HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Ms. Maureen MacDonald (Chair)

Mr.Chuck Porter (Vice-Chairman)

Mr. Alfred MacLeod

Mr. Keith Bain

Mr. Graham Steele

Mr. David Wilson (Sackville-Cobequid)

Mr. Keith Colwell

Mr. Stephen McNeil

Ms. Diana Whalen

[Mr. Wayne Gaudet replaced Mr. Stephen McNeil]

WITNESSES

Department of Community Services

Ms. Judith Ferguson

Deputy Minister

Mr. Kevin Hall

Director of IT Services

Mr. George Hudson

Executive Director, Finance & Administration

In Attendance:

Ms. Rhonda Neatt

Legislative Committee Clerk

Mr. Alan Horgan

Assistant Auditor General

HALIFAX, WEDNESDAY, MAY 16, 2007

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. Chuck Porter

MADAM CHAIR: Good morning, I'd like to call the meeting to order, please. Today we have with us witnesses from the Department of Community Services and we will begin in the usual manner with introductions of members. We'll begin with Mr. Steele.

[The committee members and witnesses introduced themselves.]

MADAM CHAIR: Thank you very much and welcome. Ms. Ferguson, I understand this is your first time in front of this committee. The floor will be open to you for a short opening statement, four to five minutes, and then followed by rounds of questioning, so the floor is now yours.

MS. JUDITH FERGUSON: Thank you very much, Madam Chair and good morning to everybody. We are very pleased to be here today to provide information and answer questions about the Auditor General's Report on information technology and financial controls. I'd like to begin by doing a little bit more formal introduction of the colleagues I've brought with me today. George Hudson is the department's Executive Director of Finance and Administration. George has held this position for the past 10 years and has a very extensive and comprehensive knowledge of the department's budget and our financial controls.

Kevin Hall, with me as well, has worked in the information technology industry for more than 29 years and as the Director of IT Services, Kevin oversees the department's IT systems and control. Both Mr. Hudson and Mr. Hall have been very much involved in the department's case management system, which I think you'll be hearing a fair bit about as we proceed this morning.

It would be no surprise to any of you, the Department of Community Services delivers a wide range of services to support the health and well-being of thousands of Nova Scotians. We help people achieve greater independence and self-reliance. Our Employment Support and Income Assistance Program delivers supports and services through 40 offices across the province and in 2006-07, we provided more than 29,000 families with more than $300 million in assistance.

Just a bit of background: On April 1, 1998, the province assumed responsibility for the delivery of social assistance - previously, short-term assistance was delivered by the municipalities. A major challenge in rolling out the new social assistance program was bringing together all of the different programs, services and delivery models. A common technology platform was implemented to assist with program delivery. The new Employment Support and Income Assistance Act was introduced in 2001 and the implementation of the Act was supported through an ESIA policy manual, information brochures, Web site information and staff training.

The Auditor General's June 2006 Report reviewed the systems and controls used by the department to deliver assistance through employment support and income assistance. While the department has processes and controls in place, we have developed and implemented further improvements that address the report's recommendations. I would now like to take just a very few moments to highlight some of the work we have been doing to improve our internal processes and controls.

The audit done by the Auditor General is based on the old income assistance systems and controls. A lot of what I think you'll hear today is that that audit dealt with the system we had in the past and we have a new system in place now that we're actually quite excited to have an opportunity to talk to you about this morning. The department was already working to improve these systems and controls and the Auditor General was aware of that at the time they began their audit.

At the end of January of this year, we launched a state of the art, world-class technology solution to support the ESIA program and services for persons with disabilities. This new technology, called integrated case management or ICM, was developed to meet the unique needs of the people we serve. This system was tested, and in fact developed, by case workers who confirmed that the new technology will greatly improve client service delivery while providing a case management system that supports our staff to deliver the best client service they can for the people we serve.

This system enhances our ability to share information and greatly improves how we document and manage client cases. It provides staff with additional tools and resources to process new clients, make payments to existing clients and progress efficiently with ongoing case management. It provides our staff with the best tools possible to deliver high quality customer service. As of April 2007, we have processed over 200,000 financial transactions on ICM and I'm very pleased to report that our systems and procedures are working well.

The ICM team worked very hard over the last year to ensure smooth implementation of this technology. This technology represents the best practice within government and we are extremely proud of the ICM team and all of our staff for the hard work and dedication they put in to put this system in place. The new system will also be used by other program areas like low-income Pharmacare for children by this summer, and within the next year by family and community supports.

In addition to ICM, we've been working on enhancing our internal processes and controls now for some time. One of the key initiatives we rolled out with ICM was the segregation of duties. The new technology system supports segregation through well-defined security roles, limiting access areas to those specific to someone's job and no single person has the ability to manage the client intake process from determining eligibility to issuing payments. This means increased scrutiny and greater accountability.

We've also developed new training tools for staff. Since the audit was conducted, all of our income assistance staff across the province have received in-depth training for program delivery in addition to the ICM system. We've had a very big year in income assistance in the department.

We continue to focus on clarifying policies, improving program standards and our documentation procedures. We know we still have some work to do and we're doing that, but we've come a long way. We've also hired the firm of Deloitte & Touche to independently review and provide recommendations to even further improve our internal controls. We've already implemented the majority of the recommendations - for example, the electronic approvals process was implemented on May 4^th.

In addition, the information we have from the Deloitte & Touche report will be built into our future ICM releases. I do have a copy of that Deloitte & Touche report if anyone is interested, I'd be pleased to share that with anybody.

In addition, we recently launched an internal audit process to determine the effectiveness of our new system because, obviously, we have a new system, we want to continually monitor that and to look at our procedural controls.

The report also reviewed departmental controls over our general computer environment at the department. These controls were related to areas like risk management, planning, operations, security, change management, user computing and business continuity.

A number of areas within the general computer environment were found to be working well. The Auditor General also made recommendations about how we can improve our computer environment and I'm pleased to say that the department has accepted all of the recommendations and we have already implemented most of them.

Some work with operational and strategic planning will be done over the next year and many of these initiatives were underway before the Auditor General's Report was released. We were pleased to receive the Auditor General's Report because it was very helpful for us in terms of validating that we were moving in the right direction.

Because of the large number of transactions we have every month in the department, we recognize the key role that information technology and financial processes have in our operations. The Auditor General's Report highlighted that appropriate controls were in place with respect to electronic funds transfers, but also noted opportunities to improve computerized checks of the electronic funds transfer data. For example, the Department of Finance has a new banking agreement which includes electronic funds transfer.

This is something that we take very seriously and that's why we retained Deloitte & Touche to take an independent look at how we could further improve our internal processes and controls. I should also say that we provided the Auditor General's Office with a copy of that report.

With the implementation of ICM, we are realizing significant improvements to financial and process controls. For example, as I already said, on May 4^th, we had enhancements to our new case management system and we now have implemented electronic approvals. This gives the department three levels of threshold controls over client and vendor payments for all types.

The first one is fixed maximum thresholds, the next is a warning message to staff for certain payment conditions, and an electronic approval required by a supervisor for payments of a certain threshold. In addition, we've improved invoice handling, we have more payment controls relating to service period, case status and eligibility and we have improved control over purchase orders.

As I already mentioned, we've improved our segregation of duties issues and greatly improved our role-based security, and we have developed a more formal process for reconciling our bank statements.

In closing, overall the department carries out tens of thousands of transactions every month to help Nova Scotians in need. These transactions are carried out in an operating environment that is safe and secure. While we do have established processes and controls in place, technology changes will prompt us to make even more improvements.

I would like to thank everybody very much for the opportunity to speak about this subject today. We look forward to providing you with more specific information in response to the questions you will have. Thank you very much.

MADAM CHAIR: Thank you. Mr. Wilson from the NDP caucus. You have 20 minutes.

MR. DAVID WILSON (Sackville-Cobequid): Thank you, Madam Chair. I want to welcome the deputy minister. I believe this is her first appearance before Public Accounts, so I want to welcome her and thank her for coming and making her presentation.

Definitely, I think this meeting has been a bit delayed over the last year. When I was trying to look back if it was the December report or if it was last June, I was clear when it was the June 2006 Report of the Auditor General. Even though the deputy minister has mentioned some changes that have taken place and a review from Deloitte and Touche, the Auditor General definitely - their recommendations and audits on departments in government, especially Community Services, are important to our committee. That is usually what we base a lot of our meetings on and those departments we bring forward to try to understand what is going on and hopefully try to get more information on changes that are being made within your department or other departments on the basis of those audits performed by the Auditor General and especially in a department like Community Services.

I think it is extremely important that the controls are there in place to ultimately protect the taxpayers because of the funding that your department spends of the provincial budget - I think you stated over $3 million was spent last year - so that's a significant amount of money and we know from past experience, from past issues that fraudulent and mismanagement of government funds happens.

[9:15 a.m.]

Several years ago, I believe, I don't know if the deputy minister is aware of a situation at Service Nova Scotia where an individual member of the Civil Service did have some dealings with fraudulent claims, of taking over $200,000 at the time, so those controls are important and definitely in Community Services. Far too often in my office, we deal with a lot of cases with Community Services and your department deals with, I think, the most vulnerable Nova Scotians, men and women and especially children. It's important that we have controls in to protect the taxpayers and the money that is spent by government, but also to protect employees, protect the system from fraudulent events and situations.

