Audit of the Values and Ethics Management Framework

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Audit Report

Project # 08/09-01-03

Prepared by the
Audit and Evaluation Directorate

March 2010

1.0 Summary

1.1 Audit Objective

The audit involved assessing the degree to which the President of the Canadian Space Agency (CSA) has integrated control activities intended to emphasize the importance of values and ethics in accomplishing the CSA's organizational goals.

1.2 Audit Opinion

In our opinion, the values and ethics management framework requires significant improvement.

1.3 Statement of Assurance

In my professional judgment as Chief Audit Executive, sufficient and appropriate audit procedures have been conducted and evidence gathered to support the accuracy of the opinion provided and contained in this report. The opinion is based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed on with management. The opinion is applicable only to the entity examined.

1.4 Summary of Recommendations

The President is responsible for maintaining public and staff confidence in CSA management and activities. To properly fulfill his responsibilities, he must first ensure that values and ethics remain part of his priorities in achieving organizational objectives, and second, regularly promote to staff and partners a policy of leading by example when it comes to values and ethics.

Our audit has shown that the CSA has implemented activities that promote values and ethics at the CSA.

However, as a result of our examination, we recommend that the CSA

  • develop a values and ethics communications plan;
  • formally and rapidly appoint values and ethics officers when positions become vacant;
  • ensure that the values and ethics policy committee is up and running so that it can carry out values and ethics program activities;
  • increase its promotion of values and ethics;
  • assess whether to impose a requirement that staff periodically confirm their adherence to the Treasury Board of Canada Secretariat's (TBS) Values and Ethics Code for the Public Service (Code) and that all managers periodically submit duly completed Confidential Reports;
  • implement a formal process for dealing with Confidential Reports; and
  • inform staff of the process for the disclosure of wrongdoing and ensure that Intranet hyperlinks are up to date.

Signature of the Chief Audit Executive

Audit team member

  • Jimmy Cheung

2.0 Audit Report

2.1 Background

The scope of work of the Internal Audit function is to determine whether the risk management, control and governance processes, as designed and implemented by management, is appropriate and work in such a way as to ensure that organizational goals are attained.

The audit of the values and ethics management framework was identified as a priority when the 2008-2009 to 2010-2011 Internal Audit Plan was established, following an assessment of the risks that could affect the organization.

An organization's control environment determines the direction and measures taken by management that show the importance accorded to controls. The values and ethics management framework is a critical element of this control environment. The TBS recognized its importance in the Management Accountability Framework by defining values and ethics as one of the expectations for good management of a department or agency.

The values and ethics framework contributes to fostering employees' commitment to the standards they are required to meet when carrying out their duties, preventing conflicts of interest and providing guidance on proper behaviour.

A well-designed, functional values and ethics framework is all the more important when, as is the case with the CSA, financial and human resources authority are delegated, for the most part, and program delivery relies in large part on the private sector and universities.

The Canada Public Service Agency is currently consulting with federal public-sector agencies and bargaining agents to develop a new federal public-sector code of conduct. This new code will apply across the federal government in accordance with the Public Servants Disclosure Protection Act, and will replace the current Values and Ethics Code for the Public Service.

2.2 Audit Objective, Scope and Approach

The purpose of the audit was to assess to what degree CSA President has integrated control activities intended to emphasize the importance of values and ethics in accomplishing the CSA's organizational goals.

The current audit project focussed on recent CSA values and ethics control activities. However, normally, due to a lack of independence, we should have excluded from the scope, the activities of the Chief Audit and Evaluation Executive regarding his roles and responsibilities as the Senior Officer responsible for receiving disclosures of wrongdoing. However, in order to ensure a full coverage of all activities related to the values and ethics management framework, we did examine the management framework in place for the disclosure of wrongdoing and made recommendations to that respect.

The audit included various audit procedures such as interviews with staff and documentation review.

The audit criteria were established in accordance with relevant best management practices, statutes and policies:

  • the Public Servants Disclosure Protection Act;
  • the Values and Ethics Code for the Public Service in effect since September 1, 2003; and
  • the TBS's Core Management Controls: A Guide for Internal Auditors.

