Report of the
Provincial Auditor: Section 3.01, Family Responsibility
Office
Ms Andromache Karakatsanis, deputy minister, Ministry of the
Attorney General
Mr David Costen, director, legal services; deputy director,
Family Responsibility Office
Ms Angela Longo, assistant deputy minister, Management Board of
Cabinet
Mr Toni Mazur, senior manager, IT systems, Ministry of the
Attorney General
STANDING COMMITTEE ON
PUBLIC ACCOUNTS
Chair /
Président
Mr John Gerretsen (Kingston and the Islands / Kingston et les
îles L)
Vice-Chair / Vice-Président
Mr John C. Cleary (Stormont-Dundas-Charlottenburgh L)
Mr John C. Cleary (Stormont-Dundas-Charlottenburgh L)
Mr John Gerretsen (Kingston and the Islands / Kingston et les
îles L)
Mr John Hastings (Etobicoke North / -Nord PC)
Ms Shelley Martel (Nickel Belt ND)
Mr Bart Maves (Niagara Falls PC)
Mrs Julia Munro (York North / -Nord PC)
Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)
Mr Richard Patten (Ottawa Centre / -Centre L)
Also taking part / Autres participants et
participantes
Mrs Claudette Boyer (Ottawa-Vanier L)
Mr Michael Bryant (St Paul's L)
Mr Erik Peters, Provincial Auditor
Clerk pro tem / Greffier par intérim
Mr Douglas Arnott
Staff / Personnel
Mr Ray McLellan, research officer, Research and Information
Services
The committee met at 1045 in committee room
1.
1999 ANNUAL REPORT, PROVINCIAL AUDITOR
FAMILY RESPONSIBILITY OFFICE
The Chair (Mr John
Gerretsen): I'd like to call this meeting to order to
deal with section 3.01 of the 1999 annual report of the
Provincial Auditor, specifically the Family Responsibility
Office. I will allow 20 minutes for a presentation by the
ministry, and then what I propose to do is go on a 20-minute
rotation between the caucuses.
We have scheduled a
continuation of this meeting at 1:30 as well, in case we're not
finished by 12 o'clock. Hopefully at the end of the day, the
committee will have some recommendations to make to the
researcher that he can work on over the next little while.
If you would like to identify
yourself for the purpose of Hansard, please, and then we look
forward to your presentation. Good morning.
Ms Andromache
Karakatsanis: Good morning. I'm Andromache Karakatsanis
and I'm the Deputy Attorney General. With me this morning is
Angela Longo. She had been the assistant deputy minister
responsible for the Family Responsibility Office until very
recently. She has gone on to take on new challenges, but has
agreed to assist me until a permanent replacement is found. Dave
Costen, on my left, is the legal director of the Family
Responsibility Office.
I appreciate the opportunity
to discuss with the committee the auditor's comments on the
Family Responsibility Office and the ministry's response. I know
all members of the committee share the Family Responsibility
Office's goal of getting to Ontario children and families the
money which they are entitled to.
The ministry and FRO welcome
the auditor's input and advice on how we can better meet the
objective of getting parents to meet their responsibilities. We
appreciate the auditor's recognition that FRO does a good job of
registering cases, processing payments and disbursing funds, once
received, and we agree with the auditor that there are
opportunities to take more timely and aggressive enforcement
actions.
It is important to bear in
mind that the auditor's report presents a snapshot of the
organization in late 1998 and early 1999. Much has been
accomplished since then, although we fully acknowledge there is
more to be done.
As background for our
discussion today, I would like to sketch the larger context
within which FRO operates and outline our progress in meeting
those challenges.
The Family Responsibility
Office plays an integral role in the family justice system. It
enforces court orders for support, as well as support agreements
filed with the court. Its mission is to strive to ensure justice
for children and spouses by enforcing support obligations
aggressively. The payment of support, of course, directly affects
the well-being of children. That is why the government has chosen
to intercede in this field.
It is important for all of us
to recognize that we are dealing with families in crisis and
individuals undergoing extremely difficult transitions in their
lives. As the Provincial Auditor noted, approximately 1,400 new
cases on average are registered with FRO every month. This
caseload is the product of marriage and relationship breakdown in
our society.
Family support is not an
ordinary debt like, for example, a financial transaction between
willing parties, in that it is an emotionally charged obligation
that the parties often find hard to address in a dispassionate
way. Many, if not most, of the cases that come to FRO are the
result of unsuccessful attempts to reach agreement on support
issues. People are free to make and maintain their own support
arrangements, and many do so. Where they can't, the case falls
within the ambit of the court system and the formal enforcement
system of the Family Responsibility Office. The reality is that
in many of the cases FRO handles, a degree of mistrust exists
between the parties. In a small minority of cases, this mistrust
hardens into a determination to avoid payment, no matter what,
creating an extremely difficult societal challenge.
Default on support payments
is a problem, of course, that is not unique to Ontario. It is a
problem in virtually every jurisdiction in North America. In
Ontario, we have built one of the most aggressive support
enforcement programs in Canada, and we are constantly making
improvements. At FRO, the top priority is enforcement. The goal
is to get more money to children and families faster than ever
before. Let me respond to the auditor's comments about FRO's
enforcement activities by outlining recent progress.
The auditor observed that the
amounts collected and disbursed by FRO had increased
substantially since his last audit five years earlier. These
positive results continue. For the current fiscal year, FRO
expects to collect and
disburse about $532 million. This represents a 45% increase from
the amount collected and disbursed five years ago. That's 45%
more money in the hands of the women and children who need it.
That 45% increase is well beyond FRO's caseload growth, a 27.5%
increase over the same period of time.
This trend demonstrates that
FRO is succeeding. It tells us very clearly that we're on the
right track to getting more money to children and families.
Furthermore, despite the increase in caseload, total arrears have
not grown over the last two years.
You may be under the
impression that arrears of over $100,000 are commonplace; in
fact, arrears of this size are rare. As the auditor reported,
only 0.6% of all cases in arrears owed more than $100,000. The
auditor also reported that 60% of payers in arrears owed less
than $5,000. That money is important to the families who need it.
I mention these figures only to create a more accurate picture of
the scope of the problem.
Part of the difficulty is
that delinquent payers often have not had their support orders
adjusted when circumstances shift; for instance, if they've lost
a job or had a serious illness. Therefore, when the court reviews
an order on a motion for change, the arrears may be substantially
reduced or even eliminated altogether.
Approximately a quarter of
the arrears is owed to recover social assistance benefits paid
out because support payments were not made. As the auditor
recommended, we have been working more closely with the Ministry
of Community and Social Services and municipalities to improve
the management of these cases.
I'm pleased to report that
we're recovering more of these funds, even though the number of
social assistance cases on our books is declining. In this year,
we project total social assistance recoveries of $52 million.
That's up 15% from five years ago, despite a 25% drop in cases of
this type.
When FRO receives money, the
auditor noted, it moves those funds to recipients quickly. The
auditor's report observed that FRO had adequate systems in place
to ensure proper control over the receipt and disbursement of
funds and that most payments were processed within 48 hours. This
is still true. Currently, in 95% of the cases families get their
money less than 48 hours after payment is received. This response
compares with up to 10 days to get payments to recipients under
the family support plan in 1995. A major reason for this success
is FRO's partnership with the Royal Bank to process payments as
they arrive and quickly transfer them to recipients.
In fact, FRO is a leader in
e-commerce, offering various electronic payment options to family
support payers and employers remitting on their behalf. These
options include automatic payroll deduction and pre-authorized
payments. Furthermore, 85% of recipients receive their money
through direct deposit. The program five years ago offered
neither direct deposit, nor electronic payment.
