ministries, high-volume routineministries, transactions, andlandregistration services. and services; registration security property registrations; personal includingcompany businessservices, certificates; anddeath marriage events, asbirth, ing vital such involvand businessesfor anumberofprograms to individuals delivery provide service centralized hasamandate to ofGovernment Services), Ministry (formerly the Government andConsumerServices of Ministry ofthe aseparate part ServiceOntario, % Total Recommendation 6 Recommendation 5 Recommendation 4 Recommendation 3 Recommendation 2 Recommendation 1 Background Chapter 4 Chapter ServiceOntario alsoprocesses, for 14ServiceOntario other 4.09 Section Follow-up to VFMSection3.09, to Follow-up ServiceOntario Recommended Ministry ofGovernment andConsumerServices Ministry Actions RECOMMENDATION STATUS OVERVIEW 100 # of 21 2 4 7 1 4 3 Implemented - Fully 43 9 1 1 2 3 2 tres and 7% in-person in2012/13).tres and7%in-person telephone cen contact (55% online,38%through centres service centres and9%atin-person contact were itstelephone these madeonline,34% through in 2012/13) andreferrals—57% for information of also handledabout11.4 million requests (12 million son and30%Internet in2012/13). ServiceOntario Internet foring for 30%(70%in-per 70%andthe in 2012/13), centres account service in-person with 37.5dled more than (35 million million transactions registrations. vehicle renewals registrations, andhealth-card and licence renewalsmost and significantly driver’s Being Implemented In the 2014/15In the fiscal han year, ServiceOntario Status ofActionsRecommendedStatus In Process of In Process 29 2013 Annual Report Annual 2013 6 2 4 Little orNo Progress 14 3 1 1 1 Implemented Will Not Be Will Not - 14 - - 3 1 1 1 - 671

Chapter 4 • Follow-up Section 4.09 672 2015 Annual Report of the Office of the Auditor General of Ontario

In our 2013 audit, we found that ServiceOntario • Significant fraud risk still exists 18 years after had made substantial accomplishments in central- the government announced its plan to reduce izing service and was generally meeting its service costs and risks by replacing the red-and-white level targets, but it needed to improve in several health card, which has no expiry date, with the key areas. It needed to continue to strengthen its more secure photo health card. As of August 1, systems and procedures to reduce service delivery 2013, 3.1 million red-and-white cards costs, effectively monitor service levels and cus- remained in circulation, or 23% of the total of tomer satisfaction, and reduce its risks in issuing 13.4 million health cards issued in Ontario. and managing licences, certifications, registrations • We estimated that as of March 31, 2013, and permits. approximately 1,500 people in Ontario In our 2013 Annual Report, we reported the fol- had been issued duplicate health cards, lowing findings: increasing the risk of misuse. As well, • In 2012/13, only 30% of ServiceOntario more than 15,000 active health cards and transactions were done online, well short of 1,400 driver’s licences were circulating in the its 2008 forecast that 55% to 60% of trans- names of people who had been reported to actions would be online by 2012. Further ServiceOntario as deceased. savings could be achieved if ServiceOntario • ServiceOntario had weak processes for issuing could encourage people to switch to doing and controlling accessible parking permits to business online instead of in person. For ensure they were not being misused by people instance, we estimated that operating costs who did not require them. would decrease by approximately $2.9 mil- • ServiceOntario did not verify that people lion annually if 50% more licence plate registering large commercial agricultural sticker renewals were done online. vehicles—which are registered at a reduced • ServiceOntario improved its website services, rate compared to other commercial vehi- but its online customer satisfaction rating cles—were indeed farmers. We estimated remained from 71% to 75% since 2009/10. that this could be costing the province about • ServiceOntario rated 43% of its 289 in-person $5 million annually. service centres as high-risk locations because • ServiceOntario had no plans in place to stop of the number of processing errors uncovered printing birth certificates on paper and switch by its audits. For example, errors included to higher security polymer (plastic) docu- incorrect financial charges, missing signa- ments and a new design to minimize identity tures on health-card applications, renewing theft, forgery and loss as recommended by the wrong licence plate number, and transfer- the Vital Statistics Council for Canada. Eight ring a vehicle to a name other than the one on other provinces have already switched to the application. polymer documents. • ServiceOntario did not measure or report on We made a number of recommendations for

Chapter 4 • Follow-up Section 4.09 the customer wait at peak times or at specific improvement and received commitments from the service centres, which often far exceeded its Ministry that it would take action to address our target time of 15 minutes. concerns. • In 2012/13, none of ServiceOntario’s seven telephone contact centres met its service stan- dards for answering calls. The range of success in answering calls within targeted times was 51% to 77%, compared to its goal of 80%. ServiceOntario 673

