRS-PSPC assigns an HR advisor to the case, the PSIC hiring manager will start to liaise directly with SHRS-PSPC HR advisor to create the assessment guides and perform interviews. Per discussion with PSIC Management, it is not clear, when the Manager HR Executive Services should be included in the communications with the HR Advisor. It was reported that the Manager Executive Services is made aware of HR file progress via e-mail and face-to-face exchanges and sometimes at the weekly management meetings or at the Executive Committee meetings. When PSIC Managers are in direct contact with SHRS-PSPC HR Advisors, Managers often forget or are unaware of when to keep the Manager Executive Services in the “loop” or notify when formal documents are required to action HR activities such as nomination of candidate, request for classification review, etc. which can cause delays and/or duplication of follow-ups.

An example is the hiring process, once the successful candidate has been identified, it is imperative that the Manager Executive Services be informed as she is responsible to ensure essential requirements of positions are met (ensure to request confirmation of security clearance and of language testing results), request drafting of the letter of offer and initiating the on-boarding process by communicating to appropriate individuals and service providers the new employee’s information for building access, IT access and payroll, etc.

Observation
The roles and responsibilities for completing an HR action are not well known by all PSIC Management and related processes and procedures are not documented. Informal and undocumented processes can create process inefficiencies in the form of delays and create frustrations. An HR process description identifying the various roles and responsibilities, in the form of a flowchart or checklist would be sufficient to allow Management involved in the various HR actions to understand the roles and responsibilities of each party involved.

Recommendation No. 5
The audit recommends that the Manager, Executive Services PSIC document the key HR processes, identifying the roles and responsibilities and share this information with key PSIC Management.

See Appendix C for an example of a diagram that could be shared within PSIC to illustrate the roles and responsibilities and the processes in place to complete an HR action.

Management comments
Management accepts this recommendation.

The Manager Executive services reported that in her absence, Management has direct access to the assigned SHRS-PSPC HR advisor to whom they can inquire about the status of their files, seek guidance and request that the service provider completes all necessary documentations to initiate HR actions or next steps for appropriate signatures. Therefore the service provider, if needed, can act as a back-up and a list of service provider contact person is available at the Manager Executive Services work station.

Observation
Even though the service provider can act as a back-up when the Manager Executive Service is absent, Management is not always aware of the processes and to which contact person they need to communicate to perform the required HR action, which may cause delays. Documented processes would provide guidance to Management and clarify roles and responsibilities. The training of a second individual at PSIC that would be knowledgeable of the HR processes would help ensure process efficiencies and provide assistance to Management when needed to initiate HR actions if the Manager Executive Service is not available.

Recommendation No. 6
The audit recommends that the Deputy Commissioner PSIC identify and coordinate training for a second individual within the current PSIC structure that would act as a back-up to the Manager Executive Services.

Management comments
Management accepts this recommendation.

IM/IT services provided by CHRC

PSIC Management communicated a high level of dissatisfaction in regards to IM/IT services provided by CHRC. To remedy some of the more pressing frustrations, PSIC hired an IM/IT Program Support Analyst, whose main duties are to provide user help for PSIC employees.

Per discussion with PSIC Management, it was noted that significant IM/IT upgrades will be necessary in the near future. The servers’ operating system needs to be upgraded before December 31, 2019 and the case management application will need to be changed as the current application is no longer supported. It was also identified that PSIC has not drafted an IT strategic plan to identify PSIC’s needs in regards to IM/IT.

It was observed that PSIC relies greatly on CHRC to provide guidance as PSIC does not possess the competencies in-house to prepare an IT strategy. It was communicated by CHRC that, per the MOU, they can provide guidance and advisory services, but PSIC “maintains responsibility for those services and remain fully accountable for those and any and all consequences which might flow from them.”^[2]

PSIC Management has communicated to Internal Audit that they have been dissatisfied with advice provided by CHRC. A root cause for this may be that a natural bias exists at CHRC when advising PSIC to procure the same network applications as CHRC has in place, as they already possess the training and expertise to manage these applications. Another root cause may be that PSICs needs may no longer be aligned with the IT infrastructure supported by CHRC. Other options have been considered by PSIC Management for the procurement of IM/IT services.

Before analyzing which service delivery model is best suited to PSIC’s needs, best practice would be for PSIC to create an IT strategic plan, to identify and communicate the IM/IT priorities, budgets and timelines and then determine which service model would be most efficient. CHRC communicated to internal audit that they are often called upon to act at the last minute, when a crisis is detected and this creates frustrations for both parties. An IT strategic plan would allow all parties to understand PSIC’s needs and set reasonable expectations for delivering the services and upgrades needed.

An effective IT strategic plan would consider the needs of all users towards the achievements of PSIC’s mandate. The case management application is an example of an IT application that is key to the achievement of PSIC’s mandate. An effective case management application can provide process efficiencies and the server operating system upgrade that will occur before December 31, 2019 needs to be compatible with the current and future case management application.

Observation
PSIC has not clearly articulated its IM/IT needs as an organization to help ensure that it achieves its mandate efficiently. Before considering making any changes to the service delivery model for IM/IT services, PSIC should clearly define its needs and priorities to provide guidance to employees, contractors and/or service delivery organizations. Internal audit also noted that PSIC does not possess in-house expertise to perform an IT strategic plan.

Recommendation No. 7
The audit recommends that the Deputy Commissioner PSIC procure the services of an IT consultant to help the Manager Financial Services draft an IT Strategic Plan. The IT Strategic Plan should include an evaluation of the service delivery options available to PSIC. An evaluation of options for service delivery model should be included in the IT Strategic Plan. Examples of options are: hiring an additional employee; procuring the services of a consultant or consulting firm; and, current service provider, CHRC.

