2.27 Income Support/Case Management Information System. Introduction

Transcription

1 Introduction Te Department of Human Resources, Labour and Employment is responsible for providing a range of programs and services directed to low-income individuals and families to elp meet teir financial needs. One of its main activities is providing income support to eligible individuals and families. Total budgeted expenditures for te income support program for te fiscal year was approximately $208 million. Given te magnitude of tese expenditures, it is critical tat te Department ave te systems to provide information necessary to analyze, monitor and control income support program activities and related expenditures. Since te mid 1970's te Department as used te computerized Financial Assistance Computer Terminal System (FACTS) to record income support payments, wile documentation of case management activities as been accomplised mainly by way of manual record keeping. In November 2003, Department officials indicated tat te FACTS system was used by approximately 550 of its staff located in 46 district offices trougout te Province and its eadquarters office in St. Jon s, as well as staff from te Department of Healt and Community Services. Approximately one million payments are made from te system eac year. It was also indicated tat te design of te system is obsolete and is a major constraint in improving te efficiency and effectiveness of services to clients. Furtermore, we were advised by officials at te Department tat te system is te oldest provincial social security based computer system used by any province in Canada. In 1988, Government contracted a firm of management consultants to complete an operational review of te ten Department of Social Services. One area identified during te review was tat te Department sould proceed wit a plan for te design, implementation and use of a compreensive management information system to address income support and case management. At tat time, te Department was responsible for te Income Support Program as well as programs for Yout Correction, Family and Reabilitation, and Cild Welfare. After six years of development, and after spending $10.3 million, te project was terminated in In 1999, te Department commenced te development of a new system to address income support and case management. At tat time, te Department was responsible for te Income Support Program as well as te Employment and Career Services Program. After five years of development, and after spending $5.6 million, te project is still not fully completed. Auditor General of Newfoundland and Labrador 421

2 Scope and Objective In November 2003, we completed a review of te development, by te Department of Human Resources, Labour and Employment, of a compreensive management information system to address income support and case management. Te objective of our review was to determine wat progress ad been made in developing suc a system. Conclusions Since 1988, te Department as made two attempts to complete te development of a compreensive management information system for its income support program and case management. However, at te time of our review in November 2003, no suc system was in place. Te latest attempt to develop a new system commenced in October 1999 and was estimated to cost $4.3 million and be fully functional in October As at November 2003, tirteen monts after te original estimated completion date, only one of te expected seven modules was fully functional across te Province. Furtermore, as a result of a cange in te project scope and expenditures not included in te original estimate, in November 2003 te Department indicated tat te project development cost was expected to be $7.9 million; owever, officials indicated tat additional costs associated wit te implementation of te system and te final date of completion ad not been determined. As at November 2003, te estimated additional annual cost to operate te new system would be $1.15 million. Wen te project was initially approved, it was estimated tat te additional annual costs to operate te system would be $700,000. Tis represents an annual increase in operating costs of $450,000 or 64% over te original estimate. Te Department contravened te Public Tender Act wen it purcased software licences costing approximately $105,000 witout calling a public tender. Te Department also contravened te Public Tender Act by not informing te Minister of Government Services of te exception. Terefore, te House of Assembly was not informed of tis exception. Government announced a departmental reorganization in February 2004; owever, Departmental officials indicated tat tere would be no delays in system implementation resulting from tis reorganization. Findings and Recommendations Background Since 1988, te Department of Human Resources, Labour and Employment as made two attempts to complete te development of a compreensive management information system to address income support and case management. Te introduction of suc a system is 422 Auditor General of Newfoundland and Labrador

3 intended to allow more efficient delivery of services and to redirect greater staff resources towards assisting clients in securing and maintaining employment. In 1989, Treasury Board approved te development of te Integrated Delivery System (IDS). Te IDS was a computerized information system intended to support te information needs of te ten Department of Social Services. Te IDS was estimated to cost approximately $3.7 million (for software development only) and was expected to be completed witin four years. After six years of development, and after spending $10.3 million (including $2.2 million for microcomputer ardware and software, and $300,000 for training), te project was terminated in By tat time, cost estimates for ardware, software development, staff training and operation ad increased to $47.9 million, wit projected completion in In 1997, te Department developed a new service delivery vision. Tis service delivery vision included: delivery of its income support program troug a telepone application and assessment process conducted at regional service centres; delivery of an employment and career services program troug a network of local offices supported by regional service centres; and a new case management and pay system designed to facilitate efficient delivery of te income support, and employment and career services programs. Tis service delivery vision was approved by Cabinet in 1998 and in June 1999 xwave Solutions (xwave) was engaged to prepare a preliminary project scope for te computerized system included in te vision. xwave was paid $42,000 to complete tis work. However, no funding to proceed beyond tis preliminary project scope work was provided in During te fiscal year, Cabinet approved te implementation of te Department s service delivery vision, subject to te identification of funding. xwave was again contracted to initiate development and implementation of te new computerized system. At tat time, te estimated project cost was $4.3 million and was sceduled to be fully completed by October Te new system was to provide for te Department s income support and case management lines of business. Te system was to be comprised of te following seven modules to facilitate te delivery of te Department s programs: Auditor General of Newfoundland and Labrador 423