2.3 Findings, Recommendations and Management Response

2.3.1 CSA has defined and communicated its values

CSA is responsible for integrating a values and ethics framework into its control environment in order to guide CSA staff and partners in all their activities. To this end, we expected to find an ethics and values code that included:

  • the values of the federal public service (democratic, professional, ethical and people values);
  • conflict of interest measures;
  • post-employment measures; and
  • avenues of resolutions.

We also expected the values and ethics framework adopted by CSA to have been communicated in an appropriate manner.

Generally, by adopting the Values and Ethics Code for the Public Service, CSA defined and endorsed the values and ethical behaviour to which it subscribes. However, we want to point out to your attention on certain findings.

Dissemination of information

A values and ethics communications plan is required in order to properly communicate management needs to staff and partners and to encourage adherence to values and ethical behaviours. To do so, CSA must make a significant effort to disseminate information by developing statements on and practical tools for values and ethics. In this respect, we expected to find at least the dissemination of the following components:

  • CSA's direction and expectations;
  • information on the various statutes and policies related to values and ethics; and
  • particular situations illustrating ethical and unethical behaviours specific to CSA activities.

The CSA Web and Intranet sites are the preferred means for keeping staff and partners, such as clients, suppliers and contractors, informed.

  • In the values and ethics section on the Intranet site for employees, we noted that the information was posted:
Objectives of the Code
Hyperlink to the TBS Values and Ethics Code for the Public Service
Tools
  • Confidential Report form
  • TBS learning video
  • Questions and answers
  • Glossary
E-mails
  • Link to quarterly electronic newsletter Window on Values and Ethics, published by the TBS Office of Public Service Values and Ethics
  • Other information on the Code
TBS
Link to the main menu of the Office of the Chief Human Resources Officer's Web site
Dialogue on Public Sevice Values and Ethics
  • Values card
  • Glossary of Management Values and Ethics
Harassment in the Workplace, Prevention and Resolution
  • Harassment Prevention Tool
  • Policy and guidelines on harassment in the workplace
  • Other information on the prevention and resolution of harassment in the workplace

Our review revealed that the information on the Intranet is minimal and mainly redirects site visitors to the home page of the TBS's Office of the Chief Human Resources Officer Web site.

  • We noticed that, on the CSA Web site, there are no documents on values and ethics.

In other words, the CSA's Intranet and Web sites do not mention any of the following:

  • CSA's direction and expectations, such as a CSA values and ethics statement;
  • information on the various acts and policies related to values and ethics, such as the Criminal Code of Canada, the Public Servants Disclosure Protection Act, the Conflict of Interest Act and the Directive on Losses of Money or Property; and
  • particular situations illustrating ethical and unethical behaviours specific to CSA activities.

Although information on federal public service values and ethics is accessible through the home page of the TBS Web site, the fact that the information is not disseminated may result in a lack of employees' awareness of CSA expectations in this respect.

In order to fully carry out its responsibilities regarding the dissemination of information on values and ethics, the CSA should increase efforts in this respect.

Recommendation

  1. The Champion should develop a values and ethics communications plan that includes at least the following:
    1. CSA's direction and expectations;
    2. information on the various statutes and policies; and
    3. particular situations illustrating ethical and unethical behaviours specific to CSA activities.

Management Response

The Champion agrees with the recommendation.

2.3.2 CSA President demonstrates by his actions that he will not accept any breaches of CSA values and ethics

It is essential that CSA President place great importance on values and ethics to ensure public and staff trust. In this respect, CSA should have implemented:

  • a values and ethics governance structure;
  • a values and ethics program;
  • regular reminder activities; and
  • a process for the disclosure of wrongdoing.

Generally, CSA President has taken action to reinforce values and ethics at the CSA. However, we want to point out to your attention on certain findings.

Governance structure

The CSA's values and ethics governance structure includes, among other things, defining the roles and responsibilities of values and ethics officers in order to encourage compliance with statutes, policies and procedures, and CSA standards for ethical behaviour.

Overview of the governance structure:

Our review revealed that CSA had assigned the duties of values and ethics officers to senior managers. However, at the time of the audit, four of the five positions were vacant following the departures of certain senior managers.