In accordance with one of our recommendations, Status of Actions Taken on ServiceOntario had analyzed barriers to customers Recommendations using online services and was continuing to make changes to its programs and client notifications to better promote its online services, which are less ServiceOntario has made progress on imple- costly to operate. On the other hand, ServiceOntario menting most of the recommendations we made did not implement a related recommendation in our 2013 Annual Report, which were aimed at to examine possible changes it could make to improving the delivery of cost-effective services to promote greater use of online transactions (includ- Ontarians. Nine out of our 21 recommendations ing changing its pricing strategy). As a result, no have been fully implemented. In particular, to lower significant progress had been made since our 2013 costs ServiceOntario has reduced its number of audit in increasing the proportion of ServiceOntario in-person service centres and implemented more customers who complete their transactions online efficient full-time/part-time staffing mixes at the instead of in person at a service centre. remaining publicly run in-person service centres. As As well, ServiceOntario has decided that it will well, it has expanded its privately run in-person ser- not implement another two of our recommenda- vice centres, which cost less to operate than its pub- tions. Instead of ensuring that it completes a licly run in-person service centres. ServiceOntario sufficient number of random audits of guarantors implemented measures to better monitor customer on birth certificate applications, ServiceOntario wait times during peak hours at both publicly run discontinued these audits entirely in August 2014, and privately run in-person service centres, and to with no alternative verification procedure to monitor and reduce transaction processing errors. replace them. It was also not planning to periodic- Progress has been made on another six recom- ally test its software copy of the land registration mendations that will take more time to implement. system to ensure it can be used if Teranet, its sole At the time of our follow-up, ServiceOntario was service provider, ceases to operate. ServiceOntario assessing the viability of a government-wide determined that doing this would be too expensive, identity approach and digital government strategy, so it still did not know if its copy of the software and reviewing potential smart card models for was reliable when we completed our follow-up. Ontario. It expected to complete the business case We continue to believe that our recommenda- by fall 2015; however, no date had been established tions are of value and that it would be prudent for for presenting the proposal to Cabinet for its con- ServiceOntario to implement them. sideration and approval. The status of each of our recommendations is as We noted that ServiceOntario had made little follows. or no progress on three of our recommendations, including making a case to government for the need to lower fees so that they reflect the actual costs Service Delivery Costs of transactions, particularly for less costly on-line

Recommendation 1 Chapter 4 • Follow-up Section 4.09 services; conducting client satisfaction surveys at To help further reduce service delivery costs, its in-person service centres without full knowledge ServiceOntario should: of counter staff(who may be motivated to provide better identify the reasons people opt for in- their best service only on the survey day); and shar- • person service rather than use the Internet, ing address-change information between ministries’ Status: Fully implemented. databases (the Ministry decided it would pursue this only as part of the development of the business case for smart cards). 674 2015 Annual Report of the Office of the Auditor General of Ontario

Details (this is one of the most frequently used services, Since our 2013 audit, ServiceOntario has expanded but only 50%–55% of users surveyed were aware its online services. ServiceOntario reported that in that it can be done online). The second phase of the September 2013 Ontario became the first province research focused on consumers who did not know in Canada to provide drivers with an online driver’s that they could renew their licence-plate sticker licence renewal service. From September 2013 online. The market researcher tested the effective- until May 2015, 366,219 online driver’s licence ness of a series of messages about online renewal renewals were completed, representing 12.2% of to identify which ones were most persuasive. Based all driver’s licence renewal transactions in Ontario. on the survey results, the market researcher made ServiceOntario also launched in September 2014 recommendations on how to develop messaging the Ministry of the Attorney General’s small claims that encourages people to access services online, e-filing pilot project to allow on-line accepting and established five early-stage communication of fee payments, and in March 2015, the pro- ideas for online licence plate sticker renewal. ject was rolled out province-wide at all courts. Based on the market research study’s findings, ServiceOntario launched an online service for ServiceOntario is working on updating its action processing security guard licences for the Ministry plan to encourage higher usage of its online ser- of Community Safety and Correctional Services in vice delivery channel. For example, it updated its October 2014. Before then, licensing services were vehicle licence-renewal notice, changing the word- only available at one in-person retail office or by ing and redesigning the format of the application mail. ServiceOntario informed us that the change form, to encourage eligible customers to shift to the has resulted in a 13% reduction in returned applica- online channel to complete their transactions. tions between April 2014 and February 2015, and In October 2014, ServiceOntario started a new that over 80% of applicants now apply for security behavioural insights project. It found that the five guard licences online. most likely barriers to customers’ use of online From June to August 2013, ServiceOntario government services to complete a vehicle licence- contracted an external market researcher to plate sticker renewal included: customers’ mistaken conduct a two-phase study to help it better under- belief that if they received a form in the mail, they stand customer behaviour with respect to the use were obligated to return it that way; lack of aware- of ServiceOntario’s service delivery channels. ness of online services; privacy concerns; risk of The first phase was an online survey designed to delay in receiving a renewal sticker when using explore the barriers to online usage (where lack of online services; and force of habit in going to an Internet access is not a barrier), the demographic in-person service centre to obtain a renewal sticker and attitudinal differences between online users immediately. It also conducted an internal feas- and non-online users, and the likelihood of drivers ibility study in November 2014 to investigate the using its online service delivery channel. A total redesign of its renewal notices. After mailing out of 601 consumers who had used ServiceOntario renewal notices with updated messaging encour-