FRO is the first support
enforcement program in Canada to use a secure, Internet-based
employers' payment system. It's called E-CLIPS, for Electronic
Corporate Link to Internet Payment Services. It lets employers
transfer support payments from their employees directly to FRO
quickly and securely. So far, 191 companies have joined the
system since it started up last October, and given the trend
towards e-commerce, we expect that number will continue to
increase. An official of the Royal Bank, which developed the
system, says: "Our goal was to create a secure, user-friendly,
Internet-based service. We are happy to say that the service is a
complete success."
Not only is money getting to
families faster; the rate of compliance with support orders and
agreements has increased. This is very good news. On average this
fiscal year, 58% of cases have been in full or substantial
compliance with the support order or agreement. This compares
with 53% five years ago. By "substantial compliance," we mean
cases where payers are meeting at least 85% of their ongoing
obligations. About one third of all FRO cases are in substantial
compliance-that's the 85% minimum-and about one quarter are in
full compliance. Our main challenge then is to get the 42% of
cases not in full or substantial compliance to meet their
responsibilities.
Prior to passage of the
Family Responsibility and Support Arrears Enforcement Act, which
was proclaimed in stages in 1997 and 1998, few enforcement
options were available. To strengthen enforcement, the
legislation added a series of tough new tools.
I would like to describe
quickly the results that FRO is achieving by taking a range of
enforcement actions. Let me first say we can't agree more with
the auditor's observation that overdue accounts are more likely
to be collected if collection efforts begin early. Too often in
the past, FRO acted only when someone complained. Now we monitor
cases to take action when money is not flowing on time. It is now
FRO's practice to contact the delinquent payer when an account
becomes 60 days overdue. Other enforcement steps are taken if
this initial contact does not resolve the situation.
One enforcement option is the
reporting of support arrears to credit bureaus. Since August
1997, more than 78,800 delinquent payers have been reported.
Since financial institutions now view support arrears as a debt
that must be paid, delinquent parents will find it harder to
obtain loans and credit.
Each month, FRO seizes funds
from about 100 bank accounts and sends the money to families owed
arrears. This includes funds seized from joint bank accounts,
which payers may be using to try and hide assets.
Almost every week FRO
intercepts a case or two of lottery winnings over $1,000. Since
July 1998, $435,000 has been collected for families through this
route.
Driver's licence suspension
was introduced in the fall of 1997. Since then, more than 12,600
delinquent payers have been notified that their driver's licence
will be suspended if they don't meet their support obligations.
As a result, delinquent
parents have paid $28 million in overdue support. If a payer
takes no action, they lose their licence. So far, more than 5,200
drivers' licences have been suspended, prompting the payment of a
further $4 million in support, bringing the total to $32 million
collected as a result of the driver's licence suspension process.
Of course this will rise as FRO continues to aggressively pursue
driver's licence suspension in appropriate cases.
Ontario has recently
concluded an agreement with the federal government for the
electronic garnishment of income tax refunds, GST refunds, CPP
benefits and employment insurance benefits. Since April 1999,
electronic federal interceptions have netted $34.2 million for
support arrears.
In late 1998, FRO launched a
one-year collection agencies pilot project, an innovative
partnership with the private sector to track down delinquent
parents who had not paid support for more than three years.
Nowhere else in Canada has such an effort been made to collect
such old support arrears. In fact, the private sector generally
considers debt that old uncollectible.
The professional debt
collectors were successful in finding some of the most delinquent
support payers in Ontario. In all, $8.7 million in support has
been located for families and children. This consists of funds
paid, as well as arrears, where payers agreed to start
payments.
Based on the success of this
project, we are now expanding the use of collection agencies. In
this second phase, private collection firms will collect more
recent debt on behalf of families owed support more than six
months overdue. At the same time, agencies will continue to
target the older cases.
FRO is also bringing
delinquent payers before the court for default hearings, which
usually lead to court orders to pay all arrears or risk jail. FRO
now initiates more than 100 default hearings per week, appearing
in court more than 200 times per week, and that compares with the
40 a week that was initiated three years ago. Last week alone, in
Toronto, FRO counsel obtained 13 orders committing payers to jail
for debts representing a total of $167,000.
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To stay out of jail, payers
are forced to make good on long overdue arrears. For example, a
parent recently agreed to pay nearly $19,000 in overdue child
support in order to get out of jail; as a result of a notice of a
default hearing, a payer paid off all arrears, worth more than
$10,000; another delinquent parent paid nearly $11,000 in child
support after FRO launched a default hearing; and, after spending
two days in jail, and facing another three months behind bars, a
payer in arrears paid $13,600 in overdue child support.
The combined impact of all
these various enforcement strategies is that more money than ever
is flowing to families with support orders, the compliance rate
is up and total arrears have stabilized. We are proud of the
significant and important advances that we have made. We know
there is more work to be done to get families and children the
support money they are entitled to.
Let me turn briefly to the
subject of FRO's customer service. This fiscal year the
government has invested $6.4 million in permanent funding to
improve service, including the hiring of 96 more front-line staff
who deal directly with recipients, payers and employers and
conduct enforcement activities.
With FRO's call centre,
client service associates personally respond to an average of
2,000 calls a day. They're available for extended evening hours,
from 8 am to 7 pm, Monday through Thursday, and 8 am to 5 pm on
Friday. That's an increase of 30% in the hours that they're
available. We have also installed document scanning and imaging
technology so that staff can retrieve and review client
information more quickly while the client is on the phone. This
system is being upgraded this week.
We understand how important
it is for callers to be able to get through to our staff. The
average telephone wait time for a client service associate is
currently down to less than 10 minutes, compared with 30 minutes
in 1997.
In the call centre, an
automated line answers up to 18,800 additional calls a day,
providing clients with up-to-date information about their cases.
It now operates from 8 am to 8:30 pm, five days a week, and it
will go to a 24-hour, seven-day-a-week operation later this
spring.
With the call centre in
place, we are avoiding the backlogs that developed under the old
regional offices with their paper-based processes. When those
offices were closed, there were more than 90,000 pending
financial adjustments and unanswered pieces of correspondence.
FRO succeeded in clearing these backlogs entirely by late 1997
and with the call centre there is no accumulating backlog.
It is encouraging that FRO
regularly receives letters complimenting the professionalism and
helpfulness of staff. Staff at the Family Responsibility Office
are dedicated and hard-working. They approach their work with
compassion and caring.
I have touched on several of
the auditor's specific recommendations and I'd be happy to
discuss others during the course of our session today, but I
would like to comment briefly on the topic of information
technology since it is so crucial to FRO's ability to deliver on
its mission.
FRO is one of the most
sophisticated users of information technology in the public
sector, as illustrated by the emphasis on e-commerce to get
payments moving faster. We are committed to making technology
work for us and for the families who count on us.
It's been asked why FRO did
not replace the computer system instead of making various
enhancements and upgrades. The bottom line for the Family
Responsibility Office was the need to improve its operations
quickly without disrupting service to clients. FRO concluded that
an incremental approach would be less risky and more
cost-effective. We have now completed an architectural review of
MECA and further changes are planned.
The Family Responsibility
Office currently has 442 employees and a budget of $28.6 million.
This represents a
substantial commitment of public funds. It seems fair to ask if
more of these costs should not be borne by the people who caused
the problem, the delinquent payers, instead of by the taxpayers.
FRO has begun to move in this direction of making those who
caused the problem help pay for the solution. That is why the
fees for private collection agencies are paid by defaulting
payers, not by recipients and not by the taxpayers.
Despite the solid progress we
have achieved, the ministry recognizes that there is more work to
be done to collect money on behalf of Ontario families. The
Attorney General has made it clear that he is committed towards
working for further improvements at the Family Responsibility
Office. Staff of the Ministry of the Attorney General are also
committed to taking a close look at FRO's processes to meet this
commitment to get into the hands of spouses and children the
money to which they're entitled.
