AUDIT OF CLASSIFICATION

Presented to the Departmental Audit Committee (DAC)
December 15, 2020

Table of Contents

• EXECUTIVE SUMMARY
  • Introduction
  • Strengths
  • Areas for Improvement
  • Internal Audit Conclusion and Opinion
  • Statement of Conformance
• INTRODUCTION
  • Audit Purpose and Objectives
  • Audit Considerations
  • Scope
  • Approach and Methodology
  • Criteria
• FINDINGS AND RECOMMENDATIONS
  • Classification Strategic Planning and Governance
  • Communications
  • Policy Compliance and management processes
  • Monitoring and Reporting
• APPENDIX A – AUDIT CRITERIA

EXECUTIVE SUMMARY

INTRODUCTION

Classification is the process of organizing and valuing work to ensure equitable, fair, and appropriate compensation management across the Public Service. It involves assigning work to occupational groups based on their definitions and evaluating the work against the criteria established in the Treasury Board (TB) Job Evaluation Standards for various occupational groups. It is a system designed to provide an equitable, consistent, and effective basis for employee compensation, and it acts as a financial control to ensure accountability over Government spending on employee compensation.

Appropriate classification and organizational design decisions are a pinnacle human resources process and the foundation of sound human resources management. These decisions affect the long-term ability of an organization to deliver programs and services, to compete for resources and retain employees.

Natural Resources Canada (NRCan) is subject to a suite of relevant TB Policy instruments regarding classification. These instruments outline the responsibilities in managing and executing the classification function. It is worth noting that some of these instruments were replaced by TB during the reporting phase of this audit. Even though the scope period of the audit only included the previous policy instruments, the audit team considered the changes made to these instruments as part of this audit.

Deputy Heads have been delegated the authority and responsibility from TB to classify positions and they are accountable for administering and ensuring the integrity of the classification system of their respective departments. Within NRCan, the Corporate Management Services Sector (CMSS) is responsible for the core operations of the classification function. Sectors within NRCan are responsible for ensuring job descriptions and organizational information related to classification is updated in order to provide CMSS with accurate information required to complete classification requests.

The objective of the audit was to assess the effectiveness and efficiency of NRCan’s classification processes, as it relates to meeting the business needs of the Department, and complying with relevant policy instruments. 

STRENGTHS

Overall, the audit team found that the Department has designed and implemented processes that comply with the TB Policy on Classification; and that roles, responsibilities and accountabilities pertaining to classification were clearly documented. Processes have been designed and prioritized to ensure minimal business disruptions, even though they are positioned to respond reactively to sudden shifts in organizational focus. Despite delays in processing classification actions, sectors have generally communicated their satisfaction with the expertise displayed by classification advisors. In addition, the classification function has recently taken steps to further advance compliance with the Directive on Classification and improve delays seen in completing requests taking into account roles and responsibilities of managers and classification advisors.

AREAS FOR IMPROVEMENT

Opportunities exist to improve strategic planning for classification priorities, as well as further compliance with the Directive on Classification. Both will assist in enhancing communication between the classification function and sectors, as well as reducing bottlenecks observed within the classification request workflow. Opportunities also exist to review the classification monitoring and reporting processes, and to enhance the accuracy and completeness of the information provided to management in order to facilitate informed decision-making and strategic planning. Gender-based analysis plus (GBA+) considerations could also be further included in classification processes.

INTERNAL AUDIT CONCLUSION AND OPINION

In my opinion, the classification function has taken appropriate steps to improve the effectiveness and efficiency of classification processes and has designed processes to support Departmental priorities and business needs. Opportunities exist to further improve compliance with relevant policy instruments, and to enhance strategic planning for key classification priorities in the context of broader business and Human Resources (HR) strategies.

STATEMENT OF CONFORMANCE

In my professional judgement as Chief Audit Executive, the audit conforms with the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing and the Government of Canada’s Policy on Internal Audit, as supported by the results of the Quality Assurance and Improvement Program.

Michel Gould, MBA, CPA, CIA
Chief Audit and Evaluation Executive
December 15, 2020

ACKNOWLEDGEMENTS

The audit team would like to thank those individuals who contributed to this project and, particularly employees who provided insights and comments as part of this audit.

INTRODUCTION

Classification within the Public Service is the process of organizing and valuing work in an equitable, consistent and effective manner. It involves assigning work to occupational groups based on their definitions and evaluating the work against the criteria established in the Treasury Board (TB) Job Evaluation Standards for various occupational groups. It is a system designed to ensure an equitable, consistent, and effective basis for employee compensation, and is an important link to bargaining unit structure, and acts as a financial control to ensure accountability over Government spending on employee compensation.

