Audit of Regular Member Relocation

Final report

January 2021

Table of contents

1. Acronyms and abbreviations
2. Executive summary
3. Management's response to the audit
4. Background
5. Objective, scope and methodology
   • Objective
   • Scope
   • Methodology
   • Statement of conformance
6. Audit findings
   • Cost effectiveness
   • Policy compliance
   • Member satisfaction
7. Conclusion
8. Recommendations
9. Appendix A – Audit objective and criteria
10. Appendix B – Management action plan

Acronyms and abbreviations

CFO

Chief Financial Officer

CM

Civilian Member

CM&C

Corporate Management and Comptrollership

DNC

Departmental National Coordinator

FMB

Financial Management Branch

FMM

Financial Management Manual

FY

Fiscal Year

GBA+

Gender-Based Analysis +

HEA

Home Equity Assistance

HG&E

Household Goods and Effects

ISU

Integrated Services Unit

NARS

National Accounting and Relocation Services

NHQ

National Headquarters

O&M

Operations and Maintenance

PSPC

Public Services and Procurement Canada

QA

Quality Assurance

RCMP

Royal Canadian Mounted Police

RD

Relocation Directive

REI

Real Estate Incentive

RM

Regular Member

TBS

Treasury Board Secretariat

TPSP

Third Party Service Provider

Executive summary

The RCMP relocates approximately 2,200 members across the country each year. Smooth relocations support RCMP operations and contribute to the well-being of RCMP members and their families.

Prior to December 2016, the Relocation Program was partially outsourced, with responsibilities divided between a contracted service provider and RCMP relocation reviewers located across Canada. The delivery of relocation services for members transitioned fully in-house to Corporate Management and Comptrollership in December 2016. This internal service delivery model was developed to streamline decision making, reduce processing times, and provide members with a single point of contact. The move was not a cost-based decision, as the new model was expected to be cost-neutral.

The Commissioner approved the Audit of Regular Member Relocation in the 2019-2024 Risk-Based Audit and Evaluation Plan. The engagement's objective was to determine if recent changes to the Regular Member relocation process were cost-effective, ensured compliance with Treasury Board Secretariat policies, and increased member satisfaction. The scope of the audit focussed on RCMP member relocation activities from December 2016 to December 2019, and included Regular Member relocations, including those related to retirement and isolated posts.

The audit found that overall, the transition to an in-house delivery of the Regular Member relocation process has resulted in improved member satisfaction, maintained compliance with Treasury Board policies, and resulted in modest cost savings, thereby enhancing the cost effectiveness of the program.

There are opportunities to strengthen the collection and analysis of member feedback on the relocation process. The Relocation Program could leverage this feedback and explore opportunities to continue to improve the program to ensure it meets all members' needs, where possible within the parameters of applicable policy.

Opportunities also exist to strengthen and implement risk-based internal controls to continue to maintain compliance and ensure accurate relocation payments to members. For example, focusing monitoring on higher risk transactions, as opposed to analyzing large statistical samples, may better utilize internal resources as it would more efficiently target transactions with the highest materiality and risk of error. The Relocation Program would benefit from documenting service standards or expectations in business process documents, and clarifying supervisory responsibilities with respect to file review to ensure they are reviewed in a timely fashion. There is also an opportunity to incorporate risk information into monitoring in order to more efficiently utilize monitoring resources.

The management response and action plan developed in response to this report demonstrate the commitment from senior management to address the audit findings and recommendations. RCMP Internal Audit will monitor the implementation of the management action plan and undertake a follow-up audit if warranted.

Management's response to the audit

The Chief Financial Officer acknowledges the audit findings and agrees with the recommendations. However, for a new program which has yet to reach maturity, the audit results are very good and demonstrate the quality of the planning and implementation, and how they led to this successful and exemplary program transformation.

Although the transition to in-house delivery of the Regular Member relocation process has resulted in modest cost savings compared to the contracted service provider delivered program, it should be noted that we expect to see increased spending in the next few years as the program continues to mature to its stable state and implements the recommendations from both the present audit and imminent Internal Control review findings of the program's controls. It is anticipated that these increased costs will yield overall cost neutrality.

The Chief Financial Officer fully concurs that opportunities exist to continue to strengthen our internal controls to continue to maintain compliance and ensure accurate relocation payments to members. To this effect, monitoring responsibilities have been clarified and agreed to, and are currently being implemented. The agreed-to roles and responsibilities, as well as our risk-based monitoring approaches and procedures will be formalized and documented this fiscal year, which will address a number of issues identified, such as the challenges with Policy Centre resourcing. Competitive processes will also be completed in 2021 to staff key positions required to fully implement risk-based monitoring activities.

The Chief Financial Officer also agrees that reinforcing the documentation of our service standards, and clarifying supervisory responsibilities with respect to file review are essential measures to continue to offer consistent, high-quality services at the best value for Canadian taxpayers. It is expected that this will be completed by the end of summer 2021.