In closing, I want to come
back to my opening comments, that this is a very important
program area, one dealing with societal problems where deep
social trends come to the surface. There has been significant
media attention to this program over a period of years, and this
is welcome if it helps the public understand the serious
consequences of support default.
I feel that changing public
attitudes must be an essential part of the problem. It must
become as socially unacceptable not to pay family support as it
has become to drink and drive. The commitment to family
responsibility is already enshrined in our laws, and all of us
must now insist that it be turned into a reality.
I look forward to today's
discussion with the committee on how efforts to enforce support
obligations can be strengthened. I look forward to answering your
questions.
The Chair:
Thank you very much for your presentation. We have 51 minutes
until the 12 o'clock recess. What I propose to do is have three
rounds of 17 minutes. That way, every caucus can get one round in
before we resume again at 1:30. I'll start off today with the
official opposition and tomorrow with the NDP, and on Friday
we'll just keep rotating.
Mr Michael Bryant (St
Paul's): Thank you for coming. My first question is for
the auditor, if I may.
Mr Peters, you've undertaken
a couple of major audits of the Family Responsibility Office. Is
that right?
Mr Erik
Peters: Over the last period. We did one in 1994 and one
in 1999.
Mr Bryant:
Ordinarily, when you undertake a major audit of an office or a
ministry over a period of a few years, do you generally find
there's some improvement between audits; in other words, that
improvement is made in accord with the recommendations you've
made?
Mr Peters: I
don't want to generalize. There are some programs which show
significant improvement and others are muddling along, if you
will.
Mr Bryant:
Which does this office fall into? In between audits, would you
say there's been improvement in the office?
Mr Peters:
There's been some improvement but not very much.
Mr Bryant:
Generally speaking, does this fall into the category of those
offices that are muddling through, or does it fall into the
category of those that are actually trying to tackle all your
recommendations?
Mr Peters: I
wouldn't contrast those two necessarily. They were trying to
tackle them in the last five years. There have been massive
changes in the way they have done business over the last five
years. There has been a reorganization from regional offices to a
centralized organization. There have been significant staff
cutbacks in those five years and are recovering from the other
period. So the impact of all of these changes is that not very
much progress has been made.
Mr Bryant:
Not very much progress has been made.
Mr Peters:
That's right.
Mr Bryant:
My first question is actually about something that recently came
into the media, and that was the discussion by the minister of an
opt-in system instead of an opt-out system. Can you tell me what
that would entail?
Ms
Karakatsanis: Currently under the family responsibility
program, all orders that are filed with the court or made by the
court are automatically part of the program. In those cases where
both parties agree that the support order should not be enforced
by the program, they can opt out of the program now. If they're
on social assistance, then the ministry or the municipality has
to agree as well. They have the opportunity at any time to opt
in. So far, 12,000 people have decided to opt out and about three
quarters of them have chosen to opt back into the system.
Another approach that other
jurisdictions have taken is that only those people who want to be
part of the enforcement program opt into the program. That would
eliminate the need, for example, for the Family Responsibility
Office to be enforcing those orders or to be dealing with those
orders which are in full compliance.
Mr Bryant:
Is that opt-in program as opposed to the opt-out program planned
for the FRO in the future?
Ms
Karakatsanis: It's certainly something we are seriously
considering. We are open to any new ideas that will allow us to
use our resources more effectively on those cases that need it
and that will result in getting more money to the families that
are entitled to it.
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Mr Bryant:
Given the number of people involved, I would anticipate that if
you went with an opt-in program, necessarily your caseload would
decline. Is that right?
Ms
Karakatsanis: If that 24% of the cases which are in full
compliance chose not to opt into the system, that would certainly
be a decline. We are doing the analysis, but my expectation is
that the caseload would be smaller.
Mr Bryant: I
don't think every member of the public understands the difference
between the opt-in and the opt-out programs. In all likelihood,
you'd have to agree, that particular approach is going to be that
some people are not going
to get the benefit of the legislative and political commitment
made by this government to enforce outstanding custodial
payments. Some people will be left out because they don't know
they have to opt in.
Ms
Karakatsanis: As I said, this is one option that we are
seriously considering. We are doing the full analysis. We are
prepared to move on those options which would have the result of
getting more money flowing. If that was something that would have
that result, we would certainly seriously consider it. As any
changes are implemented with the Family Responsibility Office, we
need to take care that there is continuity of service, that those
changes are well communicated and that people understand their
obligations and their responsibilities.
Mr Bryant:
I'm going to get off this point after I get an answer. I
understand that part of the goal is to have money flowing, but
presumably the goal is also to have enforcement. If as a result
of the opt-in program people are left out-you would agree that is
inevitably going to happen if you go into an opt-in program. Some
people are going to be left out because they don't know that they
have to opt in.
Ms
Karakatsanis: We would certainly review the potential of
that happening and review ways in which we can ensure that
whatever improvements are made to the program would be done in
such a way that those who need the program would be able to
benefit from it. We haven't completed the analysis. We'd
certainly be very mindful of the need not only to enforce the
support payments to get the money flowing but to ensure that
everyone who needed it was able to benefit from the program.
Those would be our guiding objectives.
Mr Bryant:
I'll note for the record I didn't get a "No" there, but fair
enough. Let's move on to enforcement.
In response to the auditor's
recommendations, the ministry responded that there was a strategy
being undertaken by the office to, among other things, call
payers who are chronically in arrears, target specific cases for
more enforcement etc. I'd just like to go through a couple of
them. Are you saying that the Family Responsibility Office has
not been, to date, calling payers who are chronically in
arrears?
Ms
Karakatsanis: I think too often in the past the Family
Responsibility Office relied on recipients who provided
information to trigger some of the enforcement activities. That
is something that we recognized needed to be fixed and improved.
We have moved towards monitoring cases and, as I mentioned
earlier, when payments are 60 days overdue, it is now the policy
to contact the payers directly.
Mr Bryant:
And that's a new phenomenon?
Ms
Karakatsanis: Yes, that is a new initiative.
Mr Bryant:
With respect to targeting specific cases for more aggressive
enforcement, can you explain to the committee: What does more
aggressive enforcement entail?
Ms
Karakatsanis: There are a series of enforcement efforts,
and it's usually the practice to be progressively more aggressive
in those enforcement actions. Obviously the support deduction
order, which is registering the order with the employer to get
the funds flowing automatically, is the first and immediate step
that's taken; then the lottery winnings, which has been
surprisingly successful in collecting as much as it has over the
last little while; federal garnishment is something that is done
relatively routinely and has brought in quite a significant
amount of money-$34.2 million; garnishment of bank accounts;
reporting to the credit bureau; driver's licence suspensions; and
then taking the delinquent payer to court to risk jail if they
don't pay is probably the most aggressive enforcement action.
That just gives you a sense of the progression.
Mr Bryant:
You've had those tools and presumably had been utilizing those
tools prior to the auditor's report.
Ms
Karakatsanis: We are now seeing the results of some of
the tools we were implementing while the auditor was there, and
some has been stepped-up enforcement. There's no question, for
example, on the default hearings, where we have the ability to
take a delinquent payer to court. We used to initiate 40 per
week. We now initiate 100 per week. That was an existing
enforcement tool which we are now using more aggressively. A
number of the tools are new. The driver's licence suspension was
September 1997, and as that program has become-results are
starting to show. They were not all evident at the time of the
auditor's report: garnishment of bank accounts, June 1998;
seizure of personal property, June 1998; lottery winnings
interception, June 1998; default hearings that can involve third
parties, June 1998. So we're starting to reap the benefits of
many of the new tools now. That is why the arrears have
stabilized and that is why more money is flowing to families and
children than was flowing before. It's a 45% increase over the
last five years. That is tangible evidence of more money flowing
and the success of the enforcement steps that we've taken.