The Director General, Space Science, was appointed Champion in October 2009, that is, during the audit. However, this appointment was not officially announced to staff until December 7, 2009.

The duties of the departmental coordinator for the prevention and resolution of harassment in the workplace and the departmental officer for conflict of interest and post-employment measures have been assigned to the new Manager, Staff Relations and Pay and Benefits, since November 2009; however, no official announcement has yet been made regarding the assignment of these duties to this individual.

It should be noted that TBS maintains values and ethics support networks. These networks are databases that contain contact information for all values and ethics officers in the federal government. At the time of the audit, contact information for values and ethics officers at the CSA was not up to date on the TBS Web site. However, in October 2009, the contact information on the TBS Web site had been updated.

Recommendation

  1. The President should, formally and rapidly, appoint values and ethics officers when a position becomes vacant.

Management Response

The President agrees with the recommendation.

Values and Ethics Program

The purpose of a values and ethics program is to strengthen ties between values and ethics officers, directors, managers, employees and partners. It helps those responsible to adopt practices that are adapted to the CSA's own activities. In addition, it makes staff and partners aware of the importance of values and ethics.

The CSA approved a values and ethics program in October 2005. In December 2007, the Values and Ethics Champion presented a program update to the Executive Committee (EC). The purpose of the presentation was to provide a status report on the activities carried out since October 2005 and any planned activities.

The following table gives an overview of how the program has been implemented so far as well as planned activities:

Activities Findings
Activities undertaken:
  • Creation of a values and ethics (VE) Policy Committee responsible for planning, carrying out and following up on activities.
  • Information session for managers.
  • Meeting with management sectors.
In 2005-2006 / 2006-2007:
  • The Policy Committee has a maximum of 15 members and meets twice a year:
    • VE Champion;
    • Senior official responsible for VE;
    • Senior officer responsible for disclosure of wrongdoing;
    • Chief human resources officer; and
    • One representative per sector.
  • Most managers participated in one or two values and ethics workshops.
  • A representative from the VE Policy Committee met with sector management committees on this subject.
Planned activities:
  • Inter-sector managers' meetings (interpersonal relationships and relationships with industry).
  • Employee training and activities.
  • Creation of a values and ethics advisory committee.
  • Creation of an index of lessons learned.
  • Stakeholder responsibilities and deadlines have not yet been defined.

We noted that the planned activities had not yet been carried out and that the Values and Ethics Policy Committee was no longer up and running because many of the values and ethics officers had left.

Despite the priorities identified during the 2005-2006 and 2008-2009 assessments of the corporate risk profile, which recognized the importance of promoting values and ethics, several activities remain to be carried out so that the program's planned activities can be fully implemented.

Recommendation

  1. The Champion should ensure that the Values and Ethics Policy Committee is up and running so that it can carry out values and ethics program activities.

Management Response

The Champion agrees with the recommendation.

Regular Reminder Activities

Regular values and ethics reminder activities reinforce ethical behaviour in staff and partners.

In other words, such activities are intended to serve as a reminder that management practices must be consistent with CSA values and ethics, be it in the selection of a contractor or the selection of a candidate during a staffing process.

In this respect, we expected that:

  • staff and partners be sent regular communications;
  • staff periodically confirm their adherence to the Code; and that
  • managers periodically complete a Confidential Report.

Our review highlighted the following activities:

Communication with staff:

There has been very little documentary evidence supporting the periodic communications with staff when it comes to values and ethics. According to the President of the CSA, the topics concerning the values and ethics are addressed during staff and directors meetings. However, these discussions are not systematically documented.

As to the values and ethics section of the CSA Intranet site, this does not report any communications for 2008-2009 and only five e-mails to staff since the Code was adopted in September 2003:

Date of E-mail Nature of the Communication
January 2004
October 2006
The first two e-mails introduced the Code and raised awareness of its importance.
February 2007
April 2007
November 2007
The last three e-mails announced to staff the publication of the quarterly electronic newsletter Window on Values and Ethics published by the TBS Office of Public Service Values and Ethics.