Management comments
Management accepts this recommendation.

Monitoring

Monitoring of services provided by CHRC and SHRS-PSPC is conducted informally by the concerned PSIC employees and satisfaction is measured mostly anecdotally. HR and compensation activities are monitored by the Manager Executive Services, an HR activities report is updated regularly and reported to the Executive Committee Meeting every six weeks. Financial Services are monitored continually by the Manager Financial Services by ensuring that supplier and employee payments are timely, and that monthly and quarterly reports are produced as required. IM/IT services monitoring is mostly done through ad hoc meetings with the CIO of CHRC and weekly meetings between the IM/IT Program Support Analyst, PSIC and the Network and Systems Administrator at CHRC. These weekly meetings were scheduled to better coordinate IM/IT services that are being delivered by PSIC internally versus the services being delivered by CHRC.

Both CHRC and SHRS-PSPC refer in the MOUs to regular and informal feedback to discuss any issues requiring resolution. CHRC also suggested a client satisfaction survey in the MOUs, but this is not performed for the period under scope.

Observation
Per the MOU with CHRC, “client satisfaction survey may be administered”^[3] and per discussion with SHRS-PSPC, it has been standard practice for them to administer client satisfaction surveys. Both CHRC and SHRS-PSPC have not conducted a client satisfaction survey for the period under scope. A client survey can highlight process inefficiencies by identifying which services are key and which can be improved to provide better value for their customer, PSIC.

Recommendation No. 8
The audit recommends that the Deputy Commissioner PSIC seek to participate in client satisfaction surveys and, in the absence of client satisfaction surveys, initiate regular discussions with the service provider to highlight best practices, issues needing resolution and areas for improvement to promote possible process efficiency.

---

Appendix A – Audit Criteria

The audit approach focused on two lines of inquiry: i) the terms of the service agreements are being respected (compliance with the agreement) and ii) the service provided to PSIC are provided in an effective and efficient manner.

Audit Objective	Audit Criteria		Service Provider
Line of enquiry: The terms of the service agreements are respected (compliance with the agreement).
1. To assess compliance of service providers with the terms and condition of the MOUs	1.1	Finance management services are provided as described in the Service level agreement – Annex A.	CHRC
	1.2	Information technology (IT) and Information management (IM) services are provided as described in the Service level agreement – Annex A.	CHRC
	1.3	Administrative services are provided as described in the Service level agreement – Annex A.	CHRC
	1.4	Compensation services are provided as described in the Service level agreement. (Compensation services are invoiced to PSIC a fixed monthly fee.)	SHRS-PSPC
	1.5	Workforce and workplace management services are provided as described in the Service level agreement.	SHRS-PSPC
	1.6	Services charged by the third party service level organizations are accurate, adequately supported and comply with the terms and condition of the service level agreements.	CHRC SHRS-PSPC
Line of Inquiry: The service provided to PSIC is provided in an effective and efficient manner.
2. To assess the effectiveness services provided by CHRC and SHRS-PSPC	2.1	The governance framework as described in the third party service level agreements includes structures, process, roles and responsibilities and accountabilities that are clear and understood.	CHRC SHRS-PSPC
	2.2	Results expected from services delivered by third party service level delivery organizations’ activities and objectives are clear, measurable, communicated, and are aligned with PSIC service needs.	CHRC SHRS-PSPC
	2.3	A documented mechanism exists to systematically identify, assess, mitigate, monitor and report on risks to the achievement of services delivered by third party service level delivery organizations.	CHRC SHRS-PSPC
	2.4	Services delivered by third party service level delivery organizations provide timely and sufficient, information to help inform decision making.	CHRC SHRS-PSPC
3. To assess the efficiency of services provided by CHRC and SHRS-PSPC	3.1	Services delivered by third parties do not overlap with other third party delivery organization or with PSIC internal services.	CHRC SHRS-PSPC
	3.2	Determine the extent to which services provided by third party delivery organizations are provided at a competitive rate as identified by leading practices included in KPMG’s benchmark repository.	CHRC SHRS-PSPC

---

Appendix B – List of Interviewees

• Joe Friday, Commissioner, PSIC
• Denis Bilodeau, Deputy Commissioner, PSIC
• Éric Trottier, Manager, Financial Services, PSIC
• Raynald Lampron, Director, Operations, PSIC
• Monique Halloran, Manager, Executive Services, PSIC
• Krista Kilrea, Senior HR Advisor, Classification and Labour Relations, CHRC
• Isabelle Desnoyer, Manager, Financial Services Portfolio, CHRC
• Michel Benoit, Manager, Financial Policy & System, CHRC
• Charles Desabrais, Network and Systems Administrator, CHRC
• Mellissa Albert-Gauthier, Assistant Director General, Shared HR Services, PSPC
• Liane Lavallée, Associate Director, Shared HR Services, PSPC
• Emmanuel Mejaries, Compensation Advisor, Shared HR Services, PSPC

---

Appendix C – Example of Process Flowchart

Text Version

PSIC Management

• Needs are identified
• Liaise / cooperate with the HR Advisor as required

Manager Executive Services - PSIC

• HR action form is prepared
• Receives results of HR action and communicates the result to concerned PSIC management
• When new hire:
  • Prepare letter of offer,
  • Prepare on-boarding package,
  • Advise IT of new employee,
  • Advise PSIC Finance,
  • Coordinate on-boarding to MyGCHR
  • Advise compensation service provider of any changes to employee compensation
• Update organizational chart
• Update HR reporting for Executive Committee Meeting

SHRC - PSIC

• Assign HR Advisor
• Perform HR action as requested
• Conclusion / result of the HR action