Appropriate classification and organizational design decisions are key human resources processes and the foundation of sound human resources management. These decisions affect the long-term ability of an organization to deliver programs and services, to compete for resources and retain employees.

NRCan is subject to the TB Policy on Classification, the TB Directive on Classification, Directive on Executive Classification and Directive on Classification Grievances as well as an internally developed Guide on Classification. The policy was effective from July 1, 2015 to March 31, 2020, and was replaced by the Policy on People Management on April 1, 2020. At this time, a new Directive on Classification was implemented. These instruments outline the responsibilities in managing and executing the classification function. Deputy Heads have been delegated the authority and responsibility from TB to classify positions and they are accountable for administering and ensuring the integrity of the classification system of their respective departments. The authority to classify positions at Natural Resources Canada (NRCan) is sub-delegated to classification advisors who have obtained their accreditation from the Treasury Board Secretariat (TBS) and work in the Corporate Management Services Sector (CMSS).

CMSS is responsible for the core operations of the classification function. Sectors within NRCan are responsible for ensuring job descriptions and organizational information related to classification is updated in order to provide CMSS with accurate information required to complete classification requests.

As at April 24, 2020, NRCan’s Classification Operations team and Corporate Classification team had four accredited advisors and four additional non-accredited advisors to manage 6,718 positions spanning across 38 occupational groups. The non-accredited advisors are able to perform some classification duties while obtaining the necessary experience to become accredited. The chart below outlines the composition of NRCan’s current occupational structure for which the Department has a ratio of roughly one accredited advisor for every 1,680 FTEs. TBS recommends a ratio of one accredited advisor for every 500 full-time equivalents (FTEs).

The classification advisors provide advice and guidance on organizational design, classification and job description content. They are responsible for assessing whether an adequate organizational structure is in place, and for reviewing and processing classification requests. The review and judgemental-based evaluation of classification requests performed by accredited classification advisors is conducted in order to determine whether occupational group allocations and the use of selected job descriptions are appropriate, and to verify departmental and inter-departmental relativity.      

The classification function is a corporate function that requires ongoing collaboration with the sectors to ensure efficient delivery of classification requests. Managers are responsible for providing accurate and timely information to the classification advisors, who in turn conduct a full evaluation using the job evaluation standards, if a generic job description is not applicable. Managers are also responsible to implement classification decisions once rendered. During the second quarter of fiscal year 2019-20, NRCan had 668 open classification requests, including 315 carried over from previous quarters.

Figure 2: Overview of NRCan classification requests during the second quarter of fiscal year 2019-20

A classification grievance refers to a process where a written complaint is submitted by an employee disputing the classification of the work assigned by the responsible manager to the position the griever occupies and described in the job description. It plays a role in ensuring fair, transparent and equitable classification across the core public service. At NRCan, grievances are managed and investigated by accredited classification advisors on the Corporate Classification team, separate from the Classification Operations team.

There are two major classification initiatives currently underway at NRCan: the Standardized Job Description initiative and the Program and Administrative Services (PA) conversion. The PA conversion itself is a mandatory requirement from TBS involving a change in the method of establishing the relative value of work for an occupational group through the replacement of the classification standard. The PA conversion applies to the Administrative Services (AS), Program Administration (PM), Information Services (IS), and Clerical and Regulatory (CR), and Welfare Programs (WP) standards. Classification conversion exercises will also take place for the IT group currently known as CS and Internal Audit work into a new Comptrollership (CT) group. The Standardized Job Description initiative began in 2016 and will see the Broad Band Work Descriptions developed in 1998 replaced by Standardized Job Descriptions. The goal of this undertaking is to better reflect employee work activities and the overall departmental mandate.

There are three committees that support classification objectives at NRCan: the Human Resources Advisory Committee (HRAC), the Classification Conversion Governance Committee, and the Executive Classification Committee (ECC). The Classification Conversion Governance committee was implemented to provide overall direction on PA conversion activities and expected timelines for completion while HRAC is an executive-level committee whereby classification discussions are tabled as needed, and ECC is an ADM committee responsible for ensuring senior executive oversight and involvement in the management of executive positions at NRCan.

The Audit of Classification was included in the 2019-2024 Integrated Audit and Evaluation Plan, approved by the Deputy Minister on May 14, 2019.

AUDIT PURPOSE AND OBJECTIVES

The objective of the audit was to assess the effectiveness and efficiency of NRCan’s classification processes, as it relates to meeting the business needs of the Department, and complying with relevant policy instruments. 

Specifically, the audit assessed whether:

• NRCan had implemented processes to support the delivery of classification services in alignment with departmental direction, integrated HR strategies and in compliance with relevant policy instruments; and
• NRCan had effective and efficient structures and processes in place to manage the classification services delivered to sectors.