Moreover, we found an e-mail dated September 26, 2007, asking staff to review their obligations under the Code at least once a year. In addition, at the time of the audit, an e-mail on values and ethics, dated December 7, 2009, was sent to all employees. This dealt mainly with the appointment of the Values and Ethics Champion and the 2008 survey of federal public servants on various issues related to values and ethics.

Communication with partners

We found no evidence that the CSA has formally informed partners of the values and ethics framework it has adopted and of its expectations for compliance with that framework.

Senior management dialogue

According to EC minutes between January 2007 and December 2009, there were six dialogues regarding values and ethics. These dialogues all took place prior to the departures of the values and ethics officers in November 2008.

Periodic statement

There are no formal guidelines requiring EC members, managers and employees to make periodic statements regarding their adherence to the Code.

Confidential Report

In each letter of offer sent to new employees, attention is drawn to the fact that public servants must observe the Code. The letter of offer is accompanied by a copy of the Code and a Confidential Report form. By accepting the offer, new employees confirm having received a copy of the Code and agree to comply with it. The letter of offer also notifies future employees that they must complete the Confidential Report form if there is a real, apparent or potential conflict of interest situation.

Our review revealed the following findings:

Confidential Report Findings
Employees can obtain the Confidential Report form:
  • from the Human Resources Advisor;
  • from the CSA Intranet site; or
  • from the TBS Web site.
At the time of the audit, the Confidential Report form available to CSA staff on the Intranet was not up-to-date. It dated from 1987. At the present time, an up-to-date copy is now available on the Intranet.
Employees can send the completed Confidential Report to:
  • their Human Resources Advisor; or
  • directly to the Manager, Staff Relations and Pay and Benefits. For example, some people slide their completed Confidential Report under the Manager's door.
The last time employees were asked to complete a Confidential Report, if necessary, was on September 26, 2007.
The Manager, Staff Relations and Pay and Benefits, analyzes the completed Confidential Report.
  • Completed Confidential Reports are stored in a filing cabinet in the Manager's office.
There is no formal procedure or guideline regarding processing of the submitted reports.

Recognition program

Since 2007, the CSA has had a recognition program to highlight exemplary employee behaviour and performances. One of the awards of excellence celebrates exceptional achievements with respect to values and ethics. This activity is held annually as part of National Public Service Week.

Information kit for new employees

During an orientation session for new employees, employees are given an information kit called "Welcome aboard", which addresses several subjects, including values and ethics. Among other things, the kit describes:

  • the four value categories (democratic, professional, ethical and people); and
  • the importance of complying with the Code (a condition of employment).

Conclusion

We noted that the regular reminder activities designed to emphasize the importance of values and ethics at the CSA need to be improved, since management has done little in the way of communicating with staff and has not communicated at all with its partners in this respect.

More reminders to both employees and partners would reinforce behaviour that is consistent with CSA values and ethics.

Recommendation

  1. The Champion should make more efforts to promote values and ethics by, for example:
    1. addressing this subject more regularly with CSA staff through a variety of means (such as e-mails, brochures and stands);
    2. ensuring that the CSA's partners are aware of the CSA's values and ethics framework and its expectations in this respect; and
    3. ensuring that senior managers discuss values and ethics concepts more often at meetings.

Management Response

The Champion agrees with the recommendation.

Recommendations

  1. The Champion should assess whether to impose a requirement that:
    1. staff periodically confirm their adherence to the Code; and
    2. all managers periodically submit duly completed Confidential Reports.

Management Response

The Champion agrees with the recommendation.

Recommendation

  1. The Human Resources Directorate should implement a formal process for dealing with Confidential Reports.

Management Response

The Human Resources Directorate completely agrees with the need of setting up a formal process for the treatment of the Confidential Reports.

Disclosure of Wrongdoing

Under the Public Servants Disclosure Protection Act (PSDPA), all CSA employees may disclose information on alleged wrongdoing to their immediate superior, their senior officer or the Public Sector Integrity Commissioner. Furthermore, under the PSDPA, CSA employees who have made a disclosure in good faith and who have cooperated with an investigation under the PSDPA are protected from reprisal. The Act also helps employees make ethical decisions in the workplace.

