Census of Agriculture data at work
Data products
Custom data products and services
Pricing
Service centres

Census of Agriculture data at work

The Census of Agriculture is the cornerstone of Canada's agriculture statistics program. Governments use Census of Agriculture data to develop, operate and evaluate agricultural policies and programs. Statistics Canada uses the data as benchmarks for estimating crops, livestock and farm finances between census years.

Users in the private sector see the Census of Agriculture as an important window on the agricultural industry. Agribusiness evaluates market potential, and makes production and investment decisions based on census data; farm boards and organizations use Census of Agriculture data as a foundation for their discussions with governments and trade organizations. Governments and farm organizations use census data to evaluate the impact of natural disasters on agriculture (such as fires, floods, droughts and storms) and react quickly. Academics base much of their economic analysis of agriculture on data from the Census of Agriculture.

The Census of Agriculture serves all of these needs by offering a variety of products and services.

Data products

Basic counts and totals for all 2016 farm and farm operator variables will become available online as of May 10, 2017. These data are tabulated at the national and provincial levels, as well as at all three subprovincial levels (census agricultural region, census division and census consolidated subdivision).

A series of analytical articles will appear for several weeks following the release in May providing an informative and unbiased look at the state of agriculture in the country.

In the fall of 2017, the selected historical farm and farm operator data will become available.

Custom data products and services

The Data and Subject Matter Consulting Unit of the Census of Agriculture can tailor products and tabulations to meet the special data requirements of clients. Custom tabulations allow the user to create unique tables from the 2016 Census of Agriculture and agriculture-population linkage databases (from 1971 to 2011 except for the 1976 Census), as well as selected historical data (every census year available since 1921).

Subject to confidentiality restrictions, custom tabulations can be produced for Census of Agriculture standard geographic areas, as well as user-defined areas.

Pricing

The data products mentioned previously are all available on Statistics Canada's website for free on their respective day of release. Pricing for custom data products and services are based on the consulting time that is required for developing the product, the number of geographic areas and variables requested, and the data processing requirements for the custom product.

Service centres

To obtain more information on the data, products and services available from the Census of Agriculture, please Contact us at Statistics Canada.

Introduction
User consultation
Evaluating the suggestions
Questionnaire content and development
New on the questionnaire
Getting and returning your questionnaire
Data collection begins in May
Options for completing the Census of Agriculture
The Census Help Line
The Census of Agriculture and the Internet
Internet security—completing the questionnaire online
Census follow-up
Large farms
Census Communications Program

Head office processing

Data capture
Edit, follow-up and imputation
Data validation
Data security
Data quality
Data dissemination
Census of Agriculture marketing

Introduction

As previously stated, the censuses of agriculture and population are conducted at the same time every five years. However, once the data are collected, most processing activities are quite separate.

User consultation

Planning for the next census begins even before the current census cycle is finished. A series of workshops were held across Canada in 2012 with users and stakeholders such as federal departments and provincial ministries, agricultural associations, academics and agriculture service providers. Users subsequently submitted recommendations for the types of questions they would like to see on the 2016 Census of Agriculture questionnaire. The recommendations received through these submissions were used to develop the content and design of the census questionnaire.

Evaluating the suggestions

Before going any further, the submitted recommendations had to meet certain criteria before being judged suitable for inclusion in the Census of Agriculture:

• Is this topic of national interest?
• Are data worthwhile at more detailed geographic levels than provincial or national?
• Will farmers easily understand the question?
• Can the question be answered—that is, do the farm operators have the information to answer the question?
• Will farm operators be willing to answer it?
• Will there be a broad demand for the data generated by the question?
• Can the question be answered by either 'Yes,' 'No,' or a quantitative response?

Questionnaire content and development

Although the questionnaire is updated every census to reflect users' changing requirements as identified through the submission process, certain questions appear on every census. These questions—such as those on farm operators, land area, livestock numbers and crop areas—are considered essential by Statistics Canada and other major users of Census of Agriculture data. Repeating basic questions allows the census to measure change over time, while adding new questions and dropping others allows data to be collected that reflect new technologies and structural changes in the agriculture industry. Four new topics, notably the adoption of technologies, direct marketing, succession planning and renewable energy systems were added to the 2016 questionnaire. These topics reflect changes in the industry and strong user demand for this new information. Also, to reduce respondent burden the detailed questions related to farm operating expenses have been replaced with one question asking for total farm operating expenses.

New or changed questions were developed in head office in consultation with industry experts. They were tested a number of times with farm operators across Canada through one-on-one interviews on their farms and in focus groups. Farm operators selected for testing reflected regional diversity—in types of agriculture, production techniques, farm size, language and age. This testing proved that some questions would not perform well on the census, and that the wording of other questions would require fine-tuning. Respondent burden, content-testing results, user priorities and budgets were all taken into consideration in determining the final content of the 2016 Census of Agriculture questionnaire. It was approved by Cabinet in the spring of 2015.

New on the questionnaire

The 2016 Census of Agriculture questionnaire contains questions asked in 2011 as well as new ones. Some questions remain unchanged to maintain consistency and comparability of data over time. Other questions have been added or deleted to reflect changes in the agriculture industry. For example:

• Technology: A new step (section) was added to request the different technologies used on the farm.
• Direct Marketing: A new step was added to collect information on direct marketing practices farms may have.
• Succession Planning: A new step (section) was added on whether the farm has a formal, written succession plan, and if so, who the successor would be in that plan.
• On-farm practices and land features: Several response categories were eliminated to reduce burden on respondents and to simplify the questions on manure, irrigation and land practices
• Land inputs: A new response category was added: Trace minerals and nutrients (copper, manganese, etc.)
• Organic: This category was simplified to reduce burden on respondents and to allow for emerging issues, such as succession planning, to be added to the questionnaire.
• Renewable energy producing systems: A new step was added to collect information on which renewable energy producing systems, if any, are being used on farms.
• Farm operating expenses: Only the total farm operating expenses is requested in 2016. All the detailed expenses have been removed from the questionnaire.

Getting and returning your questionnaire

On May 2, all known farm operations in Canada received an invitation letter to fill out their 2016 Census of Agriculture questionnaire on the internet using a Secure Access Code provided in the letter. If a paper questionnaire was preferred, the respondent could call the Census of Agriculture helpline to obtain the paper questionnaire by mail. Farm operators either completed and submitted an electronic form on the internet or mailed back the paper form directly to Statistics Canada in the National Capital Region.

Data collection begins in May

Conducting the Census of Agriculture jointly with the Census of Population in mid-May helps streamline collection procedures and saves millions of dollars.

In 2016, Canada Post delivered an invitation letter to fill out a Census of Agriculture questionnaire on the internet to addresses where it is believed a farm operator lives. The addresses are determined from Statistics Canada’s Business Register, populated from the previous census and other agriculture surveys. Census of Population invitation letters and questionnaires were delivered by Canada Post as well, but may have been delivered by an enumerator in rural areas.

On the Census of Population questionnaire respondents are asked if there is a farm operator living in the household. This question triggers a follow-up from Head Office to help ensure that new farms are identified and counted.

Options for completing the Census of Agriculture

Respondents were able to complete their questionnaires via the internet, on paper, or by telephone. Telephone follow-up will be conducted with those respondents who received invitation letters or questionnaires but did not return them.

The Census Help Line

The 2016 Census Help Line provided a toll-free telephone service that respondents could call during the collection period to obtain assistance in completing the questionnaire.

The Census of Agriculture and the Internet

In 2016, the option of completing the Census of Population or Census of Agriculture questionnaires over the Internet was offered once again. Both questionnaires used a single portal, or entry point. Instructions for accessing the website address and the Internet forms were included in the invitation letters delivered to respondents, as was the unique secure access code that respondents could use to access the electronic questionnaire. This authenticated users and confirmed that a letter has been received from that household. The Internet version also included navigational aids, drop-down menus, help pages and online edits.

Internet security—completing the questionnaire online

Statistics Canada always takes the protection of confidential information provided online very seriously. A secure login process and strong encryption are key elements in helping to prevent anyone from accessing or tampering with census information when the questionnaire is completed and transmitted by Internet.

Census follow-up

Once the data are collected and captured, Statistics Canada employees edit or check them for completeness. Any questionnaire with missing or incomplete data required followed up by telephone. Questionnaires not returned within a certain period of time, also required telephone follow-up.

Large farms

A special data collection process was developed to handle the increasingly complex structure of large integrated agricultural operations. Each operation's business structure was profiled to determine which of its components were to be enumerated and how many questionnaires needed to be completed. The required number of questionnaires was sent to a contact within the operation. Once completed, they were mailed back to head office, where they were edited before being incorporated into the regular census processing flow.

Census Communications Program

In the months leading up to the census, the Census Communications Program promoted both the Census of Agriculture and the Census of Population. The campaign informed respondents about Census Day, and reminded them of the importance of completing the questionnaire promptly. A variety of separate promotional materials were developed for the Census of Agriculture and distributed to various agricultural organizations, producer groups and the farm media. They were also distributed at a number of farm shows and agricultural conferences, and displayed by businesses in rural areas. The program also solicited third-party support from government and agricultural organizations and corporations. In addition, a series of advertisements ran in the major agricultural trade magazines and newspapers and were aired on farm radio stations during the few weeks leading up to May 10.

Head office processing

Data capture

The Census of Agriculture and Census of Population questionnaires, whether completed and submitted on the internet or on paper go their separate ways once they arrive at the Data Operations Centre in the National Capital Region. There, the paper questionnaires are sorted, electronically scanned and the data automatically captured using Intelligent Character Recognition (ICR) software, a technology that reads data from images. Any responses not recognized by the ICR process are sent to a Statistics Canada employee who views the questionnaire image and enters the correct data into the system.

Edit, follow-up and imputation

Once the data have been captured, they are loaded to an automated processing system that takes them through detailed edit, follow-up and imputation processes. The data are first subjected to many rigorous quality control and processing edits to identify and resolve problems related to inaccurate, missing or inconsistent data. A Statistics Canada employee followed up with these problematic records that could not be resolved in editing to clarify the missing or incomplete data. Finally, those situations that cannot be resolved through either edit or follow-up are handled by an imputation procedure that replaces each missing or inconsistent response either with a value consistent with the other data on the questionnaire or with a response obtained from a similar agricultural operation.

Data validation

Data validation follows the edit, follow-up and imputation processes. At this stage, Statistics Canada analysts review the aggregate data at various geographic levels and examine the individual values, large and small, reported for each variable. The data are compared with previous census results, current agricultural surveys and administrative sources. Errors remaining due to coverage, misreporting, data capture or other reasons are identified and corrected. Where necessary, respondents are contacted to verify their responses. Near the end of the validation process, certification reports containing results of the analysis and recommendations for publication are prepared and presented to a review committee.

Data security

The security of personal information is of paramount importance to Statistics Canada. Census data are stored on Statistics Canada systems that are isolated from any other network. External devices, such as telephone dial-in services that connect to Statistics Canada's confidential data storage systems, are not permitted, making it impossible to break into Statistics Canada's databases.