With that, it is important that we recognize in Community Services that with those controls, we have to ensure the service provided to those Nova Scotians can continue and aren't delayed, especially around disasters like Hurricane Juan or White Juan, or even a pandemic flu, possibly, with the employees of Community Services. I know that there is high caseloads for individuals within Community Services and ultimately they are there to

hopefully provide services to Nova Scotians. We need to ensure that there are controls there, there is access for employees and maybe access denied for some employees.

I will go through some of my questioning around the recommendations from the Auditor General. I know that some of them may not pertain because of the changes in the information technology and the program that you use now, but maybe just for some clarification. In the Auditor General's Report, in Section 4.7, the Auditor General had indicated, "A number of control weaknesses identified in this chapter pose a significant risk of financial loss or other negative consequences, either through fraudulent actions or error." As deputy minister, would you agree with those comments from the Auditor General with the system we had and with his report back in June of last year?

MS. FERGUSON: Thank you very much, Mr. Wilson, and thank you very much for your comments in terms of the department. Internal controls, obviously, for the department, are a balancing act between providing timely coordinated service and obviously having the adequate controls in place. Although we'll talk a lot about ICM this morning, and we'll talk about it being an information technology system in the department, it's much more than that. Really, what it is, it's a huge step forward for the department in terms of providing the best client service we can provide.

So although it's an IT system, it's really part of a much bigger process that's going on in the department in terms of really looking at how we're able to provide the best client service, and also how we can provide our staff with the best tools that we can provide them with so they, in turn, can provide that client service, so that they have actually more time to spend with the clients, and that we have a computer system that's easy for them to use to get information. So we're very pleased that we're able to do that.

In terms of the Auditor General's Report, I can say that the department always welcomes the Auditor General's Reports. We always need to be looking at ways we can improve, if there are problems, we need to address them, and as I said earlier, in this particular case it was very helpful for us to have the Auditor General's Report at the time that we did because we were able to validate that we were actually going forward and looking at the right areas. So it was a good focus for us in terms of looking at how we would move forward.

So I guess what I would say in relation to that one comment in the report, what the Auditor General found was that there was risk in the department for potential fraud. To date, I think in terms of fraudulent claims last year, there were actually only 14 that proceeded to any kind of a formalized investigation in the department. So while there was a potential risk of fraud in terms of actual cases going forward, there weren't that many.

However, having said that, part of the whole internal control process is to minimize the risks to have that fraud available, and that's what we've done in the process and that's what we've asked also Deloitte to highlight in their process in terms of looking at those

internal controls. So if I could use one example, I would say the security role-based model that we now have determining which people in the department will have access to which types of information, would certainly go to your point around minimizing any opportunities for fraud.

MR. DAVID WILSON (Sackville-Cobequid): So in those 14 cases that you mentioned, were they investigated and it was found - and was that on the employee side or was that on the client side? I know there are two sides of this. We all understand that some people out there are trying to get things and services that they might not qualify for, so out of those 14, was that on the employee side or was that on the client side, when you did the investigation?

MS. FERGUSON: Those were on the client side, and those would have been matters that we would have referred on to police for investigation.

MR. DAVID WILSON (Sackville-Cobequid): Have you found any within the department for government employees, or anything like that? Were you actually investigating, or did you find any cases where there might have been something that wasn't proper, or the procedures weren't followed from an employee side?

MS. FERGUSON: Not in terms of our IT systems or income assistance systems.

MR. DAVID WILSON (Sackville-Cobequid): That's one of the things, one of the criticisms we definitely hear quite often is how vigorous Community Services goes after possible overpayments and stuff like that, so one of the things we want to ensure is that that same policy and that same action from your department happens if it happens within the system and the controls within it. One of the concerns we have, the information your department has is very sensitive, it deals with all aspects of an individual's identity, their situation and all that, could the system possibly be hacked without improving the security system on that, and, if so, would the information on clients be at risk if that happens?

MS. FERGUSON: That's an excellent question. I'll answer the first part of it and then I may refer to Kevin for some of the more technical aspects. In terms of our staff, part of this whole role-based security piece was to ensure that people only had information they need to have in order to do their job, first of all. So we looked at protecting the information even within our own staff in the department. We had our FOIPOP staff involved throughout the entire project, because that was a big concern to people. We have very confidential information in our system, and we know that, and we have a responsibility to ensure that that information is protected and used for the purposes for which it's given.

So, one of the underlying fundamental pieces of the role security was to ensure, based on roles that people have in the system, that they only have information on a need-to-know basis, so that has been a big step forward for the department, yet, at the same time, that

people have the information they need to have to do their jobs. In terms of the second part of your question, I think I will refer that to Kevin.

MR. KEVIN HALL: We have an excellent state-of-the-art security program in place with the ICM system, and we have a very secure network. All the traffic on that network is encrypted, which means that it's all mushed up so people can't understand what is going on as it passes through that network. The security system in ICM, itself, is very robust. So we are in an excellent position to make sure that information is protected. It's backed up daily, and there are several versions of the information that is backed up on a daily basis, as well. We have off-site storage capabilities for that information, as well. So we are in very good shape there. Can it be hacked? That is always something that is there, but the risk would be very low in this situation.

MR. DAVID WILSON (Sackville-Cobequid): Are you aware, in the past, if that has happened, or that maybe the public didn't know about, are you aware - I don't know if you want to answer it or the deputy - if that has been the case in the past?

MR. HALL: I'm not aware of any such incidents, no.

MR. DAVID WILSON (Sackville-Cobequid): One of the recommendations, one of the findings, also, from the Auditor General, is that he mentioned in his June report, around the shared password, and that access to staff who left, or members of staff of Community Services who left, still had an active password. Really, one of the criticisms from the Auditor General was that their security wasn't cut off quickly enough. So have you addressed that issue, and is it still the practice of having multiple employees using the same password?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: That obviously was a very grave concern to the department. We looked at that immediately. We have instituted processes with our own HR division to automatically link with our IT division to ensure that when people leave the department that they don't continue to have an active password, and we are continuing to internally audit that as time goes on to make sure that we are dealing with that in a timely fashion. Again, that is part, and another piece of that, again, is the role security piece that we now have with an ICM, and we have 32 roles for people, and there will not be multiple passwords in the new system.

MR. DAVID WILSON (Sackville-Cobequid): But, currently, there still are multiple individuals with a password, or is that changing? I see someone nodding their head. Go ahead and answer.

MADAM CHAIR: Mr. Hall.

MR. HALL: Yes, I would like to follow up on that. That shared password reference by the Auditor General is speaking about a very specific small group of technical support resources in my division that could have access to actually start up a server and shut it down. That's what that was about. It wasn't providing access to the IA system itself. That process has gone away, anyway, with the implementation of the ICM system. We no longer do that. That was around transferring information to the banks, and that is now done through the Department of Finance in their EFT processes there.

MR. DAVID WILSON (Sackville-Cobequid): One of the other identified areas of concern was around individuals within your department having access to more information than they actually needed to perform their job. That definitely is a concern. So, has that issue been addressed, and could you explain how you addressed that issue?

MR. HALL: Yes, we have dealt with that. As Judith has mentioned a couple of times, we have something like 32, I think, different roles that have been defined in the ICM system. So people can only have access to things that they are entitled to have access to. There are different roles, for example, for registering a client, and there are different roles for managing the case once a client has been registered, and then there are processes by the financial clerks who look at the payment processes. So those are all nicely segregated now. So I think we are in very good shape there, as well.

MR. DAVID WILSON (Sackville-Cobequid): Also, in the report, the Auditor General mentioned that there were no dollar limits placed on the electronic funds transfer that employees could make, has that been corrected?

MR. HALL: Yes, it has.

MR. DAVID WILSON (Sackville-Cobequid): Definitely that, I think, left it wide open for possible fraudulent use, so it's important that we look at that. How often, now, are you going to be looking into those types of issues and monitoring the controls. I know there was some criticism within the Auditor General's Report that there was no real system in place to monitor controls and monitor those transactions. So maybe you could just brief us quickly on what's in place now to ensure that we have that protection that we need.

MADAM CHAIR: Mr. Hudson.

MR. GEORGE HUDSON: Thank you. In my division, we have a compliance group, and we've already initiated what has been called and internal audit. In the first two and a half months of the implementation of ICM, we have something like a population of 220,000 transactions. We have selected a sample size of about 1,500, and we'll be visiting every office with our internal auditors to follow up on the implementation of the controls, as designed, to ensure that they are working as intended. So that's already in the planning stage and will be occurring over the next several months. So that will be our answer with respect

to the ongoing monitoring, that section will be watching the implementation of the controls in ICM very carefully.

MR. DAVID WILSON (Sackville-Cobequid): In the audit, it identified that many of the policies and procedures related to risk analysis and information was undocumented. How could that impact the security of the information finances, have you broadened that to ensure that this information is documented well?

MR. HUDSON: The Deloitte report was all about risk management and, in fact, a subsidiary report to it is entitled Risk Control Frameworks. It's a lengthy document that is all about risk management and looking at internal control processes and making recommendations on how to further improve the controls and, thus, reduce the risk. So that is an ongoing reference source for us as we look to further releases of ICM.

MR. DAVID WILSON (Sackville-Cobequid): You had mentioned the Deloitte report. I know the deputy minister mentioned you have passed that on to the Auditor General. Would it be possible to make a copy available to the committee?