4 Client Registration; Income Support; Service Autorization and Invoice Processing; Expenditure Monitoring; Accounts Receivable; Compliance/Verification; and Employment and Career Services. Status Figure 1 provides information regarding te original $4.3 million estimated project cost for developing and implementing te system, te $7.3 million revised estimated project cost as at November 2002, and te total actual costs to date and projected cost to complete as of November 2003 wic totalled $7.9 million. Figure 1 Original and Revised Estimated Costs ($ Millions) Type of Expenditure Original Estimate (October 1999) Revised Estimate (November 2002) Actual Costs (November 2003) Projected Costs from November 2003 Total Estimated Projected Cost Development Costs: Professional Services Departmental Staff $ $ $ $ $ Sub-total Computer Hardware and Software Total $4.3 $7.3 $5.6 $2.3 $7.9 Source: Departmental of Human Resources, Labour and Employment 424 Auditor General of Newfoundland and Labrador

5 A total of $2.9 million of te $3.0 million increase in te estimated project cost to November 2002 related to suc issues as canges to te original scope of te project, including te addition of te Department of Healt and Community Services (to enable tat Department s Community Healt Division to also use te system), as well as revised infrastructure requirements and additional licencing requirements due to a greater number of anticipated users. Included in te actual expenditures of $5.6 million are expenditures totalling $600,000 wic were never included in te $7.3 million estimate. As a result, te total estimated project development cost as risen to $7.9 million. Our review of te development and implementation of te project indicated te following: Te $7.9 million projected cost at November 2003 was for te development of te system only and did not include additional costs associated wit te implementation of te system. Furtermore, at tat time te final date of completion of te system ad not been determined. Altoug te Department spent $5.6 million as at November 2003 on te system development and implementation, not everyting included in te initial $4.3 million estimate was completed. Te original plan for te project, dated 29 October 1999, provided for te development of te seven project modules wic were to be operational across te Province 22 monts after commencement date. Te project commenced in January 2001 and, terefore, was sceduled to be completed in October However, as at November 2003, only one of te seven modules is operational across te Province and no date ad been determined as to wen te system would be fully completed. Figure 2 provides information on te status of te project as at November As te Figure indicates, 13 monts after te estimated completion date of October 2002, only te Client Registration module is functioning Province-wide. Auditor General of Newfoundland and Labrador 425

6 Figure 2 Project Status November 2003 Module Purpose Status Client Registration Main departmental data base for recording a ll client information and activity w itin te overall system. Functioning Province w ide. E l i gi bi l i t y d et er m i nat i o n, Under final testing at pilot Income Support ca lculation of entitlement amount, benefit payment. project site - Stepenville Crossing. Service Autorization and Invo ice Processing Expenditure Monitoring Accounts Receivable Compliance/Verification Employment and Career Services Issuing autorizations for goods and services to be provided to clients and payment of related invoices. Budgeting, expenditure reporting and projection. Record overpayments, make recoveries from active clients, record oter payments received. Verification of client eligibility on an ongo ing basis, monitoring of long-term computer pay cases. Used in conjunction wit oter programs and systems in te adm inistration of assistanc e provided to individuals to atta in and ma intain employment. Under final testing at pilot project site - Stepenville Crossing. Under final testing at pilot project site - Stepenville Crossing. Under final testing at pilot project site - Stepenville Crossing. Not operationa l. Deferred imp lementation date yet to be determined. Source: Department of Human Resources, Labour and Employment Discussion wit officials at te Department indicated tat a final decision on a strategy to roll out te project on a Province-wide basis ad not been made. Not all costs incurred by te Department in developing tis system are included in te actual costs. For example, te Department did not make any attempt to identify costs for personnel from oter Government departments and allocate tose costs to te project. In 1999 te Department estimated tat it would cost an additional $700,000 a year to operate te new system. However, at November 2003, te estimated additional annual cost to operate te new system ad increased to $1.15 million, an increase of 64%. 426 Auditor General of Newfoundland and Labrador