In addition, Statistics Canada's premises have controlled access so that only persons with the appropriate security clearance who have taken the oath of secrecy can enter facilities housing confidential data. Anyone from outside Statistics Canada needing entrance to these premises is escorted by a Statistics Canada employee at all times. Only Statistics Canada employees who need to see Census of Agriculture questionnaires and data as part of their regular work duties are able to access personal information.

Data quality

Quality assurance procedures to ensure complete and accurate information from every agricultural operation in Canada are reviewed and improved for each census.

In 2016, Canada Post delivered a Census of Agriculture invitation letter to addresses where it was believed a farm operator lived. The addresses are determined from the previous census and other agriculture surveys. Census of Population letters and questionnaires were delivered by Canada Post, or dropped off by an enumerator in list/leave areas, or completed by an enumerator in canvasser areas.

To ensure all farm operations were identified, the Census of Population questionnaire asked if there was a farm operator living in the household. This question triggered a follow-up from head office to help ensure that new farms were identified and enumerated for the Census of Agriculture.

Respondents will be able to complete their questionnaires via the Internet, on paper, or by telephone. Telephone follow-up will be conducted with those respondents who received letters and/or questionnaires but did not return them.

In addition, the data processing sequence includes several safeguards that can find 'missing' farms that were counted in 2011 but did not return a questionnaire in 2016 or, conversely, farms that did not exist in 2011 but have been identified on subsequent agriculture surveys since then.

Finally, the Coverage Evaluation Survey gave an estimated undercoverage rate for the 2011 Census of Agriculture of 1.8%.

Data dissemination

Once data are collected, processed, verified and certified, they are ready for public use. Census of Agriculture data are available at low levels of geography and are presented in various standard formats and through custom data tabulations. All published data are subjected to confidentiality restrictions to ensure that no respondent can be identified.

Census of Agriculture marketing

This is the last stage in the census cycle. Once all the data have been collected, processed and produced, users and respondents must be made aware of what products and services are available. The Census of Agriculture staff at head office and Advisory Services staff in the regional reference centres complete most of the promotion. A variety of activities—including mail-outs, media releases, feature articles, client visits and displays—make both the public and private sectors aware of 2016 Census of Agriculture products and services. The marketing, dissemination and communications divisions of Statistics Canada provide technical support.

Introduction
A brief history
Questionnaire respondents
Timing of the Census of Agriculture
Types of data collected
Agriculture-population linkage database

Introduction

A picture of Canada would be incomplete without important and current information about agriculture, which plays an important role in the Canadian economy.

The Census of Agriculture provides comprehensive information on topics such as crop area, number of livestock, weeks of farm labour, number and value of farm machinery, farm expenses and receipts, and land management practices. The most recent was conducted in conjunction with the Census of Population on May 10, 2016. Although the two censuses are very different, conducting them at the same time has several benefits. This chapter describes the Census of Agriculture and how it is conducted.

A brief history

The Constitution Act of 1867 (formerly the British North America Act) determined that a census would be taken every 10 years starting in 1871. However, rapid expansion in Western Canada at the turn of the century made a more frequent census necessary. Starting in 1896, a separate Census of Agriculture was taken every five years in Manitoba, and, beginning in 1906, in Alberta and Saskatchewan.

By 1956, rapid economic growth and development created the need for national demographic and agricultural information at more frequent intervals. In 1956, the five-year Census of Agriculture was extended to the entire country, and the Census of Population became a regular enumeration every five years. That year, the two started a long tradition of being conducted concurrently.

Although the Census of Agriculture and the Census of Population are conducted at the same time, they do have separate questionnaires. Most of the development, testing, processing, data validation and preparation for data dissemination for the Census of Agriculture and the Census of Population are handled by different groups within Statistics Canada. However, sharing the data collection and communications activities for both censuses streamlines procedures and reduces costs considerably. Another important benefit is that information from the two questionnaires can be linked to create the agriculture-population linkage database. This unique database provides users with information pertaining to the social characteristics of the farm population.

Questionnaire respondents

Anyone who operates a farm, ranch or other agricultural operation that produces at least one of the products intended for sale (listed in Figure 1), is required to complete the Census of Agriculture questionnaire.

Figure 1
Products intended for sale from an agricultural operation

Products intended for sale from an agricultural operation

Crops	Livestock	Poultry	Animal products	Other agricultural products
hay field crops tree fruits or nuts berries or grapes vegetables seed	cattle pigs sheep horses game animals other livestock	hens chickens turkeys chicks game birds other poultry	milk or cream eggs wool furs meat	sod, greenhouse or nursery products Christmas trees mushrooms honey or bees maple syrup products

Operators are defined as those responsible for the management and/or financial decisions made in the production of agricultural commodities. All operations, regardless of size, must submit a completed Census of Agriculture questionnaire. As a group, even very small operations contribute significantly to the agricultural community and economy. Since 1991, the Census of Agriculture questionnaire has expanded to include multiple operators reporting for one farm.

Timing of the Census of Agriculture

As in previous censuses, the 2016 Census of Agriculture data collection activities were conducted jointly with the Census of Population in early May.

Statistics Canada recognizes that for farmers this is one of the busiest times of the year. However, collecting the data at the same time as the Census of Population and combining public awareness campaigns—even though the two censuses are very different—streamlines procedures, ensures accurate coverage and saves millions of dollars.

In 2016 the censuses of population and agriculture used a method called 'the Wave' to deliver invitation letters, reminder cards and questionnaires at specific times throughout the collection period, to remind Canadians to fill out their questionnaires.

On May 2, (Wave 1) all known farm operations in Canada received an invitation letter to fill out their 2016 Census of Agriculture questionnaire on the internet using a Secure Access Code provided in the letter. If a paper questionnaire was preferred, the respondent could call the Census of Agriculture helpline to obtain the paper questionnaire by mail. Farm operators either completed and submitted an electronic form on the internet or mailed back the paper form directly to Statistics Canada in the National Capital Region.

Wave 2 has no specific Census of Agriculture activities. However, Census of Agriculture respondents receiving a Census of Population reminder card, might prompt a Census of Agriculture response.

Farm operations from Wave 1 that still had not responded received a Census of Agriculture questionnaire package in the mail as part of Wave 3.

Types of data collected

The 2016 Census of Agriculture questionnaire had a total of 183 questions on 16 pages. Respondents were only required to complete questions that applied to their agricultural operations; an average respondent answered about 20% of the questions. A series of 'skip' questions also helped the respondents move quickly through the questionnaire. The following is a list of the types of data collected:

• CRA business number
• type of operating arrangements
• farm operator information
• main farm location
• size (area) of operation
• land use and land tenure
• area and type of field crops
• area and type of fruits, berries and nuts
• area and type of vegetables
• area of nursery products and sod
• area of Christmas trees
• area and type of greenhouse products
• area of mushrooms
• number of maple taps
• number of bee colonies and other pollinating bees
• land management practices
• chicken and turkey production and inventory
• eggs produced
• number of birds hatched in commercial poultry hatcheries
• number and type of livestock
• market value of land and buildings
• number and market value of farm machinery by type
• total gross farm receipts
• total farm business operating expenses
• value of forest products
• total number of employees and number of employees paid on a full, part-time or seasonal basis
• organic production
• direct marketing
• succession planning
• renewable energy producing systems.

Agriculture-population linkage database

An important benefit of conducting the Census of Agriculture with the Census of Population is that the two can be matched or linked by computer. Since all farm operators also complete a Census of Population questionnaire, linking information from the two questionnaires provides a social profile of the farm population that includes information such as marital status, the language of farm operators and the size of farm families.

Archived Taking an agriculture census Archived
Archived The Census of Agriculture cycle Archived
Archived Census of Agriculture products and services Archived

Repurposing data supports the growing need for information

Every day, government and private-sector organizations collect data for their various needs. All levels of government are increasingly interested in maximizing the potential of administrative data to build a comprehensive and coherent statistical picture of the economy, society and the environment.

Statistics Canada is responsible for providing Canadians with reliable and comprehensive data and for giving governments, businesses, unions and not-for-profit organizations the information they need to maintain an open and democratic society.

For close to 100 years, Statistics Canada has repurposed data collected by other organizations to enhance the decision-making capability of governments and communities. These data support the creation of statistical outputs which bring evidence to policy and decision making, and save money and time.

What are the benefits of giving Statistics Canada access to your administrative data?

• brings together statistical information from many high-quality sources
• reduces the response burden on individuals and companies
• saves money
• provides a direct way to tabulate statistical outputs
• responds quickly to growing needs for quality statistical outputs
• facilitates statistical modelling based on the integration of multiple data sources
• leads to better survey design.

Your data is PROTECTED

Statistics Canada will protect the confidentiality of the information that it obtains from all data providers. The data are held in a secure environment, and the privacy of individuals is fully protected.

Contact us

For more information on confidentiality, privacy or repurposing data, contact us at infostats@statcan.gc.ca or at 1-800-263-1136.

Statistics Canada website

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Information on Canadian Government Finance Statistics Provisional Estimates

November 19, 2014

OTTAWA – Statistics Canada's makes regular updates to the Canadian System of Macroeconomic Accounts in order to incorporate the most current information on the economy from censuses and annual surveys, and to improve estimation methods. These type of revisions are typically limited to a number of reference years.

Periodically, the Canadian macroeconomic accounts or components of the macroeconomic accounts undergo major revisions, which are much broader in scope. These are reserved for incorporating conceptual, classification, presentational, major statistical changes or due to the introduction of a new international accounting standard.

Since 2009 Statistics Canada has been working towards implementing the Government Finance Statistics standard, an international standard for reporting government revenues, expenditures, financial transactions, revaluations, assets, liabilities and net worth.

In short, Government finance statistics are:

• an economic representation of a government's financial activity;
• the International Monetary Fund's preferred basis for reporting government financial statistics;
• conceptually consistent with the balance of payment, international investment position and national account set of statistics.

Statistics Canada is now ready to release a set of provisional estimates of Government Finance Statistics for the period 2008-2009 to 2012-2013.

Government Finance Statistics allow users to analyze the financial soundness of the government and government business enterprises in the same way that financial soundness and stability is measured in the corporate or household sector. Government Finance Statistics also enable users to determine whether government decisions are sustainable over the long term, and assess government liquidity constraints as well as financing needs.

What are Government Finance Statistics?

The Canadian Government Finance Statistics will:

• Improve international comparability. Most countries around the world publish a set of government statistics according to the IMF's government finance statistics manual. The Canadian Government Finance Statistics will be compatible allowing for inter-country comparisons with respect to indicators such as government sources of revenue, expenditures and level of debt.
• Allow policy makers to study the financial position, liquidity and operations of the different levels of governments in a consistent and systematic manner;
• Incorporate the latest advances in methodology in the area of economic measurement, and;
• Integrate updated source data and statistical techniques to add detail to economic estimates to more fully reflect the role of government in the Canadian economy.

Why Provisional?

Given the degree of changes associated with the development of this new product, Statistics Canada has decided to release the data with the provisional qualifier.