Chapter 4 • Follow-up Section 4.09 services in the previous six months were surveyed. aging customers to renew their vehicle licence The key takeaway from the online survey was that online in February 2015, ServiceOntario reported greater awareness of the services that are available online renewal had increased by 4.3%. At the time online was needed. A workshop discussion about of our follow-up, ServiceOntario was collaborating the survey results held with representatives from with the Ministry of Transportation to replace the ServiceOntario, the market researcher and an current vehicle licence renewal notice with a letter external advertising agency determined that mes- or postcard format. saging should focus on licence-plate sticker renewal ServiceOntario 675

Also, as of July 2014, customers can use their However, the percentage of total transactions mobile devices to renew driver’s licences and licence completed online remained at 30% in the same time plate stickers, and to order personalized licence period despite the initiatives described above and plates, used vehicle information packages, and ServiceOntario’s efforts described earlier to better driver or vehicle records. Before this time, the Servi- identify the reasons people opt for in-person service. ceOntario website was not mobile-device friendly. This indicates that ServiceOntario’s efforts have not In December 2014, ServiceOntario established been successful so far, and we continue to believe its new eight-year strategic plan. One of the plan’s that further changes are needed to promote an five goals is to create a customer-centric service increase in the use of online transactions. design framework to engage with customers and to better understand what motivates them to examine ways to expedite reducing operating choose a particular service channel. ServiceOntario • costs at its publicly run in-person service centres informed us that a significant activity under this to bring them closer to the already-lower cost of goal in 2015 was retaining an external vendor to commissions paid at the privately run in-person conduct usability testing to improve the design of service centres. online business services. Status: Fully implemented.

and examine possible changes it could make, Details including to its pricing strategy, to promote greater ServiceOntario reported that, from 2011/12 to use of online transactions; and 2013/14, customer interactions at its publicly run Status: Will not be implemented. We believe this recom- in-person service centres increased by 1.17 million mendation should still be implemented. (4.2%), operating expenses decreased by $5.04 mil- lion (3.6%), and the cost per customer interaction Details decreased by $0.38 (7.4%). ServiceOntario credited At the time of our 2013 audit, only ServiceOntario’s the improvements and $11 million in cost savings to business registration fees were higher for in-person numerous business improvement and transforma- services than online. Our office recommended that tional initiatives. this type of fee structure should be explored for During the 2013 audit, ServiceOntario calcu- other services as well. ServiceOntario said it would lated that it could most efficiently meet its service- explore different approaches to accelerate the shift level standards by employing a mix of 70% full-time to online services, potentially including a differen- staff and 30% part-time staff at each in-person tial fee structure or mandatory use of electronic ser- service centre. As of July 31, 2015, ServiceOntario vices. At the time of our follow-up, ServiceOntario has moved from having virtually all staff working informed us that a differential fee structure will not full-time to a more cost-effective ratio of 55% full- be explored because changes to prices for services time and 45% part-time. require a Minister’s order and Treasury Board ServiceOntario also informed us that it has approval. ServiceOntario also indicated that it has adjusted operating hours at its retail offices, closed Chapter 4 • Follow-up Section 4.09 made such requests in the past, though not recently, some publicly run in-person service centres (which and they were not approved. are more costly to operate) and opened new pri- ServiceOntario’s total transactions had increased vately run in-person service centres (which are less by approximately 7% from the time of our audit costly to operate). Extended operating hours at in 2012/13 to 2014/15. This included an increase 40 publicly run in-person service centres have been in the number of online service transactions. reduced, or removed altogether. ServiceOntario has 676 2015 Annual Report of the Office of the Auditor General of Ontario

