Thank you, Mr. Chair, for inviting me to discuss chapter 7 of our December 2008 report, “Economy and Efficiency of Services”, an audit of Correctional Service Canada.
With me today is Gordon Stock, principal of the public safety team responsible for this audit.
Correctional Service Canada has an obligation to ensure the safety and security of the Canadian public and its own staff, as well as criminal offenders sentenced by the courts to two years or more in prison. It provides custody and care to 14,500 inmates in 58 federal institutions across Canada and spends about one-third of its budget, about $642 million, on common institutional services and goods, such as security, food, clothing, and cleaning services.
This audit looks at the business side of running institutions. We examined whether CSC's management ensures that goods and services for its institutions are procured, managed, and delivered with sufficient attention to economy and efficiency. Specifically, we focused on whether food, clothing, and cleaning products of the desired quality are obtained at the lowest available cost and whether related services are delivered efficiently. We also looked at security services, in particular at whether CSC is efficient in the deployment of correctional officers among institutions, including the use of overtime.
Savings that are achieved through better management of costs can be reinvested in areas that the Correctional Service has identified as priorities. Given that in its 2007-2008 Report on Plans and Priorities, CSC said it had exhausted its ability to reallocate existing resources in order to meet its challenges, we expected that the Correctional Service had done such an analysis.
We found that Correctional Service did not manage the provision of food, clothing, and cleaning products in a way to obtain assurance of best value at lowest available cost. In most cases, quantities of food and cleaning products needed for the 58 institutions were not analyzed at the national level. Instead, individual institutions determined the quantities of food and cleaning products they needed and carried out much of their own purchasing at the local or regional level. This means the agency was possibly missing opportunities for savings available through higher-volume purchasing. In addition, CSC had not analyzed either the overall cost of preparing food inside the institutions or whether there were more economical alternatives. While it managed most clothing purchases at the national level, a substantial percentage of purchases were still made locally by institutions.
At the time of the audit, Correctional Service employed approximately 6,200 correctional officers, with an annual salary cost of approximately $570 million. CSC is developing a model for a more consistent approach to allocating correctional officers amongst institutions by introducing national standards for deployment. The model is based on the estimated minimum number of officers required to maintain a safe and orderly medium-security institution. However, this model has not yet been adapted to suit each institution, nor has its potential impact on the need for overtime been assessed.
Overtime costs have continued to increase, even though the number of prisoners and the reported number of violent incidents has remained relatively stable. Correctional staff point to the changing offender population and therefore the need to keep certain criminal groups away from others as one reason for increased overtime. In the last six years, overtime has significantly exceeded the amount budgeted. At the same time, spending on rehabilitation programs, training, and building maintenance has been less than the budgeted amounts. While we recognize that some overtime is necessary to deliver security services, we found no overall strategy or policy designed to control the use of overtime and little analysis of the impact of overtime on salary expenses and programs and of whether using overtime is more economical than hiring additional personnel.
In examining the increased use of overtime, we noted that some employees' leave records had not been updated consistently to reflect actual leave taken. In the month tested, as many as one third of absences in the eight institutions that were selected for examination were not recorded in the human resources management system. Unrecorded leave allows for additional leave to be taken later by the same employee, and as this is unscheduled leave, it will likely result in additional overtime costs.
While we understand its focus on safety and security, Correctional Service Canada needs to be better at the business side of running institutions, including analyzing the cost of its goods and services and determining whether there are more economical and efficient alternatives. We found little direction from national headquarters to institutions on how to manage their operations more economically and efficiently. CSC had not performed sufficient analysis to understand its costs, implemented and monitored suitable performance measures for economy and efficiency in its operations, or explored alternatives to identify potential savings.
As responses to our recommendations from Correctional Service Canada were quite detailed, the committee may wish to request an update on their progress in responding to our recommendations.
Mr. Chair, thank you. That concludes my opening statement. We will be happy to respond to the committee's questions.