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Auditor finds deficiencies in management at DoJ

|Written By Jennifer McPhee

Justice Canada has made some progress since numerous weaknesses were identified in a 1993 audit, but is still falling short in most areas, says Auditor General of Canada Sheila Fraser.

Auditor General Sheila Fraser says the Department of Justice, like many law firms, needs someone to oversee its administration.

Fraser’s audit examined whether the department effectively manages the delivery of legal services to meet government needs, takes appropriate steps to ensure the quality of legal services, and delivers them cost effectively.

She found Justice Canada has tried to improve management practices for many years with little success, and needs a senior manager with the authority to lead the improvement of management practices and oversee the implementation of changes.

“Like many of Canada’s large firms, the Department of Justice needs someone like a chief operating officer to oversee the administration of the department,” she said in a statement.

Fraser found that the department lacks a system for ensuring consistent quality of its legal services provided to government. While it has elements of quality control that it can build on, the department hasn’t articulated what it means by quality and does not know whether quality controls are working.

“This impedes its ability to deliver consistent quality of service to its 42 client departments and assess whether it is meeting its objective,” wrote Fraser. “It also lacks a system to provide senior management with ongoing assurance that all services meet established minimum standards.”

Justice Canada also lacks information about the volume of work and use of its staff to demonstrate if it is delivering services cost effectively, wrote Fraser.

“It has some time-keeping data for some lawyers, but recording time worked has only recently become a department wide requirement.”

The department shares the cost of legal services with other departments, but its numerous financial arrangements are inconsistent, poorly documented, and inefficient to administer.

It also has little incentive to control costs because other departments pay for any unanticipated costs. They have little incentive to keep costs in check because they can absorb them and for significant amounts may access additional funding through the Treasury Board, says the report.

“Without good information on costs, it is difficult to manage and control the growing demand in departments for legal services and to find more efficient ways of providing them,” wrote Fraser.

Fraser revisited some weak areas identified in the previous audit, including strategic planning, management of external lawyers, alternative dispute resolution initiatives, and reporting to Parliament.

In 1993, the department had no strategic plan or equivalent sector-level plans, and was just beginning to put processes for priority setting and planning in place, according to the report.

Justice created a strategic plan for 2001 to 2005, but has not updated it, and operational plans aren’t formally aligned with it.

“Without this alignment, there is a risk that the department is not co-ordinated in achieving its corporate objectives,” wrote Fraser.

Fraser noted that, in some areas, the department has improved procurement and management of lawyers hired for indeterminate periods of time for federal prosecution, but found no evidence these lawyers are formally evaluated, and no documentation that corrective action was taken after poor performance was noted.

When it came to civil lawyers hired case by case, the report found no documented rationale for selecting agents, no basic information, such as start and end dates, and no consistent monitoring of ongoing costs. In some agreements, detailed invoices were not even compiled to keep track of ongoing costs.

In the area of ADR, the department implemented ADR strategies to reduce expensive litigation costs. However, after evaluating five of these strategies, Fraser concluded that most of the initiatives lacked clear objectives and estimates of potential cost savings.

“We did not find an identified project management structure that would guide the initiatives, and there was no formal review of outcomes against the original objectives,” she wrote in her report.

She also found that improvements are necessary in the area of reporting to Parliament because other departments include some of their legal costs in their operating expenditures, making these costs hard to identify.

Since 2000, Justice has improved its risk management of litigation, and has plans to improve inconsistent risk assessment of advisory work, the report found.

“While the litigation risk management framework is a good tool, its effective use depends on the correct initial assessment made by individual lawyers,” wrote Fraser. “We found that, in some instances, the lead counsel’s risk assessment was not challenged. This could lead to inadequate preparation for a case.”

Justice’s responses were included after each recommendation. The department generally agreed, and, in some cases, explained initiatives underway to improve the management and delivery of legal services. For instance, it notes efforts to improve reporting and promises to strengthen senior management authority to lead work on management practices.

“We welcome the report,” said department spokesperson Christian Girouard. “While we recognize that there is more to be done, we are pleased that the audit did recognize that the department has a strong commitment to providing quality legal services to the government and acknowledges that progress has been made.”

Justice has an estimated budget of almost $1 billion for the 2006-2007 fiscal year, including $625 million for legal services provided to the government.

Since the 1993 audit, legal services costs have more than tripled.

“This significant increase is attributed to growing complexity and volume of litigation and prosecutions,” notes the report.

“The department has also faced more demand for its services in areas such as Aboriginal affairs, taxation, drug prosecutions, and immigration.”

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