The PSDPA defines wrongdoing as follows:

  • the violation of a federal or province law or regulation;
  • a misuse of public funds or assets;
  • a gross mismanagement in the public sector;
  • an act or omission that creates a substantial and specific danger to the life, health or safety of Canadians or the environment;
  • a serious breach of a code of conduct established under the PSDPA; or
  • knowingly directing or counselling a person to commit a wrongdoing.

Process for the Disclosure of Wrongdoing

It is essential to have a process in place that allows employees to report all wrongdoing related to values and ethics. Such a process would create a culture in which employees feel at ease raising questions about ethics and integrity and help employees to better understand the steps involved in disclosing wrongdoing. One of the best ways of communicating such a process to staff would be to post it in the values and ethics section of the CSA Intranet site.

The CSA tasked the senior officer responsible for disclosure of wrongdoing with the responsibility of receiving disclosures under the PSDPA. In that respect, the Senior Officer responsible for disclosure of wrongdoing adopted the TBS process for disclosure of wrongdoing as illustrated below:

We noted that this process had not been communicated to staff. It would be important to disseminate this information to employees in order to make the process more accessible.

The values and ethics section of the CSA Intranet site includes an item on the internal disclosure of wrongdoing. We noted that all hyperlinks led to TBS Web pages. Some links were no longer up to date, and one of them referred to a policy (the Policy on the Internal Disclosure of Information Concerning Wrongdoing in the Workplace) that was replaced by the PSDPA in November 2005.

Recommendation

  1. The Senior Officer responsible for disclosure of wrongdoing should inform staff of the process for the disclosure of wrongdoing and ensure that Intranet hyperlinks are up to date.

Management Response

The Senior Officer responsible for disclosure of wrongdoing agrees with the recommendation.

Cases of wrongdoing

It is important to investigate quickly when a wrongdoing is disclosed and that investigation is documented. This makes it possible to intervene rapidly when there are breaches and to take the necessary corrective measures.

We made the following findings:

  • In 2007-2008, there were 29 requests for consultation, three of which were cases received under the PSDPA. Only one disclosure merited investigation. According to the information received, the investigation began five days after receipt of the case. The investigation did not show that there had been wrongdoing under the PSDPA. Therefore, no corrective measures were taken.
  • In 2008-2009, there were three requests for consultation, and no investigations were conducted under the PSDPA.

The Senior Officer responsible for disclosure of wrongdoing documented information on the disclosure of wrongdoing and conducted investigation rapidly.

Ref. Recommendations Responsibility Identified Details of Action Plan
Organization Function
2.3.1 CSA has defined and communicated its values
  1. The Champion should develop a values and ethics communications plan that includes at least the following:
    1. CSA's direction and expectations;
    2. information on the various statutes and policies; and
    3. particular situations illustrating ethical and unethical behaviours specific to CSA activities.
Space Science and Technology Director General (Champion)
  1. The Champion, with the help of the Human Resources (HR) team, will develop a values and ethics communications plan that includes CSA's direction and expectations in terms of values and ethics at the CSA. A meeting will be scheduled between now and September 2010. Following this meeting, the plan will be developed and finalized by December 31, 2010.

    Timetable: Dec. 31, 2010
  2. The Champion, with the help of the HR team, will develop and post material on the CSA'S Web site and Intranet site in order to provide employees, partners, clients and suppliers with information concerning values and ethics related legislation and policies at the CSA.

    Timetable: Dec. 31, 2010
  3. An FAQ section will be available on the Intranet site and provide examples of how to behave and respond in certain situations.

    Timetable: Dec. 31, 2010
2.3.2 CSA President demonstrates by his actions that he will not accept any breaches of CSA values and ethics
  1. The President should, formally and rapidly, appoint values and ethics officers when positions become vacant.
Office of the President President When a position is vacant, the President will promptly make a decision to appoint a responsible officer and formally and without delay, announce the appointee to the Executive Committee and/or all employees by e-mail.

The President will appoint an officer to be the senior official responsible for values and ethics by May 2010.

Timetable: May 31, 2010
  1. The Champion should ensure that the Values and Ethics Policy Committee is up and running so that it can carry out values and ethics program activities.
Space Science and Technology Director General (Champion) The Champion will ensure that the Values and Ethics Policy Committee holds an initial meeting by September 2010 so that activities may start again.