Mr Bryant:
What I'm getting at then is, I guess the answer is that no new
enforcement techniques are being used but the enforcement
techniques are now being used more often. That's the response to
the auditor's recommendation with respect to enforcement. So it's
a difference in kind, not in form.
Ms
Karakatsanis: It's both. We're using the existing tools
more aggressively, and there are a number of new tools which were
just in their infancy at the time that the auditor was there
which are now beginning to show some significance, some results.
There's more money flowing to the families who rely on the
support orders.
Mr Bryant: I
also want to understand, in terms of the caseload, how that is
going to happen. Right now, approximately what's the caseload per
client associate representative, about?
Ms
Karakatsanis: It's about 500 cases per client service
associate. That client service associate is backed up by a team
including the legal and financial officers to assist in the
enforcement of effort.
Mr Bryant: If 500 right now is the
caseload, what will be the caseload next month? How many new
cases do you get every month?
Ms
Karakatsanis: We get 1,400 new cases every month. I have
to say that we're always looking for more effective ways to use
our resources, and that's why the partnership with the private
collection agencies is a really good example of us being able to
step up some really aggressive enforcement activity at no
additional cost to the taxpayer-at little additional cost, the
cost being borne by the delinquent payers. So we are always
looking for ways to use our resources more effectively.
Technology is assisting. We
are making enhancements to our technology that will allow client
service associates to have the information they need on the case
file. As the call is being made, they won't need to take the time
to retrieve it, and they'll be able to answer the questions and
provide the information quicker. The document scanning and
imaging allow access to the documents while on the phone rather
than having to resort to paper files. That makes the information
available immediately. So we are constantly improving the
efficiency and looking at a more cost-effective way of using
resources and innovative partnerships to bring in the private
sector and let the delinquent payers pay part of the cost of
enforcement.
1120
Mr Bryant:
But if you accept that 500 cases per client associate
representative is acceptable, and I presume you do because that's
what it is right now, in order to keep up with this additional
caseload of, I think you said 1,400 a month, just mathematically
I'm not wrong to say that you need to hire about four people
every month to keep up with that caseload. Is that right?
Ms
Karakatsanis: I'll answer your question by saying that
there are ways of using the resource that you have more
efficiently in increasing productivity. We've demonstrated that
we've been able to do that and we hope to continue to do that. As
we are more aggressive with the enforcement measures early on,
and as compliance rates go up, there will be less need to deal
with some of the recurring issues that we are dealing with today.
So the efficiency of the program should be able to deal with the
increased caseloads, although it's obviously something that we
constantly monitor.
Mr Bryant:
Sure, but I've got my math right, do I not? If you are going to
keep up with 500 per month, you would have to hire four more, and
you're saying we can't do that.
Ms
Karakatsanis: I'm saying that a caseload of 500 per
client service associate is an appropriate standard and it's one
we will monitor to ensure that it stays.
Mr Bryant:
But it's going to go up.
Ms
Karakatsanis: It won't necessarily go up.
Mr Bryant:
If there are 1,400 new cases coming in, mathematically how does
it not go up? Where do they go?
Ms
Karakatsanis: The 1,400 new cases are all of the cases.
For those cases where money is flowing and there are no arrears,
that will not add a load to the caseload of those who are
involved in enforcement. Where the orders are registered, where
the money is flowing, that will not represent an added
enforcement need for the client service associate. So my answer
to you is, no, you can't do a straight mathematical formula the
way you've done it, to say that you need to have X more people.
The answer lies in looking at the total effectiveness of the
program. As those 1,400 new cases come in, as we tackled defaults
earlier and as they stay in compliance, then there will be less
need to take those aggressive enforcement actions on many of
those new cases coming in.
Mr Bryant:
You haven't disagreed with my math, nor have you said that you're
going to hire four new people a month to keep up with the
caseload. There are no plans to hire four new people a month to
keep up with the caseload, are there?
Ms
Karakatsanis: We have recently hired 96 more enforcement
officers.
Mr Bryant:
Terrific.
Ms
Karakatsanis: As I indicated to you, we have performance
standards and we continue to monitor them and we'll be looking
for new ideas and new processes by which we can improve the
efficiency of the program. And ultimately our measure is, is
there more money flowing to families, are we doing a better job
of getting the money that families are entitled to?
It's sad that some parents
won't respect their responsibilities. They won't pay. But our
objective is to get more money flowing and we will constantly be
looking at the most effective way to do that.
So you won't hire four new
people per month, but you will provide new efficiencies. You've
been at this for a few years now, more than a few years. I mean,
the FRO has been at the job of cracking down for more than a few
years. Presumably, those efficiencies have developed over the
years. If you're not bringing in more new people, how exactly are
these people, through these streamlining efforts, actually going
to do a better job at enforcement? Exactly how would they do
that?
Ms
Karakatsanis: We haven't stopped thinking about
innovative ways of being more cost-effective. In fact, we're
looking at ways in which we can improve our services. You
mentioned the opt-in as opposed to the opt-out. That is certainly
one of the options that we are looking at. I want to emphasize
that we continue to look at new ways of delivering more effective
services and new ways of ensuring that the cost of some of this
enforcement activity is borne by the payer.
Mr Bryant:
I understand, but you didn't detail-could you just tell me how
you're going to streamline?
Ms
Karakatsanis: The expanded use of collection agencies is
a good example. We're building on the successes of the private
sector collection agencies in recovering old debt. We are
expanding that. They will be looking at all cases where there are
arrears of six months, and the costs of that expanded program
will be borne by the payer. That will result in more enforcement
and more money flowing at no additional cost to the taxpayer.
Ms Shelley Martel (Nickel Belt):
Thank you for coming today. Let me just follow up on this opt-in,
opt-out. How many people have opted out of the FRO since you
allowed that to happen?
Ms Karakatsanis: Let me get
the exact number. I believe 12,000 was the number. Yes, it's 5%
to 10%. It's been 12,000 in the past three years.
Ms Martel:
How many people have opted back in?
Ms
Karakatsanis: About two thirds of them have opted back
in.
Ms Martel:
If I look at that, I would say this has not been a raving
success, and probably what we see is that people have all kinds
of concerns about enforcement, so they get back into the system
as fast as they can when they find out they can't get a payment.
That's what two thirds of the people opting back in would suggest
to me. Would that be your view?
Ms
Karakatsanis: Obviously they think they can get the
benefit of the program, so one of the two parties has opted back
in.
Ms Martel:
So what sense does it make at all for your minister or you to
even consider having a program where people have to opt in?
Ms
Karakatsanis: The experience of many of the other
jurisdictions is an opt-in program and it's certainly one that we
want to take a close look at. For those 24% of the cases that are
in full compliance, we have resources, staff time at the Family
Responsibility Office essentially shuffling money from one
willing payer to the recipient. I think there is an opportunity
to look at whether there is a more effective way to use the
resources there.
As I mentioned, it's
something we're looking at carefully. Our objectives and our
guiding light in making any decisions around changes to the
Family Responsibility Office are to make sure that the families
who need the money get the money and that those who need the
enforcement efforts of the Family Responsibility Office get
them.
Ms Martel:
But you don't have to look to other jurisdictions to see how this
works, you just have to look to Ontario's experience. You allowed
people to opt out and 12,000 did. In a three-year period two
thirds opted back in. So I would say you don't have to look
anywhere else, you just have to look at what's happening in
Ontario. Most people, for whatever reason, prefer to know that
they can get some enforcement if they need it. If you want to put
in a system that would actually force people to opt in, if they
don't know that they have to do that-and I can imagine the
thousands of people who wouldn't-what you're going to have is a
whole bunch of people who have no protection whatsoever in terms
of ever getting money or getting all the money they are owed.