also reduced core operating hours in smaller com- were attended to in less than 20 minutes; 23 offices munities. And it closed six publicly run in-person (4 public, 19 private) were identified as having service centres after conducting business analyses wait-time challenges (defined as over 20% of cus- of volume, lease terms and opportunities to con- tomers waiting for more than 20 minutes). solidate. Since our 2013 audit, ServiceOntario has To further improve monitoring of customer expanded the capacity of its more cost-effective pri- wait times at its largest publicly run in-person vately run in-person service centres. It has opened service centres, ServiceOntario plans to modernize five new privately run centres, added temporary its customer queuing system by implementing a wickets in six centres, and added permanent wick- modern, scalable and portable system in many of ets in 25 centres. its large publicly run in-person service centres to manage the flow of customer traffic. In March 2015, ServiceOntario requested internal approval for the Service Levels new queuing system, which was expected to cost Recommendation 2 $3.75 million over five years (20 existing sites shift To ensure that ServiceOntario has appropriate man- to the new system immediately for $2.54 million agement information that would allow it to further and 16 new sites to be added for $1.21 million). improve its service and increase client satisfaction, it It received approval to proceed in August 2015, should: and plans to implement the new system at the first • collect data and report on peak-hour wait times 20 offices by May 2016. The next phase of imple- at both the in-person service centres it runs itself mentation at 16 sites will include further enhance- and those run by private operators, as well as ments, such as robust reporting, data collection, examine and address the reasons for long wait appointment booking and mobile/SMS capabilities. times at many of the large, urban in-person ServiceOntario informed us that in 2014/15 it service centres; has increased capacity at its large, urban privately Status: Fully Implemented. run in-person service centres to address growing customer volumes. Five centres were established in Details busy communities, including Toronto, Hamilton, At the time of our 2013 audit, ServiceOntario Brampton, Mississauga and Whitby. ServiceOntario measured wait time performance using the also reviewed the need for wickets at privately monthly average of samples for publicly run in- run in-person centres across the province, which person service centres only. As of September 2014, resulted in re-allocations and new wicket additions ServiceOntario had implemented a new methodol- to high-volume centres. ogy at both publicly and privately run in-person service centres to determine the relationship examine why none of the seven telephone con- between customers and transaction volumes, which • tact centres met the service levels established for allows it to estimate the number of customers answering calls from the public, and take steps

Chapter 4 • Follow-up Section 4.09 waiting more than 20 minutes. ServiceOntario to improve client satisfaction ratings for these reported the new methodology has helped it to services as well as for online transactions; identify five additional sites with long wait times. Status: Fully implemented. ServiceOntario’s September 2014 Wait Time Report (monthly) analysis detailed publicly and privately Details run in-person service centres using the manual In response to this recommendation, wait-time sampling system (222 of 290 offices). ServiceOntario mentioned that its contact centres In these offices, an estimated 92% of customers ServiceOntario 677 experienced a decrease in performance levels instead of providing advance notice of the survey- in 2013 as it transitioned to a new call centre ing days. ServiceOntario also informed us that the technology platform. At the time of our follow-up, new process to hire surveyors screened out friends ServiceOntario reported that it had optimized a and/or relatives of ServiceOntario employees, new technology called “Enterprise Contact Centre and that interviews were conducted outside the Solutions” and subsequently increased service level centre when possible. However, we noted that performance in 2014. From September 2014 to ServiceOntario has done little to satisfy our recom- February 2015, the success rate for answering calls mendation since it continues to survey customers within the targeted time was in the 75-85% range, just outside the premises, which is still within sight and the average queue time at its ServiceOntario of counter staff. Therefore, it was not unexpected contact centres was 32 seconds (exceeding the that ServiceOntario reported that customer satis- Ontario Public Service standard of 120 seconds). faction scores did not change after modifications With regard to contact centre customer satisfaction, to its survey process. At the time of our follow-up, ServiceOntario reported that its rating in the fourth ServiceOntario indicated that it had no further quarter of 2014/15 was 91% (compared to 64% in plans to change its surveying methods. the fourth quarter of 2012/13). In addition, as a part of ServiceOntario’s new devise a method for counter staff to report on eight-year strategic plan, ServiceOntario hired • why customers are turned away for such servi- an external marketing agency in 2015 to develop ces as health-card and driver and vehicle trans- customer behavioural user personas, which actions, and use this data to improve customer provided information on customers’ needs and service where required. behavior patterns, based on surveys and interviews. Status: Fully implemented. ServiceOntario plans to use these personas for its continuous improvement program for online Details services. Based on discussions with its staff, ServiceOntario has determined that the primary reason customers • consider a method of surveying clients that is are turned away is they do not bring all required not done with full knowledge of counter staff documentation during in-person visits. This is due at in-person service centres, who may then be to inconsistent requirements for driver’s licence highly motivated to provide their best service and health card renewals. ServiceOntario indicated only on survey day; and at the time of our follow-up that it had begun to Status: Little or no progress. address the issue of consistent documentation, and so it will not be necessary any longer to devise and Details implement an ongoing method to report on why Our 2013 audit found that site managers were noti- customers are turned away. fied in advance of customer satisfaction surveys, ServiceOntario has engaged the Ministry of and counter staff were fully aware that customers Transportation and the Ministry of Health and Chapter 4 • Follow-up Section 4.09 would be questioned since it was done within Long-Term Care to discuss modernizing and their sight. Based on consultation with an external aligning policies and program requirements market researcher, ServiceOntario modified its (as these policies are owned by each ministry). In-Person Channel Customer Satisfaction Survey ServiceOntario has also undertaken steps to by notifying directors and/or managers of the address health card turn-aways. In partnership with survey process at the beginning of the fiscal year, the Ministry of Health, ServiceOntario has created 678 2015 Annual Report of the Office of the Auditor General of Ontario