MR. HUDSON: Yes. I have them with me, if anybody wants them.

[9:30 a.m.]

MR. DAVID WILSON (Sackville-Cobequid): That would be helpful, definitely. The audit highlights that the ITS, or the Information Technology Services, doesn't prepare a formal annual plan, yearly. Does that concern you that that doesn't happen?

MADAM CHAIR: Mr. Hall.

MR. HALL: We actually did some planning, we do some planning every year, and we didn't have it as formalized as the Auditor General wanted to see us do it. In conjunction with the Policy and Information Management division, which ITS is part of, we have recently put a formal operational plan together.

MR. DAVID WILSON (Sackville-Cobequid): Will that be made public, yearly?

MR. HALL: The business plan of the department is the one that gets publicly put out. This one, normally, is an internal document, but it could be made available if people wanted to see it.

MR. DAVID WILSON (Sackville-Cobequid): Okay, that's good. In the past it was very difficult to get data about programs such as lists for services and the number of clients getting services - now I have kind of shifted to the ICM system that you mentioned earlier - and even the number of requests for assistance turned down, will the ICM system improve this situation and this monitoring of the services that your department provides?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: Yes, it will. In fact, a big part of the construction of ICM was really around us being able to be more accountable in terms of actually tracking a number of things on a statistical basis that would allow us to ensure that we were delivering the types of programs that Nova Scotians need. So that was a fundamental piece to the process, and we will be tracking various levels of statistics. We will be looking at some from a head office program perspective. We'll be looking at some from a regional operations perspective. So we will have a much better analysis of our caseloads throughout the ESIA Program.

MR. DAVID WILSON (Sackville-Cobequid): One of the concerns, also, that we hear about a lot, or I have, actually, and I'm sure other members have in their constituency offices, is around accessing certain government services, and far too often when there's a shift or change in delivering those services, with IT support, you lose that human contact. Probably one of the most frustrating things for an individual trying to seek information or apply for services is to have to dial 10 different numbers to get some kind of individual or someone to answer them. So we've seen in the past in different jurisdictions, like Ontario, where they've changed their system and used . . .

MADAM CHAIR; Order, I'm sorry, the time has expired for the NDP caucus.

Mr. Colwell.

MR. KEITH COLWELL: Thank you very much. I'm going to be sharing my time with my colleagues as well this morning.

First of all I want to say that on a personal and a constituency basis, I want to commend the department for the staff who deal with my staff on a daily basis with issues in our riding. I find the staff in your department to be very professional, follow the rules right to the letter, which is really reassuring for me as an elected representative and the taxpayers of the province, and they go above and beyond to try to help someone who really needs help, as long as it is within the rules. I just want to have that on the record because I think that's not said enough. You have a lot of workers who have tremendous caseloads and sometimes they are criticized; in our case it's just the opposite, we find them very great to deal with and they do their job very efficiently.

Just a couple of things I'm going to ask and then I'm going to turn it over to my colleagues. Who was the new computerized system purchased from?

MR. HALL: We actually built the ICM system, as it exists today.

MR. COLWELL: Oh, internally.

MR. HALL: With external help and with our own internal staff as well, both IT staff and then, as Judith referenced in her opening comments, we heavily engaged the program people and even the field people as well. Some of the front-line workers were engaged to help us define the requirements and then build a system that would meet the needs of not just the staff but also of our internal control requirements.

MR. COLWELL: That's good to hear, a nice made-in-Nova Scotia solution. Is this tied into the SAP system?

MR. HALL: It is.

MR. COLWELL: Have there been any problems with tying it into the SAP system?

MR. HALL: No, actually we had a very good experience with that, we were able to link with the SAP system very easily, using what was called a dotnet connector. That's actually providing us a very good interface with SAP. SAP does all the payment processing on behalf of the department now and that has worked very well. Our staff don't even realize that they're getting information from SAP or from the ICM system. They don't know the difference, they don't see that, so we've integrated that interface very seamlessly.

MR. COLWELL: Was there any cost associated with tying into the SAP system from the SAP system technical people?

MR. HALL: Yes, we had to engage some consulting support on that side, to help us build that interface that I just talked about, so there were some costs associated with that.

MR. COLWELL: Now would you have a breakdown of those costs available?

MR. HALL: I don't have them with me but I could certainly get that information for you. It wasn't a substantial amount of money, as part of this project actually.

MR. COLWELL: Yes, I'd appreciate receiving that, it would be great.

Deputy Minister, you indicated that there were no frauds identified with the IT or technology side of the department since you've changed over to your new system, which I'm very pleased to hear, but have there been any other internally, within the department, that haven't been maybe IT-related?

MS. FERGUSON: Yes, I believe there has been one that I'm aware of.

MR. COLWELL: And that was handled?

MS. FERGUSON: Yes.

MR. COLWELL: What was the result of that? I don't want to know the person's name, of course.

MS. FERGUSON: That matter has been referred to the police and is in that process.

MR. COLWELL: Is the employee still working for the department or on suspension?

MS. FERGUSON: No, the employee is no longer with the department.

MR. COLWELL: Okay, thank you. On sort of - not on the enforcement side - I remember in the early 1990s when we were in government at the time, there was a concern about people outside the department committing fraud and you alluded to that earlier and that's always possible, somebody trying to get something for nothing. At that time they instituted a - I don't know what the proper term is for it because I can't remember but they hired a few people to investigate these potential frauds and sent a notice out to everybody and if I recall right, we got several cheques back in the mail because there was an amnesty period, a no-questions-asked amnesty period, a whole pile of cheques came back in the mail from people that must have been fraudulent because they didn't want the money anymore and there was a little note to say take me off the system. Do you still have individuals around who sort of police the system and go through it to ensure that if there is someone out there ripping the taxpayers off, that they don't get away with it?

MS. FERGUSON: We do have early-detection staff in a number of offices across the province whose job it is to investigate claims where workers feel there may be a potential for that action, but I should say, overall, obviously, the clients of the department don't fall within that category.

MR. COLWELL: Yes, I realize that, but it's the ones, the very few who come out and destroy it for the people who really do need help. That's the sad part of it, besides the fact that it's ripping taxpayers off, and that's not very good either.

With those few questions, I'm going to turn it over to my colleagues.

MADAM CHAIR: Mr. Gaudet.

MR. WAYNE GAUDET: Thank you, Madam Chair. I, too, at the offset, want to signal the professionalism and the co-operation from the staff of the Department of Community Services in my area. I don't think it goes a week, and sometimes every day of the week that I am in contact with people from the department in our local office. I can always say that when people call, they usually don't provide you with the entire story. Contacting officials with the department, sometimes they are very helpful in providing you with the details that are missing. So I just want to acknowledge the hard-working individuals from the department working in our area and sometimes going beyond the call of duty to help individuals.

I want to focus this morning on this new integrated case management system. Madam Deputy, in your opening comments you indicated that the new system was tested by caseworkers, I'm just wondering, what was their feedback?

MS. FERGUSON: I guess I should start by saying, first of all, thank you very much for your comments about the staff of the department and thank you to your colleague, as well. I can tell you that certainly the greatest part of my job, which is, in fact, a privilege being the Deputy Minister of Community Services, is the opportunity to work with the exceptional staff we have in the department. On a daily basis, I am impressed by the commitment and the dedication of the staff in the department, so thank you very much, I really do appreciate your comments and I will pass those along.

In terms of the ICM system, we have had staff involved, and I would say front-line regional staff and program staff, involved from the beginning. So when we started to even talk about the system, we had staff involved in the project in terms of even starting to look at the RFP process, through the design process, and then, finally, in the testing process. So we have had opportunities to have input from staff all the way along, and it has been very important because the biggest piece of this system that we wanted is to ensure that it works for the staff, so that it is user-friendly for them, so that it provides the information that they need in a way that allows them to do the kind of work that they want to do, which is actually spending more time with the clients and not less. So to go back to Mr. Wilson's comment before the time ran out, really, we see this as an opportunity for our staff to be able to spend more personal time with the clients as opposed to less.

So we have received feedback all the way along. Overall, the feedback has been very positive, but there have been some very good constructive comments about things we need to look at, and we have taken those into account and we have looked at those. In addition to, actually, the staff who we had involved, we have had an extensive change management process, because as I am sure you can imagine, this has totally changed the way our staff do their jobs. So we have been engaging staff all the way along to make sure they know about the system, to make sure they know what the system will look like, and to get feedback. For the most part, whenever we can, we have incorporated that feedback.

After we did the testing, we made changes based on what we heard. My sense is, again, that the feedback has been very positive around the system in general, and once we had tested the system, we did another round of evaluations. I know staff got together on the phone almost every day, and then every week, for a while, to continue to find out what we were hearing from our staff in the regions, and the feedback has been positive.

MR. GAUDET: Good. Good to hear.

MADAM CHAIR: Mr. Hall.

MR. HALL: If I could just add a couple of comments to that, just some personal experience that I have had. I was recently at an ESIA conference, down the Valley, where a lot of the field staff were actually at that conference, and the comments coming back were very positive from staff. I think they also were very appreciative of the fact that we were listening - as Judith mentioned, there are some changes that we could make, and they were very encouraged about some of the changes that we were making, and the most recent release, release 3.1, that went in in early May. So they were very encouraged by that, as well. The formal change management process that Judith mentioned, we actually had change agents who were representatives from almost every office in the department who were engaged in that process as well.

