December 9, 1996

PUBLIC ACCOUNTS

COMMITTEE

The Committee met at 9:00 a.m. in Room 5038.

CHAIR (E. Byrne): Order, please!

Good morning everybody. I am going to call the

meeting to order. We have some members who will be coming in a little late.

First of all, I would just like to ask the members

of the Committee to introduce themselves for everyone's purpose.

MS THISTLE: I am Anna Thistle, MHA for Grand

Falls - Buchans.

MR. WHELAN: Don Whelan, MHA for Harbour Main -

Whitbourne.

MR. J. BYRNE: Jack Byrne, MHA for Cape St.

Francis.

MR. E. BYRNE: Ed Byrne, MHA for Kilbride.

MS MARSHALL: Elizabeth Marshall, Auditor

General.

MR. NOSEWORTHY: John Noseworthy, Deputy Auditor

General.

MR. ROESTENBERG: Tony Roestenberg, Audit

Senior.

MR. BRUCE: Glenn Bruce, Director of

Communications, Social Services.

MS DAWE: Joan Dawe, Deputy Minister of Social

Services.

MR. ROBERTS: David Roberts, Assistant Deputy

Minister of Social Services.

MR. STOKES: Glen Stokes, Director of

Information Technology, Department of Social Services.

CHAIR: Madam Clerk, could we have the swearing

in of witnesses, please?

You cannot find your Bible? Okay, that's fine, we

will wait for a minute until she finds the Bible.

SWEARING OF WITNESSES

Glenn Bruce

Joan Dawe

David Roberts

Glen Stokes

Tony Roestenberg

CHAIR: Well, then, that

part is underway.

Everybody, I guess, is aware of the nature of the Public Accounts Committee. The

reason why we are here this morning is to have a look at and to explain what

emanated from the Auditor General's report in terms of the Department of Social

Services integrated delivery system. I guess the reason for the hearing is to

gather information, to hear the department's opinions as they are expressed, to

relate it to the department's activities on this particular issue.

Our policy as a Committee or our function is not

question government's policies, it is not our role, it is to look at information

that came from the Auditor General's report or any other topic that the Public

Accounts Committee feel is necessary when we are dealing with the expenditure of

public dollars. I wanted to make that clear up front, and just a couple of

reminders that, when you speak or when questions are being asked and you speak

if you could identify yourselves for the record, please, and speak clearly into

the microphones.

Initially, I want to ask if the Auditor General has

any opening comments on the matter?

MS MARSHALL: Yes, I have some comments

(inaudible).

CHAIR: Okay, go ahead.

MS MARSHALL: In 1989, the Department of Social

Services received approval from Treasury Board to develop a comprehensive

information system that would support the information needs of management and

contribute to their mandate of delivering services to their clients.

In 1990, a steering committee consisting of

representatives of the department, Treasury Board, Secretariat and Newfoundland

and Labrador Computer Services Ltd., was established to manage and monitor

development progress.

Our review of the system spanned a period from its

inception in 1989 to the fiscal year ended March 31, 1995 and was directed at

the procedures for planning, organizing, controlling, and management development

of the system.

In 1989, it was initially estimated that the cost of

systems development would be in the range of $2.7 to $3.7 million and would be

completed by 1993. After approval was obtained, the cost of developing the

system increased to $32.7 million in December of 1992 and to $47.9 million in

January of 1995. These costs included the cost of hardware, staff training and

operation of the system in addition to systems development.

At the time of our review in May 1995, the project

remained substantially incomplete after spending $10.3 million. Of the $10.3

million spent on the project, $2.5 spent on microcomputer hardware, software and

training had been identified as providing some future benefit. The remaining

$7.8 million was spent in areas that are difficult to evaluate whether there

will be any future benefit.

Many of the weaknesses and issues identified in 1989

and relating to the department which the system was intended to address, was

still unresolved at the time of our audit.

Thank you, Mr. Chairman.

CHAIR: I will ask the department if they have any

opening comments.

MS DAWE: Thank you, Mr. Chairman.

I would like to take a few moments, Mr. Chairman, if

you would not mind, to present an overview.

CHAIR: Take as much time as you need. We are not

in a rush here and I want to let you know that, so just take your time and make

whatever opening comments you feel necessary.

MS DAWE: Also, if I could, at the outset, Mr.

Chairman, I joined the department just eight months ago, so much of the

information that I am going to be dealing with, I have to rely on records as

well, but in addition to that, Mr. Roberts and Mr. Stokes who are here today,

were directly involved in the project over the years, so will be very helpful in

providing direct information that I am not able to provide at this stage.

In 1989, as the Auditor General had just indicated,

the Department of Social Services, through a steering committee which consisted

of representatives of the department, Treasury Board and Newfoundland Computer

Services, initiated an information strategic planning exercise for the

department.

The Newfoundland and Labrador Computer Services

actually was contracted to develop the plan. The primary thrust for the creation

of the plan came from a report prepared by Woods Gordon for the department

during the latter part of 1988. That report was critical of the department's

data processing systems which were in place at that time. In

summary, it was

noted that there were numerous problems with the existing system.

For example: the major service provided by the

department is that of social assistance which, at that time, was around a

$150-million budget for social assistance alone. The information system that was

relied on was developed in 1975, was operational then, and still is today. So,

it was clearly noted that the systems were out of date - they were unable to

address the needs of the department. Some of the data were inconsistent, there

certainly was a high cost of maintaining the system and the needs of the users

were certainly not able to be addressed by the systems.

The strategic plan, then, listed twenty-two new

systems that were required by the department to replace the outdated systems and

to provide for the functions to meet the departments needs. Of the twenty-two

new systems that were identified, six systems made up the core systems required

to form the basis for an integrated information system for the department. The

development of these core systems were intended to be the first development

efforts only, and I should note that, as indicated again by the Auditor General,

the development of the core systems, and I think it is clear to note that, that

was software development only, was identified at a cost of between $2.5 and $3.5

million and was to take approximately thirty-four to forty months. So again, I

think it is important from the beginning to ensure that we are comparing like

things when we talk about the cost of the project along the way; so it was

software development at the initial phase.

By implementing these core systems, the department

would reduce the level of manual work efforts in the district office and

increase the efficiency of the staff who deliver client services.

If I could take a moment as well just to give an

overview of the department, you would realize that the Department of Social

Services is the third largest government expenditure department. The first is

Health, then Education and Social Services. Social Services are, you would

realize, services provided directly by government as opposed to Health and

Education which are provided through board systems.

The services that are provided by the Department of

Social Services are indeed complex. Many, many policies and codes dealing with

the social assistance system in and of itself, the family and rehabilitation

services which provide multiple services for persons with disabilities, child

care and day care services are also provided through the department, a pretty

comprehensive child welfare system, which is currently under review, and the

community corrections systems.

Many of the clients who access services through our

department access more than one service; hence the need that existed, and still

exists, for a comprehensive information system to provide a better service to

clients as well as to be accountable for the expenditure of public funds and the

delivery of such services.

The steering committee in 1989 approved of a mission

statement and a set of objectives to guide the process. Essentially, they were

to support and improve the productivity of Social Services personnel in the

delivery of the programs, and secondly, to ensure the data necessary to support

the management and the strategic decisions of the department. Again, you would

appreciate that in the 1988-1989 period, and until the early 1990s, much of the

work that was done at the district offices throughout the Province, between

fifty and sixty offices during that period, was done manually, so you can

appreciate, then, a focus of the need to help improve the productivity by

automating many of the activities.

As well as having an information systems development

strategy, it was recommended that the department should follow an active

strategy to implement office accommodation throughout the department. Office

automation would utilize technology to improve the operating efficiency of the

offices. It would include such things as word processing, electronic mail, fax,

and electronic document filing and retrieval systems, functions that are very

well accepted today but were nonexistent for our department in the late 1980s

and early 1990s.

In 1990, Treasury Board approved in principle the

proposed development of the integrated delivery system and directed the

department to proceed to the requirements and design alternative phase. In

August 1991, the requirement phase was completed, in September 1992, the

technical design was defined, and in early 1993, Treasury Board approved the

continued development of the integrated delivery system. At that period, when

the details of the project became available, the project was estimated to cost

$32.6 million over a seven-year period, from 1992-1993 to 1998-1999.

The cost to develop the system, of course, during that

period would be cost-shareable as well, 50/50, through the Provincial Government

and the Canada Assistance Plan.

During 1993-1994, the recommendations of the strategic

plan were intensively reviewed within the department. During the Summer of 1994,

additional consultants were employed through the process, and from September to

December 1994, in concurrence with Treasury Board officials, a large project

team was assembled to construct the new system with a delivery deadline of

December 1995. Project costs to build and implement the system called for

additional funds of $2.8 million in 1994-1995 and $16.3 million in 1995-1996.

Again, this came from the further involvement of consultants during the Summer

and Fall of 1994.

Then, in early 1995, after the department had

presented the latest estimates through the consultant initiative, Treasury Board

advised that no additional funds would be made available for the project to

accommodate this increase as proposed, and therefore, on March 10, 1995 the

Department of Social Services advised NISL, which was Newfoundland and Labrador

Computer Services, to terminate the project.

Mr. Chairman, that covers the period of the Auditor

General's report, and I would like to, with your indulgence, just give you a

quick overview as to what has happened since March 1995.

In the 1995-1996 approved budget, the department was

instructed to prepare a development plan in order to recommend what direction

should be taken subsequent to the cancellation of IDS. The department

recommended that a down-sized project be initiated to replace the FACTS system,

the old system which manages the social assistance program. In October, 1995,

approval in principle again was given by Treasury Board for the work that had

been put forth by the department, and in March 1996, the study was completed,

which again was supported by Treasury Board.

In March of 1996, with the new administration of the

department, we had asked that any further activity on the development of the

information system be set aside as an interim phase because we would be

embarking upon a major review of all government services and programs through

the program review process, and also that we were very much aware of a very

comprehensive information system that was under development in the Department of

Health. We wanted an opportunity to look at the potential for collaborating on

an integrated system between the Departments of Health and Social Services.

Because I think we appreciate that with a population of 570,000 in this Province

many of the clients who access the services in the Department of Social Services

also access Department of Health services. There appeared to be a significant

potential for looking at an integrated model of information systems.