7 Compliance wit te Public Tender Act Te Public Tender Act requires te Department to invite tenders were te cost of goods and services is more tan $10,000 or a public work is more tan $20,000. Te Act provides exceptions were tenders may not be required to be invited and in tese cases te Minister of Government Services must be informed. Te Minister in turn will table a report in te House of Assembly. Te Public Tender Regulations outline requirements tat ave to be followed wen issuing a tender, opening a tender and documentation required to be maintained. Te Act also requires tat, were te cost of goods and services is $10,000 or less or public work is $20,000 or less, te Department sall eiter obtain quotations from at least tree suppliers or establis for te circumstances a fair and reasonable price. Our review of te purcase of two software licences by te Department indicated tat te Department contravened te Public Tender Act by not calling tenders for tis purcase. Details are as follows: In November 2000, xwave was contracted to develop te new computerized system. Te system was developed at xwave s offices. Altoug te original project design specifications did not make reference to te Department s responsibility to eiter provide computer equipment or acquire software to facilitate development, te Department of Healt and Community Services loaned a server to xwave. In addition, during te development work, te Department of Human Resources, Labour and Employment provided a second server to xwave. xwave advised te Department tat neiter of te two computer servers Government ad provided ad valid copies of Oracle software and requested tat te Department acquire licensed copies of tis software. In May 2003, te Department entered into a tree-year lease agreement for te purcase of two Oracle software licenses costing $105,000. Te required public tender was not called for tis purcase. Furtermore, te Minister of Government Services was not informed of te purcase exception as required under te Act and terefore te House of Assembly was also not aware of tis exception. Auditor General of Newfoundland and Labrador 427

8 In addition to te Public Tender Act contravention, Department officials could not provide an adequate explanation as to wy tey were required to provide te servers and related software for use by xwave in te system development. Recommendations Te Department of Human Resources, Labour and Employment sould: expedite te completion of a compreensive management information system to address income support and case management requirements; identify and monitor all project costs; and comply wit te Public Tender Act. Department s Response Te Department of Human Resources, Labour and Employment agrees wit te recommendations contained in te draft report, noting te pace of development of te new system will, to a large degree, be determined by te ability to ensure continuity of client service, wic is paramount, as well as availability of funding. Te development of a new computer system to replace te current Financial Assistance Computer Terminal System (FACTS) is a large and complex undertaking wic as a significant impact on te income support services tat te Department provides eac mont to more tan 28,000 families across te province, affecting 9-10% of te province's population in any one mont. Te Department as worked closely wit its computer consultants, wit Treasury Board and wit oter government departments to ensure te best possible system solution is developed and put into place wile continuing to use and maintain FACTS in te interim to deliver income support benefits and services witout interruption to clients. A number of canges in te project direction during te system development pase ave led to increased project costs and longer time frames. Tese canges include te following: A partnersip wit te Department of Healt and Community Services to operate some of its systems and HRLE's systems on a sared computer equipment infrastructure wic, wile increasing project equipment costs, meant lower overall equipment costs for te two departments. 428 Auditor General of Newfoundland and Labrador

9 An increased empasis on te testing and reconciliation of computer systems to ensure te accuracy of income support payments for HRLE clients and to minimize possible disruptions in client service. Tis resulted in a longer testing period tan originally anticipated. A slower pace of new system roll out to department offices to accommodate staff training and familiarization wit te new systems so as to reduce possible negative impacts on client service. In November 2003 te new system ad been implemented on a pilot basis in only one office. Te Department is pleased to report now tat te system as been implemented in all offices in te Department s Western Region, and implementation in Avalon Region offices begins February 2005 and is expected to be completed by June Implementation in te Department's offices in te Central and Labrador Regions will be done in te new fiscal year. Te Department is also pleased to report tat six out of te seven modules in te system ave been completed and implemented in te Western Region. Plans are in place to implement tese modules in remaining offices by te end of next fiscal year. Confirmation of te scope for te sevent module, Employment and Career Services, is currently being addressed. As noted in te draft report, te November 2003 projected cost did not include costs associated wit implementation of te new system. Usually, additional funding is not provided for implementation and te Department terefore typically redirects existing departmental funding in order to cover costs associated wit training staff. Te same practice was used to cover costs associated wit personnel from oter departments. Te Department will include implementation costs and oter related costs in future project estimates. Te estimated increase to $1.15 million in operating costs was due to additional equipment to allow Healt and Community Services systems to operate on sared computer equipment infrastructure. Te Department will review reporting of operating costs by te two departments to more accurately represent te allocation of costs for te different systems. Regarding te purcase of two Oracle software licences in May 2003, te Department notes tat it worked closely wit te Government Purcasing Agency trougout tis process. Due to an administrative oversigt, tis purcasing exception was not reported to te Minister of Government Services until January Te House of Assembly was made aware of te exception in te Report of Public Tender Exceptions dated January 2004 prepared by te Government Purcasing Agency in compliance wit te requirements of te Public Tender Act. Auditor General of Newfoundland and Labrador 429

10 Te Department considers it provided an adequate explanation as to wy it was required to provide servers and related software for use by xwave in te system development pase; it is normal practice for departments to provide additional computer equipment needed during te course of a major systems development. In summary, wile tis is te second attempt to develop and implement a new income support system, te Department as been successful in putting te new system in place in te Western Region and tere are definitive plans for te rollout to oter regions in te new fiscal year. Given te importance of income support benefits in providing basic services to low income families, te rollout pace must continue to accommodate system testing and staff training requirements in order to ensure tat service delivery to clients is not adversely affected. 430 Auditor General of Newfoundland and Labrador