The Chief Financial Officer recognizes the opportunities noted to improve the timeliness as it relates to the collection and analysis of member satisfaction data to enable continual improvements to the program. The collection concerns had been identified internally and actions were taken to ensure files were closed promptly and surveys were sent to members in a timely fashion, such as sending pre-emptive surveys to members before their files were closed if delays in closure were expected and providing monthly outstanding files waiting for closing to NARS Management. Although these actions did improve the timing issue, we recognize that more work is required to permanently prevent the issues from arising. To this effect, we have added four additional supervisor positions and staffing of these positions is underway with an expected completion date of December 2020. This will help ensure the timely review and closure of files, which will in turn ensure that surveys are sent to members promptly. While opportunities for improvements were continuously sought informally through the review of survey feedback, the Chief Financial Officer agrees that there is an opportunity to formalize the exercise of analysing survey feedback with a continuous improvement lens to ensure that the Relocation Program meets all members' needs within the parameters of policy.

The Chief Financial Officer wishes to thank the Internal Audit team for their outstanding work and invaluable feedback and recommendations.

Jen O'Donoughue
Chief Financial Officer

Background

The RCMP relocates approximately 2,200 members each year. Smooth relocations support RCMP operations and contribute to the well-being of RCMP members and their families. Ensuring that the right members are in the right place at the right time to deliver core policing services across the country is crucial in meeting the RCMP's core mandate. A robust member Relocation Program is essential in achieving this objective, while managing public funds effectively, ensuring regulatory compliance, and providing high quality services for successful continuous mobility.

Prior to December 2016, the Relocation Program was partially outsourced, with responsibilities divided between the contracted service provider and RCMP relocation reviewers located across Canada. The delivery of relocation services transitioned fully in-house to Corporate Management and Comptrollership (CM&C) in December 2016. This internal service delivery model was developed to streamline decision making, reduce processing times, and provide members with a single point of contact. While moving the program in-house was not designed as a cost saving measure, the new model was expected to be cost-neutral. To coincide with the introduction of this model, a new RCMP Relocation Directive (RD) was developed in coordination with the Treasury Board Secretariat, and came into effect on April 1, 2017. The RD changed existing RCMP benefits to better support member mobility and the achievement of the RCMP operational requirements.

Relocations generally progress through a series of steps, which include a member selling their residence, going on a house hunting trip to purchase or rent a new residence at their future location, moving to that location, and shipping their household goods and effects (HG&E). The RD provides guidance on actions authorised for each step, required approvals, and which expenses are reimbursable and in what amounts. The Relocation Program is delivered by National Accounting and Relocation Services (NARS) within CM&C. Expenses are either charged to a core funding envelope, for costs reimbursable for all relocations, or to a flexible spending envelope. The flexible spending envelope represents a limited amount of funding that relocating members may choose to spend on various expenses not covered under the core envelope, such as additional relocation expenses related to their spouse, children and pets. The RD also provides information that may be applicable in certain circumstances, such as when the member is moving from or to a remote location and when Crown-owned housing is involved.

The Commissioner approved the Audit of Regular Member (RM) Relocation in the 2019-2024 Risk-Based Audit and Evaluation Plan.

Objective, scope and methodology

Objective

The objective of the engagement was to determine if recent changes to the RM relocation process were cost-effective, ensured compliance with Treasury Board Secretariat policies, and increased member satisfaction.

Scope

The audit examined RCMP member relocation activities from December 2016 to December 2019. For the purpose of file review, the audit scope included only relocation files processed under the 2017 RD to ensure results are comparable over time and relevant to current relocation practices. The scope included RM relocations, retirement relocations, and isolated post relocations as these types of relocations are covered by the RD.

International relocations were excluded from the audit's scope as they are not covered by the RD. Rather, these relocations are managed by Federal Policing, with NARS assistance. Cadet relocations were excluded from the audit scope because they are not covered by the RD. Cadet relocations are limited to specific relocation benefits under the Financial Management Manual (FMM) chapter 9.5. The audit also excluded relocations for Civilian Members (CM) and Public Service Employees.

Methodology

Planning for the audit was completed in January 2020. In this phase, the audit team conducted interviews, carried out process walkthroughs, and examined relevant policies, procedures, and results of previous audit work.

The examination phase, which concluded in June 2020, employed various auditing techniques including interviews, site visits, documentation reviews, and data analysis.

Policy and procedure review

Interviews were conducted with key personnel from NARS, including its Director, managers, relocation supervisors, and some relocation service specialists. Interviews with key Relocation Policy Centre personnel such as the Departmental National Coordinator (DNC) and Relocation Policy Centre managers were also completed.

Policies and procedures related to RM relocation were reviewed and assessed to determine the business processes, the associated procedures, and the stakeholders involved. These included the FMM Ch. 9.5. Relocation, the 2017 RD, the Isolated Posts Directive, the Travel Directive, and various business procedure documents located in the TEAM Relocation Module.

Site visits

Site visits were conducted at NARS offices at the National Headquarters (NHQ) as well as in St. John's, Surrey and Edmonton.