In June of this year, we, in the department, signed a

Memorandum of Understanding with the Department of Health to explore the

potential for the development of a shared information system across the two

departments. That exercise is still ongoing. You would be aware that in October

past, the Minister of Social Services and the Minister of Health announced a

joint initiative for the development of an integrated system that would be

developed through NewTel Information Solutions Limited, which will be getting

under way in early 1997.

Mr. Chairman, that is a very quick overview of the

history of the project. I think it is fair to say that if we were to take the

time to analyze the state of information readiness for the Department of Social

Services in 1988-1989 and compare it with today, significant benefits have

accrued over the years as a result of the initiatives. Albeit we are still

without a replacement for the outdated FACTS system which was designed and

developed in 1975, so that certainly is a weakness, and we lack an integrated

provincial client information system. But again, we hope that is going to be

developed through the joint initiative with Health and Social Services in

another form now.

The degree of automation that exists in the department

now through its fifty offices is considerable compared with the state of the art

in 1988-1989, so the ability of our staff to be much more efficient and

productive and provide a better service to clients is certainly an offshoot of

the project, as well as many other benefits that I think we will get into in

some of the responses to your specific questions.

I thank you, Mr. Chairman, for the time to present

that overview.

CHAIR: Okay, thank you.

Questions: Ms Thistle.

MS THISTLE: I feel that the overview has been

good. I am just wondering now after all the hurdles, Ms Dawe, that you have gone

through - not yourself, really, but the department, are you now able to access

information, say, that would be held in a file in Grand Falls - Windsor at

Social Services on your computer in here?

MS DAWE: Maybe I will ask Mr. Roberts to speak to

some of the detail with regard to that question. If you would not mind.

MR. ROBERTS: We are in a much better position

today, as the Deputy Minister said, than we were back in 1989 when this started.

Our workers are able to access the FACTS system, the system that was designed in

1975, much better than they were in 1989 because we have now over 900

microcomputers as a result of the integrated delivery system installed around

the Province. In our office in Grand Falls, for example, 90-odd per cent of our

workers would have access to their own microcomputer, and they are able to

access a lot of information from the FACTS system that they could not in 1989,

but we do not have our IDS system or equivalent that would have made it a lot

more accessible both in Grand Falls and throughout the Province from St. John's

to Nain, say.

MS THISTLE: Going back to 1989 now, the Auditor

General noted in her report that the information system strategic plan that was

completed did not allocate the estimated costs with the task identified in that

development schedule. Why was that not done at that time? Can anybody speak to

that?

MR. ROBERTS: In 1989 the department received

approval to proceed with the conception and development of a system which we

called IDS, and we ended up with - I think you have a copy of it - the strategic

plan that we sent to Treasury Board. That plan was a very initial one, a very

preliminary one, and it outlined some of the problems that the department had

and some of the ways it would respond to it, but at the time I guess it was more

of a conception and a very preliminary estimation.

As our deputy minister has indicated, the department

was and is a very complicated department in terms of the programs and its

delivery system. The department, at the time, had seven programs that it

delivered through fifty-three offices directly around the Province. There was no

other department of government that had such an extensive delivery network

directly by its employees.

I think it is fair to say that when this report was

written back in 1989 it did not take into account the complexity of the

department, the extent of the programs, the extent of the delivery network that

we have, and the kind of computer system that was required to provide all this

in a very effective way.

The whole purpose of this computer system from its

very inception and today and so on is to assist our front-line workers with the

delivery of service to our clients. As I said, we have fifty-three offices

around the Province, we have about 700 to 800 people in our delivery network

throughout the Province, and I think when this was designed initially it did not

take into account a lot of the complexities.

COMMITTEE MEMBER: Is there a reason for that?

MR. ROBERTS: I think, at the time - you see, the

Woods Gordon report was a kick-off point. The Woods Gordon report was about two

or three inches thick for our department, and the

chapter on information systems

was but one, and - I believe you people have a copy of it - it did not get into

the details of what would be required in a new computer system in great detail.

It talked about the problems that the department was experiencing, and the need

for a new computer system to assist the department in delivering its services,

but it was more from a conceptual point of view.

When the department received approval to proceed with

not just the development but the idea of it, and started to flesh out what was

required in a computer system, this was the first report. This here, I believe,

represents most of the reports that probably were developed over the life of IDS

- there were more reports than one cares to think about - but in 1989 when this

one was done, it was at a very initial stage and, as it is said in this, it was

estimated at that time to cost between $2.5 million and $3.5 million for

software development only. But I am sure, as you realize, the costs of

developing a system, implementing the system and operating it involved a lot of

other expenses. For example, to run right to the $47 million - which it ended up

as - that $47 million covered a period of eleven years. It included development,

design, construction, training, migration, the roll-out of the report, which in

the $47 million is estimated at $5 million. Back in 1989 it would have been

incomprehensible to think that the roll-out of such a system would have cost $5

million.

Microcomputers: In this report, it is estimated that

the department would need 350 microcomputer work stations around the Province.

That would have provided a ratio of about one microcomputer to two or three

workers. As time went by in the development of the system and as we started

thinking about it, we said, There is no way that will work in our offices to

provide effective service to clients, if a worker is sitting down with a client

and has to access a microcomputer and it is not on his desk. So it came to the

point where - a couple of reports later when the architecture was designed and

so on - it was agreed that we would need between 700 and 800 microcomputers.

There are all kinds of reasons why this was such an initial one.

I can mention another very significant one: when this

was done there is very little discussion in this report about the technological

architecture required for this system. What happened was, as government got into

it - I think the report came out on technological architecture in the Fall of

1990 - it was recommended that the department use what is called a client-server

technology. This, at the time, was a new technology in the computer world. It

was recognized at the time that it was a very complex technology, also

expensive, but the department through which consultants - the consultants highly

recommended it as the most appropriate technological architecture for the

department to use and there are a lot of reasons for that as well. But that

meant that the cost of the system would be considerably more than what was

there.

I think I can conclude by saying that the $3.5 million

was purely preliminary. For all of us who were involved in it at the time - the

department, the consultants and Treasury Board - this was a starting point for

the development of IDS, but as you people probably know, and I think you said

before, when a comprehensive computer system is developed, it goes through many,

many stages. It starts from an inception and as time goes by it is built on and

fleshed out and unfortunately, as the more specific needs are identified, it

becomes more costly.

MR. LUSH: Mr. Roberts, there must have been though

- I am sorry -

CHAIR: Go ahead.

MR. LUSH: With the $47 million there must have

been some enormous benefits from this?

MR. ROBERTS: Oh yes.

MR. LUSH: We keep talking about the costs, about

having some familiarity with the complexity of the Department of Social

Services. This $47 million must result in - if we had proceeded with it, must

result in some enormous benefits to the Department of Social Services?

MR. ROBERTS: Without question, Sir, tremendous

benefits. Perhaps the biggest single - I have already mentioned, back in

1988-1989 when I first went with the department, we had maybe ten to twenty

microcomputers. We had four terminals, as they are called, probably thirty or

forty, something like that, terminals and the difference between them is that a

terminal, you can receive information on it but you cannot really process it.

They are not machines on which you can process information, you just receive it.

The department was in a very, very weak stage vis--vis the development of a

computer system to help deliver better service to our clients.

Perhaps one of the greatest benefits, as I said, that

did come out of IDS and was acknowledged by the Auditor General in her report,

was the hardware. Right now, the department has over 950 microcomputers

throughout the Province and because of the many benefits that have come through

that, the department is in a much better position to deliver its services today.

Without IDS, I doubt if we would be anywhere close to that, although it would be

hard to envisage our department today delivering effective service in the bigger

centres, and also in the smaller centres, without the microcomputers that we

have.

I think I would like to say as well, that the cost,

which we can talk about - it is so high. But what we were looking for here was

never considered a luxury by the department. This is the 1990s, and back in 1989

we were trying to position the Department of Social Services to provide a much

better service to our clients. Our clients are increasingly more demanding as

each year goes by and we welcome that. That is a challenge for the department to

take on. What we are trying to do is equip our employees, the 1,150 that we have

right now across the Province, with the tools to provide good service. It is as

simple as that.

The department's budget this year is $368 million and

$250 million of that, or 70 per cent, is social assistance alone. The social

assistance system right now requires the production of 1.2 million cheques a

year. It is beyond doubt the biggest system this government has, the Department

of Finance and so on. It just made a lot of sense for the department to develop

a system, or attempt to develop a system, that would assist our employees in

delivering better service, and that is what IDS was all about.

The costs, I would like to get into them if you ask

the questions.

CHAIR: I think essentially that is the question.

It is not the question of whether new and updated systems are required. I do not

think that is the scope of it. I think it is the cost of what it started out to

be from the beginning, its conception, as you defined, to where projected,

whatever it was going to end up to be. I think that is the issue before us. I

just want to ask Anna if he has any questions to clue up and then we will go to

Jack Byrne.

MS THISTLE: I have just one more question and then

we will move around. I know there are benefits because even though I am a new

MHA I am able to go into the Grand Falls - Windsor office any time I wish and

they can bring a client's account up and let me know, for instance, if the

client had money deducted from his or her cheque for arrears on a Newfoundland

Power bill and when that will be finished without dealing with actual paper, so

there are benefits and there are many growing stages.

It might seem like a fast train out of control with no

brakes on but anyone who is in the computer business knows that technology is

changing so rapidly. There is one question though. Early on in the game, in

1991, there were no clear costs attached then to the plan at that point, and

this is what the Auditor General brought out in her report, how things escalated

right from the beginning. What are your comments on that?

MR. ROBERTS: Well, it went through various stages

and, as I said, this report dated November 1989 did say $3.5 million although it

does say on the same page in a paragraph under it that it is estimated that the

direct cost of staff of the Department of Social Services seconded to this

project would be between $500,000 and $1 million. So even though we agreed that

the software development would be at $3.5 million, the next paragraph does

mention the $1 million of direct cost.

Perhaps, the next big stage, the technological

architectural report which was completed in the Fall of 1990, that estimated the

system at somewhere around $19 million but that was over a period of several

years as well. Perhaps the biggest single stage was the $32 million that the

Auditor General mentions. That was in a report in December 1992 that the

department sent to Treasury Board. It was called a project release submission.

At that point, the development of the system was identified, the five or six

core systems which we wanted to concentrate on, the technological architecture

was identified and agreed on, which was client server. This report went to

Treasury Board in December 1992 and mentioned a figure, in total, of $32

million.