Correct?
Ms
Karakatsanis: Any decisions the government takes to
change the Family Responsibility Office will be guided by the
need to get as much support payment out to families as we can and
to ensure that those who need the enforcement benefit of the
program will receive it.
The analysis is not
complete. We are certainly being rigorous in our analysis and we
will make the decisions that meet those needs.
Ms Martel:
Let me ask you about user fees. I heard you clearly say that the
user fees would only be paid for by delinquent payers, is that
correct?
Ms
Karakatsanis: No, I'm sorry. That was in the private
collection agencies enforcement program, where it is paid by the
payer. We are proposing to bring in administrative fees later
this spring. That will encourage support payers to maintain
payment, and they will address the cost of those services that
are outside its central mandate to enforce orders. They will be
borne primarily by the payer.
There is one fee that may
be borne as well by the recipient, and that is the statement of
account, where we are proposing a $25 fee for a formal statement
of account under the director's signature. The recipient will
have available 24 hours a day, seven days a week, on the
automated voice system up-to-date information about payments made
and the status of the case.
1130
Ms Martel:
Let me stop you right there. I work with the automated line, and
the automated line only gives you information about the most
recent or last transaction. It doesn't give you a listing of all
the transactions that occurred in that account. That is what a
schedule A provides. There is a huge difference between the
information you get on the automated line at night about the most
recent transaction and a schedule which will give you all of the
transactions that occurred.
We in our office usually
ask for two or three schedules every week for recipients and
payers. In the case of payers, for example, it's for people who
have to show Revenue Canada how much money they would have paid
out last year in support payments. So I want to ask you, how many
schedules are requested weekly at the FRO by recipients or
payers?
Ms
Karakatsanis: I don't know the answer to that. I can
find out and provide that information to you.
Ms Martel:
I would like to know how many are requested a week.
The second thing I'd like
to know is how many payers use postdated cheques now to pay their
support payments?
Ms
Karakatsanis: I know we used to process 10,000.
Mr David
Costen: My name is David Costen. I'm the legal director
of the Family Responsibility Office. In the summer of 1999 we
were somewhere around 10,000 cheques per month. We've been taking
steps to try to work with the clients to get this down and that
number has been diminishing. We anticipate that with the user
fees there will only be about 500 people using postdated cheques.
This creates a lot of administrative paperwork within the
organization, resources that would be better used for other types
of enforcement.
The Chair:
Just so I understand, you're saying there were 10,000 postdated
cheques in your office at some time?
Mr Costen: In the summer of
1999.
Ms Martel:
So 10,000 payers paying by postdated cheques, is that what it
was?
Mr Costen:
Ten thousand cheques. You realize that there may well be-
Ms Martel:
I want to know how many payers are paying by postdated
cheque.
Mr Costen:
I don't have that.
Ms Martel:
One of the new fees you have is for payers who are making their
payments, doing what they're supposed to, and you're going to
charge them $35 if they want to continue using postdated cheques
as the method of payment, is that correct?
Ms
Karakatsanis: Yes, it is. One way to get money to
families faster is to encourage support payers and their
employers to use several faster, cost-effective, more dependable
collection electronic payment options.
Ms Martel:
Except that a payer can give you 12 postdated cheques for every
month and all you have to do at the office is get those postdated
cheques out the door when you're supposed to. You already are
holding them in your hand.
Ms
Karakatsanis: If I can complete my answer, please. One
way to get money faster is to encourage support payers and their
employers to use electronic means of remitting their payments.
There are very dependable electronic payment options available,
including pre-authorized payments which would have the same
effect as postdated cheques, telebanking, payroll deduction and
the new Internet payment service for employers. We are offering
options for electronic payment that were not available before.
Most of that will be to ensure that our resources are focused on
enforcing those cases where money is not flowing.
Ms Martel:
I'll bet you most of those cases are probably self-employed
individuals, so it's not the same as sending an employer a notice
of deduction and getting it taken off their cheque. They would be
self-employed. So the method they use to pay is by postdated
cheque, because there isn't an employer.
Ms
Karakatsanis: It's like paying your Hydro bill. You
authorize the payment from your bank.
Ms Martel:
But we've got people who are paying; these are not delinquent
parents. You're going to charge people who are doing what they're
supposed to be doing $35 to do that. I don't understand that.
These are not delinquent payers. Depending on how many people
that actually involves, which you're going to get back to us on,
that could be a fairly substantial sum of money that you're
getting as a user fee for people who are doing what they're
supposed to be doing.
Ms
Karakatsanis: There are other very easy alternatives to
postdated cheques, ones that are just as easy as postdated
cheques. It will reduce the administrative cost of handling
postdated cheques, it will result in money being paid faster, and
allow the staff resources to be focused where the enforcement is
needed. It's the cost of doing business.
Ms Martel:
Are you going to be hiring new staff to collect these fees?
Ms
Karakatsanis: No.
Ms Martel:
You're still going to have staff who are now going to have the
added work of trying to process these fees. Can you tell us how
you're going to collect these fees, either from payers who are
using postdated cheques or from payers and recipients who are
requesting schedule As? How are those fees going to be
collected?
Ms
Karakatsanis: The fees are designed to encourage the
payers to meet their obligations.
Ms Martel:
They are.
Ms
Karakatsanis: The fees are designed to encourage
behaviour that helps to ensure more money is flowing. For
example, there will be a fee to adjust FRO accounts for direct
support payments received by the recipients. The legislation
currently requires that where a support order is registered with
the program, the payments be made directly to the program. When
they're not, the records become inaccurate and sometimes
inappropriate enforcement actions are taken and resources are
wasted. The fee that will be payable to make adjustments for
direct support payments will encourage the proper use of the
program and will reduce the inaccuracy of the number of arrears
noted on that file that might result in inappropriate enforcement
actions. That will be a benefit to the program.
Ms Martel:
Isn't it true that some of the people who make payments directly
to their spouse without going through the plan do so because the
file hasn't been registered and activated with the FRO yet? In
some cases in our office we've seen it take up to three months
before the file gets registered. That recipient has no money
during that point of time, so the payer makes a payment directly
to her and the kids while the file is being registered so that
she has money. I don't consider that to be an abuse of payment. I
don't consider that to be a problem. I consider that to be a
payer trying to get some money to a recipient and kids in the
time that the file is being registered, and that happens a lot.
We've seen that in our office a lot.
Ms
Karakatsanis: The fee would not apply to cases that were
in the process of being registered.
Ms Martel:
In what cases do they apply then? That is a case where a payment
is made outside of the plan directly to the recipient and would
require an adjustment when the money comes in.
Ms
Karakatsanis: Once the case is registered and money is
flowing to recipients, from time to time payers make direct
payments to the recipients. In those cases, arrears start to show
on the books-arrears which do not exist-and sometimes
inappropriate action is taken. It's those cases which will have
to pay the fee for the direct payment. It is not intended to
apply where payment is being made while the case is being
registered and the support deduction orders are being registered
and the money starts to flow.
Ms Martel:
In cases where a payer or a recipient requests a schedule A, so
they get a full statement of the account, how are you going to make them pay a
fee? How is that going to be implemented?
Mr Costen:
Presently, there is a team working on all the intricacies of
that. That will be ready to go in April. You can imagine that in
making adjustments to our technology and our financial processes,
that has not yet been completed but will be ready to go in the
spring.
Ms Martel:
So you'll have no new staff to collect fees? That's for sure?
Ms
Karakatsanis: We don't anticipate a need for new
staff.
Ms Martel:
How much money do you anticipate you are going to collect through
these new user fees?
Ms
Karakatsanis: I think it is up to $1.3 million.