File review

A file review was conducted for a sample of relocation files processed under the 2017 RD. This included a sample of 48 randomly selected relocation files, including 12 from each of NHQ, St John's, Surrey and Edmonton relocation offices. In addition, the five highest dollar value relocation files were included for a total sample size of 53 relocation files. The file review focused exclusively on RM relocation files, excluding international relocations and Cadet relocations.

Data Analytics

Analytical procedures were performed, based on the information available in the TEAM Relocation Module, to test the accuracy of transactions and compliance with the 2017 RD in the following areas: (1) real estate incentive (REI) benefit; and (2) home equity assistance benefit.

Review and analytical procedures were performed on 536 member satisfaction survey responses for in-house relocations.

Upon completion of the examination phase, the audit team held meetings to validate findings with personnel and debriefed senior management on the relevant findings.

Statement of conformance

The audit engagement conforms to the Institute of Internal Auditors' International Professional Practices Framework and the Treasury Board of Canada Directive on Internal Audit, as supported by the results of the quality assurance and improvement program.

Audit findings

Ensuring that the right members are in the right place at the right time to deliver core policing services across the country is crucial in meeting the RCMP's core mandate. A robust member Relocation Program is essential in achieving this objective, while managing public funds effectively, ensuring regulatory compliance, and providing high quality services for successful continuous mobility.

Accordingly, we expected to find that the current RM relocation process is cost effective when compared to the previous service delivery model, is compliant with relevant Treasury Board Secretariat and RCMP policies, and has a positive impact on member satisfaction.

Cost effectiveness

The audit assessed the availability of information for cost-related decision making. In addition, it assessed the comparative analysis of pre- and post-transition Relocation Program administration costs.

Availability of information for cost-related decision making

CM&C's Financial Management Branch (FMB) has the responsibility to plan for and report on revenues, salaries, operations and maintenance (O&M), and capital expenditures for all NHQ programs. Information in the salary and O&M forecasts is monitored on a monthly basis and can be accessed by NARS for the purpose of performing cost-related analyses of the Relocation Program.

On a semi-annual basis, FMP provides actual and forecasted cost information to provincial partners, which includes actual and foreseen changes in the Relocation Program and their impact on forecasted relocation costs.

The NARS Integrated Services Unit (ISU), supports the Relocation Program by assigning files to relocation supervisors in regional offices, monitoring file assignment to relocation services specialists, updating the relocation procedures and templates as needed, performing file verification activities, and monthly monitoring of certain risk areas (e.g., advances).

The roles and responsibilities related to management of cost-related information are clearly defined and carried out. The FMB is responsible for planning, implementing, accounting, and managing the RCMP budget, while NARS is mandated to recommend, authorize, interpret, process payment, review, and audit expense claims/benefits. As such, the financial and non-financial information needed to perform cost-related analysis is available to the Relocation Program on an as-needed basis.

Comparative analysis of pre- and post-transition relocation program administration costs

To assess the cost impact of the transition to the in-house program delivery model, a comparative cost analysis was performed by the NARS in the fall of 2019. The Relocation Program collected and summarized cost and relocation file data for the last five years (FY 2014-2015 through FY 2018-2019) for all RCMP relocations, including RMs, CMs, cadets, and foreign service relocations. The data included the benefits paid for relocating all categories of employees listed above as well as the administrative cost of running the Relocation Program. The total program costs decreased gradually by 4% from $103.3M in FY 2014-2015 to $99.6M in FY 2018-2019, while the number of relocation files increased by 2.8% from 3,120 in FY 2014-2015 to 3,208 in FY 2018-2019. The variance in total program costs appears to be due to a $1.7M decrease in benefits paid, a $3.5M decrease in external service provider administration fees, and offset by an $1.5M increase in salary.

The cost comparison performed by NARS was limited to summarizing cost data, without any evidence of variance analysis for individual cost components. In addition, the analysis did not include the pre- and post-transition costs of the Relocation Policy Centre.

To assess whether the move of the Relocation Program in-house had a cost-neutral impact on its administration costs, the audit team extracted and analyzed the relocation financial data in the TEAM financial system. Our analysis included data pertaining to members (excluding cadets and foreign service relocations) and the administration costs of the Relocation Policy Centre.

The analyzed data showed that the number of relocations related specifically to members initiated over the last five years has decreased by 10% from 2,425 in FY 2014-2015 to 2,188 in FY 2018-2019, while total relocation benefits costs have decreased by around 11.5% from $96.2M in FY 2014-2015 to $85.2M in FY 2018-2019. Therefore, the relative cost of relocating members has remained fairly consistent over the past five years.

Relocation Program administration costs gradually decreased by $2.5M over five years, from $7.25M in FY 2014-2015 to $4.7M in FY 2018-2019. The decrease was mainly attributed to the termination of the contracted service provider's contract, which resulted in cost savings of around $3.4M in FY 2018-2019. These cost savings were offset by additional salary and O&M incurred to run the Relocation Program in-house ($0.7M), as well as the fee paid to the contracted service provider for maintaining the Third Party Service Providers (TPSP) list ($0.2M).

In conclusion, we have identified that from an overall cost perspective, the cost effectiveness of administering the program was enhanced, with program administration costs having decreased since the transition in-house.