This figure, though, covered a span of seven years for

the development, the hardware, the software, the construction, the training, the

migration and implementation. It was considered by Treasury Board, and Treasury

Board gave approval in February of 1993, to proceed with IDS. We had a steering

committee established which included representatives from the department and

Treasury Board, who were involved all along the way.

I should mention as well, the consultants. NLCS was

the Crown corporation for government for IT projects. In the Fall of 1991, the

government established as a policy that it requested NLCS to get involved in the

private sector in terms of developing new systems for government. In the late

Fall of 1991, NLCS invited proposals, issued an RFP, to retain consultants to

work on the Integrated Delivery System. I think it was on February 27, 1992 that

NLCS awarded the contract to a consortium of Paragon here in St. John's,

Andersen, and Synerlogic, which was a subsidiary company of Andersen in Halifax.

I think you also have the press releases where the ministers announce this thing

on June 30, 1992.

I mention that in the sense that now we had really

external consultants. While NLCS was a separate corporation it was considered

part of the government community. Now we had external consultants who came in

with their own ideas and a lot of very good ones, but it also resulted in the

costs probably being somewhat higher than they otherwise would because their

rates were higher.

CHAIR: (Inaudible).

MR. J. BYRNE: I am not about to question the need

or the necessity to upgrade the computers for the department, but in listening

to the Auditor General's overview and listening to Ms Dawe's overview, I would

like to comment on this.

Basically, from what I see, from the terms of

reference that were first set out and the criteria set back in 1989, it seems to

me the department itself did not really know what was required, and the criteria

were not specific enough. Basically, the people hired to set the guidelines were

not familiar enough themselves with those types of systems, even when you went

outside, maybe. I do not know if the people you went to had enough experience to

be able to deal with the complex system that you would require, and it went

steadily up. Maybe right from the beginning it was a situation where one hand

did not know what the other hand wanted.

MR. ROBERTS: I think it really went through an

evolutionary stage. The kick-off point was with the Woods Gordon report, but if

you read the

chapter in that on the information system, as I said before, it is

mainly about the problems the department has, and says that it requires a new

computer system to deal with them. In developing a new system, as we all know,

you need a lot more specifics than that. So it became a kick-off point, the

Woods Gordon report, and also the initial strategic plan.

One point, as well, that we had in the initial plan

was to have two release areas for the core system. We would develop some of the

systems first in a `release one', we called it, in the first stage, and then, in

a later stage, another one. Initially, the FACTS system was planned to be

replaced in `release two', which would have been a later time. Having thought

about it, the steering committee in the department, it was felt that we should

move that up to an early release because, as the deputy has said, the thing was

designed back in 1975 and already in the late 1980s it was considered a no win,

obsolete system. So that loaded up the plan for the system more to a front end,

but there was no doubt that the evolution of IDS became a lot more than was

outlined in the original report.

Just to enlarge on that, our department, the

Department of Social Services, in the late 1980s, as I have said, was very, very

- I will not say backward - very low in the area of IT and computer systems. It

probably, in my opinion, was not where it should have been, for a lot of

reasons. Given the department's programs, the extensive delivery network you

had, its mandate and so on, it probably should have been at a much more advanced

stage in the evolution of IT than it was. I think it is fair to say that we had

a lot of catching up to do, therefore. There was a lot of energy and excitement

in the department in the late 1980s. We recognized the problems we had, we

recognized the lack of IT and where we were at the time, and there was a lot of

excitement to get on with that and to catch up. Because of that, perhaps the

design of IDS, perhaps the five or six core systems and so on, were put into it,

and perhaps it should have been done more in stages; I do not know. I am not

saying that is the way it should have gone, but it certainly became a big

system, all very necessary in order to catch up. But perhaps it was a case of

trying to do too much at one time, and because of that it became more expensive

than we had hoped it would be.

MR. J. BYRNE: Ms Dawe mentioned that there were

twenty-two systems, six core systems, that were intended to reduce the workload,

I suppose, of the social workers; but, in actual fact, from my understanding in

dealing with social workers, their caseloads or workloads are increasing, and it

seems to be symptomatic right across the country in that a lot of social workers

are actually being stressed out now because of the extra caseloads. So this, in

effect, has not had the effect that it was supposed to have, has it?

MS DAWE: I appreciate your question. I think,

though, if you look at it from the perspective that if we did not have today

what we have, how more stressed our staff would be. Let me just give you an

example. In 1988-1989, the social assistance caseload was a little over 19,000.

Currently it is 36,000. The child welfare, the child protection referrals, for

example, in 1989 were 850; in the 1995-1996 period, 4,700. So the workload has

increased dramatically since 1988-1989.

I guess my point earlier was, albeit we are not where

the department would want to be today with an integrated delivery system because

of cost issues and others, the benefits that have been accrued through the

automation of the offices are significant and have helped the staff to cope with

the increased workload. But your question is quite pertinent; indeed, there are

many, many demands on our front-line staff, both financial assistance officers

who manage the social assistance program, and our social workers for all the

other programs.

MR. J. BYRNE: Am I clear to understand, Ms Dawe,

in your statement you said that the project is terminated - $10 million spent,

and it is terminated?

MS DAWE: Yes.

MR. J. BYRNE: Just to go on with that, you

mentioned there the Memorandum of Understanding with the Department of Health.

MS DAWE: Yes.

MR. J. BYRNE: Can you tell me when you expect some

results from that, and how much you are planning to spend on it?

MS DAWE: The Memorandum of Understanding that was

signed with the Department of Health in June, is not going to cost anything

because that memorandum was intended to look at the opportunities for sharing

and developing an integrated information system across, so there is no cost

inherent in that. It is to identify the potential. What has happened since June,

is that in October past, as I had indicated, the Minister of Social Services and

the Minister of Health announced the move to work towards the development of an

integrated information system. That is intended to take a two-year development

phase but again, the partners are just coming together for the first time and

that initiative will be governed through a board of directors. Mr. Roberts is

representing the Department of Social Services on that board and I think the

first meeting of the board is actually to occur next week?

WITNESS: Next Monday.

MS DAWE: Next week, so we are sort of starting on

a new track.

MR. J. BYRNE: The $10 million that is spent on

this project is terminated?

MS DAWE: No. The project itself that was planned

with the last cost by the consultants targeted at $47 million, was terminated on

March 10, 1995. Up to that point, approximately $10 million had been spent from

the latter part of the 1980s on to 1995. That plan is put on hold. However, many

benefits that have accrued through the development of the plan to that point,

and the information that had been identified and gathered in terms of the needs

and the programs will now be taken and utilized in our initiative with the

Department of Health.

MR. J. BYRNE: Do you think there was $10 million

worth of benefits?

MS DAWE: I cannot say that there was precisely $10

million, though we have calculated what we believe to be a reasonable benefit

cost from that and maybe, Dave, you could speak to the specifics because I would

not want to downplay in any way, the significant benefits that have accrued of

the $10 million and what indeed our plans are to salvage not only the hardware

and the technology that exist in the regions now, but the information that was

gathered through that initiative, how we are salvaging that and we have built

our child welfare system already, child welfare registration system that was

developed over the last year, and much of that information is now going to be

taken and translated into this other initiative.

MR. ROBERTS: Of the $10 million that the Auditor

General mentioned, the $10.3 million, that included about $2.1 million for

computer hardware and, as we said, this is essentially the 700 or 800-odd

microcomputers that we have received and we talked about the tremendous benefit

that they have brought to the department, and that leaves about $7.8 million.

Included in that $7.8 million, was $885,000 which was an estimate for

termination charges and this essentially relates to our consultants, NISL, as

well as the Andersen Paragon Synerlogic people.

We received the bill in the Spring of 1995, after the

department had terminated IDS from these people for $885,000 and we did not

agree with it at all and to be honest, it did not include back up and so on. To

make a long story short - I could go into a lot more detail if you like - we

have ended up, the bottom line on that is, instead of paying $885,000, we have

paid $330,000 and it has been a long route, about a year-and-a-half negotiating

this, but this is what has been the final settlement which NIS agree with and

ourselves. So, the $7.8 million remaining, you can deduct $554,000 from that.

On the remaining money, several million dollars were

spent on development of the system, about $4 million on the development of IDS.

We will get a lot of benefit from that. The deputy has mentioned a child welfare

registration system that we have developed and put in, but we will also get a

lot of benefit from other systems as well, because we have these myriad of

reports. For example - and to use a clich, we will not have to go back and

reinvent the wheel as we develop subsystems in the department like the client

registration system we have developed, human resource systems, financial systems

in the department over the last couple of years. Because a lot of homework, put

it that way, a lot of documentation on our needs has been done over the years

with IDS we are at a much better advantage now than we were before. Also, if we

ever do replace FACTS, which I expect will happen at some point, we again will

not have to reinvent the wheel. We will be much, much better off than we were

before.

There was money in it for training and so on, that is

obviously a benefit. I guess it will come down to probably - there might be $2

million to $3 million in our estimation of the $7.8 million or the $10.3 million

that might be debatable as to what the benefit is but we would even argue there

an intangible amount it is hard to quantify. The benefit that our department

received in the development of IDS and the benefit that the consultants

received, both at NISL and the external consultants in working on this project

in dealing with client-server technology, which even to our consultants was a

fairly new technology at the time. The benefit to our staff - over the years of

the development of IDS, the design, we had numerous focus groups established. As

the system was designed we would bring our front-line workers in, we would take

the design out and go around the Province and show our front-line workers what

we were coming up with, get their feedback and so on, get them aware of IT

systems and what they can do. So even if you go down to $2 million-$3 million on

the construction alone costs, we feel that there would be a lot of benefits and

there have been a lot of benefits to the department, to the consultants and IDS

that are difficult to quantify.

MS DAWE: If I could just add to that, my

experience in accessing information for decision-making and monitoring of work

loads, caseloads and our budget, I think I would have to say that another

benefit that has accrued through the development of the systems, albeit not

complete, is I think they are much more significant today in accessing

information for decision making at the executive, much greater than in the

earlier days, in the early 1990s on a regular monthly - but it is quite

significant in comparison.

CHAIR: I have a couple of questions dealing with

consultants. Why was there a need to go to an outside consulting firm led by

Anderson, in my understanding; I know there are other companies involved but it

was primarily directed by Anderson - when we had our own Crown corporation,

Newfoundland and Labrador Computer Services? First of all, what was the need?