Staff are finding - some of the comments we've been hearing back is, for example, the monthly budget process, where they have to look at budget recalculations for all their active cases - that the new system is saving them some time. There's also a lot of time savings in terms of less data entry with the new system, and that sort of thing. As Judith mentioned, that translates into more time they can spend with their clients.

MR. GAUDET: Thank you. It certainly is encouraging, especially when the staff are being listened to when changes are proposed. I'm just wondering, are there any frustrations that came about from staff about the new system?

MR. HALL: Yes, there was. For the financial side of things, the financial clerks and the financial coordinators, there were some parts about the system that weren't meeting their needs as fully as they would like. So we are making some changes to address some of those issues. The other part for the financial folks is that it was perhaps an even bigger change for them than it was for some of our caseworkers, because their duties were reduced to a very finite set of duties. So that was a big change for them, as well.

MR. GAUDET: So am I correct to understand that all caseworkers have access to this system?

MR. HALL: Yes.

MR. GAUDET: Yes, they do. I guess I would like to find out by asking, is every client on employment support or income assistance on this new system, every client from the department on this new system?

MR. HALL: Yes, all our clients in the ESIA Program are on this new system, as well as the services for persons with disabilities, as well as the direct family support for children, that program is on there as well. The reason we call this an integrated case management system is it will be a foundation system for use across all program areas in the department. So, ultimately, we'll be adding in the family and community supports caseload, as well. The housing side will be dealt with perhaps in the next fiscal year.

It's a very comprehensive system that we're very proud of, and I think if we look across the country, there has been a lot of implementations that are very specific and geared just to one of these program areas, but this system has the capability to provide core case management capabilities and payment management capabilities for all the program areas in our department.

MR. GAUDET: That's good to hear. When an individual on income assistance moves from another area of the province, this information is available to your staff in that area, I'm just curious - because I had a lady just recently living in Weymouth who moved to the Valley - does that individual have to go through the system again to reapply, or basically the file is just being accessed by the individual from another area?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: No, that individual would stay on the system and simply be reassigned to the new caseworker so they wouldn't have to go through that. I should also say, Mr. Gaudet, that we would be actually very pleased, if anyone is interested in having a demo of the system just to see how it works, we've been providing it to a number of people. So I would make that offer, if at any time anyone would like to see a demo of the system, we would be more than happy to provide that.

MR. GAUDET: Who should we contact to make those arrangements?

MS. FERGUSON: You could contact me, and I would be happy to do that.

[9:45 a.m.]

MR. GAUDET: Okay, wonderful. Again, I want to come back to this information on the system. Anyone within our province can access that information, I'm just wondering if an individual who is receiving benefits from the Department of Community Services, if that individual moves outside the province, can another province, can another department of community services access your program, your system?

MR. HALL: No, it is not available to other jurisdictions to access our system.

MR. GAUDET: Madam Deputy, you indicated that your department is launching an audit to evaluate the new system. I'm just wondering, has this audit started? Or when it is planned to start, when do you anticipate to have this audit completed? Is there anything in particular that you are looking for throughout this audit?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: As George mentioned earlier, the internal audit division within George's division of Finance is starting to audit the system, and that is ongoing. We've had

that process in place since we have started. We are putting a very fine focus on the internal controls piece to ensure that that is working properly, and this will be an ongoing process. We will continue to audit the system and I would say it would be ongoing for quite a long time.

MR. GAUDET: So the audit has already started?

MS. FERGUSON: It has already started, yes. I think George mentioned they are in the process of pulling about 1,500 transactions out of the 200,000 that we have already done, and they are already beginning to look at those to ensure that things are working properly.

MR. GAUDET: What specifically is the department looking for?

MADAM CHAIR: Mr. Hudson.

MR. HUDSON: You heard in the introductory remarks the discussion about the improved internal controls around role-based security, and specifically around the segregation of duties. The audit will be looking at the functioning of the system to ensure that what was intended with respect to the segregation of duties is in fact occurring. We will also be looking at the files for each of those cases to ensure that the supervision is, in fact, functioning so that the critical role of the casework supervisor and the district manager is evidenced in the case. So it is all about the functioning of the controls that were intended in the design of the ICM, because our experience is that you can have the best design in the world but until you actually see it working you won't know how it is working. The intent is to look at the controls and see evidence of them functioning as designed.

MR. GAUDET: So who is conducting the audits, the staff here in Halifax or everyone province-wide is involved with the audit?

MR. HUDSON: It is my staff; I have four positions. Currently there is one auditor active, another one hired, and two more to get, and we have in excess of 40 offices to visit - so when you talk about how long it is going to take, it is going to take a while. Our intent as we do an office is to report on that office to both the district manager there and to the regional administrator, roll those up by region so that there is a report by region and ultimately a report on the department in total, so it is going to take a while. On the one hand I have to get the staff positions filled, and on the other it is going to take a while just to go through 1,500 transactions.

MR. GAUDET: Do you have a target date in mind when you anticipate this audit to be completed?

MR. HUDSON: It will be later this Fall.

MR. GAUDET: Okay. You mentioned about the regional offices, will that report be made public or is that audit strictly for in-house?

MR. HUDSON: All of our audits are done in-house, just the department, it is not a public process as you see with the Auditor General's Report. However, those reports are available and are part of the annual audit by the Auditor General to access those types of reports, so they are fully available to the Auditor General as a normal part of our business.

MR. GAUDET: Thank you. Madam Chair, I will pass my time over to my colleague.

MS. DIANA WHALEN: How much time is left?

MADAM CHAIR: Until 9:53 a.m., Miss Whalen.

MS. WHALEN: Okay, I can also just say hello in that amount of time, thank you.

I would like to ask about the new system, whether or not this is helping you to identify errors in payments in a more efficient way? One of the earlier speakers had mentioned that as MLAs we often hear about overpayments and the clawback mechanism set up to get back that extra money, and it seemed to be happening fairly often - I mean that is anecdotal, but at the same time I'm wondering, would this system prevent that happening now that you have better financial control?

MADAM CHAIR: Mr. Hall.

MR. HALL: As Judith referenced in her opening remarks, there are some new thresholds in this system. One is there is a fixed threshold so that staff can't inadvertently make a mistake when they're making a payment - for example, key in 10,000 when they only meant to key in 1,000, so there are some very hard limits that are set in the system for all payment types.

The recent release, 3.1, on May 4^th, provided us with electronic approvals, and we're very excited about that. What electronic approvals does is for every payment type in every program area we can specify what authority that caseworker has for spending for that particular kind of payment. If they are trying to spend over that fixed amount, then that automatically goes to their supervisor on-line, the supervisor must then look at that, approve it, there must be comments on why that payment needs to be made and, once the supervisor approves it, then it goes forward.

So we have some very good checks and balances in there, and there are all kinds of warning messages in the system as well. There are conditions where payments can't be made because the status or the service period or whatever is not correct. There are all kinds of checks like that to make sure these things can't happen. For each program area, there are only

certain types of payment that will even come up for certain program areas as well - so there are a lot of checks and balances in here.

MADAM CHAIR: Order. The time has expired for the Liberal caucus.

Mr. Bain for the PC caucus.

MR. KEITH BAIN: Thank you, Madam Chair, and I will be sharing my time as well with my colleagues. First of all, I'd like to welcome you this morning and echo the remarks made by the other members concerning the co-operation received within the department.

The first question I would like to ask is when you were considering the new system, was there consultation done with the Auditor General's department as to what the system should entail?

MS. FERGUSON: We did have extensive consultation when we were looking at the actual development and talking about the ideas. I don't believe that the Auditor General was specifically consulted, but what I can tell you is that a number of issues that were raised in the Auditor General's Report, the department was aware of those and so they formed the foundation and a big piece of why we wanted to move ahead. So I guess what I would say is a lot of the issues raised by the Auditor General were known to the department and were a big piece of the driving force to create the system.

MR. BAIN: So do you feel confident that the new system will meet with a favourable review from the Auditor General's department?

MS. FERGUSON: Yes, we would certainly hope so and would certainly invite the Auditor General's Office to come back and have a look at where we are today based on the system that we've put in place. We would welcome the opportunity for them to have a look at that.

MR. BAIN: You mentioned the system was designed in-house. How much did it cost to get that system up and running?

MS. FERGUSON: The total cost for the implementation of the entire system is approximately $11.4 million.

MR. BAIN: Okay. In your opening remarks, you mentioned staff had received in-depth training for the program delivery and case management since the audit. Could you explain the nature of the training they received and how the staff reacted to it?

MS. FERGUSON: Sure. We're very proud of the whole change management piece that we had around this project. Like I said, it was really fundamentally changing the way that people did their job and we knew we had to pay attention to that and we had to make sure

we knew what the staff's concerns would be and that we could address those early days. So as Kevin spoke a little bit to the change management process earlier, we had change champions in every office, we had people involved from the beginning of the process.

We did our change management system internally, in-house. What that means is we had sessions where we trained a number of people from across the province, we brought them in and we did "train the trainer" sessions, so actually DCS staff trained DCS staff, which was actually a wonderful process. We've been talking about it a fair bit because we think it's best practice in terms of how to do the work.