Policy compliance

The audit assessed the fulfillment of roles and responsibilities for stakeholders in the Relocation Program, policy compliance, ongoing monitoring over the Relocation Program and Gender Based Analysis (GBA+) considerations.

Roles and responsibilities

Various stakeholders are involved in the RM relocation process including the relocating member, parties within NARS such as relocation service specialists, supervisors, managers and the ISU, and the Relocation Policy Centre. The 2017 RD identifies the roles and responsibilities of members and other stakeholders during their relocations and is available on the RCMP's Infoweb. In addition, relocating members communicate with relocation service specialists as their primary point of contact throughout the relocation. The RD is supported by various business process documents on the TEAM Relocation Portal, accessible by NARS and the Relocation Policy Centre.

Relocation service specialists

Roles and responsibilities for relocation service specialists include guiding members through the relocation process and responding to member queries, processing member expense claims and various relocation benefits through the TEAM portal, and providing and reconciling advances to members in circumstances where they have large cash outlays as part of the relocation.

Relocation supervisors

Relocation supervisor responsibilities include allocating new relocation files to relocation service specialists, and acting as the point of contact for specialists, the Policy Centre, and the ISU. Supervisors also provide guidance to specialists processing relocation files, and reviewing and closing files once the member has completed the relocation, in addition to conventional supervisory functions such as staffing, training and performance management.

Relocation managers

The NARS managers responsible for the Relocation Program are responsible for managing the various regional relocation offices in addition to their responsibilities for other financial operations within NARS's purview.

ISU

Monitoring over the Relocation Program is divided between the NARS ISU and the Relocation Policy Centre. Interviews with the Manager, ISU, identified that the unit performs monitoring activities over administration of the program while relocations are ongoing and after they are closed, including monitoring the workload of regional relocation offices and allocating new files based on workloads, approving certain relocation expenditures, as well as monitoring certain transactions such as advances paid to relocation members. The ISU also creates and maintains all relocation business procedures, forms, templates, guides and support documentation, and is responsible for identifying, analyzing and implementing continuous improvements.

Relocation policy centre

The Relocation Policy Centre's roles and responsibilities include approving certain relocation expenditures, reviewing and approving relocation business cases, and monitoring elements of the Relocation Program such as member satisfaction and long term trends. The RD identifies certain transactions, such as reimbursements related to mortgage costs of home equity losses, which require approval by the Department National Coordinator (DNC), who at the RCMP is the Relocation Policy Centre Director, in advance of the specialist processing the transaction.

Evidence of these responsibilities being carried out by the various parties responsible for processing and monitoring relocations in the Relocation Program were confirmed through interviews and the results of the detailed file review. Overall, roles and responsibilities were defined and communicated to the various stakeholders in the Relocation Program, and were being fulfilled.

Policy compliance

Policy compliance was assessed through detailed file review and analysis of data in the TEAM Relocation Module. Policy guidance for RM relocations includes the FMM Ch. 9.5. Relocation, the RD, the Isolated Posts Directive, and the Travel Directive. This guidance includes identifying eligibility requirements for an RCMP paid relocation, reimbursable expenses and the amounts, conditions and limitations for expenditures, and documentation required for expenditures. In addition, various business process documents exist in the TEAM Relocation Module that provide guidance on processing these expenditures throughout the relocation.

File review

The audit team's file review identified that in general, paid expenditures were compliant with the RD and other relevant policy, included supporting documentation as required, and were paid in the correct amounts. While the majority of expenditures processed were compliant with policy, some exceptions were noted.

Minor errors were identified in 33 of the 53 (62%) files reviewed. For the most part the errors were limited to one or two transactions within a given file, with the remainder being processed in accordance with the RD. For example, the majority of transactions in the file were completed accurately, with minor errors in calculating one of the benefits paid out during the relocation, such as the reimbursement for a meal rate.

Overpayments to members related to these errors comprised a cumulative total of $6,185.34 from the $2.9M in relocation expenditures examined, for an error rate of 0.21%. Underpayments to members related to these errors comprised a cumulative total of $8,007.92 from the $2.9M examined, for an error rate of 0.28%.

Missing documents were identified for 14 (26%) files, which in some cases limited the audit team's ability to quantify any apparent over or under payments. While the specific amount of the over or underpayments could not be confirmed in these cases, the amounts involved would not have substantially impacted the overall error rates.

Minor errors in assigning reimbursements to the correct funding envelopes (core and flexible) were also noted in four (8%) additional cases of the 53 files examined. These errors did not lead to over or under payments as funding was still available in the flexible envelope. Errors also included four (8%) cases that did not impact payments to members, such as errors in recording RCMP paid airfare fees for portions of the relocation.

Evidence of Policy Centre approval was identified, where required, in all except one file reviewed. In most cases this approval was in the hard copy file, or in the associated documents in TEAM. In one case, Policy Centre approval was not on file for an expenditure paid more than two years after the transfer notice date; however, the payment occurred one day after the two-year timeframe for payments.