Who determined it and who made the decision? I know that Newfoundland and

Labrador Computer Services sent out the RFP, request for proposals, but my

understanding is it was not their decision. It came from somewhere else. Why was

there a need to do that, for example?

MR. ROBERTS: It was, in fact, the Cabinet of the

day. I believe we sent you the press releases from Mr. Gullage, who was the

Minister of Social Services, and Mr. Furey. They had a press conference on June

30, 1992, which announced all of this. I believe there was some reference in it.

In the Fall of 1991, the Cabinet of the day requested NLCS, as it was at the

time, to involve the private sector, moreso than they had in the past, in the

development of systems for government. Now, I am not exactly sure of the

rational there, I guess, other than - I think it was also seen as a policy from

the Department of ITT to develop the private sector in Newfoundland.

CHAIR: So would you say that that was then - could

it be seen from that initiative that the expertise or Cabinet of the day felt

that the expertise was lacking within Newfoundland and Labrador Computer

Services to develop this project and to move forward with it?

MR. ROBERTS: I think the primary motivation was

more the development of the private IT sector in the Province, because I think

that was consistent with the government's overall policy at the time to try to

develop different private sectors and I think -I cannot speak for the Cabinet,

obviously, but the IDS system was considered at the time the biggest system that

the government or, in fact, the Province, had ever been involved in. It might

have been a recognition that it might be timely to involve external consultants.

CHAIR: You mentioned earlier, when you talked

about consultants about ten or fifteen minutes ago, that the involvement of

private outside consultants, meaning outside of government, may have contributed

somewhat to the ballooning estimates of what ultimately and finally would have

been IDS. Could you elaborate on that for a few moments? Why you said it, and

what makes you believe - or what information do you have that would contribute

to that statement?

MR. ROBERTS: I think one tangible thing was the

external consultants, first of all, they were - an RFP was issued and NLCS,

there was a review committee and so on, then NLCS, as far as I know, made the

final decision on retaining Andersen, Synerlogic and Paragon. They came on in

the Summer of 1992. A lot of the design was done or it was well under way. As

far as the IDS experience goes, they were seen to play a major role in the

actual construction of the system.

In the Summer of 1994, the system, or the development,

had proceeded to the point where the actual design of IDS was nearing completion

and approval, and the steering committee for IDS at the time felt the time had

come to start gearing up for the construction of the system, which was seen as a

really big task. As I said, if we can believe them, even the Andersen people

felt IDS was a major system, even in their eyes.

In the Summer and Fall of 1994, as a result of that,

and the approval of the department, the consultants and Treasury Board, space at

Prince Charles Place, down on Torbay Road, was leased and we started gearing up

the construction team, which around January 1995 was up to around, I believe,

sixty to seventy people. Several of those people were from Andersen in Ottawa

and other areas, so that is one of the reasons why I am saying that by having

external consultants it might have cost more. It is hard to say because we do

not know what the other were, but I would imagine that the rates for Andersen

people would have been, or were, more than what they would be for NISL people.

CHAIR: Of the $10.3 million that was spent, it is

true that $4 million went to outside consultants, is that correct?

MR. ROBERTS: I believe that is the figure.

CHAIR: And the amount you talked about earlier,

the $885,000 termination charges which you have negotiated down to $300,000-some

odd, those were charges that resulted in termination of the project and

termination of a contract with the private group. In sum, of that $10.3 million,

$4 million was given to outside consultants. i just want to make sure that is

correct.

MR. ROBERTS: Four million dollars, yes.

CHAIR: The Auditor General found that in October

1994, just before starting construction, the external consultants concluded that

the original concept of the architectural design for the system required, was no

longer acceptable, but the Auditor General also found that this choice of

architecture, the one that the external consultants on the one hand in 1994 said

was not acceptable, was confirmed in August of 1991, and then again in May 1994.

It appears to me that all of a sudden this design of

architecture that was confirmed - I understand there was also an internal study

done for the architectural design of IDS by Newfoundland and Labrador Computer

Services in 1992 which concluded that the cost would be $27.2 million or $27.3

million. That is the information I have. That really was the first figure

floated or debated in terms of what the actual cost of this system would be.

It would appear, to me, anyway that somebody was not

doing his job, actually, in terms of a system of architecture for the design

that bit by bit, year after year, up until the three-year period was okay; and

then we see the entrance of external consultants and they say: This system

design is completely flawed; it will have no benefit.

My question is: How can something be approved in May,

that has developed over a period of three years with Newfoundland and Labrador

Computer Services, and then in October be seen as completely outdated, having no

benefit at all, and a new system, or parts, mostly of a new system, would have

to be designed?

MR. ROBERTS: I guess our quick answer is that we

agree with you totally. The Department of Social Services was the so-called

owner of the system, as they called it, and we needed the system, we wanted it,

and we also had a systems division, albeit a small one at the time, in our

department. But in the development of any system, and especially such a major

one as this, usually the client, say, as we were, depends considerably on the

technical consultants for this because this was such a major system. We did not

have the internal resources to design it ourselves.

CHAIR: Nor should you be expected to be. I mean,

that is the other side of it.

MR. ROBERTS: No, we would agree. We were

disappointed in the Fall of 1994 that word came back that the consultants now

were questioning again the original architecture that was approved back in

1991-1992. We were disappointed in that, but they came to us and said, `We need

to review it'. We asked them why and so on. Anyway, they went ahead and did it.

In fact, I think among the consultants, to be totally honest, there was

disagreement as to which way we should go. I do not know whether it was NIS and

Andersen or whatever, but there was disagreement as it was outlined here and we

were not happy with that.

CHAIR: Is it true that management from Andersen

Consulting who were sent here, or stationed here, or worked here, or the

consultants who were sent initially, were seen to be incompetent several months

after and then were hauled off the project and sent with their bags packing to

Ottawa?

MR. ROBERTS: Were seen to be -

CHAIR: Were seen to be incompetent, were

contributing to the cost of the project, and had no idea, essentially, of what

the project was about. I am leading to something here. I am not after the

department. I want to be clear on that. This Committee is not for that. I am

just trying to ascertain; there was $4 million spent, of the $10.3 million spent

on this system, to private consultants who may, in my mind, have contributed to

the demise of a system that the department really could have used. So the

question is: With regard to the consultants from Andersen who were here, do you

have any knowledge that their expertise was completely lacking, and that as a

result it caused further delays in the project, and other consultants or other

representatives of Andersen had to be sent down? Could you comment on that?

MR. ROBERTS: Well, I know that there were several

Andersen people here. From what I knew of them, and I met with them regularly

because during the Fall and Winter of 1994-1995, I guess our steering committee

met, on average, maybe every second week or something like that. We assumed, I

guess, that they were competent. I cannot say that they were not. I can mention

a couple of things.

They came in and appointed a project leader in the

Fall of 1994 for IDS; NISL did - NLCS had become NISL in October of 1994 - and

they appointed a person from Ottawa. They sent down a consultant from Ottawa to

head it up.

CHAIR: Are you aware of the number of years of

experience that the person they send down had? Did he have five years, ten

years, one year, twenty years?

MR. ROBERTS: I cannot recall offhand, but the

gentleman did have extensive experience in the IT field.

CHAIR: Okay.

MR. ROBERTS: And they had other people as well,

prior to that, who were here working on it, but they did question. In fact, back

in 1992, I think, we had the technical architecture reviewed and developed at

the time and I think we had Andersen people involved in it then, and NLCS did at

the time. And now, they were questioning their own work, which really bothered

us, but again, where we did not have the technical expertise in-house, as we

have said in our response to the Auditor General, you are somewhat at their

mercy.

CHAIR: Completely - we all are.

MR. ROBERTS: Because they tell you all of a sudden

that the - but I can say what really concerned us and I would like to get back

to the $47 million because it is related to this.

The $47 million was never a figure that our department

agreed with. The $47 million spanned a period of eleven years and it included

the design, the construction, the training, the migration and three years of

operation. The IDS system was supposed to be constructed down at Prince Charles

Place through the twelve months of 1995 and was supposed to be rolled out, as

they called it, migrated out to our fifty-odd offices in 1996. The $47 million

includes three years of operations after that, so it is probably somewhat

misleading to think that that -

CHAIR: Okay, you said that the $47 million that

was tossed around was never something the department agreed with. Was that put

forward by the external consultants - by Newfoundland and Labrador Computer

Services, or by the external consultants -

MR. ROBERTS: Well, you see the -

CHAIR: - or both? That is what I am trying to

determine here.

MR. ROBERTS: I guess we could say together.

Andersen reported to NIS. NIS were our consultants, our primary consultants, and

they, I would imagine the right term is to say, they subcontracted some of the

work to Andersen. The person who actually headed the construction phase of it in

the Fall of 1994 was an Andersen person, a fellow, Keith Glover his name was

actually. He was from Ottawa, and he was the project leader, we called it, for

IDS in the construction stage, and he reported to a senior person at NIS, a

vice-president.

CHAIR: How we get scared! In politics, I guess,

irrespective of a party, a famous line we all hear is: `Hi, I'm from Ottawa and

we are here to help things.' It sends chills up all of our spines. But anyway,

continue - sorry.

MR. ROBERTS: What happened then, to get into the

$47 million, we had, as I said earlier, received, I suppose, approval back in

February of 1993 through a project release submission, for the IDS to continue,

and included in our report was $32 million. Now, how we went from $32 million to

$47 million: In that Fall, we were gearing up for construction. We were looking

for figures because the department was receiving pressure from Treasury Board to

submit its new budget for the 1995-1996 fiscal year. We needed a lot of

information, obviously, on the construction of IDS. What happened was, in

December we received a report from the consultants with figures for the

construction for the following year. Within a few days of receiving it, they

withdrew it and told us not to use the figures at all.

In late January of 1995, after we had to apply a lot

of pressure - because we were getting pressure at this point from Treasury Board

to submit our budget and we knew it was going to be a big one. In late January

we received further figures from the consultants on the construction of IDS, and

this is where the construction really went high. I think the actual figure was

$16 million or $17 million required the following year for the construction of

IDS. Also, although we could not use the figures in December, we did have them

but they had withdrawn, and we compared the figures and they had increased some

of their figures from what they had given us in December 1994 to January 1995 by

$8 million alone, for a couple of aspects of the construction.