The other thing that did was it created experts in the system all over the province, so we now have people who went through that train the trainer process who are themselves experts in the system and can help to support their colleagues. We brought people in, we did a week, I believe, of train the trainer sessions - four days - with staff in I think three or four sessions. Then those staff went out with a specific program, with a training manual, and we had sessions set up for all the staff in the regions and they did training for close to 800 staff. It was really a monumental bit of training that we did, but from everything we've heard the training has gone very well and that's a commitment to our staff, to the trainers, and certainly to our caseworkers who took it very seriously. As we've mentioned, we've done almost around 200 transactions and things have gone relatively well.

MR. BAIN: It was mentioned that the new system may not address all the concerns that were raised in the Auditor General's Report - what concerns would it not address?

MADAM CHAIR: Mr. Hudson.

MR. HUDSON: For a good example of our trade-offs - we committed to get this thing running by the end of January. One of the recommendations that you'll see particularly in the Deloitte report is around how much better it would be if we had electronic approvals. To show you how this and subsequent releases work, our release 3.1 that Kevin referenced has electronic approvals in it. There's another issue with respect to how cash receipts could be improved - that's intended for subsequent release. Just like any software you buy, whether it's a spreadsheet or a word processor, there are subsequent releases to it that always improve the product. That's our intention with this - we can't wait forever to put in all the controls because we'd never have the product. So we've implemented it and have a phased approach to improvements to take into account these other recommendations. That also is the value of the report you have from Deloitte as a reference source for future improvements.

MR. BAIN: So basically all the concerns that aren't addressed are gradually coming into the system? Can Nova Scotians be confident that the right people are receiving the right amount of money from Community Services?

MS. FERGUSON: Yes, very much so with the new system. Between the electronic approvals that we've talked about, between the role-based security, we certainly have come a long way and I think Nova Scotians can be very confident.

[10:00 a.m.]

Another piece that we haven't talked about this morning - while we were working on the ICM system we were also working on updating our income assistance policy manual. We did the two things: we rolled out the policy manual piece first, and then the technology piece second. Part of that was, again, to ensure consistency, to ensure that if there were some policies that were unclear, or there were varying degrees in interpretation, that we had clarified all of that, that we had it set out in a way that is very user-friendly for staff. So prior to rolling out the ICM system in the Fall we rolled out a revised policy manual and we trained staff right across the province on the policy manual. So between the improved policy manual and the ICM system, we feel that we've made significant headway in terms of that.

MR. BAIN: You might have already answered this before, but how many clients does the department have in the Employment Support and Income Assistance Program?

MS. FERGUSON: At any one time we have approximately 29,000 to 30,000 clients.

MR. BAIN: And this is being delivered through each office throughout the province?

MS. FERGUSON: That's correct, yes.

MR. BAIN: And the staff in each of these offices, are they all now logging on to the same system?

MS. FERGUSON: Yes, they are.

MR. BAIN: So what is the total amount of assistance provided through the Employment Support and Income Assistance Program?

MS. FERGUSON: Last year I believe, for the ESIA Program, in total we spent $348 million. That's a global figure that can be broken down between programs.

MR. BAIN: Okay. I'm going to turn it over to my colleague, Madam Chair.

MADAM CHAIR: Mr. MacLeod.

MR. ALFRED MACLEOD: Thank you, Madam Chair. I would like to certainly welcome the staff here today and appreciate the comments that they made so far. I'd also like to echo comments about the quality of the staff - I've had an opportunity to deal with the

Sydney office on a far too regular basis, however, they are, as pointed out by others, very efficient in what they do. As a matter of fact, I just want to share this little story with you.

Within the last six weeks I've had an opportunity - an issue came forward, I made a call to the department and within three hours staff had contacted the individual, and within 24 hours there had been a solution found to a situation that had four young children in a bad way. That's the kind of professionalism that your department displays in our area and it is really refreshing when you see that. So I really think that that is the good news, and I did take the time to thank them at the department for what they did.

That being said, there are a few questions that I would like to ask and I guess one of them is - because I am not as well-versed as some of the members here - the differences between the new system that is now in place and the old system. It's quite different as I understand from the conversations this morning, but I'm still not sure just how much - I know you said time savings but I'm trying to get an idea of just how much more efficient it is, and I'm wondering if you could share some of what you found out already.

MADAM CHAIR: Mr. Hall.

MR. HALL: The new system reduces a lot of the data entry for staff because in the past, in the old system, they would have to manually key in responses to various fields on a screen in the system, and a lot of that has been minimized. There are just drop boxes they can pick selections from as opposed to having to key in entries - and that will also serve us very well when we get into reporting, because then we have much more consistent input coming into the systems and then we will be able to report much more accurately back into the system as to what kinds of services are being provided to our clients. So that is one big area for them.

Just in terms of the differences between IA and ICM, the income assistance system was pretty much a payment management system. It didn't provide a lot of case management supports for our staff, that ICM now provides some very comprehensive capabilities that IA never provided. For example, we just look at case notes themselves as a very big part of managing a case for these workers. Our workers can do text-based searches on case notes, for example, while in the past they would have had to manually search through pages and pages of case notes that were on the old IA system, and now they can very quickly find the reference that they were looking for and the history of that case. So that is just one small example of the kinds of time savings it would provide for staff.

MR. MACLEOD: I was wondering if, along with those, are there any other items that are new, things that you can do now that you couldn't do under the old IA system, besides what you just mentioned?

MR. HALL: There is one facility that workers have, for example if they need to go do a home visit to a client site, there is a link on the system that automatically brings up a

map from their office - because it understands what office they are in - right to that client site. So that is one example there. The budget recalculation process is much easier for them and staff have commented on that, it has taken them a lot less time. And that's a very intensive process for them, once a month they used to spend four days, I think, getting ready for the month-end cheque production process on the old IA system and that's much easier for them now.

MR. MACLEOD: So because of this new system, can Nova Scotians be sure that the right people are receiving the right amount of money - I shouldn't say the right amount of money, the amount of money they qualify for at the right times?

MR. HALL: Involved in that is a combination of things. It's the system, it's the policy and procedures and making sure staff understand that. It's the training that they get, and we have covered all of those things off, as Judith has referenced in the last while, so we are in a much better position to make sure that people are getting the right amounts. With the new system and with the new thresholds in place that we talked about, that will provide for much more equitable and consistent application of the policy across the province. So there should be less inconsistencies applied from office to office.

MR. MACLEOD: I believe in the Auditor General's Report there was reference to electronic funds transfers and there were no checks or balances in there. I just wonder what has been done in order to look after that concern?

MR. HALL: We go through the SAP system at Finance now and they have the relationship with the banks in terms of making those electronic file transfers and they have recently put a new agreement in place with the banks that they're dealing with.

Again, we reference back to these thresholds. In the past we only had some thresholds on vendor payments that were being made, so we would do some high-water mark tests to see there was no vendor payment above some limit, and that's been extended now to be much more comprehensive, not just on the vendor payment side but on the client side as well, and both vendors and clients can have direct deposits made now - in the past we just had direct deposits for the clients.

MR. MACLEOD: There's been an issue in the past over Canada Pension Disability and payments of Canada Pension Disability and its effect on community services, what has the department done in regard to this lately?

MS. FERGUSON: We are looking at working with a number of organizations - and that would be one - to ensure that we have, I guess, as quick an interface as possible to ensure that we're aware of those payments and when they are happening. So we are in the midst of doing some work with Canada Pension, and I know also the Workers' Compensation Board, around that very issue. So that is in progress.

MR. MACLEOD: Why did you engage Deloitte Touche to do a report?

MADAM CHAIR: Mr. Hudson.

MR. HUDSON: We had the Auditor General's Report, and certainly the Auditor General is aware of the work going on, but the nature of the recommendations that you have before you were not at the level that we needed to actually put them in design. So the engagement of the Deloitte firm, following an RFP process that selected them from amongst a bunch of bidders, the intent was to get very specific recommendations that were plugged into the design of ICM. So it is a much more comprehensive work done by Deloitte over a longer period of time than the Auditor General was able to involve themselves in just this one piece of work.

What you have before you is just the tip of the iceberg of the work that Deloitte has done. There is a much more comprehensive document underneath of that. All of that was made available to the ICM design team.

MR. MACLEOD: When you got the report, was there anything that just jumped out and said, oh my God, why are we doing that?

MR. HUDSON: Well it's much more around the design for the future than why are we doing something with the past. We recognized the challenges that we faced with the existing system, recognizing that it was a very, very old mainframe system, so it was very limited in terms of the features it could provide. So as we jumped several decades in terms of computer development, it provided lots of opportunities that were not there before with the old system.

Using services like Deloitte, they plugged in nicely into the overall design of ICM, because they brought an expertise that wasn't otherwise with the design team, which was mostly caseworkers and IT professionals.

So, no, I wouldn't say there was anything in the Deloitte report that I would say shocked us. From my own perspective, I was head of audit in the department for ten years prior to this particular position, so there wasn't anything that surprised me in that report.

MR. MACLEOD; I guess just a general question. In the short time that you've had this system in place now, the general feedback from the staff - and I heard you mentioning some things before - overall, has it made not only customer satisfaction but I guess employee satisfaction, has it raised? I mean, it sounds to me that it has enabled staff to do their job a little better, so in the workplace there should be a few more smiles - is that something that you've seen as feedback?

MADAM CHAIR: Mr. Hall.

MR. HALL: Yes, I would say that's definitely the case. You know, there are a few staff who don't adapt to change as quickly, and that's true in any organization, so you're bound to have the odd person who is not happy with something. We're looking for common themes and trends for changes and improvements we can make constantly. We are getting some formal feedback in the forms of surveys and focus group sessions as part of the formal change management process that Judith has talked about.