Data analytics

Due to their high value and complexity, the following areas were identified by the audit team for further testing: (1) real estate incentive (REI) benefit payment; (2) home equity assistance (HEA) benefit payment. A combination of analytical procedures and detailed testing were performed on Relocation Tombstone Data, which is used to electronically store all information relevant to relocation files, to test the accuracy of transactions and compliance with the 2017 RCMP RD.

In accordance with the 2017 RCMP RD, if a member is physically relocating and chooses to retain the residence at their old place of duty, they may accept an REI equivalent to 80% of the applicable real estate commission to a maximum of $12,000. To be eligible for the REI benefit, the member must have not previously received the incentive for the same property, unless they subsequently reoccupied it. Audit testing indicated that of the total of 212 REI payments made since the program was brought in-house, no payments were made to the same member for the same property. Several minor errors were found, including an REI payout error (resulting in an overpayment of $398) and inconsistent application of policy when a member only partially owns the residence. In addition, the audit team found 75 files with data entry errors in the appraised value and origin province fields (key information for calculating REI payments) or intention at origin fields. These data entry errors may impact the ability for NARS and Policy Centre to effectively leverage data analytics to monitor the program and to perform reliable analysis using the information included in the Tombstone Data.

Senior management in Corporate Accounting, Policy and Control identified as an area of concern the significant financial losses incurred by the relocated members when selling their homes if their residence of origin is located in areas where there is a decline in the real estate market. To address this concern, in 2019, the RCMP launched an initiative to examine the impact of depressed real estate markets and the extent to which these losses are covered by the HEA benefits. In recognition of the initiative's links to RCMP modernization efforts, it was included on the Vision 150 Results Tracker, which is used to monitor overall efforts to modernize the RCMP.

Home equity assistance

HEA benefits may be available to relocated members that experience losses upon selling their residence for less than the original purchase price, based on conditions and thresholds within the 2017 RD. Data analytics indicated that 528 relocation files in the audit scope period contained HEA payments. Further analysis identified 106 files with potential data entry errors in the TEAM Relocation Module Tombstone Data. Having reviewed supporting documentation, the audit team found that 87 (82%) out of the 106 files contained data entry errors, such as an incorrect original purchase price or selling price. These data integrity errors may impact the ability of the Relocation Program and Policy Centre to effectively leverage data analytics to monitor the program and to perform reliable analysis using the information included in the Tombstone Data. An example of such analysis is the initiative to analyze the extent to which the HEA losses were reimbursed through the relocation benefits. These reimbursements required use of historical information stored in the Tombstone Data.

As a result of the data integrity errors noted, the audit team tested 26 relocation files out of the 106 in more detail and found that five files (19%) contained errors of HEA underpayment (one file for a total of $1,600) or overpayment (two files for a total of $7,500). These errors were communicated to the NARS for further assessment. In addition, six files (23%) were missing some or all of the required supporting documentation in the TEAM Relocation Module to support amounts paid. As the Policy Centre relies on the documents uploaded in TEAM for the purpose of their review and approval of the HEA benefits, NARS should ensure the completeness and accuracy of the relevant information uploaded.

Overall, the data analysis did not identify significant compliance errors. However, numerous errors were identified with data integrity in the TEAM Relocation Module for HEA and REI transactions. This indicates that there are opportunities for improvement related to data integrity in the TEAM Relocation Module, which may allow NARS to better monitor higher risk transactions.

Ongoing monitoring

Interviews with the Relocation Policy Centre and NARS identified that there are three types of monitoring that take place to detect errors and ensure policy compliance, including file review by supervisors, monthly reporting and follow-up by the ISU, and quality assurance testing for compliance with the RD by the Policy Centre.

Monitoring by relocation supervisors

Once a specialist has completed a relocation file, it is sent to a relocation supervisor for review and file closure within a two-week timeframe. Review requirements include a supervisory review checklist for all files which confirms that a report that tracks file expenditures has been completed, the member has in fact relocated, and the relocation was greater than 40km. Also, the checklist reviews that all reimbursements related to the relocation had been paid to the member, and notes the date the file was closed.

Evidence of completion of this checklist was identified in the file review. However, supervisors stated that the checklist was the minimum level of required review, and that additional steps were required to detect errors and policy non-compliance. Supervisors noted a lack of defined guidance on what should be reviewed. This resulted in inconsistent approaches being taken for additional review, and file reviews rarely being completed within the two-week timeframe. Lack of consistency in file review, including files not being reviewed in a timely fashion and review of data entered in TEAM being performed inconsistently, may increase the risk of errors not being detected and addressed.

Monitoring by the ISU

The ISU performs monitoring over various components of the Relocation Program, including how many relocation service specialists are available to process files at regional relocation offices and their workload, as well as various financial elements of the relocation program, such as advances made to members.

Monitoring of workloads and the capacity of the various regional relocation offices to take on additional relocation files takes place via monthly reporting. The monthly report includes the number of specialists available to process relocation files, the number of files each specialist has, and the file's status (e.g. open, pending, set for final review). This information allows the ISU to better understand each relocation office's current workload, and to allow it to allocate new relocation files to regions that have capacity.