When we received these figures, what we wanted to do

was, have a steering committee meeting and discussions with Treasury Board and

with the consultants, because the truth of the matter is, the department felt

that the figures were very, very high. When we saw them we had major problems

with the phase, the construction phase cost, the $16 million or $17 million they

were saying it would cost to construct it.

CHAIR: That $16 million or $17 million, correct me

if I am wrong, is what changed the cost of the project from $32 million to $47

million?

MR. ROBERTS: Yes, that drove it, essentially, from

$32 million to $47 million. We were quite disappointed and quite taken aback, to

be honest with you.

CHAIR: Was there a guarantee of delivery made in

terms of a set-up date with that? In the final analysis, the project was

estimated to cost $47 million and change from the external consultants, but on

the other hand, did they guarantee that the system would be up and running by a

certain point in time? If government went ahead and approved that, would they

guarantee that it would be done and up and running?

MR. ROBERTS: We had established schedules. The

schedule was that the construction would be completed by December of 1995. It

would take a year and a bit. Nineteen ninety-six would be migration year. It

would take twelve months to roll out the system, say, to our fifty-odd offices.

That was the commitment. I believe at that point there was no contract in place,

actually, between NISL and Andersen but I am not sure. Because, as I said,

again, our primary contact, our primary consultants, were with NISL.

Anyway, getting back to this high construction cost.

Because our budget was overdue in Treasury Board, our IT budget, the department

made the decision to send the information over. They were after us every day to

submit our IT budget, because it was part of the overall government thing. Our

intent was to sit down with Treasury Board officials and the consultants and

talk about this figure, and hopefully reduce it considerably. Because it was a

significant increase and we were not happy with it.

We sent our budget over to Treasury Board. Within a

very short time, they came back to us really and said: There is no way that the

government can agree with this, can afford it. In fact, they said: We will give

you the same amount for development for IDS next year that you have this year,

which was $2.4 million. This essentially killed the project, because, although

we did not like the figures the consultants had given us, there was no way they

could construct it for $2.4 million in the next fiscal year versus $16 million,

but we had hoped we would get it down.

We commenced meetings then. Rather than sit down and

negotiate with the consultants, we started trying to negotiate with Treasury

Board. We sent letters and we had meetings with them to see if there was some

way we could salvage the system. When all was said and done, it went through

several stages of the budget review in Treasury Board and the final decision was

that no, it would be $2.4 million for next year. This brought us up, as our

Deputy Minister has said, to March 10, 1995 when - that was - we received the

final word a day or two before. We then officially went to the consultants,

NISL, and told them the project would have to be cancelled because of the - we

had given them some indication in the few weeks before that we were having

problems with the budget. We made it official on March 10. Every day it was

costing the department considerable money, because at this point down at Prince

Charles Place there were sixty to seventy people. Several of them were from the

mainland through Andersen and they were costing us - you know, these people are

not cheap. So on March 10 it was cancelled.

The bottom line is, although this $47 million - that

was a figure, that was never a figure the Department of Social Services agreed

with, and I do not think ever would. Had it got to the point where we could sit

down with the consultants and Treasury Board to discuss it, I believe our

department would never have agreed with that at all. Well, we know Treasury

Board did not. Whether the consultants would be able to come back and say they

could construct it at a cheaper price, I do not know, because it really never

came to that.

CHAIR: I am getting some looks. We are going to

take a fifteen-minute break for some coffee and we will resume about, say, 10:35

a.m., if that is okay. Thanks.

Recess

CHAIR: Order, please!

Tom, did you have any further questions?

MR. LUSH: Not at this point.

CHAIR: Okay. I will continue if I could. With

respect to what future benefit will result in terms of the money that has

already been spent, we have identified that there was $4 million spent to

external consultants, another $300,000-some odd to terminate the relationship

with them. As an opened-ended question, what benefit do you see coming from that

expenditure of public monies? Has the benefit already been realized, or are we

inherently, within the department now, realizing any benefit from that

relationship we had with external consultants?

MR. ROBERTS: I feel the department is continuing

to get benefit from the exposure to the consultants, considering them as a

group. As I said before, they did a lot of work on the design and -

CHAIR: For the record, the consultants I am

referring to are outside of Newfoundland and Labrador Computer Services.

MR. ROBERTS: Okay, you are talking about Andersen?

CHAIR: Yes.

MR. ROBERTS: I suppose it is a case of - the

department, like any, when you are developing a system, you have to look to

consultants, especially for the technical. Whether NIS - previous initial -

could have done this, developed and constructed the whole system, I am not sure.

They did acknowledge all along that it was a major system and I do not believe

they had any problem with government policy to involve external consultants,

like Andersen who (inaudible). But as far as the department goes, I am not sure

that it mattered whether it was Andersen or NISL, from that point of view. I do

think, as I said, it probably ended up costing more in actual -

CHAIR: In terms of their work, though, what they

left behind as a result of public expenditure of $4 million, are we still

realizing any benefit or were there any benefits whatsoever? Are we realizing or

continuing to realize within the department - inherently based upon the

relationship they had with government vis--vis, the Department of Social

Services, are there any benefits still accruing today as a result of that

relationship?

MR. ROBERTS: We have had benefits from - you are

speaking specifically about Andersen?

CHAIR: Absolutely. The point of view I am coming

from, we spent $4 million to retain an external consultant on the one hand,

which is a significant amount of money, as I see it, and then we terminated the

relationship and negotiated the price of termination. Something must have been

left behind for that, whether it was a system that is in place that is now being

used, whether it is the direction that they outlined for the department to

follow at some future point, in terms of its IT development in the future. What

I am trying to get at, what benefit did that $4 million leave for us and the

department?

MR. ROBERTS: Well, we did benefit from the

consultants. We have a new child welfare registration system. The deputy

mentioned earlier, financial management - the department's ability now to

involve all sectors of it in the preparation of our annual budget, the

monitoring throughout the year -

CHAIR: And this benefit that you are talking about

now came from Andersen's involvement, you are saying?

MR. ROBERTS: Well, I cannot distinguish between

Andersen and NISL in terms of - the involvement of consultants to the department

CHAIR: Somebody was able to. My point is, somebody

was able to distinguish in terms of what we paid out. And I am not trying to

belabour the point, I am just trying to come to grips with what did we get as a

Province for spending $4.5 million to hire an external consultant? Now,

obviously, Andersen was able to distinguish between itself and NISL in terms of

what it costs or what it charged the Province. So there must have been some

benefit to that and if there was, I am trying just to understand what the

benefit was. I will just leave it at that. I am not trying to put you on the

spot, as such, I am just trying to get your opinion or your evaluation of what

their involvement was and how we benefited from their involvement.

MR. ROBERTS: I find it difficult to distinguish

between - we looked upon NLCS, and subsequently, NISL, as our primary contact

for the external consultants. They were our technical advisors, consultants.

Andersen, Paragon, Synerlogic were subcontracted to us through NISL, they

reported to NISL. I guess - I am not trying to be evasive - I looked upon them

as a group specifically (inaudible) -

CHAIR: Because that is the way you dealt with

them, you are saying.

MR. ROBERTS: Yes.

CHAIR: Okay, fair enough.

MR. ROBERTS: Right. Really, I guess, my immediate

counterpart in dealing with the consultants was the vice-president at NISL to

whom Andersen reported. I, obviously, did talk to the Andersen people and so on,

but we viewed Andersen as a group that was there initially to help NISL help us,

if that makes sense.

CHAIR: My understanding - and again, correct me if

I am wrong, and at any point, please feel free to interject. A number of studies

were involved with this project over the period of time we are talking about. My

understanding and my information has indicated to me that one such study that

came from Newfoundland and Labrador Computer Services, late 1991 or early 1992,

dealt with the architectural design and construction of the system. At that time

they had put an estimated budgetary figure associated with that of about $27.3

million or $27.4 million. Essentially, that represented the first time there was

an actual cost associated, outside the software development, but with the actual

construction of it. Can you confirm that?

MR. ROBERTS: I believe that sounds correct, is it,

Glen? There was a technical architecture study done in 1990 that brought the

amount to $19 million. That was one stage. But there might have been that one as

well. The $27 million does not stick out in my mind. I go more from the $3.5

million to the $19 million to the $32 million as the major stages. There were so

many reports that -

CHAIR: Yes, I know are, okay. I will have one

final question. In terms of terminating the relationship with the external

consultant, Andersen and the group that was around them, was there a written

contract of sorts that compelled the department - did the relationship, the

monies from that, the $300,000-some odd that it ended up being, did that come

from the department's budget in terms of termination of the relationship with

Andersen? Did it come from Treasury Board? Where did it come from? Why were we

compelled to pay that amount of money, anyway, if the project was halted? Were

there agreements in place that compelled us to do that?

MR. ROBERTS: The money came from our department's

budget because it was seen as the legitimate charge of the department because

consultant fees were part of the project budget. We are calling it termination

fees. Actually, it was bills that came in in April and May of 1995 but went

back, actually, to about August of the previous year. We did not receive bills

from the consultants through the Fall of 1994 and Winter of 1995. This was

another concern of ours because -

CHAIR: Who would have received them?

MR. ROBERTS: I do not know. The Andersen bills,

ideally, were supposed to go in to NISL, which was their bosses. They would in

turn, if they agreed with the invoices, the charges, forward them to us for

payment and we would review them. We did not receive invoices on behalf of

Andersen through NISL through the Fall and Winter of 1994-1995. In April, I

believe, April or May, was the first time we got these invoices. Now, at this

point, it had been terminated, March 10, 1995 and we got this for $885,000 -

they totalled that, and we had -

CHAIR: And then you laughed.

MR. ROBERTS: Well, we had major problems. This was

not all - we have since called it, loosely, termination fees, but it represented

legitimate fees for Andersen back to the Summer, Fall and Winter of 1994-1995

where we had not received the invoices. We had major problems with the charges

and we told NISL that.

CHAIR: Did your problems with the charges stem

from the fact that the Department of Social Services was actually charged when

it should have been NISL, or were there other problems that you had with the

charges? And if they were outside of who should have been charged, then what

were the problems, and why did you have them?

MR. ROBERTS: We felt the fees were too high and we

did not feel that a lot of it was justified, so we went back and told them that.

CHAIR: Based on what?

MR. ROBERTS: Based on our understanding of what we

would be charged for these things, for their services.

