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2003 November Report of the Auditor General of Canada

November 2003 Report—Chapter 1

Case Study 1.2—Applying for Employment Insurance benefits on-line

Each year, Human Resources Development Canada (HRDC) receives about 2.6 million applications from Canadians for Employment Insurance (EI) benefits. Applications are being submitted in paper form or completed electronically at kiosks and HRDC offices. Electronic applications are then printed to be processed manually by the HRDC agents. Noting the growth of the Internet, HRDC saw an opportunity to use it as another vehicle for delivering services to Canadians.

HRDC wanted to establish a secure method for the public to access a complete line of EI services on-line, beginning with the Application for Unemployment benefit. The intent was to expand access over time to include on-line capabilities for conducting other related services.

The initial work involved developing a module known as Appli-Web. The expected outcomes at first were twofold: first, on a limited scale, to provide Canadians with secure access to EI services over the Internet; and second, as an early partner of the Government of Canada Secure Channel, to provide valuable feedback on the use of the Secure Channel in an operational situation. The GOL funding to 31 March 2002 for Appli-Web was $8 million. HRDC also allocated $2.5 million of its own funds.

The initial Appli-Web work involved enabling claimants to apply for unemployment benefits on-line rather than having to apply in person at an HRDC office. This first deliverable was completed and piloted in London Ontario in the summer-fall of 2001. The on-line application was subsequently rolled out nationally in April 2002. Applicants can now apply on-line. However, they must still submit their Record of Employment (ROE) form (information that employers provide on a claimant's employment history), either by mail or in person.

HRDC staff still perform many other tasks manually. For the most part, claims are validated and calculated using paper-based and existing electronic systems. In fact, an HRDC officer will, in many cases, still print out the original on-line application and include it in a paper file along with other information needed to approve a claim.

In October 2001, the work on the interface with the Secure Channel was postponed. The testing for implementation of the interface with the Secure Channel is now planned for the spring of 2004. HRDC considers this component to be critical to the successful implementation of the full complement of functions for the EI program.

As this project progressed in 2001, it was renamed EI Services to Individuals. The expected outcomes of the project also expanded significantly. These included reducing the rate of errors on EI applications and reducing and simplifying the EI application process.

As the initial development work was being completed, additional features were being planned. Work on the first phase of Inter-active Fact Finding was added late in 2001. It included developing interactive questionnaires that would yield information from clients that would normally be obtained either through interviews or through letters. Other features that HRDC was working on included the Automated Benefits Estimator, Bi-Weekly Declarations, and Case Specific Enquiries, which would enable claimants to review the details of their claim file. The cost of doing this work in 2001-2002 was $1.9 million, all funded by GOL. The latter two features can only be fully implemented when the Secure Channel has been put in place. However due to delays in migrating to the Secure Channel, the Department in the interim is looking at alternative secure methods for some of the functionalities of the Bi-Weekly Declarations.

In 2002 HRDC recognized that a fundamental review and change of its business processes would be needed if many of its major programs and services were to be delivered effectively in the future. The operating costs of many of its services were high and continued to rise. Furthermore, the EI program is supported by mainframe computer systems, some portions of which are more than 35 years old. Thus, continuing to invest in the status quo was considered to be unsustainable.

The Modernizing Service for Canadians (MSC) initiative was put in place by HRDC to support the objective of the Government of Canada to strengthen the quality and cost-effectiveness of the programs and services it provides to Canadians. All key projects, including EI services, were rolled into this new initiative. It was also renamed EI Automated and Streamlined. Expected outcomes of the project have also expanded. The main additions have been to develop all modules to provide an end-to-end application (all services needed) for clients. Funding in 2002-2003 totalled $20.4 million. Of this, $4.6 million came from GOL and $15.8 from the Employment Insurance Account.

HRDC is planning on completing the MSC initiative and the transformation of all HRDC services within the next five years. Since this also includes the EI project, this effectively extends the completion date to 2006-2007. At the time of our audit, the funding had been identified only to 2004-2005 and amounted to an additional $30.4 million.

In summary, the EI project had received a total of $32.8 million at 31 March 2003. GOL funding has amounted to $14.5 million. Funding from the EI Account has amounted to $15.8 million, and $2.5 million in funds came from internal re-allocations. There was a further $30.4 million requested from the Treasury Board Secretariat via an MSC submission in May 2002 to cover work to be done up to fiscal year 2004-2005. This brings the total funding to $63.2 million.

In expanding the number of on-line EI services, HRDC has managed the related activities largely as individual, distinct projects. In essence, it has focussed on automating its existing business processes. With respect to service transformation, a key overall objective of GOL, limited progress has occurred. Over the past three years, the Department has not focussed on integrating the various systems involved in automating the entire range of EI processes. Such integration and service transformation will be an important factor in successfully putting all EI services on-line. The Department considers this to be the most complex and challenging part of the project.

HRDC has used only one performance indicator—the take-up rate—to measure the success of the project to date. The Department has indicated that the take-up rate is the key success indicator. The take-up rate for the first year was expected to be 15 percent, which was achieved. For 2004-2005, the take-up rate is expected to be in the 70 to 80 percent range.