Ms Martel:
Can you table with the committee a breakdown of how much you
anticipate you will collect in each category: (1) with the $35
fee for people who want to use postdated cheques, and (2) the
amount for schedule As and the other items where you now have
those user fees? Could you table that with the committee,
category by category?
Ms
Karakatsanis: I'm going to have to get back to you about
the precise breakdown.
Ms Martel:
One final question on that: Do you have any legislative mandate
which would bar someone from paying by postdated cheque?
Ms
Karakatsanis: No, there's no legislative mandate that
would bar it. Many companies are no longer accepting postdated
cheques, and when postdated cheques are accepted, there is a fee
associated with the administration cost. That's the cost of doing
business.
Ms Martel:
I wouldn't call the FRO a company. That's not how I look at it in
terms of your responsibilities.
Ms
Karakatsanis: No, but the Family Responsibility Office
is offering many other just as simple, more efficient ways for
payers and employers to make their payments. We're a pioneer in
the E-CLIPS program, which I mentioned in my opening remarks,
which allows employers to electronically transfer payments. The
fees apply only for those who want to continue to provide
postdated cheques. There are other easy alternatives that are
being used. Electronic payments, telebanking and pre-authorized
payments are just as simple, just as reliable and are faster.
1140
Ms Martel:
I understand that. I'm saying that we have people who are doing
what they're supposed to and I don't think they should be charged
a fee, which is basically a penalty or fine, for doing what they
are supposed to be doing, which is to make sure payments are
going to spouses and children. I think that's ridiculous.
The Chair:
Can I just ask for a quick clarification? Is that $35 per year or
per cheque?
Ms
Karakatsanis: Per cheque.
The Chair:
Thank you.
Ms Martel:
So we should say 10,000 cheques times 35: $350,000.
Ms
Karakatsanis: No. I think that number has been reduced
since the summer.
Ms Martel:
OK. Maybe you should get us the number of cheques that we're
talking about and the number of payers, so we can make some
calculations about the fees.
Let me ask you about the
private collection agencies and this latest pilot. The auditor
reported that in the six months he looked at the private
collection agencies program, only $1 million was collected. We
know that by the end of the pilot, if the minister is correct,
over $8 million was actually collected. This is a bit at odds
with what a ministry spokesperson announced in October: about $4
million actually collected out of $450 million. So I would like
to know who is correct? Is it the ministry spokesman, Mr Crawley,
who told the Toronto Star that it was actually about $4 million,
or less than 1%, or is it you today or the minister, who now says
that about $8 million was actually collected?
Ms
Karakatsanis: The numbers continue to grow as the
program develops.
Ms Martel:
My understanding was that the private collection agency pilot
project was over and the files were returned to the FRO about the
end of October. Is that correct?
Ms
Karakatsanis: Yes. The files were returned and, as part
of that project, FRO staff are now going to through the files,
following up on any new information and determining what further
enforcement steps are needed. The private sector turned over the
files in October, but the pilot project is continuing in the
sense that FRO is continuing to review and act on those files. I
can give you the current-
Ms Martel:
OK. Then before you keep going, I want to know how much of the
money that came in was as a result of work done by the private
collection agencies and how much of the money coming in is as a
result of FRO staff now handling those cases?
The Chair:
That is the last question.
Ms
Karakatsanis: I'll give you the numbers I have, which
reflect the current status of the money that has come in as a
result of the collection agency pilot project: $5.4 million has
been collected directly for families that have not received
money. An additional $1.6 million will be collected as a result
of payers entering into voluntary arrangements for payments. A
further $1.7 million was collected through federal government
garnishments on information provided. That totals $8.7 million
that was located as a result of that pilot project. I don't have
the different numbers at different stages of the project. This is
the current amount of money that has flowed as a result of the
collection agency pilot project.
Ms Martel:
Just on that, can you table with the committee, then, the amount
of money that was actually collected directly as a result of work
done by the collection agencies and the amount of money that has
subsequently been collected as those files have returned to FRO
staff and FRO staff has actually done the work? There's a world
of difference, and I suspect the $8.7 million is not really an honest or legitimate
number to associate with the private collection agencies.
The Chair:
Your time is up, Ms Martel. Mr Hastings was first and then Mr
Martiniuk.
Mr Gerry Martiniuk
(Cambridge): I'll be sharing my time with my fellow
caucus members, Mr Chair.
Thank you, deputy, for your
presentation. I was particularly pleased that you did discuss the
education of the public. As a lawyer and a member of the public,
I have found that many consider a default in child payments to be
a business transaction or a business debt rather than a moral and
social obligation of a parent. I think there is a distinction we
must make clear to the public.
My question is in two
parts. May I say that our cases in my constituency office have
fallen substantially. I don't know whether that has happened
across the province. A couple of years ago, we had a great rush
of cases, which has now declined. At last count I think we have-I
spoke to my constituency assistant-approximately 10 cases that we
are administering, and I'm pleased to report that they're all
going smoothly. So I congratulate you in that regard.
My questions are in regard
to communication with the public. I would like to know, firstly,
what plans the ministry has in regard to extending-I know you've
mentioned there's going to be a minor extension, but I live in a
riding, for instance, where there are many shift workers who may
not be able to get to the phone at 5 o'clock or even 8
o'clock. I would like to know the plans, and the exact time
frames if you have them, as to the automatic line being extended
to a 24-hour basis and perhaps seven days a week. In dealing with
that, you could also deal with the matter of security and
privacy. I would be pleased to hear about that.
Secondly, as a novice on
the Internet-I opened my first commercial banking account the
other day-I would like to know what plans the ministry has, and
the implementation dates, as to a Web site where, for instance,
individuals might acquire information including a schedule of all
payments and things of that kind.
Ms
Karakatsanis: The automated voice line will be moving to
24 hours, seven days a week, later this spring. I don't have an
exact date for you, but it will be this spring. We're on track to
do that.
The automated voice system
does have security features. You have to enter your name and case
number, and they have to match. The Web site is something we
don't have any plans for at this time. Security and privacy are
important considerations for us, of course, and we would have to
fully address those in any plans in that direction.
Mr
Martiniuk: When I chaired the justice committee and we
heard the bills and the additional tools, I was under the
impression, and perhaps mistakenly-I know the difficulties in
collecting from the self-employed. As a lawyer, I lived with
those difficulties with clients. The licence suspension seemed to
me at that time to be almost a panacea.
I recall one witness before
our committee was the former wife of a lawyer, with three
children, a very intelligent person who at that time had received
absolutely no payments from her spouse, who had carefully
engineered his affairs so that he was judgment-proof. As she
related, he drove a Mercedes which was not in his name, he did
not do legal aid any longer because that amount could be
garnisheed, and he lived in a rather substantial house with a
female person whose name the house was in.
We passed that a couple of
years ago and there have only been 5,000 suspensions, which to me
seems a relatively small number when we look at the total number
of persons in arrears, which now exceeds approximately $80,000.
If we take the substantial arrears at 58%, we're talking about
80,000 people in arrears. I would like for you to go through
and-
The Chair:
You meant 80,000 cases. You said $80,000.
Mr
Martiniuk: Cases, sorry. Thank you, Mr Chair. I would
like you to go through, first, the time frame and the steps taken
for the suspension of these licences. I'd like you to also
comment on whether it's working and whether or not 5,000 is low
or high, considering the length of time the law has been in
force.
Ms
Karakatsanis: The driver's licence suspension program
has brought in a total of $32 million; 12,600 notices have been
sent, and that resulted in $28 million, so there wasn't a need to
move to the next step and suspend the licence. The notice itself
was sufficient to bring in $28 million. Our objective is not to
suspend the licences of delinquent payers; it's to get them to
pay their child support. So the notice is sufficient in those
cases to bring in the $28 million.