CHAIR: Did you feel you were going to be charged

$100,000 and then you got a bill for $800,000? There must have been some

benchmark.

MR. ROBERTS: Well, we had an idea of what their

per diem rates would be, what they would charge us, and when the bills came in

they did not correlate with our understanding at all so we told them that and

sent them back. They looked at it and they actually came back to us awhile after

and dropped it from $885,000 to $499,000, and from that we negotiated. We did

not agree with all of that either, but we ended up paying $331,000 of the total.

CHAIR: Where does the department go from here? My

own opinion of this is that a project that had tremendous merit, that while it

may have had some short-terms flaws in terms of some of the concerns outlined in

the Auditor General's report in terms of its own strategies, a project that had

tremendous merit on the one hand was proceeding along and the cost estimates

over a period of eight or nine years, I believe, when it came to the $32 million

seemed to go completely off the rails with the introduction of external

consultants. My concern with it is, and I am not looking for a comment, but it

seems that a project that had merit apparently went off the rails for no good

reason, in my mind, but at the same time, the problems still must exist for the

Department of Social Services in terms of where it is, so where do you go from

here?

MS. DAWE: That is absolutely correct. The needs

that have been identified since 1988-1989, and all along the way, many of them

are still there.

CHAIR: They have increased, I would think.

MS DAWE: They have increased obviously because of

the workload increase. And while the workload has increased dramatically,

proportionately, our staffing has not, so if you put all this together, the

needs are still there. Particularly, we are dealing, again, I have to stress,

with the fax system which is one we rely on. Seventy per cent of our budget for

social assistance is relying on a system that was designed and implemented in

1975. We just keep our fingers crossed day by day that indeed we are going to be

able to maintain that system until we are able to have an appropriate system in

place. A central client registry is also a significant need that is in the

department so that if an individual accesses a service in Bonne Bay and happened

to move into another region in central Newfoundland then we can access the

information. We do not have that ability today. So where from here?

While - and I hope we have stressed - we have indeed

achieved significant benefits already as a result of the initiative, much is yet

to be done. Again, with the program review process underway, we first have to

determine the role of the Department of Social Services, and we are going to be

embarking in the new year on a major review of the income support system. So

until we have other pieces of the puzzle -

CHAIR: That has been ongoing for some time.

MS DAWE: Yes, and until we know, sort of, what are

our programs, what is the direction of our new programs, it is still a bit

premature to finalize the systems, but we will be using a significant amount of

information that has been gathered through the process and the identification of

needs. Because, you know, whether you shift the system a bit or not, the need is

basically still there. You may have to modify and update the information. But

our hope is now and we are committed to working with Health to develop the

integrated system, and I think for the expenditure of public funds, that is the

best value for dollar because, as I had said earlier, we are talking of a small

population base in this Province. Many of these individuals access services from

both departments so, as it would be for the convenience of the public to enter

and access the various departments and systems, much better service for the

public, better systems for government-wide in terms of developing its policies

and programs into the future, and then much better systems for the workers who

have to carry out these programs.

CHAIR: One final, final question is and is a very

- On page 6 of the Auditor General's report, it outlines the total expenditure

dealing with the $10.3 million, I believe; 39 per cent of that, which represents

$4 million, went to consultants, we have determined that already; 44 per cent,

which is $4.5 million, went to Newfoundland and Labrador Computer Services or

NISL. What did that involve? Did that involve the actual supply of hardware,

construction design, consulting fees, what?

MR. ROBERTS: Yes, that would be consulting fees,

as well as some of the lease arrangements for the supply of hardware, because

some of the microcomputers that we have were acquired through NISL and we leased

them from them. That was the original lease/purchase arrangement.

CHAIR: Okay, and the 17 per cent of that amount,

$1.8 million from the Department of Social Services, what did that involve,

software development or -

MR. STOKES: That was systems (inaudible).

A portion of that related to the direct salaries

incurred by the department which seconded staff on the project.

CHAIR: You said a proportion of that? How much are

we talking about? Again, if you do not have the information, feel free to write

back but you know, even approximate values would be sufficient for this morning.

MR. STOKES: Again, I think the portion of it is

approximately $300,000.

CHAIR: For salaries?

MR. STOKES: Yes, and also the termination charges

which you referenced earlier, the $885,000 I think these figures were included

with the social services figure, that was later reduced to that $330,000, so -

CHAIR: That still leaves us with about $900,000 or

so. Would that have gone into software development? Where would it have gone?

MR. STOKES: One would be left with $700,000. I

would have to go and find out what (inaudible).

CHAIR: Sure, okay. If you could get back to me, in

writing preferably.

MR. STOKES: Yes.

CHAIR: Would somebody else, the Auditor General's

staff or -

MR. ROESTENBERG: Those were the costs (inaudible)

staff salaries, as Glen said. There are also office supply costs, telephone line

costs, facilities rental costs; that is at Prince Charles Place. That would

cover the most significant portion of that money.

CHAIR: Okay, I am finished. Thank you.

Do any other members have questions? Mr. French?

MR. FRENCH: Probably just a couple.

CHAIR: Okay.

MR. FRENCH: First of all, I would like to

apologize for being late this morning. I am not sure if I made a group of kids

at Queen Elizabeth High School happy or not, but I was supposed to go in and

speak to a democracy class and when I got in there the school was closed. I am

not sure if it was because of me going in to speak, or if it was because they

lost the power and the water supply. Anyway, suffice to say, I did not get to

speak.

I just have a couple of questions. This whole business

really intrigues me, the amounts of money that we spent. The first question I

would like to ask is: Did we have somebody designated from the department who

was totally in charge of this project? Or was it a project where we had a

committee in charge? Or was there just one particular individual in charge of

seeing this particular job done, and done right through to the end?

MR. ROBERTS: When it was decided to go with the

system, a steering committee was established that had several representatives

from the department and from Treasury Board and from the consultants, who were

NLCS at the time - just NLCS. We also had a project leader, the person was

called, in charge of it, and that person was from NLCS because the department

did not have - at the time, back in 1989, we had a very small systems division.

We only had about three or four people in it, and we did not have the resources

to have it, so we had a project leader and we had a steering committee, and from

the department point of view that was seen as sufficient at the time.

MR. FRENCH: So where would these consultants get

their information? How did they gather their information?

MR. ROBERTS: Well, as the system and the design

proceeded, the department worked very closely with them. We had focus groups

established, we had sub-committees, and they worked very closely with the

consultants, with the project leader; and NLCS, I guess, as time went by,

allocated several people to this project. As time went by they allocated more

and more. The work done on a regular daily basis was a full-time job.

MR. FRENCH: Okay, because I guess what I am trying

to get at is, if they are going to design a system, then they should talk to

people who understand the system. I do not know if I am right or wrong, but I

have been sitting here listening and I am getting an impression, whether rightly

or wrongly - were they getting the information they should get? If we take Bob

French out of his office and stick him over to do a job for the Department of

Social Services, do I really have the knowledge to be the front runner for that

particular department, to be giving people the information that they need? I am

getting the impression, for some reason or other, whether rightly or wrongly,

maybe there was nobody in charge.

MR. ROBERTS: Well, I would have to disagree with

that. I think there were people in charge. Ultimately, I suppose, I was Chair of

the steering committee at the time. We had an acting director of systems who

reported to me. At one point, the project leader reported to the acting director

and then reported to me. But quite apart from that we had, in terms of the

consultants talking to the department and helping the design, which is very

important because you cannot design a computer system, or anything I suppose, in

a vacuum, we seconded to the development team, people from our department.

Specifically, we had an individual from our social assistance division seconded

full time to make sure that the people who were developing the system were aware

of the department's needs and requirements, and as time went by we had other

people add to it.

One of the reasons, unfortunately, why it took longer

than we had wanted it to, and originally planned to develop it, is that as it

was developed we had focus groups. We had people come in from around the

Province, our front-line workers, to review the design at various stages. We put

a lot of emphasis on that because we did not want the system to be designed in

isolation of the people who would actually be using it. The whole purpose of it,

as we said before, was to assist front-line workers provide service to our

clients, and we wanted the front-line workers directly involved in the design.

We would have groups come in over the early 1990s when

it was being developed and designed to meet with the consultants and the people

who were actually the technicians to make sure their input came in. Also, when

most of it was designed, we had a road show, we called it. It took a lot of late

1993 and the first five or six months of 1994, and we had people go around the

Province talking to representative groups from all areas of the department where

we would give presentations and say: This is IDS, this is how it is looking so

far, what do you think? If this is on your micro on your desk, what do you

think? We got all kinds of suggestions. It was an excellent exercise. It took

longer than we originally thought.

I have to say I think the department was well involved

in the design of it. In my view, it was in control. What may have happened

towards the end is - you see, the design phase of the system involved the

department more than the construction phase. The design phase is when you tell

the technicians what you want, and so on. When you know what you want, then the

next phase sort of goes to the technical experts. They say: We know what the

department wants in this, now we have to build it. We are the technicians, we

are the experts. As we went in the Summer and Fall of 1994 from the design stage

to the construction stage, the momentum in the project turned more to the

consultants, and we got the build-up at Prince Charles Place of sixty to seventy

construction people, and we got the project leader then who was an Andersen

person. Actually, there were two or three of them. I mentioned Keith Glover who

came in the late Fall of 1994. There was someone before him who was from

Andersen, also.

The momentum and emphasis of the project turned more

to construction and the technical experts. That is when we started, to be

honest, getting some problems, as the Auditor General has said. There was some

discussion and questioning of the technical architecture at that point. They

were reviewing it and wondering if what they had agreed with before was okay, so

we had problems with that. Then we could not get budget figures. We would get

them and they would take them back.

CHAIR: It seems to me (inaudible) in terms of

Newfoundland and Labrador Computer Services and Andersen, actually, who was the

lead consultant. Bob, do you have any more questions?

MR. FRENCH: Again, was there a written contract

with Andersen as to what specifically they were to do, laid out in writing?

MR. ROBERTS: I do not know for sure. If there was,

it would have been between Andersen and NISL. I do not know if there was an

actual contract. There were lots of reports and contracts between NISL and the

department. I would imagine they would have had a written contract but I do not

know.

MR. FRENCH: I do not mind all these written

reports, because I think there are a lot of reports written that somebody brings

in a stack of paper and nine times out of ten you do not really get around to

reading it because time does not permit you to read it.

