ARCHIVED - Audit of the Management of the Public Service Disability Insurance Plan

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Appendix 3—Management Response and Action Plan

MANAGEMENT RESPONSE TO THE AUDIT OF THE MANAGEMENT OF THE PUBLIC SERVICE DISABILITY INSURANCE PLAN

The audit has confirmed the importance of work that is planned and underway to modernize the benefit plans. This work will ensure cost effective, well-managed health, dental and disability benefit plans that reflect current industry standards, including appropriate internal controls and procedures and risk management strategies while continuing to provide members with appropriate benefits.

Currently the Pensions and Benefits Sector is focusing on the renewal of the Public Service Health Care Plan (PSHCP) given its size and importance to members.  The PSHCP is the largest health care plan in Canada with Treasury Board Vote 20 employer expenditures in 2008-2009 totaling $660.8M compared to the $219.5M for the Disability Insurance (DI) Plan.  Since much of the work planned and accomplished to date for the PSHCP will apply to the other benefit plans, we will build on this work as we address the DI Plan audit recommendations. In terms of timelines, the new contract for the PSHCP will be operational on November 1, 2010 and we expect that we will be in a position to start addressing the action items for the DI Audit in early 2011. The management action plan has been developed to address the issues and recommendations in the internal audit report as described below, recognizing the interdependencies of activities and stakeholders.

Recommendation #1:

Roles, responsibilities, accountabilities and authorities for the Secretariat and its DI Plan delivery stakeholders should be reviewed, clarified, adjusted where necessary, and summarized in a consolidated manner.

Priority Ranking:  High

Management Action	Completion Date	Office of Primary Interest
Agreed.  a. Review, identify, consult and document the roles, responsibilities, accountabilities, and key authorities for the Secretariat and its DI Plan delivery stakeholders.	December 2011	Assistant Deputy Minister, Pensions and Benefits Sector, OCHRO Executive Director, Group Insurance, Policy and Programs, Pension and Benefits Sector, OCHRO
b. Develop a consolidated document that will inform the development of memoranda of understanding (MOUs) with key stakeholders.
c. Review, develop and adjust authorities and operational process documents as required to reflect any revisions following the documentation of the roles, responsibilities, accountabilities and key authorities.
d. Establish MOUs with identified stakeholders in the delivery process that formalize their roles and the services provided.

Recommendation #2:

Existing monitoring and reporting activities should be enhanced and formally defined to support DI Plan management. The monitoring aspect of such a framework should include the following:

1. Definition of monitoring objectives, key activities and related responsibilities;
2. Analysis of the accuracy and completeness of information provided by delivery stakeholders;
3. Verification of payments related to the DI Plan;
4. Measures to assess performance; and
5. Documentation and retention requirements relating to DI Plan activities.

Priority Ranking: High

Management Action	Completion Date	Office of Primary Interest
Agreed. Clarification of the roles and responsibilities and the accountabilities as per above action item will provide the foundation to initiate the actions required to address this recommendation. Define, document and communicate monitoring and reporting objectives, key activities and related responsibilities for all stakeholders in accordance with DI Plan objectives Establish and implement a process to analyze the accuracy and completeness of information provided by delivery stakeholders and used for monitoring and decision-making purposes, including the monitoring and compliance of the MOUs with delivery stakeholders. Identify and enhance information requirements that will support on-going monitoring of the DI Plan. Define activities, frequency, and responsibility with respect to the verification of payments made to the contractor by PWGSC. Identify measures to assess DI Plan performance. Identify and document internal roles and responsibilities and reporting requirements. Identify documentation and retention requirements. Implement enhanced reporting, and documentation retention activities to support DI Plan management.	March 2012	Assistant Deputy Minister, Pensions and Benefits Sector, OCHRO Executive Director, Group Insurance, Policy and Programs, Pension and Benefits Sector, OCHRO

Recommendation #3:

Existing risk management activities in support of DI Plan management should be enhanced, formally defined, and implemented to ensure that risks are regularly identified, assessed and mitigated in a comprehensive and systematic manner.