The provisional qualifier signals to users that the data are fit for use but subject to revision. Over the next year these data will be integrated into the rest of the Canadian System of Macroeconomic Accounts (such as the National Accounts, Balance of Payments, International Investment Position, Input-Output Tables). The data will be revised due to this integration process as the estimates, concepts and methods are compared and adjusted to align with counterparty information and integrated into the wider national accounts framework.

In addition there are a number of tasks that need to be completed over the next year to improve the usability of the data. These include:

• Balancing grants across levels of government: The GFS data estimate grants paid by one government to another government. Since the data are built from individual government accounting records the recording of what one level of government pays to another is not always consistent with what the receiving level of government records. For example, the Federal government may record a grant to a province valued at $100m. The provincial government may only record receipt of $95m (due to timing or approaches to classification). It is the role of the GFS compiler to determine how to balance these flows. This balancing has not been incorporated into the GFS data at this time.
• Inclusion of capital expenditures and capital stock: The current version of GFS data will not include estimates of capital spending and capital stock by government. The GFS manual recommends that government capital stock estimates be valued on a replacement cost basis. This means that the value of the government's non-financial assets need to be valued at current prices. Government accounting records are inconsistent in their valuation of non-financial assets. As such, a methodology referred to as a perpetual inventory method, needs to be adopted to properly value the government's non-financial assets. These estimates are not yet ready for dissemination. They will be ready sometime within the next year. The implication is that the provisional CGFS estimates will not include estimates of capital investment and capital stock and therefore it will not be possible to derive government net operating balance, net lending/borrowing or net worth.
• Consolidation: Consolidation is a method of presenting statistics for a set of institutional units (or entities) as if they constituted a single unit. For example, consider the following sectors within the Canadian public sector universe: Federal general government, provincial and territorial general government and local general government. Assume that we would like to analyze the overall impact of the federal, provincial/territorial and local governments on the Canadian economy. One way to do this would be to view these sectors as a single general government sector. In order to do this we could consolidate these units together and treat them as if they are a single unit. Consolidation is not simply summing together the data into a single aggregate. Consolidation involves first eliminating the transactions and debtor-creditor relationships that occur among the units being consolidated and then aggregating the remaining transactions. In other words, transactions or stock position of one unit are paired with the same transaction or stock position recorded for the second unit and then both the transaction or stock position are eliminated. The provisional GFS data will not be presented on an inter-sectoral basis. This has a number of implications. First, it makes it difficult to compare data from one province to another. For example, suppose you wanted to analyze total expenditures on health in the province of Ontario. You could not add together the health expenditures of the provincial general government, health sector and local government because you would invariably double count the expenditures. Some of the expenditures of the provincial general government on health represent grants to the health sector. The health sector then spends those same funds on hospital care, emergency care etc. Adding the two figures together results in a double counting of the information. Until the data are consolidated the only analysis that can be done using the CGFS data is a time series comparison of the data for a particular level of government.
• Aboriginal General Governments: While Statistics Canada has been producing data for the aboriginal general government sector since 2012 as part of the release of the Canadian System of National Accounts these data have not yet been incorporated into the CGFS release.

Given these limitations one could ask why the data are being released at this point in time. Statistics Canada felt it was better to release the data now rather than wait another year since there is currently a lack of data in the area of government finance statistics, especially at the provincial and local level. While some of the detailed series may change over the next year and there are some data gaps, the general story and trends found in the data will remain the same.

‘Sequence of accounts'' approach

The strength of the Government Finance Statistics framework lies in the fact that it is a set of interrelated statements that integrate flows (revenues and expenditures) and stock positions (debt) for different levels of governments and government business enterprises.

The CGFS data is presented as a “sequence of accounts.” That is, it consists of two inter-related accounts; a statement of operations and a balance sheet.

This framework allows data users to monitor the impact current government policy and spending has on its stock of assets and liabilities, examine the liquidity of governments and the sustainability of government fiscal policy.

The Canadian Government Finance Statistics are also closely linked to other macroeconomic frameworks such as the System of National Accounts, Balance of Payments and International Investment Position. This ensures the data are comparable to other macroeconomic indicators such as gross domestic product, the balance of payments, household debt and net worth positions.

Increased Detail

With the initial release of the CGFS nine new matrixes will be published from which over 100 new data tables can be constructed.

Users will be able to look at government revenues (by type of revenue) and expenditures (by type of expenditure), transactions in assets, liabilities, as well as the stock of assets and stock of liabilities by level of government (federal, provincial, local).

Information is also available for various sub-sectors of governments such as the health sector and education sector.

A classification of the functions of government (COFOG) table is also available for each level of government. The COFOG tables provide an alternative view of government expenditures – focusing on the intended purpose of the expenditure. They paint a picture of the social and economic role governments play in society and the economy.

Finally a selected set of analytical tables are provided to data users. This includes tables which present government financial stability indicators and debt positions – at book and market value.

Who can use Government Finance Statistics?

Government Finance Statistics can be used by:

• Taxation analysts interested in studying tax rates and sources of revenue
• International bodies such as the OECD, IMF, UN to analyze the activities of the Canadian government relative to other countries.
• International credit agencies who need to advise on the credit worthiness of Canadian governments.
• The financial sector who need to track the governments'' demand and supply of funds in/to the economy.
• Tax payers interested in understanding how their tax dollars are spent and assessing the stewardship of the government.

Complex project

The compilation of the Canadian Government Finance Statistics is a complex project including structural, presentational, conceptual and statistical changes.

Regular users of Statistics Canada's data are urged to familiarize themselves with these changes.

Users are invited to consult the following links on our website for a more in-depth explanation of the changes.

For more information, contact Media Relations (613-951-4636); statcan.mediahotline-ligneinfomedias.statcan@statcafn.gc.ca.

Ce document est aussi disponible en français.

Background

In 2010, Statistics Canada launched the Integrated Business Statistics Program (IBSP) to provide a moreefficient model for producing economic statistics. The main objective was to enhance the economic statistics program so that it remains as robust and flexible as possible while reducing the burden onbusiness respondents.

The IBSP encompasses around 60 surveys covering four major sectors: manufacturing, wholesale and retail trade, services (including culture) and capital expenditures. By 2019/2020, the IBSP will include roughly 150 economic surveys covering all sectors of economic statistics.

The program changes ensure that Statistics Canada will continue to produce a consistent and coherent set of economic statistics. As well, data users and researchers can more easily combine economic data with information from other sources to undertake their analyses.

The IBSP uses a standardized approach for economic surveys conducted at Statistics Canada. This framework involves:

• Using a common Business Register as the unique frame
• Maximizing the use of administrative information to reduce business response burden
• Using electronic questionnaires as the principal mode of collection
• Harmonizing concepts and questionnaire content
• Adopting common sampling, collection and processing methodologies

What are some of the more significant changes?

• A new approach to sampling ensures businesses will only be asked those questions that are pertinent to their operations. This creates a win-win situation for Statistics Canada and respondents. Statistics Canada reduces the collection effort and has a greater likelihood of collecting the information it requires to produce official statistics relevant to Canadians. It also reduces the time needed by respondents to complete their business surveys.
• Increased use of administrative data reduces business response burden. Administrative data files (such as corporate income tax files) have been used extensively as a direct substitute for a sub-set of sampled units and for imputation of non-response. In the transition to the IBSP model, imputation methods were adapted to take full advantage of the availability of administrative data. This resulted in additional response burden reductions across survey programs. The majority of sampled businesses are no longer required to provide data for revenue and expense information that is available from tax data. The IBSP questionnaires are designed to collect information that is not available from administrative data files, such as commodities produced and business practices.
• A new coherent approach to developing provincial/territorial estimates uses existing information on Statistics Canada's business register to determine provincial/territorial shares of revenues, expenses and value added. This ensures a coherent and standardized approach that is consistent across all IBSP surveys. Previously, these data were collected directly from each respondent, contributing to response burden.
• Electronic questionnaires are now the primary mode to collect data from business respondents. Businesses complete surveys using a secure online application. The result is a more efficient and higher quality collection process. In addition, the quality of survey statistics may improve because electronic questionnaires have built-in checks designed to limit reporting errors that can occur with paper-based questionnaires.
• Increased coverage of the business population results in a more comprehensive set of business statistics. Beginning in reference year 2013, the population covered by the suite of annual economic survey programs increased to include all firms regardless of their size. In previous years, relatively small businesses (based on their sales) were not included in Statistics Canada's central business frame. However, with new self-coding technology, it became possible to classify all businesses operating in the Canadian economy onto the central business frame, regardless of the sales of the firm. As a result, with improved coverage of the population, the IBSP-based estimates better reflect the population of businesses operating in Canada.
• Questionnaires have been updated to reflect the latest business terminology and accounting practices of Canadian businesses. In addition the questionnaires apply the latest standard classifications used by Statistics Canada, such as the North American Industry Classification System and the North American Product Classification System.

Does this impact the comparability of data through time?

The extent of the changes in the business statistics program introduced by the IBSP means that some series may no longer be consistent with estimates from previous periods. For example, the increase in the business population alone means that the estimates will tend to be higher than those previously ublished.

For some series, data changes will be small and comparisons with estimates to previous reference periods will be consistent. In other cases, the impacts can be significant, leading to breaks in the current estimates when compared to past estimates.

Recognizing the importance of data continuity, Statistics Canada will continue to use several assessmenttechniques in order to examine whether current estimates will be directly comparable to past estimates.Some of the techniques that may be used include:

• Evaluating survey estimates at all levels of detail (national, sub-national, NAICS)
• Comparing estimates obtained from sub-annual surveys (where applicable)
• Comparing tax information
• Analysing the results for common respondents in 2012 and 2013
• Comparing historical movements by respondent and by the industry in general.

In all cases, users are aware that breaks can exist and that any comparisons with previousdata should be made at their own discretion.

Once the estimates for the current reference year are available, revisions will be made to the previous year's data.

Who will use the new IBSP estimates?

• Businesses use the estimates to better understand their performance within their given industry relative to the industry average.
• Industry analysts and associations use the IBSP estimates to analyze the performance of given industries in the Canadian economy both nationally and regionally.
• Federal departments and agencies, provincial ministries and authorities, the press, survey respondents, and the general public use estimates to assess trends in the Canadian economy.

The IBSP data are a main input into the Canadian System of Macroeconomic Accounts. They are first adjusted to macroeconomic accounting concepts and definitions and are then integrated into the macroeconomic accounting frameworks. This integration involves adjusting the data to adhere to the macroeconomic accounting identities as well as ensuring consistency through time. These data are thebuilding blocks for Statistics Canada's benchmark measure of gross domestic product and a key input into the estimates used to determine equalization payments and the allocation of harmonized sales tax revenue.

Periodically, Statistics Canada undertakes large scale changes as part of its survey renewal process.The new IBSP data will be integrated into the Macroeconomic Accounts. Although the new data may leadto some changes/revisions to the national accounts, the System of National Accounts framework ensuresthat the national account estimates are robust and coherent.

Have any other survey releases taken place under the new IBSP schedule?