a more user-friendly Ontario Health Insurance events, business registrations, personal property Coverage Official Documents List. It has updated and real property. This was the first time that its website to ensure all health card information is ServiceOntario conducted such an analysis. It current and easy to find, and has used advertising involved calculating the cost per transaction for to remind customers of what to bring with them. each line of business. The analysis showed that, From April to September 2013, ServiceOntario just as we noted in our 2013 audit, ServiceOntario established front-line staff focus groups to identify continued to charge fees for certain lines of busi- the reasons customers were being turned away. nesses that are significantly greater than the costs The groups focused on ServiceOntario’s publicly it incurred. Nevertheless, ServiceOntario has not run in-person service centre in Brampton, and used this information to recommend any changes found that 80% of turn-aways resulted from to its fees to the Minister of Government and customers visiting with incomplete documenta- Consumer Services. tion. ServiceOntario noted that the groups most ServiceOntario also had not developed a strategy affected were youth, new immigrants and people with time frames for restructuring its fees. Instead, who speak English as a second language. In a all it committed to do in the future was to complete six-week marketing campaign held in Brampton only an updated revenue and fee analysis for each from October to November 2014, ServiceOntario line of business after it has completed several developed brochures and had them translated into improvement initiatives. For vital events, ServiceOn- six languages, as well as online banners and print tario has committed to conducting a detailed fee advertisements. However, ServiceOntario informed analysis in the last quarter of the 2015/16 fiscal year us that the on-site changes did not result in any sig- or the first quarter of 2016/17 (after the polymer nificant improvements in Brampton because visitors birth certificate, which launched in April 2015, is needed to know in advance which documents were fully implemented). It had yet to determine a time- required in order to qualify for a health card; as a line for analyzing its fees for business registrations, result, ServiceOntario decided not to implement but it expected to conduct the analysis before the the focus group marketing strategies in any other launch of the new Ontario Business Information in-person centre. System, which has been postponed as it requires legislation to enable its use of new electronic services. ServiceOntario also could not provide a User Fees timeline for analyzing personal property fees, stat- Recommendation 3 ing only that it will be completed after its Personal To ensure that registration-related fees are set at levels Property Registration system is refreshed, for which that would recover the costs of providing services there is no timetable established at this time. Finally, when it is reasonable and practical to do so and also the Ministry was not planning on conducting an to meet the legal requirement that fees not be set at updated fee analysis for real property transactions, excessive amounts, ServiceOntario should conduct a even though fees were scheduled to increase Nov-

Chapter 4 • Follow-up Section 4.09 full costing and revenue analysis, and develop a strat- ember 2, 2015, and each year thereafter by the infla- egy with time frames for restructuring its fees. tion adjustment formula set out in the Minister’s Status: Little or no progress. Order dated December 16, 2010.

Details In October 2014, ServiceOntario completed an expenditure analysis for each of the four lines of business that it manages end-to-end: vital ServiceOntario 679

Issuing and Managing Licences, accurate. With respect to verifying the eligibility of Certifications, Registrations and applicants, ServiceOntario will continue its existing Permits authentication process by comparing the informa- tion provided by the applicant with the birth regis- Recommendation 4 tration on record. To improve service and security surrounding the issu- ing and management of licences, certificates, registra- tions, and permits that it administers, ServiceOntario and consider updating its birth certificate identity should: document to the newer polymer composition and • ensure that it completes enough guarantor aud- design standard to minimize identity theft, forgery its for birth certificate applications, and loss; Status: Will not be implemented. We believe that it Status: Fully implemented. continues to be prudent for ServiceOntario to ran- domly verify guarantor information to help ensure Details that the information provided about the applicant ServiceOntario decided to go ahead with polymer is correct. birth certificates after conducting further analysis on their feasibility by assessing cost implications Details and looking at the experiences of other Canadian The Vital Statistics Act requires guarantors for appli- jurisdictions. In April 2015, ServiceOntario started cations for birth certificates for anyone over the issuing polymer birth certificates. age of nine. After this requirement was introduced in 2001, ServiceOntario staff regularly conducted reassess the processes in use and supervisory random audits of guarantors’ information to valid- • oversight over counter staff at in-person service ate their qualifications, including having Canadian centres to better ensure policies and procedures citizenship, having known the applicant for at least are followed for processing higher-risk trans- two years, and holding a public position or profes- actions and verifying that customers provide sional occupation that meets the requirements proper documents when registering for health stated in the Act. cards; In 2014, ServiceOntario completed an analysis Status: In the process of being implemented by on the effectiveness of guarantor audits for birth March 31, 2016. certificate applications and determined that the random audit of guarantors did not add value to Details the existing application screening process for veri- In our 2013 audit we found that ServiceOntario’s fying the eligibility of applicants. ServiceOntario quality assurance processes were uncovering a very indicated that the existing guarantor audit process high number of transaction errors even though is only used to verify the credentials of the guaran- staff received ongoing support with regard to con- tor, not to verify that the applicant is entitled to a