AUDIT CONSIDERATIONS

A risk-based approach was used in establishing the objectives, scope, and approach for this audit engagement. The following areas were identified as having significance in the achievement of the Department’s objectives, and were therefore assessed as increased areas of risk for this audit:

• Effective strategic planning for classification priorities have been established and are conducted to support the strategic direction of the classification function;
• Adequate and effective controls and processes necessary for compliance have been developed and implemented, taking into consideration the requirements of the TB Policy on Classification, TB Directive on Classification and NRCan’s policies and guidelines related to classification;
• Adequate and effective communication channels exist between sectors and the Classification function; and
• Effective monitoring processes, including performance measurement and problem identification, have been established to inform senior management for decision-making purposes.

SCOPE

The scope of the audit focused primarily on classification activities from July 1, 2015 to March 31, 2020, with transactional testing focusing on recent years. Transactional testing assessed the efficiency and effectiveness of classification processes; however, the audit team did not express an opinion on the classification decisions or outcomes.

The results of recent audits conducted at NRCan, including the Audit of HR planning and the Audit of Strategic and Operational Planning, were considered in order to inform the audit and reduce duplication of efforts.

APPROACH AND METHODOLOGY

The approach and methodology followed the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing and the Government of Canada’s Policy on Internal Audit. These standards require that the audit be planned and performed in such a way as to obtain reasonable assurance that audit objectives are achieved. The audit included tests considered necessary to provide such assurance. Internal auditors performed the audit with independence and objectivity as defined by the International Standards for the Professional Practice of Internal Auditing.

The audit approach included the following key tasks:

• Interviews with key personnel, stakeholders, platform users, and subject matter experts;
• Review of selected key documents, business process, and communication materials;
• Review of information and documentation pertaining to project planning, oversight, outreach, feedback, and information management activities; and
• Various file testing and analyses pertaining to the specified criteria.

The conduct phase of this audit was substantially completed in April 2020.

CRITERIA

Please refer to Appendix A for the detailed audit criteria. The criteria guided the audit fieldwork and formed the basis for the overall audit conclusion.

FINDINGS AND RECOMMENDATIONS

CLASSIFICATION STRATEGIC PLANNING AND GOVERNANCE

Summary Finding

Overall, the Department has demonstrated nimbleness and flexibility in delivering classification processes that address sudden shifts in organizational focus as well as immediate business priorities, clearly articulating the various roles, responsibilities and accountabilities pertaining to classification for both the Human Resources Systems and Services (HRSS) group and NRCan sectors.

Opportunities exist to ensure timely considerations of classification implications when determining organizational priorities. Opportunities also exist for senior management to plan, define, and articulate key strategic classification priorities. While efforts have been made to address classification issues as they arise, limited evidence was found indicating strategic classification priorities are promoted to sectors. Furthermore, it was noted that no existing governance mechanism is designated to enable frequent and timely communications between sectors and the classification function for the management of requests.

Supporting Observations

The audit sought to determine whether the Department has implemented processes to support the delivery of classification services in alignment with departmental direction and integrated HR strategies. Such processes allow for clarity of roles, responsibilities and accountabilities among stakeholders and ensure that governance bodies align the key classification processes and resources to departmental business priorities.

Articulation of strategic classification priorities

Overall, the audit team found that the Department has not clearly articulated its key strategic classification priorities, in the context of broader business and HR strategies. Furthermore, based on interviews conducted, the audit team found that appropriate planning for classification does not regularly occur at the sector-level. The sectors’ organizational charts reviewed by the audit team were found to be outdated and inconsistent with the current organizational structure. In addition, the audit team reviewed a sample of committees’ meeting agendas and records of work done, and found that there is no designated governance committee enabling frequent, timely and continuous communications between sectors and the classification function for the management of requests. Instead, classification discussions are held on an ad-hoc basis, through general HR committees, including the Conversion Governance Committee and the HRAC.

The Classification Conversion Governance committee was implemented to oversee overall direction and to ensure timely completion of PA conversion. The PA conversion was announced by TB in December 2018, with the expectation that Deputy Heads would finalize the conversion by 2022. The audit team noted that the Department has developed initial targets for completion and worked on the conversion that will be conducted between fiscal years 2020 and 2022. HRAC – prior to 2019, known as the Human Resources Renewal Committee – discusses classification as an agenda item on an ad-hoc basis and not frequently. The committee is attended by key stakeholders in the HR division and sector representatives.

The limited strategic planning for key classification activities noted in this audit is consistent with the observations raised in recent internal audits conducted by NRCan, including the Audit of Human Resources Planning and the Audit of Strategic and Operational Planning.