I have to say that I have been in IT for 29 years and for a system implementation this complex that went in at the end of January, for it to have gone in as smoothly and for staff to have adapted as well and as quickly as they did, we were blown away by that. We were thinking the first morning that something was wrong because things were quite quiet on the service desk, much quieter than we expected them to be - not to say that there weren't issues certainly and you know people didn't necessarily have some of their security roles set up properly and stuff like that. So we were working on that, but by 10:00 a.m. that morning people had made 500 payments, which meant if they were getting that far into the system they had adapted very quickly to the system and the training had obviously done its job.

There are on-line manuals available to people as well, so they can go onto the system guidelines and they can also reference the policies on-line from that system as well. We put what we call a practice area in place as well, so people can go out and practice on the system without being part of the production environment as well. So we were very impressed with the results to date on this system.

MADAM CHAIR: Order, please. The time has now expired for the PC caucus. The second round of questioning will be 10 minutes per caucus.

Mr. Wilson from the NDP caucus.

MR. DAVID WILSON (Sackville-Cobequid): Madam Chair, one quick question to the deputy. Was this report from Deloitte publicly given out earlier in the year - was it given out to the public earlier than today and our department receiving this?

MS. FERGUSON: Is hasn't been publicly distributed. The report, as you can see, is dated December and we provided it to the Auditor General's Office in January. We have certainly been using it for our own internal purposes since that time.

MR. DAVID WILSON (Sackville-Cobequid): Madam Chair, one of the things that we have been dealing with as a committee, definitely over the last few months, is trying to make sure that we have the information for committee members to do what I think is an effective and appropriate job on questioning witnesses that come before us.

[10:15 a.m.]

To think that this report was written and given to the government on December 22^nd and we are here today - and the department knew that this has been on the agenda for some time now - that is wasn't given to our committee, to our clerk, to put into our packages concerns me. I hope the deputy minister understands that, that this is not something this committee just wants to have this information or that information, it is important for us to do our job appropriately and I would find that this report should have been at least given to the clerk to be distributed to committee members. With that, I will go into some questioning.

One of the things I will start with, what I tried to finish off with earlier, is around that human contact that individuals have and the concerns many Nova Scotians have when they can't get someone on the phone. The concerns we have are around the applications of clients who are going to apply for community services. We have heard from other jurisdictions, like Ontario, that have used automated phone systems for intake for community services. I'm wondering if the deputy minister could assure us that, with this ICM system, it won't lead to a computer- only intake of community services applications?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: Thank you. That is certainly not the intention of the system; in fact, I would say that the intention of the system is just the opposite. The intention of the system is to make the data entry and other pieces of that work more efficient for our front-line caseworkers so that they can spend more time actually dealing with their clients. And that is something that we've heard from them, that the data entry process had been quite labour intensive and, as Kevin alluded to earlier, for the four days of the month that they have been doing the budget input process that is very labour intensive - so our hope would be just the opposite, that this would be an opportunity for our staff to spend more time with their clients.

I can also tell you that we have done some other work, we actually have a position in the department that is dedicated solely to client service, and that was a priority of the deputy prior to myself in terms of really having the department put a focus on client service. We have done some things like institute telephone protocols, so staff now has a protocol for timelines for returning phone calls; and if staff aren't available in the office, making sure that their voice mail says that, that someone's covering for them, that people are checking. So we are trying to do a number of things to ensure that our staff are available to address the needs of the client on a more holistic basis.

MR. DAVID WILSON (Sackville-Cobequid): With that new goal to hopefully have caseworkers spend more time with their clients - I know currently caseworkers have a heavy caseload and it's difficult for them to try to get back to us, or to me as a member or as an MLA trying to assist someone going through that process - with your statement that you're trying to get caseworkers back to spend more time with their clients, how much more time

are you looking at for caseworkers to spend with an individual? Is it five minutes more per session, per day, per week, per month, or is it 10 minutes - could you give me some indication on what your goals are on that increased time that caseworkers have with clients to hopefully try to sift through their situation?

MS. FERGUSON: That's a good question. We haven't quantified it in terms of the types of measures that you've spoken to, but certainly our casework supervisors and our district managers will be looking at that. I know we have done work in various district offices in terms of allocating caseloads and that kind of thing to ensure that caseworkers are able to have more time. So it is something that we'll be constantly monitoring as we go along.

MR. DAVID WILSON (Sackville-Cobequid): So has the caseload for those caseworkers decreased over the last little while?

MS. FERGUSON: Well, the IA caseloads generally have decreased and are continuing to decrease, but as we know goes along with that, we also are aware that the needs of our clients, particularly our IA clients, are complex.

MR. DAVID WILSON (Sackville-Cobequid): So one of the concerns about the integrated case management system that has been expressed to us is that it de-professionalizes the caseworkers, in giving them little or no flexibility or discretion to take into account a client's individual needs. The new system, from what we understand, is very much a formula where a caseworker inputs the information and then it spits out the services and the amount that the potential client will have, and far too often many individual needs won't fit this formula or mould that might be integrated in this system. So how will you address that issue on caseworkers being able to provide services to different needs because, of course, individuals are different and their needs are different - maybe a comment on that.

MS. FERGUSON: Sure. Part of what you're speaking to in terms of that piece really is the formulation of our income assistance policy and, as I said earlier, we have, as part and parcel of this project, done a significant bit of work to our income assistance policy to ensure that the policy is interpreted consistently, that it's easy to understand, and that it provides caseworkers with the guidance they need to do exactly the kinds of things that you talked about. It's obviously a balancing act in terms of having program requirements and a framework and accountability versus opportunities to have discretion in terms of looking at those special needs.

As I'm sure you're aware, we do have a number of special needs that caseworkers can look to and provide that information to our clients on an individual basis, and that's really how the system is set up - that there's a certain amount of money for basic needs and then certainly a large number of special needs that are more in tune to the individual needs of those clients. So while there are approval processes in terms of amounts, there is also discretion in terms of the caseworker. I appreciate the comments that you brought forward this morning, but I should say that we've also heard comments that staff welcome those types

of changes because it's clear to them in terms of what the process is and where they can go. It provides consistency in terms of the service that we're providing across the province as well.

MR. DAVID WILSON (Sackville-Cobequid): I know I don't have much time, but actually your answer kind of leads me into an area where we've heard recently from many individuals who contacted the caucus office, and my office, around those special needs allowances and some of them being cut off, or that client being required to go back to their doctor, go back to their specialist, to have new information, new letters written up to provide caseworkers. We've heard of one case where the specialist was quite upset that their patient was coming back to them after they had already written the letter that they were required to initially. Many of the times these special needs are a result of a disease and things haven't changed. Would this be a situation where you think because of the change to the ICM system, this is the result of those changes and requirements needed by clients?

MS. FERGUSON: I wouldn't say that that's as a result of the ICM system. We have done some work in terms of our policies, in terms of clarifying some of those, but haven't specifically changed entitlements. Again, it's a balancing act in terms of what's required, from an accountability perspective, to ensure that we are providing a special need under the correct circumstances versus the need, obviously, to provide those funds to the client. So I would say it's a balancing act but that we are required to be accountable, and that we would expect staff to be accountable in terms of ensuring that they get the specific information that's needed to provide the basis on which they can provide the special need.

MADAM CHAIR: Order, the time has now expired.

Ms. Whalen, for the Liberal caucus. You have until 10:34 a.m.

MS. WHALEN: Thank you very much, and I'm glad to have a few more minutes; that was too short last time.

I wanted to ask a number of questions relating to this. There's quite a range of things that this can affect. As you said, it's a broad implication to the whole department isn't it - change in really the manner in which work is carried out has a profound effect, I think, in the client relationship as well, which we hope will be to the benefit of our clients, which is certainly our concern as elected members and I'm sure yours as well.

In the direct deposit, I notice that about a quarter of the clients were receiving direct deposit rather than a cheque. Is that something that's going to be encouraged to increase - it was listed in the Auditor General's Report, it said that something like $7.2 million out of $31.6 million, on a monthly basis, went into direct deposit - is that something that is encouraged with your clients, rather than the mailing out of cheques?

MADAM CHAIR: Ms. Ferguson.

MS. FERGUSON: It's certainly an option that we provide to our clients if that would be their preference. So that would be discussed with them, but it's the client's preference whether or not they proceed with direct deposit.

MS. WHALEN: So there is no policy that would say you would prefer that?

MS. FERGUSON: I think it is encouraged in terms of preferring that, but again it's the client's choice.

MS. WHALEN: Okay. Is there a trend to see that increasing?

MS. FERGUSON: I think from a system's perspective, we feel it would a more efficient practice if we could do that, but again we recognize that some clients' individual circumstances, simply it's not possible and we would respect that.

MS. WHALEN: Okay. It might be that some sort of financial coaching for people would help them to understand it better, because sometimes it's a lack of confidence or understanding of the system. I don't know that you have time to do that kind of assistance, but I do think that people who are receiving assistance often need some sort of financial guidance in terms of just training or experience.

MS. FERGUSON: Yes, I would agree, and I know that our staff has had some of those discussions with clients.

MS. WHALEN: Can you tell me, since the Auditor General's Report, has there been a change in the percentage of clients receiving their cheques by direct deposit rather than in a cheque form?