1150
When someone receives the
notice of licence suspension, they have 30 days and they can do
one of three things. They can pay up, they can enter into an
arrangement to pay up and they can go to court to get a
refraining order, which would stop the Family Responsibility
Office from suspending the licence while they go to court to ask
for an adjustment of the order in arrears. That is a court
process they are entitled to take and sometimes do take.
When I say that 12,600
notices resulted in $28 million, that means it wasn't necessary
to suspend licences. A further 5,200 licences were suspended and,
as a result of that suspension, another $4 million came in. I
like to look at the whole number, including the notices because,
as I said, the objective is not to suspend licences but rather to
use that as a tool to get the money flowing. Of course it works
best when people need their licences and it's something we're
certainly looking at, how we can increase the number of notices
we issue in appropriate cases.
The Chair:
Mrs Munro and Mr Hastings have questions.
Mrs Julia Munro
(York North): A couple of quick questions. I wanted to
come back to an issue that had arisen earlier in our discussion just to clarify
for the record this question of the opting in and out
circumstance. It was my understanding that a recipient who fails
to receive money as a result of the original court decision would
virtually automatically have the right to step back into the
program. Is that not true?
Ms
Karakatsanis: Yes, it is true. They have the right to
opt back into the program.
Mrs Munro:
There seemed to be some confusion about that issue.
Another question I have is
that you clearly made reference in your opening remarks to the
hiring of new people. It seemed to me that-quick math-this would
certainly be consistent with the kind of information you provided
us with earlier in terms of the increase in the number of people
who need the services of the Family Responsibility Office, but I
wonder if you've got any statistics that would give us a picture
of the obligations of individuals coming to an end in this
program. When people pay through the Family Responsibility
Office, is there not a natural end of their financial
obligations?
Ms
Karakatsanis: Yes. It depends on what the order says.
Sometimes the order is dependent upon certain facts happening. In
the case of child support, it may terminate upon the child
reaching a certain age or leaving school or whatever the order on
its face says. We look to the order to determine whether the
support payment is to be terminated.
Mrs Munro:
Do you have any information that would give us a sense of some
kind of data in terms of numbers, a percentage or things like
that?
Ms
Karakatsanis: Yes.
Mrs Munro:
If we know how many are coming in, do we have any idea of how
many, through attrition or natural causes, if you like, according
to those court orders, come to an end?
Mr Costen:
I think what happens is, the 1,400 we talked about coming in,
cases are closed out naturally as the order ends. It may well be
that the order says the order is to terminate on February 16,
2000, and then that would be the end of it. As the age of the
files progresses, those files will drop off.
There are those files where
it's dependent upon the actual order itself. It will say, "As
long as the person is in school, things will terminate," or it
may well be that the parties agree themselves that the order has
terminated. That's the only time when FRO can actually do it, but
cases drop off that way. Cases also drop off through the
collection agency project, which allows us to close out certain
files. Although people drop in, you still have a net of 4,000
people dropping out, which allows you to redirect your
enforcement towards other files.
Mrs Munro:
My final question: Certainly in my office-I think others have
made reference to the kind of familiarity we have through our
constituency offices with this program-it seemed to me that one
of the most difficult personal issues that people had was in the
areas where the payer was self-employed. I wondered whether or
not you could give us a sense of what actions have been taken to
rectify that situation? I had the experience of very difficult
circumstances people found themselves in where the individual was
self-employed.
Ms
Karakatsanis: A number of the enforcement mechanism
tools apply to those who are self-employed as well. The lottery,
the federal garnishments, the seizing and selling of assets,
garnishment of bank accounts, credit bureau, driver's licence
suspension, passport suspension, and of course the ultimate
default hearing, taking the person to court, those are all
enforcement tools that do apply to self-employed. We heard before
that sometimes a parent is determined not to meet their
obligations and sometimes it is very difficult to recover money.
That's a sad thing. It's sad that parents don't recognize their
respect for the law and don't recognize their responsibilities. I
have to concede that it is very difficult to get money in cases
where someone deliberately chooses to make that very
difficult.
The Chair:
Mr Hastings, you have two minutes and a half for now.
Mr John Hastings
(Etobicoke North): And then later-
The Chair:
Then we recess until 1:30.
Mr
Hastings: My first question would be related to where
we're going. You have reported some significant progress in terms
of collection, but when I look at your mission statement and I
look at the auditor's report of the growth of unenforced payments
from $700 million to $1.2 billion-if that's not correct-I heard
you say something about an improvement there. If that's not the
right figure, then I would like to know where FRO is going to be
in three to five years if we're still doing the same stuff even
with all your enforcement tools, so called. Are you going to have
this down to half a billion? Will it be $1.5 billion, given the
number of self-employed, the rising number of dysfunctional
families and so on? I don't see anything in your stuff that
says-unless there are internal documents-in 2003 the number will
be whatever it will be that's been collected versus not
collected. I don't see anything there, and that's disturbing to
me.
Ms
Karakatsanis: Going back to the end of fiscal year
1994-95, the arrears were $831,000. The current arrears are $1.2
billion. That represents an increase, but it has been stable over
the last two years. The amount of money flowing in to families
has increased by 45%, although the caseload has gone up 27%. That
shows we're making progress and making gains on the amount of
money that's going, and that's why you've seen the arrears
stabilize. As to the results of some of these new tools, as that
matures, we would hope to see those arrears go down. I don't
have-
Mr
Hastings: Do you actually have figures for that?
Ms
Karakatsanis: We don't have specific estimates at this
point, but it's certainly something that we predict will start to
come down. As we get better at monitoring cases and enforcing
earlier, then that should result in reduction of the arrears.
The Chair:
You said $831,000. You meant million.
Ms Karakatsanis: Million. I'm
sorry.
Mr
Hastings: Wouldn't it be better as a management
information tool to have some specific estimates by a category so
you could measure your progress instead of hoping?
Ms
Karakatsanis: We are looking at the results as they come
in. We have specific performance indicators, and they are
monitored constantly and used by the program. As we see the
trends in enforcement and the trends in increasing money coming
in, we will certainly do our best to set targets for that area as
well and determine the numbers we think are achievable and would
be a good a goal.
The Chair:
The time is up, Mr Hastings. Before we recess until this
afternoon, I've had a request for a copy of your opening
statement. Could that be made available?
Ms
Karakatsanis: I've made quite a few changes from the
text I had before me. We would have to incorporate those changes
and I could make it available later.
The Chair:
OK. You've talked about certain responses. Any idea as to when
the committee can get those back?
Ms
Karakatsanis: We'll do our best to get them to you as
quickly as possible. Perhaps later on today I can give you a
specific commitment.
The Chair:
Thank you very much. We're recessed until 1:30 this
afternoon.
The committee recessed
from 1201 to 1334.
The Chair:
I'd like to call the meeting to order. We'll continue now with
the rotation of approximately 20 minutes for each caucus. We're
at the Liberal caucus.
Mr Richard Patten
(Ottawa Centre): Welcome back. I'm sorry I missed part
of your presentation this morning, so you may have dealt with
part of this. I was snowed in a little bit in Ottawa; the plane
was late.
I'm trying to get at the
big picture, and if I'm short of some figures maybe you could
help me a little bit. In 1995, the decision was made to
centralize the files of the program through computerization,
electronic communications, all that sort of thing, and the word
was that this was going to be more efficient. I won't get into
the gory details of what happened but we saw that there were big
problems in dealing with many, many cases. As was already pointed
out by Mr Martiniuk, there has been a reduction of the frenzied
period, for sure. However, I must tell you we still have a number
of cases on a weekly basis. There was an assignment of a liaison
for MPPs' offices to deal with that, and that worked for a while.
I'll tell you we still have problems with that at our office.