Priority Ranking: High

Management Action	Completion Date	Office of Primary Interest
Agreed. a)  Determine resource requirements for ongoing risk management activities and prepare proposal for funding.	December 2010	Assistant Deputy Minister, Pensions and Benefits Sector, OCHRO Executive Director, Group Insurance, Policy and Programs, Pension and Benefits Sector, OCHRO
b)  Design a formal risk management process addressing legal, operational, reputational and financial risks involving both internal and external sources.  The process will include the development of procedures for the identification, assessment and response to risks.	March 2011
c)  Implement the risk management process developed above to identify, assess, mitigate and monitor ongoing risks in a comprehensive and systematic manner.	December 2011

Recommendation #4:

Recruitment and succession planning processes should be enhanced and formalized to ensure that the necessary knowledge and skills related to insurance benefits programs are maintained.

Priority Ranking:  Medium

Management Action	Completion Date	Office of Primary Interest
Agreed Review and identify gaps in current recruitment and retention activities including impact of classifications, targeting activities to specific subject matter and industry expertise, and benchmarking to other public and private organizations. Develop and implement targeted HR strategies to secure, retain and maintain resources with appropriate training and knowledge: Ensure alignment with the Secretariat's HR Strategy 2008–11 which focuses on a robust resourcing strategy that enables enhanced recruitment and succession planning processes to ensure that the required knowledge and skills related to the insurance benefits program are maintained; Use collective staffing actions and maintain pre-screened and interviewed applicant pool. Identify key positions to be vacated over the short, medium and long term; Finalize the  implementation of a mentoring program that shares the knowledge, materials, skills and experience of mentors with new employees; Hold workshops to provide an overview of PSMIP/DI Plan; Develop an orientation manual and training to allow the transfer of specific job responsibilities and corporate knowledge; and Review annual performance evaluations and learning plans of current employees to identify training and development needs to assume future key positions. Annual Convene annual meeting of senior managers to discuss talent management including topics such as development options for top talent, organization succession plans, and other critical workforce issues	April 2012	Assistant Deputy Minister, Pensions and Benefits Sector, OCHRO Executive Director, Group Insurance, Policy and Programs, Pension and Benefits Sector, OCHRO

[1]. As per the Secretariat's 2008–09 Departmental Performance Report, Treasury Board is a Cabinet committee of the Queen's Privy Council for Canada invested with a broad range of responsibilities for management excellence, policy development and budget oversight. As the general manager of the public service, Treasury Board has three key roles: the government's management board, the government's budget office, and employer of the core public administration.

[2]. As per section 11(1) of the Financial Administration Act, "core public administration" means the departments named in Schedule I and the other portions of the federal public administration named in Schedule IV of the Act.

[3]. The National Joint Council is an advisory body to the President of the Treasury Board on employee-employer matters. The Council is made up of representatives from the employer and the public service bargaining agents.

[4]. PricewaterhouseCoopers LLP described how traditional corporate governance principles are applied to retirement plans. While the described framework is for pension plans, the principles are applicable to other employee benefits plans.

[5]. Only the roles, responsibilities and accountabilities related to the delivery of insurance benefits programs were reviewed. Those related to ensuring that departments comply with Treasury Board's Policy on the Administration of the Public Service Pension Plan and Group Insurance and Other Benefit Programs were not analyzed.

[6]. The Office of the Chief Human Resources Officer Human Resources Plan for 2010–11.

[7]. Refinements were made to the subobjective to clarify the audit's focus on processes in place to support knowledge and skills.

[8]. The audit criterion was expanded during the audit to include the monitoring activities performed by the Pensions and Benefits Sector related to DI Plan delivery.

[9]. The audit criterion was expanded during the audit to include the process to ensure compliance to other mandatory documents, e.g., Treasury Board policy

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