With respect to roles, responsibilities and accountabilities, the audit team found that the key roles and responsibilities within the classification function have been clearly defined and communicated on the NRCan intranet. The Department has published a Guide to Classification including key contacts, frequently asked questions, links to appropriate request forms and a high-level overview of what is required on the part of sectors as well as the classification function.

Classification priorities and alignment with departmental priorities

Within the context of departmental business priorities, the audit team examined the mobilization of the classification function with respect to prompt business needs arising from a high-priority project requiring significant support. This project was recognized as a departmental business priority, evolving at a rapid pace and in order to address the need to classify an entirely new Sector, the classification function utilized tactics such as position cloning to gain efficiencies and create the classification positions required to staff a large team in a short period. The resulting actions led to minimal disruption in business delivery.

RISK AND IMPACT

When classification priorities are not clearly established and communicated, there is a risk of being unable to respond to requests efficiently.  

RECOMMENDATIONS

Recommendation #1: It is recommended that the Assistant Deputy Minister (ADM), CMSS, in collaboration with Sector ADMs:

1. ensure timely considerations of classification implications as part of the Department strategic and operational planning processes, including organizational priorities; and
2. establish, develop and communicate classification priorities regularly to Senior Management.

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation #1a

1. ADM, CMSS will leverage Senior Management Committee (SMC) to promote and inform on the benefits of increasing Departmental strategic and operational planning and ensure classification considerations, priorities and initiatives are included in the process.

Timing: June 2021

Position responsible: ADM, CMSS and SMC

Management agrees with Recommendation #1b

1. Human Resources Branch (HRB) will define and develop a mechanism (e.g. leverage existing committees and/or, quarterly communiqués, etc.) that will ensure timely communication and dissemination of information, Senior Management engagement and collaboration on classification priorities and initiatives.

Timing: September 2021

Position responsible: Chief Human Resources Officer/Director General (CHRO/DG), HRB

2. HRB will continue with efforts to engage and regularly discuss classification priorities at monthly Sector Management Team meetings.

Timing: June 2021

Position responsible: CHRO/DG, HRB

COMMUNICATIONS

Summary Finding

Overall, opportunities exist to increase the effectiveness of communication between sectors and the classification function. The audit team found that, in some instances, a lack of timely communication between both the sectors and classification advisors contributed to delays in completing classification requests. Audit interviews with sectors submitting classification requests also indicated a lack of understanding on timelines, and business processes.

The audit team also noted that more than 50% of a classification advisor’s time is spent on requests that are ultimately cancelled. In addition, the Department currently does not have any formal, or informal, impasse process to handle disagreements between sectors and classification advisors, which is a requirement of the Directive on Classification.

With respect to classification grievances, the audit team determined the Department utilizes processes defined by TB and these processes have been designed appropriately; however, no instances of classification grievances were filed during the scope period of this audit.

Supporting Observations

The audit team sought to determine whether adequate communication processes are in place and are being utilized effectively by the classification function and sectors for the management of requests. The audit team also sought to determine whether effective and efficient processes are in place to address classification concerns and grievances.

Impasse processes & resolution

The classification process has the inherent challenge of managing the expectations of the requestor while maintaining relativity and applying classification principals free from any bias. TB has recognized the challenges that arise from this process, outlining the requirement for Departments to manage an impasse process internally. The purpose of an impasse process is to provide sectors who disagree with the results of a classification decision with the opportunity for a final third-party review of a classification decision. The audit team noted that HRSS has drafted an impasse process plan in September 2019; however, no impasse resolution processes was in place during the audit period.

At NRCan, a frequent reason for a delay in completing a classification request was noted to be an impasse between classification advisors and sectors. Actions tend to be prolonged and ultimately cancelled, or resolved – in some cases – hundreds of days after the request was initialized. Specifically, the audit team found that 1,086 out of 4,249 (26%) actions for non-executive positions which occurred between April 1, 2017 and December 2, 2019 were opened 100 days or more. The audit team observed that more than 50% of a classification advisor’s time is spent on requests that are ultimately cancelled. The classification function started tracking reasons for cancellation in 2016. The high rate of cancellations may indicate a culture where impasses are not being resolved and requests are instead being cancelled by the requesting authority if they believe the result will not meet their expectation or desired outcome, resulting in loss of productivity and resources.

The audit team also found that the managers’ community did not always have a clear understanding of the work required by the classification advisors in fulfilling the requests. An opportunity exists for the classification function to share process documentation with sectors, ultimately allowing them to gain a better understanding of the process, and have general expectations on how actions are to be processed.