ducting higher-risk transactions and transactions Chapter 4 • Follow-up Section 4.09 birth certificate or that the information provided that require policy interpretation and adjudication. about the applicant is correct. The audit process In February 2015, ServiceOntario initiated the was therefore eliminated in August 2014. However, ServiceOntario Improvement Project to address ServiceOntario will retain the requirement to processing errors uncovered through their quality provide guarantor information because, if required, assurance audits, specifically in scenarios where this information can be used to verify whether or original documents cannot be authenticated elec- not statements that applicants have provided are tronically for assessments that occur during original 680 2015 Annual Report of the Office of the Auditor General of Ontario

registrations (for example, a guarantor form used 2015, approximately 200,000 conversions were in place of a residency document). completed from the beginning of the fiscal year The project engaged a task force of subject starting April 1, 2015. As of March 31, 2015, 2.5 mil- matter experts who analyzed potentially high-risk lion red-and-white health cards remain in circula- health card transactions and then made recom- tion compared to 3.18 million as of March 31, 2013. mendations on how to mitigate risk. The first phase of the project was completed in February 2015. The examine the benefits and cost savings from task force’s recommendations called for additional • creating a smart card that would combine more staff training, improved procedure guidelines for than one government ID card, and set timelines use by counter staff and requiring a manager to to achieve them; review documents before counter staff complete Status: In the process of being implemented. This a high-risk transaction. ServiceOntario started to is a long-term project which may extend to five develop and implement these recommendations years or more. during the project’s second phase, which began in April 2015 and is expected to be completed by Details March 31, 2016. In September 2014, ServiceOntario created a focus group that consulted with the Ministries • complete its long-delayed conversion from of Transportation, Health and Long-Term Care, the old red-and-white health cards so that all and Natural Resources and Forestry. The group Ontarians are carrying the more secure photo concluded that the business case for implementing health cards that reduce the risk of fraudulent a single card was not feasible based solely on the medical claims; savings represented by manufacturing only one Status: In the process of being implemented by type of card. The group determined that it would March 31, 2018. need to also quantify and include the benefits and savings that would incur to ministries’ programs by Details having more efficient operations from using a com- In February 2015, ServiceOntario received govern- mon smart card, such as reducing the need to input ment approval for its conversion strategy, with all information on clients by each program area and red-and-white health cards to be removed from sharing information between programs. According circulation by the end of 2018. It has set an internal, to ServiceOntario, without including program-area earlier target for completion by the end of 2017. operational efficiencies, factors contributing to the ServiceOntario reported that, from April 2013 to negative financial projections included the cost of March 31, 2015, the number of cardholders invited initial client registration, client data harmoniza- weekly to convert to a new photo health card tion processes and the compensation structure increased from 750 to 24,000. It also reported that of the current card manufacturing contract. 360,986 conversions were completed in 2014/15 (a ServiceOntario and the partner ministries projected Chapter 4 • Follow-up Section 4.09 79% increase compared to 2013/14). In total, more that, if program-area operational efficiencies than 436,000 red-and-white cards were removed are not included, a net savings of approximately from circulation in 2014/15 (a nearly 100% increase $500,000 would accrue (at the earliest, in year six compared to previous years). The reasons they of implementation), along with a payback period of were removed from circulation included cardholder 12 years and a ten-year net present value of nega- deaths and the Ministry of Health and Long-Term tive $7 million. Care cancelling inactive cards. As of the July 31, ServiceOntario 681

ServiceOntario also engaged an external firm • improve processes for issuing accessible parking in 2014 to complete a jurisdictional analysis and permits, and introduce changes that would develop the business case for conversion to smart make it easier to identify abusers. cards in Ontario. According to ServiceOntario, Status: In the process of being implemented by De- research on best practices that emerged from this cember 2015. work indicates that an integrated smart card is a key to transforming government services to a one- Details window approach, and to help reduce fraud. ServiceOntario consulted municipalities on track- At the time of our follow-up, ServiceOntario was ing the number of Accessible Parking Permits seized developing a broader detailed business case that by their law enforcement operations in late 2013, would take into account the operational efficiencies which resulted in ServiceOntario establishing an ministries would gain by having a government- updated process for municipalities to report and wide identity approach and digital government return seized permits. strategy, and a common smart card. ServiceOntario By December 31, 2015, ServiceOntario will informed us that the technical assessment, prelim- implement a new policy on Accessible Parking inary policy review and initial consultations would Permits that would require customers to show iden- be completed by the first quarter of 2016/17. tification (as well as proof of authorization if acting on someone’s behalf) in order to get a new permit or renew an existing permit. Beginning in late 2015, improve verification requirements for applica- • ServiceOntario also plans to cross-reference parking tions to make sure that vehicles registered as permits with death certificates issued by the Ontario farm vehicles, and thus subject to a much lower Office of the Registrar General to cancel parking annual registration fee than other commercial permits belonging to individuals who are deceased. vehicles, are indeed used for farm purposes; and At the time of our follow-up, ServiceOntario Status: Fully implemented. was also planning a procurement process that would enable vendors to submit proposals for Details the production of parking permits that will Effective January 1, 2015, the Ministry of meet ServiceOntario’s security, durability and Transportation implemented a new process that cost-effectiveness requirements. It is currently requires applicants for farm plate registration to putting together information on the specific secur- provide proof of a farming business. Acceptable ity features required to ensure copy resistance; proof includes an accredited farm organization tamper, erasure and modification resistance; and membership card, Gross Farm Income Exemption counterfeit resistance (for example, holograms and Certificate, a letter from the Ministry of Agriculture, embossing). ServiceOntario had not developed a Food and Rural Affairs’ Appeal Tribunal indicating timeline for completion of the procurement process religious exemption, or a letter from Agricorp indi- at the time of our follow-up. cating the individual’s Farm Business Registration

