Year ended March 31, 1999 Shared services for
community based programs
Recommendation No. 31
It is recommended that the Department of Human Resources and Employment prepare a plan and agreement for the delivery of shared services for
community boards and children’s authorities which will support the management of their operations.
Support service areas were established to provide financial and administrative support
The Department of Family and Social Services’ structure changed with the establishment of the Persons with Developmental Disabilities (PDD) Boards and the Calgary Rocky View Child and Family Services Authority. Regional and Head Office support service areas were established that were to provide administrative systems for these new organizations and existing Departmental programs. This arrangement continued throughout the 1998-99 fiscal year.
In order for shared services to be delivered successfully, the following matters should have been identified and dealt with in a plan and agreement:
• The financial and administrative requirements of the new entities needed to be identified and met.
• Existing systems needed to be adequate or modified to support the new entities.
• A mechanism for establishing priorities and resolving performance problems needed to be established.
• The approach proposed for the delivery of support services needed to be evaluated and tested.
• Existing legislation needed to be considered to ensure it was complied with.
• Staff needed the appropriate skills to deliver the services.
• Training needs had to be met and any expert services made available on a timely basis.
• Reporting structures and performance management for staff had to be clear and understood.
• Details of costs associated with providing the support required had to be available and a mechanism had to be in place for passing those costs on to the area being provided with the service.
The consequence of not having proper systems in place was that significant risks were not identified and managed
The Department did not have adequate systems in place to identify and address all the above matters related to the reorganization of PDD boards and the children’s authority.
As a result, the operations of the PDD boards and Calgary Rocky View Child and Family Services Authority were subject to significant risks relating to finance and
administration, allocation of costs, and compliance with authorities.
While a statement of services to be provided was issued by the Department in March 1999, it does not represent an agreement that meets key accountability requirements. Since parties to shared services are dependent on each other, a mutually agreed service agreement would help ensure that appropriate systems are in place to meet their expectations.
In our view, the absence of an appropriate agreement likely contributed to the following problems.
Accurate and complete accounting information was not available for most of the year
Certain systems required to allocate expenses to the
appropriate PDD boards and Calgary Rocky View were not functional at April 1, 1998. As a result, a large number of transactions had to be re-coded. Although the problem was identified early in 1998, the majority of coding corrections were not started until December 1998 and not completed until April 1999. This resulted in boards and Calgary Rocky View not being able to manage and control their operations effectively. For example, the comparison of actual and budgeted expenditures for most boards could not be relied upon.
The Client Service System was not available at April 1, 1998. Even when available the CSS did not provide information that was required by PDD board management
When delivery of services by the PDD boards commenced on April 1, 1998, the Client Service System (CSS) was not operational. CSS was intended to both assist the PDD boards manage the delivery of services to their clients and to provide support for the financial statements of the PDD
boards. System changes, unsuccessful training efforts and failure of users to understand the capabilities of the CSS, resulted in inaccurate and incomplete information. As a result, some PDD boards chose to develop alternative methods of obtaining information.
Accounts payable errors amounted to $1.5 million
As a result of PDD boards being unable to utilize the
CSS system properly, errors were made in year-end accounts payable balances. One of the features of CSS is that it creates budgeted monthly expenditures for each client in accordance with authorized agreements. Details from client invoices are entered into CSS. A calculation of accounts payable is available by subtracting year to date invoices paid from total budgeted expenditures on a client by client basis. These amounts then need to be reviewed by the related case worker and adjusted to reflect current circumstances. Audit
procedures identified $1.5 million in overstatements of accounts payable.
In addition to the above observations there is also a need to measure the success of the plans and determine the cost of providing services to PDD boards and CFSAs.
Measuring the costs of services provided
It is recommended that the Department of Human Resources and Employment measure the costs of
providing financial and administrative support services and allocate them to each supported entity.
As there were no formal agreements for the shared services, there was no measurement and assessment of costs and results. Further, there was no allocation by the Department of these costs to PDD boards or to Calgary Rocky View.
The current statement of service does not prescribe for measuring the cost of providing services
The success of shared services can be measured by customer satisfaction and the successful and timely meeting of
objectives for an appropriate cost. The current statement of services provides service descriptions and indicators of performance, however it does not require that costs of providing services be measured and allocated. It is
important to measure the cost of delivering the services so that it can be compared with budget estimates and the cost of alternative service delivery models.
Costs of providing services should be charged to the entity receiving the service
Once the Department has determined the cost of the shared service, the cost of providing that service should be charged to the appropriate board or authority to provide the
appropriate accountability for services provided.
Services to children provided by Persons with
Developmental Disabilities boards
Recommendation No. 32
It is recommended that the Department of Health and Wellness ensure that services to children with
developmental disabilities continue to be provided in accordance with existing legislative authority and that such services should not be provided under the Persons With Developmental Disabilities Community Governance Act unless and until the Act is amended to extend its provisions to children.
The PDD boards provided services that they had no authority in their legislation to provide
During the year ended March 31, 1999, the PDD boards provided services to children with a total cost of
approximately $6.4 million. The Department has provided services to children with disabilities for many years. Certain children were using the same agencies as the adults with disabilities, and some children were also using facilities that became the responsibility of the PDD boards. The
Department found it administratively convenient to continue providing these services through the PDD boards. However, with the introduction of the Persons with Developmental Disabilities Community Governance Act, the PDD boards are restricted, under section 11, to providing services to adults.
Responsibility for children who have disabilities was that of the Department of Family and Social Services or Calgary Rocky View Child and Family Services Authority during the
year ended March 31, 1999. In future years, the
responsibility for children with disabilities will be with the 18 CFSAs.
The provision of services to children by PDD boards occurred without the proper legislative authority. It is understood that agreements are currently being negotiated relating to the transfer of responsibility and related funding of these services to CFSAs.
The needs of the children are recognized as being most important and to best protect their interests it may be necessary to have the legislation amended.