Yes. The first survey released under IBSP was the 2013 Survey of Aquaculture that was published in theDaily on November 14, 2014. Since then, several other annual surveys have been released, and a number of monthly surveys will soon be made available.

Further Information

For a more detailed explanation of the changes, please consult the Integrated Business Statistics Program Overview on the Statistics Canada website .

More information on the technical aspects on sampling and estimation is available upon request.

For more information, contact Media Relations (613-951-4636); statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca.

Ce document est aussi disponible en français.

Changes to the Passenger Bus and Urban Transit Survey

Starting in May 2015, Statistics Canada rolled out a re-designed survey related to public bus and urbantransit in Canada. All companies engaged in public bus and urban transit in Canada are included in thisredesigned survey.

The changes starting for 2014 include:

• Increasing the coverage of the estimates from 95% to 100%
• Combining urban transit services with commuter services and para-transit
• Eliminating the publication of CANSIM Table 408-0011 – Canadian passenger bus and urban transit industries, maintenance cost, by type of vehicle

Data comparability and accessibility

Data for this survey is published in CANSIM tables. Direct comparisons of data between the new CANSIM table and the previously published tables may not be possible. However, previous tables will remain available for reference purposes.

How can I obtain for more information on changes to the survey?

This document highlights key changes to the survey and its impacts for end users. For more information, or to enquire about the concepts, methods or data quality of this survey, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (613-951-4636; statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

Background

In 2010, Statistics Canada launched the Integrated Business Statistics Program (IBSP) to provide a more efficient model for producing economic statistics. The main objective was to enhance the economic statistics program so that it remains as robust and flexible as possible while reducing the burden on business respondents.

The IBSP encompasses around 60 surveys covering four major sectors: manufacturing, wholesale and retail trade, services (including culture) and capital expenditures. By 2019/2020, the IBSP will include roughly 150 economic surveys covering all sectors of economic statistics. The list of surveys currently included in IBSP is available online.

The program changes ensure that Statistics Canada will continue to produce a consistent and coherent set of economic statistics. As well, data users and researchers can more easily combine economic data with information from other sources to undertake their analyses.

The IBSP uses a standardized approach for economic surveys conducted at Statistics Canada. This framework involves:

• Using a common Business Register as the unique frame
• Maximizing the use of administrative information to reduce business response burden
• Using electronic questionnaires as the principal mode of collection
• Harmonizing concepts and questionnaire content
• Adopting common sampling, collection and processing methodologies

What are some of the more significant changes?

• A new approach to sampling ensures businesses will only be asked those questions that are pertinent to their operations. This creates a win-win situation for Statistics Canada and respondents. Statistics Canada reduces the collection effort and has a greater likelihood of collecting the information it requires to produce official statistics relevant to Canadians. It also reduces the time needed by respondents to complete their business surveys.
• Increased use of administrative data reduces business response burden. Administrative data files (such as corporate income tax files) have been used extensively as a direct substitute for a sub-set of sampled units and for imputation of non-response. In the transition to the IBSP model, imputation methods were adapted to take full advantage of the availability of administrative data. This resulted in additional response burden reductions across survey programs. The majority of sampled businesses are no longer required to provide data for revenue and expense information that is available from tax data. The IBSP questionnaires are designed to collect information that is not available from administrative data files, such as commodities produced and business practices.
• A new coherent approach to developing provincial/territorial estimates uses existing information on Statistics Canada's business register to determine provincial/territorial shares of revenues, expenses and value added. This ensures a coherent and standardized approach that is consistent across all IBSP surveys. Previously, these data were collected directly from each respondent, contributing to response burden.
• Electronic questionnaires are now the primary mode to collect data from business respondents. Businesses complete surveys using a secure online application. The result is a more efficient and higher quality collection process. In addition, the quality of survey statistics may improve because electronic questionnaires have built-in checks designed to limit reporting errors that can occur with paper-based questionnaires.
• Increased coverage of the business population results in a more comprehensive set of business statistics. Beginning in reference year 2013, the population covered by the suite of annual economic survey programs increased to include all firms regardless of their size. In previous years, relatively small businesses (based on their sales) were not included in Statistics Canada's central business frame. However, with new self-coding technology, it became possible to classify all businesses operating in the Canadian economy onto the central business frame, regardless of the sales of the firm. As a result, with improved coverage of the population, the IBSP-based estimates better reflect the population of businesses operating in Canada.
• Questionnaires have been updated to reflect the latest business terminology and accounting practices of Canadian businesses. In addition the questionnaires apply the latest standard classifications used by Statistics Canada, such as the North American Industry Classification System and the North American Product Classification System.

Does this impact the comparability of data through time?

The extent of the changes in the business statistics program introduced by the IBSP means that some series may no longer be consistent with estimates from previous periods. For example, the increase in the business population alone means that the estimates will tend to be higher than those previously published.

For some series, data changes will be small and comparisons with estimates to previous reference periods will be consistent. In other cases, the impacts can be significant, leading to breaks in the current estimates when compared to past estimates.

Recognizing the importance of data continuity, Statistics Canada will continue to use several assessment techniques in order to examine whether current estimates will be directly comparable to past estimates. Among the techniques that may be used include:

• Evaluating survey estimates at all levels of detail (national, sub-national, NAICS)
• Comparing estimates obtained from sub-annual surveys (where applicable)
• Comparing tax information
• Analysing the results for common respondents in 2012 and 2013
• Comparing historical movements by respondent and by the industry in general.

In all cases, users are aware that breaks can exist and that any comparisons with previous data should be made at their own discretion.

Once the estimates for the current reference year are available, revisions will be made to the previous year`s data.

Who will use the new IBSP estimates?

• Businesses use the estimates to better understand their performance within their given industry relative to the industry average.
• Industry analysts and associations use the IBSP estimates to analyze the performance of given industries in the Canadian economy both nationally and regionally.
• Federal departments and agencies, provincial ministries and authorities, the press, survey respondents, and the general public use estimates to assess trends in the Canadian economy.

The IBSP data are a main input in the Canadian System of Macroeconomic Accounts. They are first adjusted to macroeconomic accounting concepts and definitions and are then integrated into the macroeconomic accounting frameworks. This integration involves adjusting the data to adhere to the macroeconomic accounting identities as well as ensuring consistency through time. These data are the building blocks for Statistics Canada's benchmark measure of gross domestic product and a key input into the estimates used to determine equalization payments and the allocation of harmonized sales tax revenue.

Periodically, Statistics Canada undertakes large scale changes as part of its survey renewal process. The new IBSP data will be integrated into the Macroeconomic Accounts. Although the new data may lead to some changes/revisions to the national accounts, the System of National Accounts framework ensures that the national account estimates are robust and coherent.

Have any other survey releases taken place under the new IBSP schedule?

Yes. The first survey released under IBSP was the 2013 Survey of Aquaculture that was published in the Daily on November 14, 2014. Since then, several other annual surveys have been released, and a number of monthly surveys will soon be made available.

Further Information

For a more detailed explanation of the changes, please consult the Integrated Business Statistics Program Overview on the Statistics Canada website.

More information on the technical aspects on sampling and estimation is available upon request.

For more information, contact Media Relations (613-951-4636); mediahotline@statcan.gc.ca.

Ce document est aussi disponible en français.

Changes to how natural gas storage information is produced

New Product

Starting January 2016, Statistics Canada will begin surveying the natural gas storage industry in order to examine its characteristics related to inventories and flows. Companies whose principal activities relate to distribution and transmission of natural gas but who also have storage operations will be part of this new survey.

The creation of the survey will provide more detailed and complete data to end users as it will expand on the relatively small storage content previously requested on natural gas distribution and transmission surveys.

Among the information that will be released to end users are national and provincial storage data related to the following:

• Opening inventories
• Closing inventories
• Inventory change (i.e., the difference between total opening and closing inventories)
• Injections to storage
• Withdrawals from storage
• Other adjustments (i.e., includes discrepancies due to meter inaccuracies and/or leakage or other losses)

Data availability

Gas storage data will be made available on the volume of gas stored in both thousands of cubic metres and gigajoules.

Data comparability and accessibility

As a result of the content changes for the survey, natural gas storage information previously found in CANSIM tables 129-0001, 129-0002, 129-0003 and 129-0004 will no longer be directly comparable with data that will be published under IBSP.

In place of these tables, gas distribution data will now be published solely under table 129-0005. By centralizing the data in one table, users will more easily be able to access survey results.

How can I obtain for more information on the monthly gas storage survey?

This document highlights key changes to the survey and its impacts for end users. For more information, or to enquire about the concepts, methods or data quality of this survey, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (613-951-4636; statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

Starting with the release of January 2016 reference month data, the basket of goods used to calculate the EPSPI was updated to reflect the sales revenues in 2014. This update is to better reflect important changes in the consumption of electricity by non-residential customers in Canada.

The update, which occurs periodically, is designed to ensure the EPSPI reliability for two key purposes: a measure of inflation for the distribution of electricity; and a tool for analysis of price formation and behaviour as well as for contract escalation.

The update includes two major changes: the weights of various items in the basket of goods used to calculate the index, which was based on 2009 data, will now be based on 2014 data; and the EPSPI base year (the period for which the value 100 is assigned to the index) has changed from 2009 to 2014. As a result of rebasing, CANSIM table 329-0073 has been replaced by the new table 329-0079. This new CANSIM table contains historical and current data. A vector number concordance table between the new and old tables is available below.

Although the EPSPI base year has changed to 2014=100 in the new CANSIM table, the rates of change measured for periods prior to 2014 remain unchanged for both of the 2009=100 and the 2014=100 tables, barring rounding. From 2014 onwards, the same lower-level or elemental price movements are used, but updated 2014 weights will be used to aggregate these movements. Therefore, at the lower level, the movements will be the same, but the aggregate movements will change due to the updated weights. This means that with the implementation of the new 2014 weights, the index movements from January 2014 to December 2015 were revised.

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or for the Media unit: 613-951-INFO (613-951-4636);STATCAN.mediahotline-ligneinfomedias.STATCAN@statcan.gc.ca.

April 15, 2016
Project Number: 80590-90

• Executive summary
• Introduction
  • Background
  • Audit objectives
  • Scope
  • Approach and methodology
  • Authority
• Findings, recommendations and management response
  • Management of Leave
  • Management of Overtime
• Appendices
  • Appendix A: Audit criteria
  • Appendix B: Acronyms

Executive Summary

Statistics Canada was established to ensure that Canadians have access to a trusted source of statistics on Canada to meet their highest-priority needs.

The agency's mandate derives primarily from the Statistics Act. The act requires that Statistics Canada collect, compile, analyze and publish statistical information on the economic, social and general conditions of the country and its people. It also requires that Statistics Canada conduct a census of population and a census of agriculture every fifth year, and that the agency protect the confidentiality of the information with which it is entrusted.

The agency's organizational priorities include the delivery of a comprehensive set of statistical programs in conformity with Statistics Canada's quality assurance framework. These programs provide Canadians with access to timely, relevant and quality statistical information on Canada's changing economy and society for the purposes of informed debate, research and decision making on social and economic issues. They include programs for economic statistics; social statistics; and census, demography and Aboriginal statistics.

