Ontario's Liberal government knew there were problems with a new system for disability and welfare payments, but decided to launch it anyway, the province's auditor general said Wednesday.
The minister responsible for the file, however, says, "Nobody told me."
Defects with the Social Assistance Management System became public when the system erroneously queued up $20 million in overpayments last December. The Ministry of Community and Social Services said Wednesday that $382,000 of that was actually paid out.
Auditor General Bonnie Lysyk said in her annual report Wednesday that the ministry knew there were problems with SAMS before its launch but rolled it out anyway before it could be properly tested. Minister Helena Jaczek said she only became aware of the issues last December, like the public did.
"Apparently the executive committee assumed the risk was worthwhile and they decided to launch," she said.
The executive committee included the deputy minister and three assistant deputy ministers.
The government is spending an extra $52 million on fixes — bringing the total cost close to $300 million — but the auditor general reports that the problems were, and continue to be, much more widespread.
As of October, SAMS had erroneously calculated $89 million in potential overpayments and $51 million in potential underpayments, Lysyk found.
SAMS automatically corrected some of those errors while others were caused by the old system, leaving $35 million, which the government is looking into, Jaczek said.
"We have not established that any payments, either overpayments or underpayments, in that group have actually been made," the minister said.
The auditor listed several examples of erroneous payments.
The system overpaid benefits to a mentally disabled client who did not realize the error, spent the money and didn't have the means to repay it, Lysyk said. Because of the Ministry of Community and Social Services' collection efforts, the bank froze the client's account and a caseworker had to issue cheques by hand.
SAMS created a $2,900 overpayment on another client's file that was never actually paid out, but the system recovered it anyway by deducting $32 each month from the client's benefits, the auditor reported.
The government's own audit division suggested it look at SAMS' readiness four months before the launch, but because they could not agree with the SAMS' project teams on the scope, no audit was ever done, Lysyk said.
The government is implementing recommendations from a $200,000 audit by PricewaterhouseCoopers this spring, but Lysyk found that problems are continuing to pile up.
As of July, there were 771 serious defects outstanding and not all have been identified, she found. There was a backlog of about 11,500 calls from the help desk and it was taking the ministry an average of 40 days to fix a serious defect, the report said.
The ministry told auditor staff in August it had fixed a defect that made the system vulnerable to fraud, but that was not true, Lysyk said.
Software upgrades were installed to fix defects, but the upgrades couldn't be tested because the ministry didn't renew contracts with consultants who knew how to do that, the auditor found. So the ministry hired eight new consultants to work on the fixes, but it will take them six months to get up to speed, the report said.
Neither did the ministry properly oversee consultants on the project, Lysyk said. Instead, consultants — who billed an average of $190 an hour — oversaw other consultants, who were paid as much as $2,000 a day, the report said.
The government estimates SAMS won't become fully stable until the spring of 2016, so the full cost won't be known until then.
"The ministry launched SAMS in a way that makes it impossible to return to the previous system," Lysyk said. "Since the ministry must salvage SAMS, it is crucial that it prioritize the allocation of resources to fixing it."
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