Monitoring of advances takes place through a monthly report sent to each region identifying outstanding and unused advances associated with their relocation files. Each specialist provides an explanation to their relocation supervisor for their files, indicating why advances have not been used, or when the advance will be reconciled with the expense claim. The supervisor then returns the report to the ISU. This process allows the ISU to provide oversight over advances and to identify and address any issues with advances in a timely fashion.

Monitoring by the Policy Centre

Monitoring by the Relocation Policy Centre includes an annual quality assurance (QA) review of a statistical sample of closed files, and re-performing the transactions processed to identify whether they were performed in compliance with the RD. These reviews were completed for 2017/18, 2018/19, and at the time of the audit, initiated for 2019/20.

The results of the Policy Centre's QA work are provided to the ISU. The ISU reviews the results and, in coordination with the relevant regional office and specialists responsible for the file, validates and actions the findings, including pursuing underpayments and overpayments greater than $2.

The audit team's review of QA review findings identified a trend of decreasing issues over time. The 2017/18 review found 59 errors out of 102 (58%) files reviewed, and the 2018/19 review found 28 errors out of 92 (30%) files reviewed. Similar to the findings from the audit team's detailed file review, the QA findings noted that recoveries and reimbursements related these errors were due to minor calculation errors made by the specialists during various relocation transactions.

While the QA program is designed to review a substantial sample size, the sampling strategy does not incorporate risk information into the approach, and the Policy Centre could not always complete the review of the statistical sample due to resource constraints. In addition, although the Policy Centre had already identified certain transactions they believed were high-risk due to complexity and error rates, and had the ability to review data in TEAM to identify transactions with a high likelihood of errors based on data in TEAM not aligning with amounts paid, this information was not incorporated into sampling.

The audit team's file review identified a single instance where a transaction that required Policy Centre approval had been processed without this approval. This instance represented a minor error as the file had been open for one day more than the normal two year timeframe for processing a relocation, a situation which normally requires Policy Centre approval. Upon granting approval to a specialist for a transaction, the Policy Centre does not perform further monitoring of whether that transaction is subsequently processed, other than instances where the file is selected as part of the QA sampling.

In conclusion, monitoring of the Relocation Program is in place to ensure that transactions are processed in compliance with the RD. This includes monitoring the workload of specialists to allocate files efficiently, monitoring advances and certain complex transactions when relocations are ongoing, and reviewing transactions processed once relocations are complete.

While monitoring is in place over the Relocation Program, there are opportunities for improvement. For example, supervisory review should be more timely and consistent to better detect and address errors in a timely fashion. In addition, the guidance on how supervisors are to perform reviews is unclear, which increases the risk that inconsistent approaches will be taken by supervisors reviewing files and may contribute to challenges in completing them within expected timeframes.

In addition, while statistical samples for QA reviews are useful to allow extrapolation of results, the results of testing show a trend of reduced errors as the Relocation Program matures. As a result, there is an opportunity to focus testing on areas of highest risk, and to better incorporate risk information into testing to identify areas where specialists are still experiencing challenges. This may better align sample sizes with the Policy Centre's capacity to complete the reviews, and to focus on areas where transactions are not being completed correctly and where more supervisory attention may be needed. At the time of the audit, NARS and Relocation Policy Centre were in the process of finalizing and implementing new, clarified monitoring responsibilities.

GBA+ considerations

The Relocation Program did not have clear evidence that the RD was analyzed with a GBA+ lens when prepared in collaboration with TBS in 2016. However, business process documents designed by NARS subsequent to the RD included reference to GBA+ considerations. For example, the consultation guide for specialists, which is used when specialists are initially contacting members to obtain information about their family status and details of the relocation, included notes on terminology and the need to adapt to member preferences. While the RD states 'spouse' and 'member', the guide noted that a member may have a variety of living arrangements including legal or common-law, as well as hetero or same-sex relationships and, as such, the member may prefer a different terminology be used. The RD description of 'spouse' and the associated benefits under the RD apply equally in all these situations. In addition, the guide noted that members may also identify as non-binary or transgender, and that all communication with the member should be tailored to the member's preference.

While the RD itself did not explicitly identify GBA+ considerations, the policy provided for funding for core expenses, which represent the standard relocation expenses all relocations would be expected to incur, as well as a separate amount of flexible funding for each relocation. The flexible component is intended to be spent differently for each relocation, based on the specific circumstances of the individual member (e.g., there are potential reimbursements related to children, pets, spouses, etc. that are reimbursed to the limit of flexible funding). As a result, the Relocation Program has the ability to respond to the differing needs and circumstances of members.

Business process documentation for the Relocation Program includes consideration of member preferences from a GBA+ perspective, and the requirement to communicate with the member in their preferred terminology. The process documentation also expands on the definition of spouse to recognise the diversity in members' family situations. The RD also allows for flexibility in accommodating the relocating members' individual circumstances with the use of its flexible spending envelope, available to all members relocating.