The nature of the business creates complex resourcing and scheduling demands for managing timelines for publications that have set release dates. Teams that support the survey and census operations infrastructure are sometimes required to be available outside core business hours to respond to situations that may impair the achievement of operational objectives.

The objectives of the audit were to provide the chief statistician (CS) and the Departmental Audit Committee (DAC) with assurance on

• the adequacy of the control framework in place to support the management of leave and overtime
• the effectiveness of internal controls in ensuring compliance of leave and overtime transactions with relevant acts, Treasury Board (TB) policies, guidelines and collective agreements.

The focus of this audit was the management of leave and overtime, in part to ensure that TB policies, Statistics Canada guidelines and the provisions of collective agreements were respected, but also to establish whether the agency is managing overtime efficiently. As a federal government agency, Statistics Canada is accountable to the public for using resources effectively and efficiently.

The scope of the audit included the following elements of the management control framework: roles, responsibilities, accountabilities, authorities, policies, procedures and monitoring mechanisms, as they relate to sections 32, 33 and 34 of the Financial Administration Act (FAA) and to the management of collective agreements. Coverage included employees hired under the Public Service Employment Act (PSEA) and working at headquarters. The audit included transactions incurred during the period from October 2013 to November 2014, where 163,846 leave transactions were approved and employees earned $4,093,761 in overtime.

The audit was conducted by Internal Audit Division in accordance with the Government of Canada's Policy on Internal Audit.

Key Findings

The control framework for the pre-authorization and approval of leave is consistently applied and effective. Key controls are embedded into the corporate framework and the Time Management System (TMS), and ensure adequate oversight for the management of leave.

Results of analysis, testing and interviews revealed that leave transactions recorded in the TMS were approved by the appropriate individual, in compliance with applicable TB policies and within the limits of collective agreements. Transactions were accurate, valid and properly coded. The TMS is an effective tool for recording leave transactions.

There is an adequate control framework to support the management of overtime, and it is in line with the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements; however, the control framework is not consistently applied across the agency.

Budget holders provide pre-authorization to work overtime in writing when operationally feasible or for planned projects, but pre-authorization to work overtime on short notice is mostly given verbally. Undocumented pre-authorization of overtime and a lack of diligence in the certification of work performed in overtime increase the risk of undetected errors and can lead to inefficient use of resources.

There were also instances from the sample selected where budget holders and supervisors do not actively monitor their employees' work hours or periodically review employee schedules for resource optimization purposes. Furthermore, several divisions manage overtime outside the control framework.

The management of overtime generated by standby duties requires strengthening. The need for standby coverage outside core hours is not always formally documented, approved or reviewed for relevance on a regular basis. Certification of eligibility and entitlement to compensation for standby activities (Section 34 of the FAA) is done by individuals with delegated authority, but greater diligence is required to manage standby schedules for resource optimization purposes.

Management and oversight bodies do not have clearly communicated mandates that include roles for the monitoring and day-to-day administration of overtime. Circumstances that drive overtime costs are not effectively identified, measured or addressed at the corporate level.

Overall Conclusion

The agency has implemented a framework that ensures adequate oversight of leave management and that is aligned with the requirements of the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements.

The framework that supports the management of overtime is also aligned with the requirements of the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements; however, it is not consistently applied across the agency. Strengthening of corporate monitoring activities and tools is required in order for oversight bodies and managers to effectively identify, assess, monitor and remedy potential overtime-related irregularities or trends. Documentation of pre-authorization for overtime needs to be retained, and greater diligence with respect to certification of work performed is required to bolster compliance with FAA requirements. Greater accountability of budget holders and managers is required, so that they are compelled to optimize resources where possible and preserve the integrity of information systems used by management for decision making.

Conformance with Professional Standards

The audit was conducted in accordance with the Internal Auditing Standards for the Government of Canada, which include the Institute of Internal Auditors (IIA) International Standards for the Professional Practice of Internal Auditing.

Sufficient and appropriate audit procedures have been conducted and evidence gathered to support the accuracy of the findings and conclusions in this report and to provide an audit level of assurance. The findings and conclusions are based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria. The findings and conclusions are applicable to the entity examined and for the scope and time period covered by the audit.

Steven McRoberts
A/Chief Audit Executive

Introduction

Background

Statistics Canada was established to ensure that Canadians have access to a trusted source of statistics on Canada to meet their highest-priority needs.

The agency's mandate derives primarily from the Statistics Act. The act requires that Statistics Canada collect, compile, analyze and publish statistical information on the economic, social and general conditions of the country and its people. It also requires that Statistics Canada conduct a census of population and a census of agriculture every fifth year, and that the agency protect the confidentiality of the information with which it is entrusted.

The agency's organizational priorities include the delivery of a comprehensive set of statistical programs in conformity with Statistics Canada's quality assurance framework, in order to provide Canadians with access to timely, relevant and quality statistical information on Canada's changing economy and society for the purposes of informed debate, research and decision making on social and economic issues; economic statistics; social statistics; and census; demography and Aboriginal statistics.

Statistics Canada has an operating budget of approximately $400 million. The agency's statistical program is funded by two sources: direct parliamentary appropriations and cost-recovery activities. In recent years, 'respendable' cost-recovery revenues have contributed approximately $90 million to $100 million annually to its total resources. Federal departments are the source of a large portion of these revenues, which fund specific statistical projects.

Departmental Strength

The following table indicates the actual number of employees (including full-time and part-time employees) on strength at Statistics Canada as of September 30, 2014.^{Footnote 1}

Table 1: Agency strength

Fields	Number of employees
Field 1 – Chief Statistician's Office	41
Field 3 – Corporate Services	1,347
Field 5 – Economic Statistics	1,165
Field 6 – Analytical Studies, Methodology and Statistical Infrastructure	792
Field 7 – Census, Operations and Communications	1,127
Field 8 – Social, Health and Labour Statistics	783
Total – September 30, 2014	5,255

The majority of the agency's workforce is located at headquarters in Ottawa. Other locations that house Statistics Canada employees outside the main complex include:

• regional offices located in Vancouver, Edmonton, Winnipeg, Sturgeon Falls, Toronto, Montréal, Sherbrooke and Halifax
• twenty-seven research data centres located in universities across the country
• the census Data Operations Centre located in Gatineau.

Between October 18, 2013, and September 30, 2014, a total of 163,846 leave transactions were approved. For the same period, employees earned $4,093,761 in overtime, which is equivalent to 11,681 days. This amount of overtime also includes overtime entries for standby duty claimed by 172 employees, which represent approximately 1,400 days of overtime.

The management of leave and overtime is governed by the PSEA, the FAA, and several TB policies and collective agreements. Employees are responsible for the timely and accurate submission of leave and overtime claims. Supervisors are responsible for ensuring that employees' leave provisions are used for the intended purposes, as set out in collective agreements, and are processed in accordance with policies and procedures, and that requests for leave take into consideration applicable operational requirements before they are approved.

Audit Objectives

The objectives of the audit were to provide the CS and the DAC with assurance on:

• the adequacy of the control framework in place to support the management of leave and overtime
• the effectiveness of internal controls in ensuring compliance of leave and overtime transactions with relevant acts, TB policies, guidelines and collective agreements.

Scope

The scope of the audit included the following elements of the management control framework: roles, responsibilities, accountabilities, authorities, policies, procedures and monitoring mechanisms, as they relate to sections 32, 33 and 34 of the FAA and to the management of collective agreements. Coverage included employees hired under the PSEA and working at headquarters. The audit included transactions incurred during the period from October 2013 to November 2014.

Approach and Methodology

The audit work consisted of an examination of documents, interviews with key senior management and personnel, and a review for compliance with relevant policies and guidelines. The field work included a review, an assessment and testing of the processes and procedures in place for leave and overtime management.

Samples of overtime and leave transactions were selected for testing purposes for this audit. A combination of random, stratified and judgmental sampling techniques were used to assess the effectiveness of various controls (i.e. that the controls are functioning as designed on a consistent basis over the period under examination). As such, results are not meant to be statistically representative when extrapolated over the population.

This audit was conducted in accordance with the Internal Auditing Standards for the Government of Canada, which include the IIA International Professional Practices Framework.

Authority

The audit was conducted under the authority of the approved Statistics Canada integrated Risk-based Audit and Evaluation Plan, 2014/2015–2018/2019.

Findings, Recommendations and Management Response

Management of Leave

The control framework for the pre-authorization and approval of leave is consistently applied and effective. Key controls are embedded into the corporate framework and the TMS, and ensure adequate oversight for the management of leave.

Results of analysis, testing and interviews revealed that leave transactions recorded in the TMS were approved by the appropriate individual, in compliance with applicable TB policies and within the limits of collective agreements. Transactions were accurate, valid and properly coded. The TMS is an effective tool for recording leave transactions.

To ensure that employee leave is managed effectively, an adequate control framework should be in place and be in line with the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements.

At Statistics Canada, leave, such as vacation leave, sick leave, compensatory time off, family-related leave, and personal and volunteer leave, is approved by each employee's immediate supervisor or above. Other leave provisions that are granted under special circumstances must be approved at the director level or above. The TMS indicates to users which level of approval is required for each type of leave; however, each employee must manually select the appropriate supervisor with the suitable level of authority, as the system is not programmed to make the position linkage.

There are 43 categories of paid and non-paid leave available to employees. Between October 18, 2013, and September 30, 2014, a total of 163,846 leave transactions were approved. The two most used leave categories were paid vacation leave (35%) and uncertified sick leave (29.5%), representing approximately 64% of all Statistics Canada leave transactions for the period covered by the audit.

The TMS is an application that allows employees, supervisors and cost-centre managers to record, track and review daily project time charges, leave requests, extra duty (overtime) and employees' work schedules. Employees are required to account for their use of time by entering project time codes in the TMS. The system sends employees a reminder to enter their time codes if daily activities have not been populated. If a two-week gap in time reporting occurs, the TMS escalates reminders to the immediate supervisor and, subsequently, up to the next level, as a reminder to populate all time fields.

Tools and practices for corporate monitoring of leave are adequate

A corporate monitoring function should be in place to ensure that public funds and resources are used responsibly and that program managers are actively managing leave. Management and oversight bodies should have clearly communicated mandates that include roles for the monitoring and day-to-day administration of leave.

At Statistics Canada, there are corporate-led initiatives for monitoring, reviewing and reporting on leave transactions. The Human Resources (HR) Branch's Labour Relations team performs ongoing monitoring of requests for long-term leave without pay. The compensation unit receives requests for the different types of leave without pay, as pay adjustments are required. Various reports on sick leave are generated, and senior management review them at the agency level on an ad hoc basis.

When supervisors receive a leave request in the TMS, the following information is displayed: the type of leave requested, the dates, the number of hours of leave requested, any notes or remarks and the remaining leave balance or total amount of leave accumulated for the fiscal year. The TMS leaves an audit trail for each stage of the approval process, recording any modifications made to requests, and identifies the user who submitted or approved the transactions throughout the process.