MADAM CHAIR: Mr. Hudson . . .

MS. WHALEN: Or what percentage, could you tell us? I think I said roughly a quarter, but . . .

MR. HUDSON: It's about 50 per cent. Certainly it's our wish - as I think I see where your question's going - to get that ever increased. We are the ones who have to fix things when cheques get lost in the mail, and that has happened in the past, and certainly it's those kinds of things that result in more clients choosing the direct deposit because it is a much more reliable system.

MS. WHALEN: There's more security, really, for the recipient as well.

MR. HUDSON: Yes, they can count on the money being in their bank account on a specific day every month; it offers a significant advantage to them.

MS. WHALEN: You mentioned 50 per cent - is that the figure you're at now or that's a target, because it wasn't at 50 per cent when the Auditor General's Report was done?

MR. HUDSON: That's where it is now.

MS. WHALEN: So it's doubled in less than a year.

MR. HUDSON: Yes, and certainly any time that there's a threat of a Canada Post strike, it goes up, and it doesn't go back. It is certainly not our strategy to force it on clients, but it's to their advantage. We recognize, however, that . . .

MS. WHALEN: Can I ask, though, what would have made it double in less than a year if it wasn't a concerted effort by the department to encourage people? I think it's a good thing to do, but I'm just wondering why it would double.

MR. HUDSON: It's our suspicion that it hasn't increased - my own experience has it was never 25 per cent, so it may be . . .

MS. WHALEN: Well, the figures were in the Auditor General's Report.

MR. HUDSON: That may be where it needs to be checked.

MS. WHALEN: The figures they gave, both in dollar amounts and the number of clients that received it in that regard, and it was much closer to a quarter, so maybe you want to check that because that's a bit misleading. I would imagine the Auditor General had the right figures; that would be my guess.

MR. HUDSON: We can check, but for the last, at least, decade it's been 40 to 45 per cent . . ..

MS. WHALEN: Really? I think it's an important thing to increase, as you say. If the clients understood it was also greater security to them, I think it would be a help.

I wanted to go back to the idea of the errors in terms of the department's errors in overpayments - I don't think underpayments are usually the issue, but overpayments have been a big issue where people are, unbeknownst to them, receiving benefits they shouldn't. Then, when it comes time to rectify that, there's a huge fallout for the family and an inability to find the extra money that needs to be returned to the department. I'd like to know if you've kept records on how many overpayments are made, like what the error amounts were per year or any period of time it might be measuring.

MS. FERGUSON: I didn't bring that specific information with me this morning, but I will go back and see if I can get that. I have global amounts, but I don't have specific by year.

What I would like to say on the overpayment issue is that we've been doing a lot of work in the department, separate and aside from this, in terms of overpayments. It is an area that has been of great interest to our current minister and she has asked staff to look into the overpayment issue and come back to her and provide her some recommendations around that piece.

I can also say that a lot of the work and the training we've been doing with staff is around exactly what you've talked about, around the prevention. So ensuring we're providing the right information to clients so that they know, if they receive additional payments, what the process will be from the department. Also, a focus with our staff has been trying to avoid, at all costs, the overpayment from happening in the first place.

[10:30 a.m.]

We have been putting a tremendous focus on prevention. Having said that, we know there are emergency situations and situations where overpayments will occur, and we do our best to minimize that. The other things we're doing - I think I talked about this a bit earlier this morning - talking to CCRA and the Workers' Compensation Board to ensure we get information as timely as we can, again to minimize the overpayment risk.

But, like I said, it's an area that has been of great interest to our minister. She's asked us to do some work on that, and we're in the process of doing some work and we'll be coming back to her with some recommendations.

MS. WHALEN: Could you say - is it still a problem even with the new ICM system in place?

MS. FERGUSON: I think the overpayment issue remains an issue for the department. I think we're getting much better at it in terms of prevention. I think we are taking some very active steps forward in terms of wherever we can minimize that issue, of minimizing it, both in our staff training, the information we provide to our clients, taking some steps, like I said, working with other organizations to ensure we have as timely information as we can.

While it's an issue in the department, I think it's an issue we're working on from a number of angles.

MS. WHALEN: I'm glad to hear that the current minister is looking at that because it has, as I said, a profound impact on the families when this occurs - sometimes devastating, really, to find that they have to repay that amount of money, especially if , as is the case, the errors have occurred on the staff side, not on the client side. So this is something that I think should be tackled very aggressively and I think the information given to clients is very important and, again, staff should be aware of the fallout when mistakes are made.

I would think this new ICM system would allow you to put those, you mentioned the checks and balances, in place; it should really be making a considerable difference in the amount of overpayments. My question would be, I'd like to ask, you mentioned you could get us information on the level of overpayments, I would like to see that on an annual or perhaps over several years, if you have that kind of information, just to give us a sense of the magnitude of it, and at the same time I would like to know whether with the new ICM, has it been in place long enough for you to measure whether this is going to have a positive impact here?

MS. FERGUSON: To your first question, I will go back with your request and get whatever I can to best meet what you've requested. The system has only really been in place since the end of January so it's relatively early days in terms of measuring that. Given the electronic approval processes that are in place we would certainly anticipate that there would be positive impact on the overpayment situation.

MS. WHALEN: I'd like to suggest that you measure that as one of your performance measures of the new system if you would. I would just like to close with one question on the budget. It was originally budgeted at $11.4 million for this ICM system. Are you within budget?

MS. FERGUSON: Yes, I'm pleased to say that we are on time and on budget.

MS. WHALEN: It must be a good thing to do it internally then. Does that include the cost of new computers as well, hardware and software?

MS. FERGUSON: Yes, it does.

MS. WHALEN: That's good. How much was spent in the current year? Are you completely spent now it's done or it continues?

MS. FERGUSON: No, we haven't. It's not completed yet, it was multi-year funding.

MS. WHALEN: At what percentage of rollout are we at? I know it's been going on at least three years from your business plan.

MR. HALL: We have spent about $9 million to date in capital funding on the project and we've got about another $2.5 million - $2.7 million to spend this year. We are adding some new functionality around the providers that we do business with, what facilities they operate, what kinds of services and bed facilities are available at any point in time so that we can improve placement sets. So that's not as specific to the ESIA program but will be very useful in some of the other programs, the SPD program, and the FCS programs that we operate in and then we will be . . .

MS. WHALEN: Just one final question if I could, you said it's $9 million to date on capital. Does that mean you're not including in the $11.4 million your training and your travel and your internal staff that are working on this project?

MR. HALL: That's under our operating budgets, those amounts.

MS. WHALEN: So you've absorbed that within the annual operating rather than identifying it separately? I think my time is gone.

MADAM CHAIR: Your time has expired.

The PC caucus, Mr. Porter.

MR. CHUCK PORTER: I just want to take a moment to welcome staff here, thank you very much for being here today and also echo some comments the same as others. In my area I have an opportunity to deal with your staff on a very regular basis and I always call that unfortunate and fortunate - some very good staff, some quality people that care about what they're doing and you can see it when you're dealing with them with regards to clients. Caseworkers, through supervisors, through office staff, everyone there, has been exceptional at least in my time there in the last year or so. I really appreciate those people for being there, it's a tough job, and generally on the other end there are a lot of people in situations that are of despair and certainly unhappy in most cases. I'm very happy to have those folks out there.

What I was wondering, knowing the numbers that we do have, of clients, about caseworkers, the ratio - it may have been asked earlier and I apologize if I missed it - between caseworker and client, is there are number that you have set for a goal and are we within that provincially and/or regionally?

MS. FERGUSON: We don't have a set goal within the ESIA program but I can tell you that it's something we monitor on an ongoing basis and it depends, from district to district office in terms of the caseloads and also it's not just the number of cases but it's the complexity of the cases that would figure into that. So we would monitor that in all of our district offices.

MR. HALL: Also, in the new ICM system the supervisors have a tool that allows them to manage and monitor caseloads so they actually have a snapshot that shows them how many cases are assigned to each of their staff. They can also see what kinds of activities are going on in those cases and when they start to see a lot of outstanding activities, particularly high priority activities on some of the cases for staff, they can look at re-balancing. All cases are not equal, some are more complex than others, so they're able to take a look at that on a daily basis that's available to them on ICM and they're going to be able to re-balance their caseloads and staff assignments much more effectively.

MR. PORTER: I guess that was my next point of clarity as well that I was wondering about, is it number/person ratio or is it actually case related? I know that there are multiple cases with many different scenarios that do exist and are more time consuming. Knowing a little bit about the system I do know the caseworkers do an annual assessment and other multiple visits as needed.

My background, I come from a communications sort of area, dealing with very high-level technology and I want to ask a question with regard to technology. I know we've talked about that a lot and you've talked about it over the last number of years, funding and so on. Putting the new system in place, its technology, it changes almost by the day. You talked about the old mainframe system, it was so old and now, all of a sudden, we have this nice new system. Coming from that world, I know it doesn't take very long and you're already planning for the next new phase of that system.

Where are we in this particular system? I guess maybe for myself the question would be, is the current system now in, or being put in, good for five years, in your opinion, or 10 years, or is there a plan?

MR. HALL: We expect this new system to last quite a while. The design of the new system is very comprehensive and it will allow us to very readily change things in the system to accommodate changes in the program. Some of our old IA technology didn't allow us to very easily adapt to program changes and business changes that needed to be made in the department but this new system allows us to do that.