CHAIR: I am sorry I must interrupt you. There is

time for just one more question, so one more please.

MR. FRENCH: The other thing is, and I guess I am

looking for an opinion here: Did we get the best bang for our buck? We spent $4

million in outside consultants. Was it really worth the $4 million or was it

not? Or is that a fair question to ask you?

CHAIR: I must interrupt you for a second, `Bob'.

That was a question that was already asked just before you got here. I do not

mean to interrupt you, but it was already asked, I think, on probably three

different occasions. Hansard will probably record it, and you can have a look at

it. I apologize.

MR. FRENCH: I certainly will.

CHAIR: Okay, I am sorry. `Jack'.

MR. FRENCH: That is a question I certainly want

answered.

CHAIR: Yes, but if you can look at the transcript

MR. FRENCH: No problem.

CHAIR: - it was answered, I think, two or three

different times.

MR. J. BYRNE: I have one quick question.

Someone mentioned that the hardware was on

lease/purchase from NISL. I am just wondering if the hardware itself was put out

to tender.

MR. ROBERTS: Yes.

MR. J. BYRNE: It was?

MR. ROBERTS: It is tendered through the Government

Purchasing Agency.

MR. J. BYRNE: Okay.

Also, the word `terminated' was used with respect to

Andersen. I want to get back to that because I am not quite clear on them yet,

why they were terminated. You mentioned the fees; you were not satisfied with

the $800,000 and you cut it down to $331,000. If they were being terminated,

obviously they were being terminated before they got the bill, so it had to do

with service, I would think, somewhere along the way. Obviously, someone must

have recognized that their contribution was ineffective, for some reason or

other. Were they wasting money?

Before they were terminated, when the bills were

coming in, did they come through from Andersen to NISL to the department? And

were NISL themselves putting a mark-up on Andersen's bills? Because that does

happen sometimes.

MR. ROBERTS: Back to your first question - I think

there were several there - we never did terminate Andersen. What happened was

when Treasury Board said no to the budget for next year. In fact, Treasury

Board, I guess, have to this day never said that they terminated IDS, but when

the answer came back on the budget, that it was $2.4 million, it is not rocket

science, as they say, what the department had to do. So we terminated the

project and then NISL, I guess, went to Andersen and said -

MR. J. BYRNE: What about the mark-up? Was there a

mark-up on the bills coming through from Andersen to NISL to the government?

MR. ROBERTS: Between Andersen and NISL?

MR. J. BYRNE: Yes. If they put in a bill for, say,

$10,000, would there be like 10 per cent on it for NISL?

MR. ROBERTS: Not that I know of; I do not think

so. The Andersen invoices went to NISL, and NISL would send them to us with

their covering letterhead. How much analysis they did of them, I do not know.

MR. J. BYRNE: (Inaudible) analysis. I am just

thinking it might have been an administrative fee, it could have been a

consulting fee, just on top of what their bills would have been.

MR. ROBERTS: There was no mark-up, certainly, that

we are aware of from NISL.

I had mentioned earlier that some of the termination

charges went back to the Fall. I think most of the termination charges actually

related to costs from March 10 on, when the decision was made to terminate it. I

just wanted to clarify that.

CHAIR: Mr. Lush?

MR. LUSH: I just want to go back to the very

beginning to try to establish a better picture here of what really happened,

because it seems to me that in some cases we are comparing apples with oranges.

For example, in the beginning, the cost projected - when I say back to the

beginning I am talking about the projected costs of between $2.7 million and

$3.7 million. I think you had said yourself, Mr. Roberts, that these were very

preliminary figures kind of thing. The Auditor General points out what it did

include, and said it included a development

schedule spanning four years, and it

represented a cost of design, construction and implementation. It did not,

however, include costs associated with hardware, software, staff training, and

operation of the new system. Furthermore, it did not allocate the estimated cost

to the task identified in the development schedule.

Mr. Byrne was getting close to that question; I do not

know whether he did get to it. Supposing you could assign a figure to these

things `not included' - I do not know if that is a fair question to ask, but in

retrospect and as a basis of your experience - if you could have assigned a

figure for these items `not included', what do you think the cost would have

been at that time as opposed to the raw figure of $3.7 million?

MR. ROBERTS: Back in 1989 -

MR. LUSH: Yes.

MR. ROBERTS: - we had assigned several times more

than the $3.5 million. The $3.5 million, as the Auditor General indicated, just

included software development. We now have 900-odd microcomputers in the

department as a result of IDS. That alone came to probably $2.5 million or $3

million. If you include, then, the extensive design, development, the

construction alone, the migration - the latest figure in that $47 million that

we got from the consultants was $5.8 million for migration, which would be the

roll-out of the system. I mean, that is almost twice what the initial figure was

for the development, $2.5 million to $3.5 million. So it would have been several

times had the other - I will get the figures.

MR. LUSH: Because we are given the impression -

you know, the figure escalated from $3 million to approximately $50 million

which makes everybody look like a bunch of blithering idiots, to go from that

kind of figure of $3 million to $50 million approximately. But if we factor in

these costs, it is altogether different. I think that is why it is important,

because assign a figure to that and we would see what happened. Now, why was

that not done? Because you could not have a system without hardware and

software. Obviously somebody - I think the Auditor General stated that there

seemed to be no planning along the way. We decided that this was going to cost

$3.7 million and it did not include hardware, software, staff training,

operation and so on. Then, progressively along the way it seemed to get more

expensive. The Auditor General condemns the department or somebody on the basis

that there did not seem to be timely planning along the way. What is your

reaction to that?

MR. ROBERTS: Well, my initial reaction is that I

think this speaks for itself in terms of planning and reports over the five or

six years that the department was involved in IDS from 1989. This was the first

report after Woods Gordon and these are reports that the Public Accounts

Committee requested and I do not know but there are more. So in terms of

planning and documentation, I believe that we did it - now whether it was in the

format that the Auditor General feels is necessary I do not know. In terms of

planning, we submitted a project release report to Treasury Board in December

1992 that spanned a period of seven years. The technological architecture report

that went over in 1990 spanned a period of seven years. The final figures, the

$47 million - that we never did agree with, as we have said - that covers a

period of eleven years from 1989 and the cost of this to three years of

operation ending in 1998-1999.

So the department, at the time and still does feel

that there was tremendous planning of the system and tremendous forecasting,

long-term forecasting. Apart from all of that, there were the annual budgets

that we had to send to Treasury Board every year, quite apart from all these

reports. The budget documents themselves, from our IT division that went over,

were probably up to an inch thick because of the size of the system. They went

over every year and we would have discussions with Treasury Board and get

approval. The documentation alone there were - all I can say is, I believe the

record shows that there was tremendous planning, long-term planning and

forecasting for IDS. I do not know what else we could have done.

MR. LUSH: Just following along on that line of

thinking that each set of figures were not necessarily inflationary figures - I

know they are inflationary, I suppose, but they always included things that were

not in the initial stages. For example, the $3.7 million was just a raw figure,

a preliminary figure, as I said before, not including the cost of hardware,

software, training and that had to be, as you yourself have indicated, a

substantial cost. It is too bad we could not have a figure on that. Then, with

subsequent planning, the Auditor General mentions in that figure that it did not

include the estimated cost to a development schedule, whatever the development

schedule might require.

Now, the next figure that we come up with is in

December, 1992. The department completed a project, released the mission to

Treasury Board Secretariat to secure continuing support. This document projected

costs of $32.7 million. An important line here, this document supported costs of

$32.7 million and benefits. Now, that is what I would have liked to have heard.

We got the costs and I know we do not want to get into that too much, but you

could hardly talk about Social Services without talking about benefits, and that

is why this is being done. We said this document projected costs of $32.7

million and benefits of $33 million. The benefits outweighed the cost. It says:

Costs and benefits were projected beyond an inferred implementation date to a

point where benefits exceeded cost.

Now, if this were the case - I wonder if we could just

talk about this for a moment - what were the benefits? Were they cost

efficiencies, or were they benefits that would have accrued to Social Services

clients in that sense?

MR. ROBERTS: They were a combination, Sir, of all.

The December 1992 report, which I guess is included in this because we did send

it to you - we thought we had our own copy here but - this is it, okay. It

includes a projected cost benefit analysis of the cost being $32.7 million, and

then the benefits. The benefits were a combination. They are all listed. They

were a combination of financial benefits to the department in terms of better

control over accounts receivable, and so on. There were a lot of efficiencies

that we turned into tangible benefits as well that were included in these in

terms of front-line services that our social workers and financial assistance

officers would be able to use.

Just purely cutting down on administration - our

front-line workers have to spend too much time, I think everybody agrees, on

administration and pushing forms and so on. One of the benefits of having IDS

and a system like this would mean that it would facilitate the administration of

the work we have to do for clients and free up our social workers and financial

assistance officers to spend more time with our clients in assisting them in

terms of counselling, et cetera.

MR. LUSH: This latest proposal that we are up to

now, $32.7 million, is still minus a development schedule. It seems as though as

we are progressing through these various stages that each estimated figure is

without something. I have been looking for this development schedule, since

there were two sets of figures where that one did not come. In the final one we

get the development schedule, but that is going to cost us $47.9 million when

all of the other things are in there, plus the development schedule. What is a

development schedule? Would it have accounted for - I know we have dealt with

that, but just along this line of thinking - would a development schedule, if

that is all that was included in this figure, have brought it from $33 million

to $47.9 million? What is a development schedule?

MR. ROBERTS: It would not in 1992, if I understand

what you are saying. In 1992, this report included what we feel was the

development schedule, which I guess would be outlining the actual projected

costs of the development, building and implementation of the project. If you

look at the back of the report, there are several schedules in it. There is one

here that covers the period of seven years for the development of IDS and ends

up with a figure of $32.8 million. It covers the seven years and several aspects

of development, design, construction, and the training of our people and so on.

I do not know if it is a case of semantics as to what

a development

schedule is, but all I can say, to the best of the department's

knowledge, there were development schedules and plans and forecasts - in fact,

if anything, I do not know but there were too many done on this system. This

system was perhaps one of the most documented IT systems this government has

seen. I do not think that is an exaggeration.

MR. LUSH: If our benefits, in the end, will exceed

the cost, are we not to proceed with it?