The TMS allows supervisors to view the annual time charges for each project, all submitted leave requests, daily and monthly overtime claims, and employees' recorded work schedule. Supervisors can view information on their employees for the fiscal years in which the employees report to them; in other words, they do not have access to employees' previous history of work schedules, time charged against projects, leave and overtime transactions.

Finance employees, who are responsible for ensuring that leave requests are processed in a timely fashion, have access to several TMS monitoring reports on leave.

Leave is used for the intended purpose and in accordance with collective agreements

An effective control framework for managing leave should be consistently applied across the agency. When approving leave requests, managers and finance and HR employees must ensure that leave is used for the intended purpose and taken in accordance with the provisions of collective agreements.

The audit team performed a comprehensive analysis and conducted testing on the various types of leave to verify whether they were approved by the appropriate individuals. The overall population of 163,846 approved leave transactions was tested using a risk-based approach. For most leave types, a sample of 20 employees was randomly selected for testing purposes. Testing was conducted to verify the accuracy and validity of leave codes used and compliance with applicable TB policies and provisions of collective agreements.

The following fifteen types of leave were selected for analysis and testing:

• vacation leave
• uncertified sick leave
• certified sick leave
• special vacation leave
• appointments for family members
• care of family members
• school functions
• appointments with professionals
• volunteer
• personal
• professional development
• personnel selection
• medical appointments
• other paid leave
• compensatory leave.

Results of analysis, testing and interviews revealed that leave transactions recorded in the TMS were approved by the appropriate individuals, in compliance with applicable TB policies and within the limits of collective agreements. Transactions were accurate, valid and properly coded. The TMS is an effective tool for recording leave transactions.

The control framework for managing leave is consistently applied and is effective. Leave is used in accordance with collective agreements.

There are no recommendations for the management of leave.

Management of Overtime

There is an adequate control framework to support the management of overtime, and it is in line with the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements; however, the control framework is not consistently applied across the agency.

Budget holders provide pre-authorization to work overtime in writing when operationally feasible or for planned projects, but pre-authorization to work overtime on short notice is mostly given verbally. Undocumented pre-authorization of overtime and a lack of diligence in the certification of work performed in overtime increase the risk of undetected errors and can lead to inefficient use of resources.

There were also instances from the sample selected where budget holders and supervisors do not actively monitor their employees' work hours or periodically review employee schedules for resource optimization purposes. Furthermore, several divisions manage overtime outside the control framework.

The management of overtime generated by standby duties requires strengthening. The need for standby coverage outside core hours is not always formally documented, approved or reviewed for relevance on a regular basis. Certification of eligibility and entitlement to compensation for standby activities (Section 34 of the FAA) is done by individuals with delegated authority, but greater diligence is required to manage standby schedules for resource optimization purposes.

Management and oversight bodies do not have clearly communicated mandates that include roles for the monitoring and day-to-day administration of overtime. Circumstances that drive overtime costs are not effectively identified, measured or addressed at the corporate level.

To ensure that overtime is managed effectively, an adequate control framework should be in place to ensure that it is pre-authorized and approved. The control framework should be aligned with the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements.

Overtime is subject to specific conditions, which are outlined in the TB Directive on Terms and Conditions of Employment as follows:

A person is to be compensated for overtime, in accordance with the provision of the relevant collective agreement or terms and conditions of employment, only when the following conditions are in place:

• the person with the delegated authority has required the person to work overtime
• the person does not control the duration of the period that he or she works overtime
• the person with the delegated authority has certified the duration of the overtime worked and has authorized compensation.

During fiscal year 2013/2014, employees earned a total of $4,093,761 in overtime, which is equivalent to 11,681 days. Of this total, compensation taken as time off amounted to $1,516,420, and $2,577,341 was paid as additional salary.

Roles, responsibilities and recommended procedures in the context of the FAA, other legislation, and Government of Canada policy instruments are described in the TB Guideline on Common Financial Management Business Process 5.1—Pay Administration. This guideline presents the recommended model for pay administration, including overtime.

At Statistics Canada, the management of overtime follows this guideline, as it includes the following three key controls exercised prior to payment: pre-authorization of overtime (FAA Section 32), certification of the work performed (FAA Section 34) and payment requisition (FAASection 33) if overtime is compensated by means of a payment to the employee.

The control framework requires the following:

1. pre-authorization of overtime to be granted in advance of when overtime is actually worked (currently, collective agreements allow pre-authorization to be provided verbally or in writing either by chiefs, or in some cases by a client division, or by budget holders)
2. certification of work performed; entitlement to applied overtime rates; and compliance with policies and collective agreements, which involves a three-level review process:
   • Level 1: certification of work performed, applied at the divisional level (recommended for approval by supervisors, then approval by budget holder); before approving overtime claims, budget holders must perform a review to certify that the hours submitted as overtime are valid and that the employee produced the expected deliverables during that time
   • Level 2: review of monthly claims by the Finance Branch; finance employees verify that the person who approved the claim has the proper delegation of authority.
   • Level 3: review of monthly claims by the Compensation unit; HR employees verify that the system calculates overtime at correct rates
3. payment requisitions performed by finance employees who are delegated to ensure that the pre-authorization of expenses and the certification of work performed have been completed.

Supervisors and directors are responsible for managing overtime. It is expected that overtime be managed in accordance with policies, guidelines and collective agreements; be applied in a fair and consistent manner across the agency; and be in line with the organization's corporate goals, operational objectives, and values and ethics. Employees are responsible for ensuring that overtime worked is recorded in and submitted through the TMS.

Our analysis revealed that there is an adequate control framework to support the management of overtime, and it is compliant with the FAA, TB policies, Statistics Canada guidelines and the provisions of collective agreements. Key controls are embedded into the corporate framework and the TMS.

Monitoring tools and activities for managing overtime need to be strengthened and applied

An effective corporate monitoring function ensures that public funds and resources are used responsibly and that managers are actively managing overtime with a view to optimizing resources. Management and oversight bodies should have clearly communicated mandates that include roles for the monitoring and day-to-day administration of overtime. The establishment of budgets for overtime expenditures is an effective way to set operational targets and ensure that resources are used efficiently and for intended purposes, and that circumstances that drive overtime costs are identified, measured and addressed in a timely fashion.

At Statistics Canada, overtime is planned during the annual budget planning process and is monitored to ensure that sufficient program funds are available in the event that compensatory time earned by employees cannot be used as leave and must be paid out at the end of the fiscal year, as per collective agreements. Service-provider divisions set a budget for overtime based on the estimated cost of planned standby activities, as set out in their service agreements with client divisions.

The Finance Branch's Financial Reporting Division reviews pending overtime monthly reports in the TMS to ensure that they are processed in a timely fashion, and it ensures that overtime costs are approved by a person with the appropriate level of authority. The management variance reporting (MVR) process is a periodic financial review process that provides an opportunity for managers to review expenditures, and explain variances from forecasted expenditures. At period six (P6) each fiscal year (i.e. August), targets for line objects, including overtime, are adjusted to reflect newly projected forecasts. Forecasts set at P6 are the basis for decision making. At year end, actual costs are compared to the P6 forecasts and variances are justified.

To assess the effectiveness and relevance of these processes, interviews with managers and finance staff were conducted. Interviews revealed that variance analysis and forecasts are conducted at the divisional level, with guidance from financial management advisors through active financial management, for fund transfers throughout the year. The audit team also reviewed financial information available for overtime. For fiscal year 2013/2014, it was noted that the initial budget for overtime was set at $430,840, the P6 forecast was revised and increased to $1,332,000, and the actual total expense for overtime for the fiscal year was $1,516,420.

Corporate monitoring and support services provided to program divisions focus on the management of available funds. However, overtime expenditures are not effectively controlled throughout the year to ensure that actual total costs remain within budget. Even if fields across the agency are within their respective budget envelops and do justify variances with revised projections set at P6, program overtime costs exceeding the original budget are not explained or rationalized.

Without the establishment of reliable financial targets in the initial budget or corporate monitoring of these targets, there is a risk that material errors may go undetected and that trends or anomalies may not be identified or followed up.

Management should monitor the use of overtime against plans to ensure that costs are realistic. To support decision making, supervisors and directors should have access to complete and timely information to help identify operational and administrative issues and trends related to overtime.

The following information is available to supervisors and directors to support the management of overtime:

• The TMS generates several reports for overtime, such as the pending overtime report, the excess compensatory leave report and the report on overtime not yet actioned by HR. These reports are available to finance and HR employees, who ensure that overtime requests are processed in a timely fashion and that compensatory time balances are paid out in accordance with the provisions of collective agreements.
• The Financial Reporting System (FRS) is a web-based tool to access all essential financial information on divisional and program budgets, including recoverable projects. It allows financial information to be viewed from many different perspectives by enabling the user to navigate from high-level information to detailed transactions.
• Managers must request or create their own reports in the FRS based on their specific needs and preferences. While the information is available, additional pre-formatted reports could be developed to simplify access and analysis of useful indicators (e.g., top overtime earners or individual employees' overtime for previous fiscal years).
• Managers are provided with their divisional budget, revised forecast based on trends and actuals at the divisional level with each monthly financial review package. The financial officers (FI) review and analyse the information for trends and as need be, discuss the requirement to adjust the forecasts with the managers.

Interviews confirmed that most budget holders are managing overtime with limited detailed information and rely on the analysis being completed by their financial management advisers. Most were aware that customized reports are available through the FRS; however, they were unfamiliar with how to build or request such reports. As a result, these budget holders use the TMS interface, which does not provide sufficient information to identify trends and irregularities, compare or challenge overtime being claimed, or identify outliers.

Management and oversight bodies do not have clearly communicated mandates that include roles for the monitoring and day-to-day administration of overtime. The establishment of budgets for overtime expenditures is not used to set operational targets or ensure that resources are used efficiently and for intended purposes. Circumstances that drive overtime costs are not effectively identified, measured or addressed at the corporate level.

Recommendation:

It is recommended that the Assistant Chief Statistician, Corporate Services/ CFO ensure that:

• The corporate monitoring or quality assurance function is strengthened to ensure compliance with FAA requirements, collective agreements and Statistics Canada overtime processes.

Management Response:

Management agrees with the recommendation.

• An additional monitoring/quality assurance process will be added to the existing functions to incorporate overtime transactions testing for compliance to FAA requirements, collective agreements and Statistics Canada processes. If instances of non-compliance or wrongdoing are found, management will undertake necessary steps and appropriate actions to address the issues (ex: recovery of funds, dismissal, and referral to the justice system).
  
  Deliverables and Timeline: The Director, Financial Reporting Division (FRD) will establish and implement a new sampling approach to review compliance of overtime transactions starting progressively in April 2016 and findings will be shared with the CFO on a monthly basis.

Pre-authorization of overtime is mostly given verbally, leaving no documented evidence

An effective control framework for the management of overtime should be consistently applied across the agency. When pre-authorizing and certifying overtime, program managers must ensure that it is used for the intended purpose and finance and HR employees must ensure that compensation is granted in compliance with the FAA and is applied in accordance with collective agreements.