Communication of service standards and delays

Audit interviews with sectors submitting classification requests indicated that there was a lack of understanding on timelines and processes. The audit team found that the classification function does not measure the amount of time between a sector submitting a request and the creation of the job-opening request (i.e. triggering the service standard), resulting in this gap period not being measured, monitored or reported. In several cases reviewed by the audit team, sectors would not hear back from the classification function on the status of their requests for many weeks. Management informed the audit team that they have taken steps to address this concern, and that the classification function began to send out confirmation emails that detail acknowledgement of request in October 2018. This acknowledgement includes which advisor the file has been assigned to, the service standard associated with the action, the priority listing of the request, and a note indicating that sectors should only follow up on the request after the service standard period has elapsed. However, the audit team found that sectors were not always kept informed in a timely manner of the status of their requests following the initial acknowledgment of the receipt of their request.

Classification related grievances

The audit team found that the Department follows TB prescriptive guidance in support of grievances. The audit team examined the design of this process and noted it mirrors the guidance provided by TB. It was noted that this process takes a significant amount of time due to multi-party coordination and involvement; however, the audit team was only able to assess the design of this process as no classification related grievances were noted in the audit period.

RISK AND IMPACT

Without a further analysis and understanding for the reasons contributing to cancelled requests, the Department is unable to effectively improve classification processes.

The lack of a formal process to resolve impasses related to a classification request could result in lengthy delays in processing classification actions and unnecessary overburdening of resources both within sectors and the classification function.

Without a consistent approach to informing clients of the status of their requests, there is a risk that the expectations regarding length of processing time or time until request will be initialized might not be clear, leaving clients unknowing of the status of their files. In addition, a lack of articulated expectations regarding timelines could potentially lead to a host of other communication and / or interpersonal relationship challenges, such as disappointment, redirected hostility, and clients perceiving unmet expectations as a failure on behalf of Classification.

RECOMMENDATIONS

Recommendation #2: Given their shared responsibilities in ensuring that the classification system is working effectively, it is recommended that the ADM, CMSS, in collaboration with Sectors ADMs:

1. identify key underlying reasons, including potential cultural issues, contributing to the 50% cancellation rate of classification requests and ensure they are resolved;
2. work with SMC to establish expectations in order for sectors and classification advisors to have a productive relationship and work together more effectively; and
3. build upon current efforts to enhance communication between classification advisors and sectors (i.e. status updates, clarification on timelines, and availability of business processes to sectors).

Recommendation #3: It is recommended that the ADM, CMSS, continue on current efforts to initialize an impasse process to resolve disagreements on classification decisions and provide a forum for open communication to improve the working relationship between sectors and the classification function.

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation #2

1. HRB will :
   
   • Continue its research and analysis on reasons for cancelled requests; and
   • Work with their staffing colleagues to determine whether alternative solutions are being used to appoint employees when the classification review did not meet their expected outcome.

The purpose of the report is to determine whether these two areas of concern are indicative of potential departmental cultural issues regarding classification and develop an action plan in collaboration with Senior Management aimed at reducing the number of non-productive requests and time spent on them. 

Timing: October 2021

Position responsible: CHRO/DG, HRB, and sector ADMs

2. HRB will develop and present SMC with a communication campaign, which will include but not be limited to classification tools and information documents such as Classification 101 placemat or information bulletins that will educate management on the classification process and need for communication and consultations with classification regarding organizational needs.

Timing: October 2021

Position responsible: CHRO/DG, HRB

3. Existing processes related to acknowledgements will be reviewed to identify any potential gaps. Classification activity reports will be developed and distributed to clients on a monthly basis. The reports will include all active requests on-hand as well as the service standard date for completion.

Timing: August 2021

Position responsible: Director, HRSS, CMSS

Management agrees with Recommendation #3

A new Impasse process has been developed and was approved by the ADM, CMSS, in July 2020. Corporate HR will finalize the associated communication material and the ADM, CMSS, will disseminate the new process to departmental sector ADMs.

Timing: February 2021

Position responsible: ADM, CMSS and Senior Director, Corporate HR, CMSS

POLICY COMPLIANCE AND MANAGEMENT PROCESSES

Summary Finding

Overall, the Department is adhering to the Policy on Classification; however, the audit team noted several departures from the Directive on Classification. The audit team also found that processes in support of classification activities have recently been created, documented and provide adequate guidance to classification advisors to execute their duties.

Opportunities exist for the Department to share the classification processes documentation internally to allow for a better understanding of expectations associated with classification requests, as well as to ensure record keeping is complete and accurate regarding the processing of these requests. Opportunities also exist to ensure that gender-based analysis plus (GBA+) considerations are included in classification processes.