In our 2013 report, ServiceOntario indicated Chapter 4 • Follow-up Section 4.09 number. In order to make required proof of farming that it would explore opportunities for collaborat- business consistent across ministries, the Ministry ing with the Ministry of Transportation to incorpor- of Transportation aligned the definition of “farmer” ate the Accessible Parking Permits program into under the Highway Traffic Act with the definition the Medical Reporting Modernization Project, used by the Ministry of Agriculture, Food and Rural which would allow regulated health practitioners Affairs in the Farm Registration and Farm Organiza- to facilitate the direct submission of approved tion Funding Act. Accessible Parking Permit applications and the 682 2015 Annual Report of the Office of the Auditor General of Ontario

immediate production of temporary permits. errors are identified and reported, allowing Since then, ServiceOntario has engaged with it to focus only on these. In November 2013, the Ministry of Transportation on this multi-year ServiceOntario introduced the use of data ana- initiative, renamed “Electronic Submissions for lytics to monitor transactions in the Licensing and Medical Review,” which will meet the needs of the Control System. Some of the functionalities of Accessible Parking Permits program. At the time the auditing software include detecting and cor- of our follow-up, ServiceOntario and the Ministry recting processing errors and identifying instances of Transportation had concluded their initial feas- of multiple transactions when only one was ibility discussions, but no date had been established required. Along with executive reporting on data for completion. analytics, management at ServiceOntario is now able to obtain results by region, manager, office or operator, allowing it to continually improve its Quality Control Over Processing operations. ServiceOntario informed us that this Transactions data is not consolidated by region but that it was Recommendation 5 investigating options to make it easier for various To ensure that transactions are processed in accord- internal groups to access regional data. ance with legislation and established procedures, and At the time of our follow-up, ServiceOntario was reduce the risk of fraud and misuse of government- evaluating the possibility of expanding the use of issued identity documents, ServiceOntario should: data analytics to other business lines, such as ana- • regularly identify from its audit activities the lyzing health card transactions; however, no date types and frequency of errors found that can has been established for completing this analysis. In be used to target staff training and changes to addition to considering data analytic tools to detect its systems and procedures needed to reduce errors as discussed earlier, in February 2015 the the high transaction error rate at many of its ServiceOntario Improvement Project has developed service centres; recommendations for improving training, guide- Status: In the process of being implemented by lines and management oversight over high risk March 31, 2016. health-card transactions. Since April 2015 it was in the process of implementing the recommendations Details and expected to be completed by March 31, 2016. In early 2014, ServiceOntario established a task ServiceOntario is also improving its Quality force under its Service Quality Improvement Assurance Audit program, which provides perform- Project to improve driver and vehicle transactions. ance diagnostics by measuring program integrity, ServiceOntario informed us that the task force has customer experience, stock management and finan- addressed processing errors uncovered in their cial monitoring. The program was implemented in audits and that fiscal performance data reflected a 2006 to ensure that services were being delivered 99.95% accuracy rate (when considering only more consistently with program policy. Improvements to

Chapter 4 • Follow-up Section 4.09 significant errors) in the completion of transactions, the program are based on our 2013 audit, a 2014 which equates to roughly 500 more significant Internal Audit report, and best practices around defects per million transactions. ServiceOntario industry quality assurance and risk management. informed us that since our 2013 audit it has made The redesigned program was implemented in substantial changes to the Licensing and Control July 2015 at both publicly and privately run in- System, which is the Ministry of Transportation’s person service centres. system used to process and record driver and vehicle transactions. Now only more significant ServiceOntario 683

• recommend to its partner ministries the need for identify and deactivate 29,627 health cards that further automated and other processing controls were still in circulation although the cardholders had to improve the security and integrity of registra- been deceased. ServiceOntario expects to perform tion and licensing databases; further analysis on partial data matches to inform Date when ServiceOntario has committed to fully additional changes to death notification systems. implement recommended action: March 31, 2016.