Pre-authorization (Section 32 of the FAA)

Pre-authorization to work overtime is currently not managed or recorded through the TMS. Interviews confirmed that budget holders provide pre-authorization of overtime in writing when operationally feasible or for planned projects, but pre-authorization to work overtime on short notice is often delegated to assistant directors and chiefs and is mostly given verbally.

Activities supporting certification of work performed are ineffective

Certification of work performed and entitlement (Section 34 of the FAA)

Two judgmental samples were drawn to verify the effectiveness of key controls surrounding overtime:

• A first sample of 30 employees was drawn from the top 100 overtime earners in the agency, which ensured coverage of all fields, including mission-critical and non-mission-critical survey programs, service-provider divisions and corporate functions.
• A second sample of 14 employees was selected from the top 25 overtime earners who claimed significant amounts of overtime over a five-year period.

Sampling techniques used for this test were established in accordance with auditing standards to assess the effectiveness of various controls (i.e. that the controls are functioning as designed on a consistent basis over the period under examination). As such, results drawn from this test should not be extrapolated over the population, as the sample techniques are not statistically representative.

A total of 14 divisions were represented in these samples. Interviews were also conducted with selected directors and assistant directors, and with key finance and HR compensation employees to document the process at each of the three levels of review to certify overtime.

Audit procedures confirmed that budget holders have the means to monitor work performed and obtain evidence of measurable deliverables. Observed examples include review of outputs after the overtime period, email communications sent at the end of overtime periods and review of progress reports. While work performed can be monitored by budget holders, the following weaknesses in the process were noted:

• Most budget holders did not, or were unable to, review evidence of pre-authorization, as it is mostly provided verbally.
• Prior to approval, employee schedules are generally not reviewed for absenteeism, modified schedules or time off, which can lead to inefficient use of overtime.
• Most budget holders interviewed stated that employees are generally encouraged to claim overtime as compensatory time off rather than as a cash payment, as a means to minimize its impact on budgets.
• Testing revealed instances where employees who are required to be on the premises to perform their work had claimed overtime during periods when they were not present at work.
• There were instances of leave and overtime claims being submitted and approved for the same day.

Undocumented pre-authorization of overtime and a lack of diligence in the certification of work performed in overtime increase the risk of undetected errors and can lead to inefficient use of resources. Furthermore, the lack of availability of any outputs generated as part of the verification process limits the review of opportunities for the payment requisition process (Section 33 of the FAA).

Recommendations:

It is recommended that the Assistant Chief Statistician, Corporate Services/ CFO ensure that:

• a formal process is established for obtaining and documenting pre-authorization of overtime (Section 32 of the FAA)
• a strengthenedprocess is established to support the certification of work performed (Section 34 of the FAA) to optimize the use of resources and to better support the payment requisition process (Section 33 of the FAA).

Management Response:

Management agrees with the recommendations.

• A formal process for documenting overtime pre-authorization has been developed and will be communicated to all employees. A strengthened process for certification of work performed will be implemented as part of this process.
  
  Deliverables and Timeline: The Director, Financial Reporting Division (FRD) will establish a new requirement for obtaining written/email approval prior to overtime work being performed, including a short description of the work to be achieved and estimate of time necessary. This change will be communicated to all employees and the administrative portal will be updated to reflect this enhanced process by April 2016. Starting in April 2016, Managers certifying work performed (Section 34 of FAA) will be required to do so by confirming that overtime was pre-approved and that related deliverables were completed.

Budget holders and supervisors do not periodically review employee schedules for resource optimization purposes

Statistics Canada is accountable to the public for using resources in an effective and efficient manner. To ensure that public funds and resources are used responsibly, program managers should be actively managing overtime with a view to optimizing its use.

Statistics Canada supports employees and encourages a healthy work–life balance through a variety of mechanisms, such as variable hours of work and compressed work schedules. Such arrangements are subject to chiefs (or above) approval, are dependent on operational requirements and must comply with collective agreements and Statistics Canada guiding principles. Collective agreements also reference the implementation of variable work schedules, stating that their implementation "shall not result in any additional overtime work or additional payment by reason only of such variation." Once modified work hours are approved, the revised schedule must be entered in the TMS.

Approximately 1,000 employees were on some form of variable work schedule at some point between October 18, 2013, and November 28, 2014.

To assess the effectiveness of controls for managing overtime and variable work schedules, the audit team selected a sample of 14 employees from the top 25 overtime earners for review. Testing revealed the following findings, which were then tested against a larger sample across the organization:

• Employees in the sample earned overtime on an annual basis over the previous five years totalling 40 days or more each year. The overtime earnings of half of these employees resulted in over 30% increases in their annual salary.
• Variable work schedules or compressed work schedules lead to overtime being earned exponentially.
• Significant amounts of overtime accumulated as compensatory time off lead to overtime being earned exponentially.
• Overtime from standby duties led to six employees to be in the top 25 earners.
• Claims for overtime on the second day of rest at the higher rate (2.0) despite not having worked on the first day of rest (1.5), without justification.

The EC collective agreement allows employees, with the consent of their supervisor, to work variable work hours. Section 28.01(d)(i) states that

(…) upon request of an employee and the concurrence of the Employer, an employee may complete his or her weekly hours of employment in a period other than five (5) full days provided that over a variable hour schedule the employee works an average of thirty seven decimal five (37.5) hours per week. As part of the provisions of this clause, attendance reporting shall be mutually agreed between the employee and the Employer. In every variable hour period, such an employee shall be granted days of rest on such days as are not scheduled as a normal workday for the employee.

This allows employees in the EC category to modify their work schedules in such a way that any extra hours worked can be accumulated as straight time for future use. Modified schedules must be entered in the TMS.

The TMS records modifications to employees' work schedules. When daily and total weekly hours differ from the standard daily 7.5 hours and weekly 37.5 hours, the system sends an email to notify the employee's supervisor of the change. Although the system records the number of hours entered into employees' schedules, it does not keep track of the total number of additional hours worked in any given period, nor does it calculate or identify gaps in core hours. For example, if an employee chooses to enter daily time totalling 9.5 hours over a five-day period, the TMS does not keep track that 10 hours were in excess of standard core hours and that the employee has accumulated 10 hours of straight time that can be taken at a later time. Interviews with finance and information technology staff confirmed that there is currently no mechanism to track hours for modified work schedules, other than the manager receiving email notification when a schedule is modified and employees keeping their own alternative ledger.

Systematically and accurately tracking employees' modified schedules would provide management with the ability to effectively monitor and optimize resources.

Directors interviewed stated that they do not review employees' requests for modified schedules in terms of impact on overtime costs to the agency and that concerns are not raised unless there are significant performance issues with an employee or deficits in the overall program budget.

Recommendations:

It is recommended that the Assistant Chief Statistician, Corporate Services/ CFO ensure that:

• opportunities to develop functionalities in TMS are explored to strengthen supervisory accountability and to effectively manage and review variable work schedules, with a view to improve monitoring and optimize the use of resources.

Management Response:

Management agrees with the recommendation.

• Opportunities to enhance the Time Management System will be explored to effectively manage variable work schedules and strengthen supervisory accountability.
  
  Deliverables and Timeline: The Director, Financial Reporting Division (FRD) will request, through a call letter sent at the beginning of each fiscal year, that employees and managers review their work schedules, starting in May 2016. Directors will also be informed annually on plans for variable work week schedules for their divisions. Increased awareness and better planning of these activities by directors will help achieve the expected results. Results of the analysis of TMS options for the management of schedules will be shared with Executive Management Board Starting in June 2016.

A number of employees do not work the daily extra time required under their compressed work agreements

Compressed work schedule arrangements are available to Statistics Canada employees. This enables them to arrange their schedule to work an extra 50 minutes every day, for example, which allows for one day off every two weeks. This day off is entered in the TMS as a modified day off. Approximately 600 employees were on a compressed work schedule at some point between October 18, 2013, and November 28, 2014.

The audit tested whether employees actually worked the additional daily time required as part of their arrangements. A sample of 23 employees was tested to confirm their physical presence on the premises for the required 8 hours and 20 minutes.

Sampling techniques used for this test were established in accordance with auditing standards to assess the effectiveness of various controls (i.e. that the controls are functioning as designed on a consistent basis over the period under examination). As such, results drawn from this test should not be extrapolated over the population, as the sample techniques are not statistically representative.

Results showed that 13 out of the 23 employees selected generally did not work the required extra time every day.

Interviews revealed that there is a culture of trust within the agency, and managers expect their employees to work their agreed upon hours with limited supervision.

Several divisions manage overtime outside the control framework

A number of anomalies and patterns were detected through audit testing. By comparing employees' time entries in the TMS with their actual presence on work premises, a significant number of discrepancies were noted.

Interviews were conducted with directors and employees of six divisions where anomalies were noted and confirmed that overtime is sometimes being managed outside the corporate TMS. Supervisors and employees enter into informal agreements with the understanding that overtime can be worked and that compensatory time off can be taken later, without recording the overtime entries in the TMS.

The following methods were observed:

• Overtime is compensated by voiding an employee's previously taken leave in the TMS, with the approval of the supervisor, who is not necessarily the budget holder with delegated authority to approve overtime. As a result, the employee's leave balances are credited and the TMS is then populated with project time charges, when, in reality, the employee was off on compensatory leave.
• An employee submits a leave request in the TMS for a date in the future, and then asks the supervisor not to approve the request, but to leave it pending until the day off is taken. Once the employee returns to work, the leave request is cancelled in the TMS. Audit testing revealed noticeable patterns of TMS entries used for this specific purpose. In some cases, remarks attached to the leave request were explicit about being compensation for overtime worked.

To estimate the extent to which overtime is managed outside the corporate TMS, the audit team tested a sample of voided and cancelled leave transactions, representing 72 employees, drawn from 43 out of the 77 divisions across all fields. Results revealed that nearly half of the reversed transactions followed the identified pattern used to track informal arrangements. Follow-up interviews were conducted with directors and assistant directors in the divisions with the most reversed leave transactions and confirmed that informal arrangements between chiefs and employees for overtime are a known practice for a number of divisions across all fields.

Although the TMS requires employees to account for the use of their time during core hours, it does not require supervisor approval. Approval of employees' bi-weekly time entries would be considered certification of work performed under Section 34 of the FAA in the context of payroll. As a result, supervisors are not obligated to review, attest and approve the project time codes entered in the TMS, actions that would certify the validity of time entered in the system and help detect errors, such as the omission of leave codes when an employee is absent.

The control framework for managing overtime is not consistently applied across the agency. There are weaknesses in the process for pre-authorizing overtime and for certifying that work has been performed. Managing overtime outside the control framework does not comply with the FAA and creates opportunities to circumvent provisions of collective agreements. It also underestimates actual overtime costs, and this compromises the integrity of the information used by management for decision making.

Recommendations:

It is recommended that the Assistant Chief Statistician, Corporate Services/ CFO ensure that:

• a directive is developed and communicated to all employees, which clearly sets out the requirements to manage overtime within the established corporate control framework and to record overtime activities in the TMS.

Management Response:

Management agrees with the recommendation.