Timetable: Sept. 30, 2010
  1. The Champion should make more efforts to promote values and ethics by, for example:
    1. addressing this subject more regularly with CSA staff through a variety of means (such as e-mails, brochures and stands);
    2. ensuring that the CSA's partners are aware of the CSA's values and ethics framework and its expectations in this respect; and
    3. ensuring that senior managers discuss values and ethics concepts more often at meetings.
Space Science and Technology Director General (Champion)
  1. The Champion will promote values and ethics among CSA staff more regularly by means of the following:
    • E-mail: The Champion will send a message regarding values and ethics to all employees. The purpose of the message is:
      1. to encourage employees to contact the Senior official responsible for values and ethics for all issues related to values and ethics in the public service, and
      2. to encourage employees to read or re-read the Values and Ethics Code for the Public Service.
    • Presentations: The Champion, with the help of the HR team, will produce a bilingual PowerPoint presentation to be given in all sectors and branches that highlights issues related to values and ethics in the public service.
    Timetable: Oct. 31, 2010 and on an ongoing basis
  2. The Champion will promote and ensure that the CSA's partners are aware of the CSA's values and ethics framework by means of the following:
    • Posting of the above-mentioned presentation on the Web site to make partners, clients and suppliers aware of the CSA's values and ethics.
    • During forums and workshops held at the CSA, the Champion will encourage the host to disseminate information about values and ethics to participants and the CSA's partners, such as representatives of universities, companies and organizations.
    Timetable: Oct. 31, 2010 and on an ongoing basis
  3. The Champion will ensure that information is disseminated during all staff meetings called by the President and Directors General of branches. He/she will encourage other members of the Executive Committee and the sector managers to discuss values and ethics at their employee-management meetings.

    Timetable: Oct. 31, 2010 and on an ongoing basis
  1. The Champion should assess whether to impose a requirement that:
    1. staff periodically confirm their adherence to the Code; and
    2. all managers periodically submit duly completed Confidential Reports.
Space Science and Technology Director General (Champion)
  1. The Champion, in consultation with the HR team, will assess whether or not to impose a requirement that staff periodically confirm their adherence to the Code by adding a signature box with specific mention for this purpose on the Performance Appraisal Report and Commitments for the Next Review for the employee and in the Performance Management Program for managers.

    Timetable: March 31, 2011
  2. The Champion, in consultation with the HR team, will assess whether to require all managers to submit a Confidential Report periodically.

    Timetable: March 31, 2011
  1. The Human Resources Directorate should implement a formal process for dealing with Confidential Reports.
Human Resources Chief Executive Development and implementation of guidelines and procedures for handling Confidential Reports:

Step 1: Development and implementation of guidelines and procedures for the handling of Confidential Reports by the staff relations branch.

Timetable: April 9, 2010

Step 2: Presentation to the expanded Human Resources management committee for comments.

Timetable: April 15, 2010

Step 3: Presentation to the Executive Committee for comments and Approval.

Timetable: May 19, 2010

Step 4: Implementation of guidelines and procedures for the handling of Confidential Reports.

Timetable: May 31, 2010

Step 5: Training and awareness workshop for Human Resources advisers.

Timetable: From May 31 to June 11, 2010

Step 6: Training and awareness workshop for managers.

Timetable: From June 14 to Sept. 3, 2010 (and as needed after this date)

Step 7: Communication and awareness-building for employees in regard to procedures for handling Confidential Reports.

Timetable: Sept. 2010

Step 8: Review and update of the guidelines and procedures implemented for the handling of Confidential Reports.

Timetable: April 2011

  1. The Senior Officer responsible for disclosure of wrongdoing should inform staff of the process for the disclosure of wrongdoing and ensure that Intranet hyperlinks are up to date.
Audit and Evaluation Chief Executive
(Senior Officer)
The Intranet page on the internal disclosure of wrongdoing will be updated with the insertion of up-to-date hyperlinks. The process for the disclosure of wrongdoing in effect at the CSA will also be updated. A direct link and an e-mail box will also be added to the page to make it easier for all employees to make use of this process.

Timetable: June 30, 2010