Just to give you an example, the kind of thing that I'm talking about, the low-income Pharmacare for children, that program was introduced last Fall and we are actually going to implement - the technology we're going to use for that will be under ICM. We don't have to develop any new pieces for ICM, we can configure that whole program under ICM, so it's not taking a lot of effort at all to bring that in.

We have things called a business rules engine that allows us to be able to make changes to the system very readily. We have code table maintenance, which allows us to, for example, change rates very easily. You've probably heard in other jurisdictions where they've had some difficulty even making rate changes. That is not an issue for us, this is very well architected, I'm very impressed with the job the team did on architecting this system and positioning us for the future and accommodating many more programs in the department.

MR. PORTER: So having said all this, then this would be, I guess I would say hardware issues along the way versus software issues, then? You see the software as being a program or programs that will take us through a number of years, whereas we know hardware wears out maybe or a replacement model we used to have, every third year you were turning over - is this something that your department has also in place, or something similar?

MR. HALL: Unlike the mainframe environment, this new system is based on some very common technology, it is based on dotnet technology from Microsoft, it is based on Windows servers. Those Windows servers are not that expensive to put in. They're almost a commodity, Windows servers, so we can add servers to the system very easily and they're not big cost items.

MR. PORTER: Thank you. Just with regards to payments to clients, and again I may have missed it and I apologize if I did - numbers of folks receiving cheques in the mail versus number of electronic deposits these days - do you know what the difference there is or what that ratio may be?

MADAM CHAIR: Mr. Hudson.

MR. HUDSON: It's very close to 50/50. We can get you the exact number.

MR. PORTER: I was just kind of curious, given the way that people are moving along and even a lot of what I call our older folks these days, have sort of adapted to the direct deposit and so and I was just kind of curious what the number was. I thought it might have been higher than that, actually, I would have thought maybe 75 per cent or so were on technology so I was somewhat curious with that.

I guess on that, I don't take very many calls from people saying, I didn't get my cheque. That's why I was wondering, I thought if there were still 50 per cent manual cheques out, in a year now I think two max maybe, saying I didn't get my cheque, for some reason, but when we've gone back, it has sort of been well, the paperwork didn't get completed or put in on the right date, et cetera, so I would have thought that was higher.

MR. HUDSON: Part of our business in getting the cheque to the client includes a very close working relationship with postal services, the provincial arm, and through them to Canada Post. So we, over the many years, have done everything possible to try to bring more reliability to that system. There are always hiccups but it's been over my term, very few.

MR. PORTER: Yes, and the dates, I mean the dates are very specific on those documents that the client fills out. They have to be in by, and that seems to work fairly well and most of the cases that I've dealt with, and again only a couple have been, one of the first questions, there is a date stamped on that documentation did you get it in on time? Oh, what documentation and sometimes it is just forgotten for whatever reasons, I realize that, but it is still fairly quickly resolved though, I must say it is impressive how quick it does get resolved.

MR. HUDSON: Part of our deal with Canada Post is a three day guarantee that if we get it to Almon Street on a certain day then they guarantee three days. One of our challenges is that at the end of the third day we have to then react very quickly if the client hasn't gotten

it and Canada Post can't explain where it went. So as we all experience, there are still challenges with the mail but we are very fortunate there when you look at the volumes that we are putting through the mail, which when we had the postage costs our costs were in excess of $300,000 a year in postage, so it was a very big business for us. When you look at the numbers that get lost of the mail, they are very small.

MR. PORTER: So it is $300,000 today or it is half of that now?

MR. HUDSON: For our entire postal cost it was over $300,000. Now with the new arrangements it is Finance that is responsible for issuing the cheque, so that cost centre has moved from us to Finance. In many cases the cheque to a vendor gets rolled up so it is not in many cases just a Community Services cheque to a vendor, but to our clients, those are all the same but it is Finance issuing the cheque, not us.

MR. PORTER: How long is the processing time? From the time you get that, I'll say from the middle of the month or whatever date is stamped on said documentation that goes in, they have checked off and signed, they come out generally the end of the month, the 29^th or 30^th, depending on the day of the week?

MR. HUDSON: There are two systems, there is the monthly entitlement that is the end of the month, but there is also an ever-increasing volume of what I call daily ad hoc cheques. We are doing over 1,000 cheques or payments per day now which is a new feature to the system. In the old days most of the income assistance was through a monthly entitlement but because of our systems and response times, we are able to respond more quickly to the client's need, which then generates more daily cheques.

MR. PORTER: Thank you and I know my time is up.

[10:45 a.m.]

MADAM CHAIR: Thank you. The time has now expired for the questioning portion of today's meeting. I would like now to extend an opportunity to Ms. Ferguson to make some closing comments.

MS. FERGUSON: Thank you, Madam Chair and thank you very much to all the members of the committee for the opportunity to come in and talk to you today about this very important topic. The ICM system was a huge step forward for us in the department; we are very proud of the success that we've had, but we also know that we are accountable for the dollars that we spend and how we spend them, and that this will be a significant piece for us as we move forward.

As I said earlier, we are looking at this as much more than simply an IT system, this is really looking at a different way to deliver client service and also to provide tremendous support to staff.

In closing, I would just again like to say thank you for the opportunity and certainly would make the offer again that if anyone is interested in having a demonstration of the system, that we would be more than happy to do that. Thank you very much for your time.

MADAM CHAIR: Thank you. I would like to thank all of the witnesses for being here today and your patience with us in terms of having postponed your appearance here that had been previously scheduled.

With that, I would like to table two items of correspondence that I have received. The first item of correspondence is from Mr. McNeil, Leader of the Liberal Party, requesting that the Public Accounts Committee call in front of us representatives from the Department of Fisheries and Oceans with respect to the plan to move Coast Guard vessels from the province. I would say that while this, I think, is an extremely important issue and really deserving of full public examination, I don't believe this is the committee where that should occur. I think this falls beyond the mandate of the Public Accounts Committee, which examines the public accounts of the Province of Nova Scotia. With the agreement of members, I would like to make contact with Mr. McNeil and suggest to him that his request go to the Resources Committee. I think they would be well within their mandate to have this matter in front of them.

Ms. Whalen.

MS. WHALEN: Thank you. I was just thinking the Economic Development Committee might be a more reasonable fit for that, rather than the Resources Committee.

MADAM CHAIR: Certainly. One or the other, I think, would be a good fit. So that's the first matter.

The second piece of correspondence is from Mr. Glavine with respect to having the Atlantic Lottery Corporation appear in front of us. I know that the subcommittee, in fact, did discuss this in the past and were in agreement that they come in front of us. Somehow that fell out of our list of topics when we were scheduling, so what I would like to do, we'll reconvene the subcommittee, maybe even for a phone conversation, to discuss how best to handle this, given that we've established a schedule until mid- June. So if that's agreeable to the members, that's how that will be dealt with.

Mr. Steele.

MR. STEELE: Events are moving very quickly in the Atlantic Lottery Corporation matter, and I just wanted to point out that the Gaming Corporation has commissioned a study; the Atlantic Lottery Corporation itself has commissioned a study; and I'm given to understand that the Alcohol and Gaming Authority is also undertaking a study. I understand that some of the results, or all of the results from the KPMG forensic audit have been handed over to the police for investigation. Obviously, this is an important topic. To me, it's more

a matter of timing - when is the appropriate time to have the ALC in when there are at least four separate studies or investigations going on, and whether it might not be better, more prudent and more useful for this committee to wait until some or all of those investigations are completed?

MADAM CHAIR: I concur with that point, and in fact those were some of the discussions that we had before, because although this is evolving, there were still, I think at the point where we were talking about it, the beginning stages of some investigation, and so we wanted to see some conclusion that we would have material to deal with here.

Mr. Colwell.

MR. COLWELL: Yes, we have discussed this as we talked before in the subcommittee. With the new information we now have, I think it would be appropriate if we could have - and we'll discuss this more, of course, in the subcommittee - the people in before and after all the reports are in, just to see what's going on with this.

It's a big concern in the communities. I think the Lottery Corporation has lost a lot of credibility for not identifying this much sooner and, possibly, it's something, hopefully, that will be resolved positively for a long period of time, because the Lottery Corporation provides a lot of important funding to the provinces. I think, again, we'll discuss this more in subcommittee, and I would be willing to stay this morning to discuss that with the subcommittee if my colleagues would agree to that, but I think it's something we should move forward before the report and after the report.

MADAM CHAIR: Mr. Porter.

MR. PORTER: Thank you, Madam Chair. Certainly we're not opposed to having that group before us, I was just kind of curious as to whether or not what information we'll get. If, in fact, the police are involved right now, there may not be a lot of information pre-reports to get from that. I know that we don't like to waste folks' time, and certainly coming before this committee, we would like to have all the information. We talk about that almost on a weekly basis these days, coming before us. I, personally, don't know that there would be adequate information to bring them forward at this time. Again, as we discussed in subcommittee, and I am willing to stay for a few minutes afterward to discuss it further, and we can carry that over to there, if you like, that's fine. Thank you.

MADAM CHAIR: I'm not able to stay after - I have a commitment, unfortunately, but I will organize a subcommittee conversation as soon as possible, even a phone conference, and we will bring some recommendations back to the full committee. Thank you.

Is there any other business?

We stand adjourned.

[The committee adjourned at 10:52 a.m.]