Supporting Observations

The audit sought to determine whether classification processes and activities were conducted in accordance with relevant TB guidance, mainly, the TB Policy on Classification and the TB Directive on EX Group Organization and Classification for non-executive occupational groups and the executive occupational group. Specifically the audit sought to determine whether processes were designed to allow for the achievement of classification actions in the most effective and efficient manner, while maintaining compliance with relevant policy instruments. Such processes would ensure the Department is utilizing appropriate tools and techniques in order to operate the classification function as efficiently and effectively as possible. The audit team also sought to determine whether GBA+ considerations were included in the development of classification processes and delivery of services.

Compliance with Treasury Board policy and directives

Overall, the audit team found that classification processes are designed in adherence to the Policy on Classification. Processes were examined against section six of the Policy on Classification and no departures from requirements were identified. In measuring processes against the Directive on Classification, the audit team identified situations where requirements per the directive were not adhered to or were omitted in their entirety, most notably, the requirements for managers to maintain valid job descriptions and to have a formalized process for disagreements and impasses. It is worth noting that these requirements are still applicable as per the new Directive on Classification, which took effect on April 1, 2020, and replaced the previous Directive dated July 1, 2015.

An opportunity exists for the Department to evaluate the requirements in the new directive to ensure compliance, as well as the optimization of classification processes. For instance, while the 2015 Directive on Classification stated that Deputy Heads may sub-delegate their classification authority to “employees (trained managers in classification and/or accredited human resources advisors)’’, the 2020 Directive refers to “Persons accredited in organizational design and classification (OC) who are working within their organization and who have classification decision-making authority.’’ This could now include employees, managers, casual workers and contractors, and give more flexibility to the Department. In addition, while the previous Directive on Classification required the positions that have been vacant for over two years to be reviewed for continued relevancy, the new directive on classification requires that the Heads of Human Resources ensure that controls are in place for the management of vacant positions.

The previous Directive on Classification, which was in place for the entirety of the audit period required job descriptions to be reviewed every five years in order to “maintain the currency and accuracy of job descriptions, particularly as the work changes or new work is assigned.” The audit team found that the Department utilizes Broad Band Work Descriptions (BBWDs), which were developed prior to the year 2000 and have only been recently revisited. The outdated BBWDs were noted to create delays in classifying new position action requests, as Sector managers would submit the BBWD as the work description, which classification advisors are unable to rely upon given the descriptions are too generic. The newly implemented Directive on Classification now requires managers to ensure job descriptions are up to date. 

Information management

Prior to January 2018, documentation was stored and tracked manually for classification requests; however, a digitalization process was implemented to have all new requests stored electronically and have older requests scanned and uploaded into a central data repository. The audit team reviewed a sample of non-EX requests, and found that all of them had been initialized electronically or digitized and stored centrally in GCDOCs. However, the audit team found that the documentation required to be on file was not present and that required signatures were missing in documents in 19 out of 34 samples reviewed.

The nature of EX classification requests results in a process that is more fluid than the process used for non-EX classification requests. Compliance with the Directive on EX Classification largely pertains to ensuring that documentation is retained and that certain actions are conducted in support of these activities, such as ensuring relativity is conducted and that job descriptions are evaluated. The audit found that in six out of 26 EX requests sampled, some supporting documentation was not retained. The largest deficiency noted in EX classification was that the management and retention of documentation that is required to be on file was not found. Processes were generally abided by, however information in support of the full sample was lacking.

Processes and tools, and resource allocation

The audit team also found that the classification function recently documented the processes in place to support non-EX classification requests. The process documentation is complete and accurate, and provides guidance for classification advisors to execute their roles.

Certain EX actions are required to be tabled at the Executive Classification Committee (ECC), which is an ADM-chaired committee used to present and recommend EX actions for DM approval. The audit team was able to confirm that items were tabled at ECC through a review of the committee’s records of decision. However, there was no evidence of a formal documented processes for EX classification requests. A decrease in frequency of ECC meetings has also impacted the timeliness for completing classification cases.

In terms of resource allocation, the TB guidance recommends having a ratio one classification advisor for every 500 FTEs. The audit team found NRCan currently has four accredited classification advisors, representing a ratio of roughly one classification advisor per 1,680 NRCan FTEs. Management indicated they have attempted to hire additional classification advisors with little success. Furthermore, the audit noted opportunities to optimize the current classification processes and resource allocation. For instance, during a walkthrough, the audit team noted that classification advisors have to complete tasks that are better suited to administrative positions or non-accredited advisors, which reduces the amount of time they can spend on classification requests. The audit team also found that one individual was responsible for coordinating all incoming classification requests. This situation is due to recent challenges in staffing a vacant position in the classification function. While not specifically attributable to completion delays, this situation create a bottleneck in the classification process.