Member satisfaction

The audit assessed member satisfaction before and after moving in-house, how the program tracked and responded to member feedback, and third party service providers (TPSPs) contributions to member satisfaction.

Member satisfaction before and after moving in-house

Senior Relocation Program management noted that the impetus for moving to an in-house relocation model stemmed from a high degree of dissatisfaction with the contracted service provider's relocation services (e.g. poor advice, erroneous information, poor policy knowledge, and overpayments or underpayments). In December 2012, Ward O'Farrell Consultants Inc. provided the RCMP with a "Service Delivery Model Analysis" of the RCMP relocation program. The report discussed the observed issues with the service model in place at the time, including significant issues with member satisfaction such as a lack of responsiveness and errors in program administration, impacting members' morale and job satisfaction as well as the members' and families' wellness throughout the relocation process and their ability to transition to the new location. The report made specific recommendations to remediate the issues noted, including delivering the Relocation Program in-house. A business case was subsequently prepared by the RCMP seeking Treasury Board approval to deliver the Relocation Program in-house, with the intention of addressing the various issues impacting member satisfaction in a cost-neutral fashion.

There was limited member survey data available for the period when the Program was delivered jointly with the contracted service provider. No member satisfaction data collected by the contracted service provider was available. Therefore, the audit team based its pre-transition analysis on RCMP surveys undertaken between July 2016 and July 2017 to assess the level of member satisfaction with the services provided by both RCMP relocation reviewers and the contracted service provider.

Overall, the results of the pre-transition survey data, identified in Table 1 below, indicated that the average member satisfaction rate (members who were somewhat satisfied or very satisfied) with the services provided by RCMP relocation reviewers was 87%, only slightly higher than the 79% satisfaction rate with the contracted service provider's services in the same areas. In addition, on average, 6% of members were either somewhat dissatisfied or very dissatisfied with the services provided by the RCMP relocation reviewers, while 10% were either somewhat dissatisfied or very dissatisfied with the services provided by the contracted service provider.

Member satisfaction post-transition

The audit team reviewed the data for the surveys collected between January 1, 2018 and September 30, 2019 to assess the level of member satisfaction with the in-house services provided by the NARS Relocation Program (1,073 responses).

As Table 2 demonstrates, member satisfaction with RCMP services provided by the relocation service specialist was 15% higher compared to the rating of the contracted service provider's advisors. In addition, only 3% of the members were dissatisfied with the services provided by the RCMP relocation service specialist compared to 10% of members dissatisfied with the services provided by the contracted service provider.

Policy and file knowledge

Prior to moving to an in-house service delivery model, members were frustrated with relocation staff having insufficient file and/or policy knowledge. The RCMP's in-house service model has centralized communication to one main relocation service specialist per relocating member, and a designated back-up in the event that this single point of contact is absent. This single-point of contact model reduces the number of people handling any one relocation file, thus providing the relocation service specialist with better file knowledge. Furthermore, the survey data indicates that over 90% of the members are generally satisfied with the policy knowledge of the relocation service specialist.

Promptness

An analysis of the available in-house survey data found that between 88% and 94% of members were satisfied with the promptness of the relocation service specialist, while 29 out of 1,073 (2.7%) members expressed concerns with communication with relocation service specialist (including responsiveness).

Several measures have been put in place by NARS to improve response rates:

• The procedural requirement to respond to member inquiries within 48 hours.
• Assigning a back-up specialist that can take over in case the assigned specialist is on leave.
• Setting up a monitored general inbox within the regional relocation office where members can direct their general concerns.

As Table 2 demonstrates, member satisfaction with relocation staff responsiveness has generally improved.

In conclusion, overall member satisfaction has improved since the Relocation Program moved in-house. The adoption of an internal services delivery model with a single-point-of-contact centralized communication, increased policy and file knowledge among relocation service specialists, and improved response and processing times.

Tracking and responding to member feedback

Once a relocation file is closed, the member receives a survey link where they can provide feedback on their relocation experience and the benefits they received. The audit team's analysis of available data found that between April 1, 2018 and March 31, 2020, a total of 3,945 survey requests were sent out to members. In the same timeframe, 1,284 responses were received, resulting in a response rate of 33%.

During audit interviews, the Policy Centre and ISU confirmed that they examine survey data in order to identify additional opportunities to improve the program as well as member satisfaction. However, a formalized process to analyze responses along with potential program improvements was not in place. While a formal process had not been developed, the ISU explained that in response to member comments, the following initiatives have been planned or implemented:

• A training package was under development; however, it was not approved for official use at the time of the audit.
• The ISU ensures that the region where the relocation originates and the office that handles the file coordinate with each other. In addition, the process was revised to ensure that retiree relocations are now handled by both the Ottawa and Surrey offices.
• Relocation service specialist changeover procedures were created to ensure that in the event of file reassignment, core information is communicated to the next relocation service specialist.

Service standards

In order to assess whether service standards exist, are documented and applied, the audit team interviewed one relocation supervisor and two relocation service specialists from each regional office. The audit team also examined the Relocation Service Specialist Business Procedures and the Consultation Guide for Relocation Service Specialists.