MR. ROBERTS: Well, in December 1992 in that

report, as you mentioned, we outlined the cost at $32.7 million or $32.8 million

and we outlined benefits equal to that amount. As we said earlier, Treasury

Board indicated in early February - through a decision they communicated to us,

they approved the IDS system to continue based on that report. They approved the

continuation of acquiring micro-computers for the department, and they also,

actually, in the same decision, authorized the department to hire up to twenty

permanent positions for its systems division. So, I mean, in February 1993 every

indication we had from Treasury Board was that the project should continue, and

I presume, at a cost of about $32 million, because that was what was included in

the project release submission.

CHAIR: Up until that time.

MS DAWE: Yes.

MR. ROBERTS: Yes. This is February 1993.

MS DAWE: Mr. Chairman, in the 1992 plan, there is

a fairly extensive outline of the benefits and the savings to be accrued over

time as a result of the project. That is well-recorded in that document that you

have access to.

MR. LUSH: I was a firm believer in this IT for the

Department of Social Services. If there was ever a division of government which

needs to take advantage of information technology, it has to be the Department

of Social Services. I just want to say, Michael Petit, who is the president, I

think, or the chair of the Child Welfare League of America, did a report at one

point, and in identifying some of the weaknesses of the department, one of them

centred around our inability to collect information. I had held out this

information technology as a solution to the problem that Michael Petit

identified. Was I overly optimistic when I said that this new, this integrated

system that the department was initiating, would help address the problem,

particularly the one with respect to information collecting, and again with

respect to children? Would you like to comment on that?

MS DAWE: Yes I will. Thank you, Mr. Lush. I would

go further than that in supporting your comment, in that you will recall as well

the Hughes Commission and the Hughes report, which identified the same need. I

guess one of the major benefits that has been accrued as a result of this

initiative is that just recently the department has been able to use the

documentation and the needs analysis to introduce a child welfare registry, so

that our front-line workers then will be able to input and access provincial

data for child welfare cases. So if we want to highlight one of the benefits,

and one of the significant benefits, indeed it is related to child welfare. I

think your comments are very apropos, that this system was intended to correct

the problem that was brought to your attention through that report.

CHAIR: Ms Thistle.

MS THISTLE: Going back to the beginning when you

looked at the idea of bringing in a computer system, was our Department of

Social Services' unique - the administration unique to the rest of Canada, in a

way that we could not have piggy-backed on a system that was already in

existence?

MR. ROBERTS: I think the quick answer to that is

that it appears the delivery of social services in this country, each one is

unique in each province. When I came with the department in 1988, I was amazed

at the ways different provinces delivered the systems. In our Province, we have

perhaps the cleanest delivery system of any in the sense that these social

services are delivered through the Provincial Government, one department, and

through fifty-odd offices that are entities of the department. In many provinces

the delivery is fragmented. Various services are delivered through the

provincial office, provincial government, county governments, municipal

governments, child welfare agencies, a host of delivery areas.

I think the point of your question is: Could we not

have gone to another province and, instead of custom designing our own IDS

system, picked up one there? I think the answer is no. Because in every province

there is pretty well a different system. We believe, actually, the way we

deliver social services here in terms of the delivery system has a lot of

benefits. The department at the time did not feel it would make sense to, at the

time, delegate a lot of these services out. This is 1988 and times have changed,

and maybe that is being reviewed now, but at the time it was felt that our

delivery system was appropriate for the day and that we should develop a

computerized system that would facilitate the delivery of the system we have.

MS THISTLE: You brought in this system in stages.

Was there any time that you said: Well, this is stage one, we are comfortable

with it and we will use this until we move on to the next one or, was it a

continuous new system being introduced all the time? Was there ever a time when

you said: Our whole department is comfortable with this stage one, we will move

on to stage two?

MR. ROBERTS: Well, the evolution of the design of

it is certainly - over the period we were designing it, we expanded the scope of

what was originally envisaged, although not by a lot. Because, as the deputy

said earlier, this report here - the initial one outlined I think, a six-core

system in twenty subsystems. it was somewhat comprehensive then, but we never

did see IDS as a system; it never did get to the point where it was operational

and so, you know, we did get spin-off benefits like the microcomputers, and so

on, but in terms of saying: Okay, we have enough now, if I read your question

correctly, none of it was ever implemented at all.

MS THISTLE: Yes. As you went along there was

always something new to add to it I expect, was there not?

MR. ROBERTS: Well, the core systems, we tried to

concentrate on them and actually, one of the few things that we did to expand

the scope was to include a budget management system, which was not in the

original plan. So, as much as the cost did escalate, it was not a case of

expanding the scope dramatically beyond what was originally envisaged, it was a

case of trying to concentrate, really, on a couple of areas which was client

registration, to which we referred before, and which really comes down to

registering our clients throughout the Province and being able to

cross-reference them, and if I walk in to one of our offices in St. John's

today, and go into Grand Falls tomorrow and try to get social assistance, say,

in both offices, a good client registration system will help to prevent that.

MS THISTLE: Continuing now with the line of Mr.

Lush's questioning, there was a period from 1992 to 1995 where there was no

review as such of the plan, and annually you are submitting your department's

budget saying what it was going to cost for the next year's work to proceed with

the implementation and so on. Do you feel now that those three years you had

accurate accounting figures and should have, moreso, a review being done during

that period?

MR. ROBERTS: No. Personally, I feel that there was

accurate accounting. In terms of month-to-month budgeting, I mean, we kept a

very close eye, we had monthly statements, we reviewed on a regular basis the

costs, and so on. As we said a few minutes ago, the project release submission

we sent to Treasury Board in December, 1992, which was a considerable thing - we

got a decision in February of 1993 which approved proceeding forward with the

IDS system and a lot of related things. So, we had a document on file that was

very current, very comprehensive, that Treasury Board approved for us to proceed

with. So, then, we went into a real design phase of the system that really

continued, I guess, until the Summer of 1994. But, in terms of documentation on

the system, we had monthly monitoring of costs, and so on. I mean, the

department felt - and I believe it is fair to say that Treasury Board agreed

there was sufficient control over it. Treasury Board, as we said before, was a

member of the steering committee all along the way. We would have regular

meetings with them, we would submit our annual budget and they were as much

involved in it as we were, I suppose, certainly from a financial point of view.

So, there was, to our mind, regular monitoring, control, documentation.

MS THISTLE: Yes. If you were to look at it again

now, you would say: Okay, consultants, I have $10 million - design me a program

for $10 million and that is where we are going to stop. How would you approach

it now, looking back over the past number of years, if you were to do this

again?

MR. ROBERTS: Well, as we said earlier, I think if

the department can be faulted at all, it might have been a case where there was

so much work to do. The consultants, Woods Gordon, in 1988 clearly outlined

where the department was with IT. We were far behind, I think, there is no

doubt, and we had a lot of work to do. I suppose, if we could be faulted

anywhere, it is that we tried to do too much too fast. The executive and senior

management of that department at the time were really anxious to get on with

this and get moving.

Quite apart from what the deputy is saying about

involvement in health in the future, and all that, if we were given the

situation today, I think we would do what we suggested last year, and that is,

develop one system to replace FACTS right away. FACTS, as I said, is our system

since 1975 that pumps out the client payment cheques twice a month. It is our

so-called bread and butter system. It is twenty years old and it has to be

replaced. In terms of what is the top priority in IT in our department today, I

would have to say it would be to replace the FACTS system as soon as possible.

MS THISTLE: That is the system that creates the

most work and the most paper, I would imagine. So, you are saying that would be

the top priority within your department. With regard to clients, that would be

the top priority, too, that affects clients the most?

MR. ROBERTS: Absolutely.

MS THISTLE: So, in order to get this system on the

go and working now, what would be the dollar figure to do that?

MR. ROBERTS: To replace FACTS?

MS THISTLE: Yes.

MR. ROBERTS: As the Auditor General outlined in

her report, a lot of the weaknesses are still there. When IDS was cancelled we

set about and sent another proposal to Treasury Board in the Summer of 1995

which essentially asked to have FACTS replaced. We called it Client Registration

and Financial Transaction System. We received approval in principle for that

last Fall and we were working on the cost, to get to your question. I do not

know that we had established what the cost would be to purely replace FACTS but

I would think if we were given $10 million, we could certainly replace it. It is

our bread and butter system, the system that gives all our clients their cheques

twice a month and if our department thinks we have problems now, if those

cheques do not get out -

MS THISTLE: Thank you very much for your answers.

CHAIR: Since we do not have any other questions at

this time, we have decided not to meet tomorrow but we are going to reserve the

right to call you back probably sometime after Christmas. Because I personally

feel that we need to get some of the consultants who were involved in this

project in the seats you are sitting in right now. We may decide not to ask you

to come back but I just want to let you know up-front that we want to reserve

the right to do that at some point. It would be after Christmas, but if you have

any concluding remarks, I ask you to make them now.

MS. DAWE: Mr. Chairman, thank you for the

opportunity to be able to come to present what has been a very complex system

that has evolved over the last number of years. I hope we have been able to

honestly identify for you some of the problems the department encountered in

that regard. I think it is very important, though, as Mr. Lush had identified,

to make sure that when we talk about $3.5 million, $32 million, or $47 million

that we try to identify what is contained in these figures, and that we are not

comparing like things along the way and the $2.5 or $3 million was intended to

be more a conceptional framework. The $32 million is more the accurate figure

when the details were developed in terms of what the requirements were.

All that being said, I think again I would stress

that, yes, a number of benefits have been derived through the process. We have

not completed the task. We are still without the systems ultimately that were

intended to be developed. So we look forward to the next short time across

government departments through our initiatives to put the proper systems in

place.

With respect to your final comment, we would be

available if you need us to come back again after Christmas. Thank you again.

CHAIR: Okay. I do not know if the Auditor General

has any concluding remarks for the time being?

MS MARSHALL: Just to clarify that I still disagree

with the department with regard to adequate planning for a couple of reasons:

Firstly, the time frame that we looked at was seven years. There were three

estimates provided during that seven-year period and I felt that it should have

been done more frequently. Also, the level of detail provided was not

sufficient. So it is very difficult, if not impossible, to go back and compare

the $3.7 million to the $32.7 million to $47.9 million.

CHAIR: Okay, thank you. That is all I have and

thank you very much. I would like to ask Committee members to stay for a few

minutes.

On motion, the Committee at its rising adjourned.