Gender-based analysis plus considerations in work descriptions

The audit team reviewed the work descriptions of 34 non-EX transactions and 10 EX transactions and found that generally, gender-neutral language is being used for work objectives and BBWDs in support of classification. Given that there is a broader movement to develop, implement and utilize standardized job descriptions, there is an opportunity to explore whether additional facets for GBA+ need to be considered in the classification process.

RISK AND IMPACT

When processes are not sufficiently documented or updated regularly, there is the risk that classification advisors may not be equipped to conduct their work efficiently and effectively, affecting the overall processing of requests and their timeliness, and potentially creating inconsistency of decisions.

Failing to comply with requirements dictated in the Directive on Classification can result in the utilization of inefficient and ineffective processes or the omission of necessary processes to ensure a fully optimized delivery.

The failure to retain key documents and information may affect the ability to substantiate and support any grievances, impasses, communication issues and disagreements related to a classification request.

RECOMMENDATIONS

Recommendation #4: It is recommended that the ADM, CMSS, ensure that:

1. a comparison analysis is conducted between the 2020 Directive on Classification and current classification processes, in order to ensure compliance with policy instruments and optimization of classification processes;
2. internal processes for EX actions are documented, and processes for both EX and non-EX actions are updated as needed to ensure the accuracy of actions taking place, and to facilitate the onboarding of new advisors or consultants;
3. all required documentation associated with a classification request is retained in a centralized location and readily available; and
4. GBA+ considerations are included in classification processes and delivery of services.

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation #4

1. HRB has already completed a comparative analysis between the 2015 and 2020 Directive on Classification in April 2020. Information on the new flexibilities will be communicated by Corporate HR to the classification team in order to be fully leveraged.

Timing: December 2021

Position responsible: Senior Director, Corporate HR, CMSS

2. Processes and documentation for EX and non-EX classification will be reviewed on a yearly basis to ensure the information is available for onboarding of new classification unit employees or consultants. 

Timing: December 2021

Position responsible: Director, HRSS, CMSS

3. A checklist to guide Classification team members will be developed and implemented to ensure that all required documentation is saved to position folders in GCDOCS in a timely manner. Monitoring will be conducted to confirm that documentation is complete for each classification actions.

Timing: June 2021

Position responsible: Director, HRSS, CMSS

4. Consult with departmental GBA+ champion to obtain advice and guidance on may be required to implement GBA+ considerations into the classification process and delivery of service.

Timing: June 2021

Position responsible: Director, HRSS; and Senior Director, Corporate HR; CMSS

MONITORING AND REPORTING

Summary Finding

Overall, Operational Key Performance Indicators (KPIs) have been developed for non-EX activities, and are monitored consistently. The classification function tracks classification metrics for all non-EX classification actions, and report on their service standards quarterly through the “NRScan” reports. However, the audit team noted that the time between the submission of a non-EX classification request from a Sector and the creation of the job-opening request is not tracked or measured.

With regards to the EX classification activities, which occur far less frequently than non-EX actions, the audit team found that KPIs have not been developed, and that actions are not tracked and monitored consistently. While the Directive on Executive (EX) Group Organization and Classification does not require the establishment of service standards and KPIs, they could be helpful in informing planning and monitoring. 

Supporting Observations

The audit sought to determine whether the Department has established standards and procedures to monitor and report on the status of classification activities for both executive classification actions (EX actions) and non-executive classification actions (non-EX). This includes measuring completion times for actions against service standards, and reporting on monitoring efforts to senior management.

Service standards and KPIs – Non-EX classification actions

The audit team found that service standards have been established for non-EX actions – including administrative actions such as change in language, security or location. The table below presents the service standards associated to each non-EX classification request:

	Abolish / Inactivation	Change in Reporting or Title	Clone a Position	New Position	Position Review / Reclassification	Reactivation	Change in Official Language, Security or Location
Service Standard (days)	30	30	30	60	80 - 120	60	20

Classification requests are tracked against service standards through the creation of a Job Opening in PeopleSoft based on the date all required documentation is received. The audit team noted that the date of the initial classification request received from a Sector is not tracked by the Department. Instead, requests were tracked from the date they were logged rather than the date of receipt, even if all required documents were submitted. Consequently, the length of time from the initiation of a classification request to its completion, which is a key data to inform resources and planning decisions, is not measured. This situation can also create inconsistencies in the logging and triaging of the requests, which could result in delays in taking action.