Service standards were observed in the following areas:

• File Assignment and initial contact. Relocation Program management explained that when assigned a file, relocation service specialists' performance objectives require them to contact members within 48 hours. While relocation specialists were generally aware of this requirement, it was not formally documented in the Procedures.
• File Management. The audit team found that in general, relocation service specialists attempt to respond to member inquiries within 24 hours. However, the audit team did not observe defined guidance on response times in the Procedures.
• Claims Processing. Some specialists believed that they must process expense claims within two weeks, however there was a lack of clarity among specialists as to whether these timelines are formally documented. The audit team's review of the Procedures and Guide did not identify formal timelines for processing claims.
• File Closure. Supervisors explained that upon receiving a file, they have two weeks to review it prior to closing the file. However, the audit team did not observe any defined timeline for supervisory review/closure in the Procedures.

While a service standard exists for reviewing files, interviews and file review identified that supervisors were not reviewing files in a timely fashion. This impacts how quickly a survey will be sent to a member after relocating as member satisfaction surveys are only sent after a file has been closed. Therefore, supervisory delays in reviewing files may impact survey response rates, especially when these delays are significant.

Third Party Service Providers' contribution to member satisfaction

Some aspects of relocations are delivered by parties outside the RCMP. As per the RD, moving companies are engaged through a Household Goods Moving Services contract, managed by Public Services and Procurement Canada (PSPC), at a specific cost based on the weight of items being moved and the distance involved in the relocation.

TPSPs are engaged to deliver specific services during a relocation, including home inspection, appraisal, real estate agents, and legal services related to purchasing and selling residences. These TPSPs are provided through a contracted service provider at a ceiling rate. While the member is able to contract their own TPSP, the member will only be reimbursed up to the ceiling rate.

Moving companies trends

Audit interviews determined that before relocation services moved in-house, moving companies were a source of member dissatisfaction. These interviews indicated that despite the move in-house, moving companies' service quality and property damage may continue to be a source of member dissatisfaction. Analysis of survey data identified that the two most common sources of member dissatisfaction as follows:

• Van line unprofessionalism (e.g. unprepared, late, improper packing/unpacking, missing items, interactions, claims process issues) was identified 170 times out of 1,073 member comments (15.8%).
• Property damages caused by van lines was identified 130 times out of 1,073 member comments (12.1%).

Surveys and service failure process

Audit interviews indicated that the Policy Centre gathers quarterly survey data from member relocation surveys for the purpose of issue identification. Depending on the nature of the issue, the actions taken and which party is responsible for them differs. The PSPC contract identifies specific actions as 'service failures.' For example, in cases where a moving company does not pick up a member's HG&E on the assigned date, or does not deliver and unpack the HG&E on the assigned delivery date, the moving company is assessed a service failure by the Policy Centre.

If a service failure is confirmed, the TPSP may be subject to monetary penalties and/or lost business. The Policy Centre provided documentation demonstrating that van line service failures are recorded by company/file number, date, service failure type, monetary penalty (if applicable), and member information. The Policy Centre also tracks payment status as well as the total dollar figure (in penalties) attached to each service failure category.

Audit interviews found that in other cases when an issue with moving companies arise, such as loss or damage claims, the 2017 RD requires members to deal with van lines directly and that there is limited recourse through the RCMP. Evidence suggests that members were aware of this requirement and were independently pursuing the resolution of TPSP service issues.

Conclusion

Overall, the transition to an in-house delivery of the RM relocation process has resulted in improved member satisfaction, maintained compliance with Treasury Board policies, and modest cost savings, thereby enhancing the cost effectiveness of the program.

There are opportunities to strengthen the collection and analysis of member feedback on the relocation process. The Relocation Program could leverage this feedback and explore opportunities to continue to improve the program to ensure it meets all members' needs, where possible within the parameters of applicable policy.

Opportunities also exist to strengthen and implement risk-based internal controls to continue to maintain compliance and ensure accurate relocation payments to members. For example, focusing monitoring on higher risk transactions, as opposed to analyzing large statistical samples, may better utilize internal resources as it would more efficiently target transactions with the highest materiality and risk of error. The Relocation Program would benefit from documenting service standards or expectations in business process documents, and clarifying supervisory responsibilities with respect to file review to ensure they are reviewed in a timely fashion. There is also an opportunity to incorporate risk information into monitoring to more efficiently utilize monitoring resources.

Recommendations

1. The Chief Financial Officer should formally document guidance related to:
   1. service standards or other timelines for relocation specialists and supervisors; and
   2. clarifying responsibilities, including expectations for file review and monitoring over data integrity in the TEAM Relocation Module.
2. The Chief Financial Officer should formalize processes to ensure that member feedback on the relocation process is obtained and acted upon in a timely manner to identify opportunities to continuously improve the Program.
3. The Chief Financial Officer should clarify and finalize implementing monitoring responsibilities for quality assurance testing and refocus and reduce monitoring efforts from a statistical sampling approach to a risk-based approach.

Appendix A – Audit objective and criteria

Appendix B – Management action plan

Date modified:

2021-03-31