• The requirement to manage overtime within the established corporate control framework and to record overtime activities in the TMS will be incorporated in a directive.
  
  Deliverables and Timeline: The Director, Financial Reporting Division (FRD) will develop a new directive, which will be communicated and posted by June 2016.

The management of overtime generated by standby duties requires strengthening

Overtime is also generated by requiring employees to be readily available during off-duty hours, which is referred to as 'standby.' Operational realities require a standby coverage program, and there are a number of advantages to having one; qualified employees are available on call to attend to urgent matters that could have a significant impact on core operations.

The conditions for and application of compensation for standby activities are stated in collective agreements. Generally, collective agreements require that employees who are on call be compensated at the rate of one half-hour for each four-hour period (or portion thereof) the employee is on standby. Collective agreements state that to be entitled to standby pay, employees must be designated by letter or by list, and no standby duty payment is to be granted if the employee is unable to report for duty when required.

Between April 1, 2013, and October 31, 2014, a total of 12,763 standby entries were approved for 172 employees. Pre-authorization and certification of standby activities is currently not supported by internal reference documentation or guidelines. To ensure compliance with the FAA and provisions of collective agreements, Statistics Canada has implemented the following common practice.

Pre-authorization of standby activities is established through two levels of authority:

1. Directors, or budget holder, establish the need for coverage outside core hours of operation based on operational risks, document the rationale for this need and provide formal approval of the overarching schedule where coverage is needed through a signed service-level agreement (SLA) between the directors of the client-program division and service-provider division. Operational requirements and coverage needs should be reviewed for relevance, and the agreements should be renewed periodically.
2. Assistant directors or chiefs, or managers at that level, identify qualified employees available to assume the required coverage. Standby schedules should be established and communicated to qualified staff members, based on their availability. This is the basis for establishing employees' eligibility and entitlement to compensation for standby.

Once an employee has completed his or her standby period in accordance with the schedules, he or she must record it in the TMS for approval and compensation. At the end of the month, an overtime report is generated and submitted to the employee's supervisor, who, in turn, recommends the claim for approval to the client program's director (if applicable). The claim is ultimately recommended to the budget holder for approval.

Before approving overtime for standby duties, financial responsibility centre managers should ensure that the hours on standby recorded by employees are consistent with the hours of coverage established in the SLA and standby schedules. They should also ensure that employees were available to perform their duties if called during that period. According to the delegated authorities, supervisors can manage standby schedules, but managers are required to have financial delegation for Section 34 of the FAA when approving overtime claims.

Standby coverage is not formally approved or reviewed for relevance on a regular basis

An effective control framework should be consistently applied when managing standby activities. When program managers pre-authorize coverage outside regular business hours and certify that employees are entitled to compensation for standby activities, they must ensure that standby coverage is claimed for the intended purpose and finance and HR employees must ensure that compensation is granted in compliance with the FAA and applied in accordance with collective agreements.

Pre-authorization (Section 32 of the FAA)

To verify whether standby activities are pre-authorized, the audit team selected a judgmental sample of 19 employees who claimed overtime from standby activities. The audit team also requested that directors who approved the overtime provide documentation supporting the need for coverage outside core hours and the rotational schedules used to support the amounts of standby hours claimed by these employees. A total of seven divisions were covered in the sample.

Results revealed that the need for coverage was established and documented in SLAs for five out of the seven divisions; however, only one of the agreements had been formally signed off by appropriate delegated authorities. For one division, the SLA was still in draft form and its contents had not been finalized. As required by collective agreements, the list of employees authorized to claim overtime for standby was documented for all seven divisions. Although rotational schedules were in place, standby overtime claims recorded by employees from three of the seven divisions were not consistent with the approved schedules. Testing also revealed that 17 employees with significant numbers of standby entries for the period (ranging between 125 and 425 entries) had no record of any call-back entries.

The need for standby coverage outside core hours is not always formally documented, approved or reviewed for relevance on a regular basis. When operational needs are not periodically reviewed, more optimal options for coverage outside core hours can be overlooked and opportunities for cost savings may be missed.

Certification of eligibility and entitlement to compensation for standby activities (Section 34 of the FAA) is done by individuals with delegated authority

Certification of eligibility and entitlement to compensation for standby activities must be signed off by a budget holder. Before approving overtime claims originating from standby activities, financial responsibility centre managers should ensure that standby hours recorded by employees are consistent with the hours of coverage established in the SLA, and that employees' recorded activities are consistent with the established schedules and that employees were available to perform their duties should they be called back during that period.

The same sample of 19 employees used to test pre-approval was used to test whether overtime claims had been approved by individuals with delegated authority. Results showed that in all cases, overtime claims were approved by the appropriate individuals through the TMS. However, the absence of supporting documentation identified in the pre-authorization process left gaps as to what was pre-approved under Section 32 of the FAA for standby, i.e., who, when, how much and for what service.

Greater diligence is required to manage standby schedules for resource optimization purposes

Statistics Canada's guidelines generally allow employees to select their work hours, as long as schedules do not create additional costs to the agency. Employees' schedules and hours of work should be taken into consideration before employees are assigned to standby duty, to ensure that they are available to provide the required services and that their hours of work do not create additional overtime costs.

To verify whether employees' standby schedules were managed effectively for resource optimization, analysis and testing of standby entries were performed for the period under review. The following observations were noted:

• There were 12,763 standby entries in the TMS, and 3,072 entries (24%) resulted from standby periods with durations of one hour or less, which are paid at a rate of 30 minutes for each recorded entry, as per collective agreements.
• Depending on the timing of employees' schedules (i.e., start and end time for work hours), entries for standby activity were for short periods of 10, 30, 45 and 60 minutes before the employees' start time or at the end of their work day. Every time an employee enters one of these short periods of standby activity, 30 minutes of overtime are paid to the employee.
• Of the 172 employees who claimed standby activities during the period, 20 employees (11.6%) each claimed between 60 and 320 periods of standby activity of less than one hour. This resulted in the accumulation of between 4 and 21 days of overtime during the 13-month period.

Directors and assistant directors interviewed confirmed that they do not review or manage employees' schedules for resource optimization when planning and approving standby activities.

Testing also revealed several questionable claims in the TMS:

• Instances where employees had claimed hours for standby activities on the same day they also took sick leave, or for periods during which they were out of the country on vacation.
• Instances where employees had claimed standby activities for periods during which they also recorded overtime. Many collective agreements contain a specific clause that prohibits pyramiding payments of overtime while also claiming standby.

The control framework for managing standby activities is not consistently applied. There are weaknesses in the process for pre-authorizing coverage outside regular business hours. Procedures applied by program managers and finance and HR employees do not ensure that standby activities are used for the intended purpose. Compensation for standby activities is granted in compliance with the FAA and applied in accordance with collective agreements.

Recommendation:

It is recommended that the Assistant Chief Statistician, Corporate Services/ CFO ensure that:

• monitoring activities are established and carried out for managing standby overtime, to optimize resources.

Management Response:

Management agrees with the recommendation.

• Monitoring activities will be established and carried out for the management of stand-by overtime, to optimize resources.
  
  Deliverables and Timeline: The Director, Financial Reporting Division (FRD) will establish and implement a new sampling approach to review resource optimization for stand-by activities by May 2016 and findings will be shared with the CFO on a monthly basis.

Appendices

Appendix A: Audit Criteria

Appendix A: Audit Criteria

Control Objective / Core Controls / Criteria	Sub-criteria	Policy Instruments
Objective 1: Statistics Canada has an adequate control framework in place to support the management of leave and overtime.
1.1 Statistics Canada has established a framework that is documented and adequately communicated to support strategic management of leave and overtime.	1.1.1 Strategic direction provided by senior management is documented and communicated to all relevant stakeholders. 1.1.2 An effective process exists for budgeting and monitoring leave and overtime. 1.1.3 Management meets regularly to monitor use of leave and overtime against plans, and ensure that costs are minimized. 1.1.4 Management receives complete and timely information related to operational and administrative concerns for leave and overtime, in support of decision making.	Statistics Act Management Accountability Framework (MAF) Various Statistics Canada guidelines Various collective agreements Treasury Board (TB) Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment Financial Administration Act (FAA)
1.2 Management and oversight bodies have clearly communicated mandates that include, as appropriate, roles for the monitoring and day-to-day administration of leave and overtime.	1.2.1 Sufficient and relevant information has been developed and communicated in a timely manner to the appropriate stakeholders, enabling them to perform their assigned responsibilities. 1.2.2 Authority for the approval of leave and overtime is clearly defined, established at the appropriate level and communicated. 1.2.3 Issues, concerns and disputes are formally escalated to responsible authorities and are resolved in a timely manner.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA
1.3 Statistics Canada has clear and comprehensive systems and procedures for effectively managing leave and overtime activities.	1.3.1 Formal systems and controls to capture, record, authorize, action (pre-approval) and report leave and overtime events are documented and communicated. 1.3.2 Systems and procedures for managing leave and overtime are documented and communicated.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA
1.4 Statistics Canada has processes in place for effectively managing risks related to leave and overtime.	1.4.1 Mechanisms are in place to identify, assess and mitigate administrative and operational risks related to leave and overtime. 1.4.2 Employees are aware of values and ethics directives and understand to whom and where to report potential wrongdoing.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA
Objective 2: Internal controls are effective in ensuring that leave and overtime are managed in compliance with collective agreements and applicable policies and directives.
2.1 Leave and overtime are earned and taken in accordance with applicable policies, directives, guidelines and collective agreements.	2.1.1 Leave and overtime transactions are recorded and managed through the TMS. 2.1.2 Overtime payments are authorized by a person with the required authority. Overtime pre-approval can be verified. 2.1.3 Leave and overtime are earned, taken or paid in compliance with policies, regulations, directives and collective agreements.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA
2.2 Management organizes employee schedules and the agency workload in a manner that minimizes the amount of overtime required.	2.2.1 Managers receive information on the status of leave, overtime and employees with special work arrangements. 2.2.2 Management updates work schedules to ensure that adequate staff is available to conduct operations and the need for overtime is minimized.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA
2.3 Transactions recorded in the TMS are accurate, valid and properly coded, in compliance with applicable policies.	2.3.1 Leave transactions recorded in the TMS are accurate, valid and properly coded, in compliance with applicable policies.	Statistics Act MAF Various Statistics Canada guidelines Various collective agreements TB Directive on Terms and Conditions for Employment TB Policy on Terms and Conditions for Employment FAA

Appendix B: Acronyms

Appendix B: Acronyms

Acronym	Description
CFO	Chief Financial Officer
CS	Chief statistician
DAC	Departmental Audit Committee
FAA	Financial Administration Act
FRC	Financial responsibility centre
FRS	Financial Reporting System
HR	Human Resources
IIA	Institute of Internal Auditors
MAF	Management Accountability Framework
MRV	Management Variance Report
PSEA	Public Service Employment Act
SLA	Service-level Agreement
TB	Treasury Board
TMS	Time Management System

Footnotes:

Footnote 1

Agency Strength Report, September 30, 2014.

Return to footnote 1 referrer