co-ordinate with the Ministry of Health and Details • Long-term Care, the Ministry of Transportation Since our 2013 audit, ServiceOntario has worked and the Office of the Registrar General, as well with partner ministries, including the Ministry as the Office of the Privacy Commissioner, to of Health and Long-Term Care and the Ministry introduce measures such as limited sharing of of Transportation, to improve the security and current addresses among databases in order to integrity of registration and licensing databases mitigate the risks posed by erroneous and dupli- by sharing its information from the Vital Statistics cate ID documents. database. For instance, ServiceOntario has worked Status: Little or no progress. on further sharing of birth, change of name and death information with the Ministry of Health and Details Long-Term Care and with the Ministry of Transpor- ServiceOntario indicated that the sharing of tation, updating their health-card and driver and address-change information between ministries’ vehicle licencing databases, respectively. Revised databases, including this information for the data-sharing agreements were signed with both health card records of the Ministry of Health and ministries in 2013 and 2014 that allowed for shar- Long-Term Care and this information for the driver ing death-registration information. ServiceOntario and vehicle registration records of the Ministry of says it will begin assessing processes for sharing Transportation, will depend on a policy framework birth-data information from the vital statistics that supports further ministry integration (includ- database with the Ministry of Health and Long- ing the concept of the smart card, which was dis- Term Care in the fall of 2015 with a plan to finalize cussed in the details for Recommendation #4) and new processes by March 31, 2016. For example, that provides the required policy and/or legislative ServiceOntario was planning to amend a birth authority for data-sharing. This is because the shar- registration in the case of a name change and pro- ing of address-change information requires policy vide the information to the Ministry of Health and and legal consultation among multiple ministries Long-Term Care. and the Information and Privacy Commissioner, and amendments to existing agreements with part- • improve its systems for cancelling identity docu- ner-ministries. As a result, ServiceOntario decided ments for people who have died; and that any changes to allow for sharing of address- Status: Fully implemented. change information will be completed as part of the development of the business case for the smart Chapter 4 • Follow-up Section 4.09 Details card. No date has been established for completion. In addition to providing regular notification of Nevertheless, as noted previously, deaths to the ministries of Health and Long-Term ServiceOntario has made progress in other areas, Care and Transportation, ServiceOntario shared his- including sharing death data reports from its Vital torical death data reports with the Ministry of Health Statistics database with the Ministry of Health and and Long-Term Care that were matched against Long-Term Care and the Ministry of Transportation, the health-card database. This made it possible to 684 2015 Annual Report of the Office of the Auditor General of Ontario

and is also in discussions with the former to share land registry program software to ensure it can use the name-change information. program without further support and co-operation from Teranet. Teranet IT Performance Details Monitoring ServiceOntario has decided not to periodically Recommendation 6 independently test the source code because the cost To better ensure the ongoing reliability and availabil- is too high. Instead, it will rely on annual audits ity of Ontario’s Electronic Land Registration System, by an external auditor to continue to validate that ServiceOntario should obtain independent assurance Teranet’s operating controls over electronic land that Teranet’s performance reports, and its disaster registration services are effective. recovery plans and security measures, meet industry- ServiceOntario’s investigation into cost-effective accepted standards and are validated routinely. means to independently verify and test its copy Status: Fully implemented. of the land registry program software indicated that the process would require implementing and Details maintaining a mirrored IT system. ServiceOntario Following our recommendation, ServiceOntario informed us that it received an estimate from and Teranet agreed to have an external firm with Teranet for the cost of acquiring IT systems and management, auditing and IT expertise examine independently testing the source code, which was the design of controls related to the electronic approximately $3 million in the first year, and land registration services, including over disaster $320,000 annually thereafter. recovery, organization structure, user access to ServiceOntario consulted with external vendors data, and monthly reporting on performance. The on the scope of effort required to establish an firm issued a report concluding that in all material arrangement that would allow it to rely on the respects, Teranet was meeting the control object- copy of source code. Those consultations indicated ives that were required as part of its agreement that the costs and resources required would be with the Ministry of Government Services to ensure significant because of the learning curve that any the system operated reliably and as intended, as of developer outside Teranet would face in trying April 30, 2014. It was also ensuring that the con- to rebuild the system. ServiceOntario also exam- trols in place were suitably designed to provide rea- ined the estimate received from Teranet with the sonable assurance that systems operated effectively. Government Services Integration Cluster, which In May 2015, ServiceOntario received a detailed recommended that duplication of the system would audit report from the firm that provided evidence represent poor value for money when there are that the controls identified as of April 30, 2014 were alternate business continuity provisions in place in in place at Teranet and operating effectively during the Ministry’s agreement with Teranet. The agree- the one year period from April 1, 2014, to March 31, ment includes provisions for an orderly transfer of

Chapter 4 • Follow-up Section 4.09 2015. ServiceOntario will continue to receive these the land registry system to either ServiceOntario or reports annually. an alternate service provider. As a result of not acting on our recommenda- tion, ServiceOntario continued to not know if it has ServiceOntario should also periodically test its a reliable copy of the land registry program soft- copy of the land registry program software. ware, or even if the copy of the software it receives Status: Will not be implemented. We continue to be- is complete and functional. lieve that ServiceOntario should independently verify the