The audit team also found that the classification function tracks classification metrics for all classification actions, and report on their service standards quarterly through the “NRScan” reports. The classification metrics reported in the NRScan present KPIs and trends over time, and highlight areas of concern to be addressed. They provide a quarter over quarter snapshot showing the number of actions opened, cancelled, completed and carried over from the previous quarter, indicating whether service standards were met, and how long the average processing time was for each file. The audit team noted that since December 2018, classification activities have been assessed requiring Departmental attention, meaning, service standards are not always being met for this function. Specifically, the audit team found that 1,600 out of the 4,249 (38%) non-EX classification actions processed between April 1, 2017, and December 2, 2019, were late as per the service standards. This number does not include reorganizations, as there is no associated service standard for these. In addition, the NRScan highlights the “key takeaways”, which contextualize the results from tracking classification actions against service standards. In December 2019, the classification function began tracking the volume of active cases on a monthly basis for HR management reporting purposes. This provides HR management a timelier snapshot of the state of classification requests.

Service standards and KPIs – EX classification actions

At NRCan, there are far fewer EX classification actions than non-EX actions. Based on the data obtained by the audit team, there has been 238 EX classification actions from April 1, 2017, to December 2, 2019, compared to 4,249 non-EX actions for the same period. The audit team found that the Department has not established classification service standards for EX classification actions. Furthermore, no information is formally tracked or monitored for the purposes of reporting the status of EX classification actions to management. While the Directive on Executive (EX) Group Organization and Classification does not require the establishment of service standards and KPIs, they could be helpful in informing planning and monitoring. Despite no formal performance tracking, the audit team noted the sectors were generally satisfied with EX classification requests being conducted in a timely, accurate manner.

RISK AND IMPACT

Without a formal process to monitor, track and report on EX classification actions, there is a risk that inefficiencies that could be mitigated through early identification are prolonged or not addressed.

Without a formal process to monitor the full amount of time it takes to complete a classification request – i.e. monitoring the time spent after receiving a request before initializing the process to address the request – inefficiencies could permeate without the ability to detect issues, potentially resulting in management not receiving complete information to make informed decisions.

RECOMMENDATIONS

Recommendation #5: It is recommended that the ADM, CMSS, implement a plan to:

1. collect, analyze, monitor and report on EX classification activities in order to inform future strategic planning components; and
2. track the initial date at which classification requests are received in order to better inform resources and planning decisions.

MANAGEMENT RESPONSE AND ACTION PLAN

Management agrees with Recommendation #5

1. Develop an EX position classification activity report to inform decision-making and strategic planning. The report will include all active requests on-hand as well as the status of each request.

Timing: November 2021

Position responsible: Director, HRSS, CMSS

2. HRB will revise the process for logging and tracking classification requests to ensure requests are logged and tracked based on the date a request is received with complete and accurate required documentation. 
   
   Resource complement will be reviewed to determine if additional capacity is required to ensure consistent practice of logging and triaging requests including communication with clients regarding documentation requirements in order to reduce delays in taking action.

Timing: March 2021

Position responsible: Director, HRSS, CMSS

APPENDIX A – Audit Criteria

The criteria were developed primarily from the key controls set out in the TB Core Management Controls, and the TB Policy on Classification.

The objective of the audit was to assess the effectiveness and efficiency of NRCan’s classification processes, as it relates to meeting the business needs of the Department, and complying with relevant policy instruments.

The following audit criteria were used to conduct the audit:

Audit Sub-Objectives	Audit Criteria
Audit Sub-Objective 1: To determine whether NRCan has implemented processes to support the delivery of classification services in alignment with departmental direction, integrated HR strategies and in compliance with relevant policy instruments.	1.1 It is expected that NRCan has clearly articulated its key strategic classification priorities in the context of broader business and HR strategies.
	1.2 It is expected that classification services are delivered in accordance with departmental business priorities.
	1.3 It is expected that classification activities are conducted in accordance with relevant policy instruments.
Audit Sub-Objective 2: To determine whether NRCan has effective and efficient structures and  processes in place to manage the classification services delivered to sectors.	2.1 It is expected that the roles, responsibilities, and accountabilities pertaining to the classification processes are clearly defined, documented and communicated.
	2.2 It is expected that adequate communication processes are in place and are being utilized effectively by the classification function and sectors for the management of requests.
	2.3 It is expected that effective and efficient processes are in place to address classification concerns and grievances.
	2.4 It is expected that effective structures are in place and that resources are allocated effectively to support the classification function.
	2.5 It is expected that the classification function considered GBA+ in the development of its classification processes and delivery of its services.
	2.6 It is expected that NRCan has effective processes and tools in place to provide classification services to sectors.
	2.7 It is expected that effective processes are in place to monitor and report on the status of classification activities, and that key performance indicators pertaining to classification activities have been established and are being monitored on a regular basis.