When they call now it's taking days before anyone gets back to
us, and as you are probably are aware, the people who tend to use
the MPPs' offices are really the ones who are pretty desperate.
So I would point that out to you.
You had 340 staff in
1994-95, and your arrears were about $1.2 billion, was it, in
that neighbourhood? Or was it higher than that?
Ms
Karakatsanis: It was $831 million.
Mr Patten:
OK, I'm sorry. Then in May 1999, you said it was at $1.2?
Ms
Karakatsanis: Yes.
Mr Patten:
What was it as of the end of the year? Do you have any more
up-to-date information? As of December 31 or January or
whatever?
Ms
Karakatsanis: As of December 31, it was actually $1.227
million.
Mr Patten:
At the end of the fiscal year, the calendar year, I'm sorry.
Ms
Karakatsanis: At the end of 1999.
Mr Patten:
Are you able to tabulate that on a-
The Chair:
Excuse me, you said "million." you meant "billion," didn't
you?
Ms
Karakatsanis: Yes, $1.2 billion.
The Chair:
I just wanted to make sure.
Mr Patten:
We were just about ready to applaud.
OK, so you're saying it has
remained constant, although the staff is now back to-you
mentioned a figure of 428?
Ms
Karakatsanis: It's 442, I believe.
Mr Patten:
OK. So if we look at the big picture, ostensibly the rationale
for all this was to be more efficient. There was a cut in staff
originally, which I gather was soon rectified because it was too
much of a cut and you had to have more staff help-and you got
it-because of the crisis that was pending.
What I'm trying to look at
is, four years ago you had a situation and there was an attempt
to be more efficient. We're now at another stage, there's more
staff, the arrears are actually up, the cases are growing and
what has really happened, other than a hell of a lot of heartache
for a lot of people who through the requirements of
reorganizing-and I noted you kind of implied that the regional
system, and maybe electronically, was not as good, but I have to
tell you that the regional system before was a hell of a lot more
sensitive to people. I'm sure you've experienced this on a
personal basis, and all the members do, but automated,
voice-activated communication in sensitive situations like this,
in my opinion, is inhuman. You may catch 80% of the cases, maybe
even 90%, but for those individuals where you've got mom there
with kids and she hasn't got her payments and she can't get
through or she's been told something else-or the flip side is
that the spouse who is making the payments gets nailed through
collection agencies for not having made payments when in fact
they have-and I have a number of cases that I could cite to you
where someone was actually finished with the program and was
contacted by a collection agency. My whole point is, are we
further ahead today than when we started this back four years
ago? It seems to me in terms of the big picture we're not.
1340
Ms
Karakatsanis: We are further ahead.
Mr Patten:
How would you describe that and how would you measure it?
Ms
Karakatsanis: I'll tell you. First of all, we are
getting more money. We are collecting and disbursing more money. In 1995 we collected
and recovered $360 million. This year we're collecting $532
million. That's an increase of 45%, and that's well ahead of the
increase in caseload of 27% over the same period.
Today we respond to an
average of 2,000 calls a day, and that's to live people, that is
to the client service associate. The 18,000 people who reach the
automated voice system are in addition to the 2,000 calls per day
who speak to the client service associate, and the automated
voice system is there just for updates and information; it's a
choice that the caller has. The 2,000 people are getting through
today and that's an improvement over the number of people who
were able to access under the old system.
The payments are faster.
Once the program received the payments, it used to take up to 10
days to get it out. Now, in 95% of the cases the payments are
made within 48 hours of the Family Responsibility Office
receiving them. The compliance rates are up, and this is perhaps
the most important. It used to be, in 1995, the compliance rate
was 53%. That means that 53% of the cases were in full or
substantial compliance. Today it's 58%, and that's a significant
increase.
That's just looking at the
big picture, but the facts demonstrate that there have been
tangible improvements, and the amount of money that's going gets
going faster than ever before. So that is the big picture. The
performance indicators demonstrate the improvement in service,
the improvement in getting the money that families and children
are entitled to.
You asked about MPPs. There
are two staff assigned to answer the inquiries of MPPs-one is a
client service manager-and they are instructed to respond as
quickly as possible. That is something we strive for and we hope
to continue to improve.
Mr Patten:
It slipped a little bit. It was better for a while, I will tell
you, from my office's experience.
Ms
Karakatsanis: Yes, and in fact the Ombudsman notes that
complaints about the office were down 35% last year over the year
before.
Mr Patten:
By the way, I know you go after all of the cases and some of
them, after a particular period of time, you pass along to a
collection agency. What's your priority system? In other words,
obviously you want to help each individual, and each individual
is a unique case. What's the range of things? You say less than
$5,000. Is this on an annual basis? These are annual?
Ms
Karakatsanis: That's the arrears of less than-when I
talked earlier about 60% of the cases, there are arrears of less
than that.
Mr Patten:
Oh, I see, and that could be accumulated over a matter of months,
or whatever?
Ms
Karakatsanis: That's right.
Mr Patten:
What's your worst case? We heard a good one from Mr Martiniuk, a
good one in terms of it exaggerates, not typical but an extreme
case.
Ms
Karakatsanis: I can't tell you what the worst case is.
Again, I rely on the auditor's numbers in talking about the
percentage of cases in arrears. In the report he noted that 0.6%
of cases had arrears of more than $100,000. Those arrears include
old arrears and old cases. Sometimes payers go to court and get
some of those arrears reduced or cancelled if there's been a
change in circumstances and they haven't gone to court to get
their cases adjusted. These are arrears that have existed since
the beginning of the program and with some growth over time, but
they have stabilized now. It does depend, as well, what the court
order was and the size of the court order.
Mr John C. Cleary
(Stormont-Dundas-Charlottenburgh): You mentioned earlier
that you were going to hire 96 front-line staff. What will they
be doing? How are they going to make the system better? I'd like
you to explain that a little more, please.
Ms
Karakatsanis: We've already hired them. They are client
service associates. They will be speaking with people on the
phone. They will be dealing with the cases in enforcement
actions. They will be taking the full range of services that
client service associates offer.
Mr Cleary:
I was pleased to hear you say that some of your staff are getting
complimented on the good job you're doing. It's sure a lot
different in my constituency office up until now. There weren't
many compliments there about the way things were being
handled.
The other thing that I
would like to ask-you say that the new models make the
difference? I was wondering if you could expand a little bit on
that.
Ms
Karakatsanis: I think we have a number of new
enforcement tools that are making a difference, and we are more
aggressive in the enforcement tools that we've had. Credit bureau
reporting, for example, is something that's new. Almost 80,000
people are reported to credit bureaus. That's something that's
really easy to do, and it's a very cost-effective enforcement
measure. The staff push a button at the end of the month and the
list goes to the credit bureau.
Interception of lottery
winnings is new. That has brought in more than $435,000. Driver's
licence suspension-again, 12,600 notices of suspension resulted
in $28 million coming in and a further 5,200 suspensions brought
in $4 million, for a total of $32 million.
Federal garnishments, where
we garnish income tax refunds, CPP refunds and GST refunds as
well, has netted $34.2 million since April 1999. The collection
agencies project has located $8.7 million which has flowed
through to families. Sorry, we're getting the exact numbers. The
numbers which resulted from that pilot project-and this is as of
this point in time, and more money may flow yet on that
project-that brought in $8.7 million that has been either paid
directly or has been agreed to be paid by the delinquent payers.
We are expanding that now to deal with debt that is six months
old.
The private collection
agency project was on cases where a payment had not been received
for over three years. There hasn't been such an effort in any
other jurisdiction to go after debt that old in such a concerted
way.
For court actions, we used to initiate 40 court
actions a week, where delinquent payers risk going to jail if
they don't pay up. We now initiate more than 100 of those cases
per week.
Many of these tools are new
tools. We're beginning to see the combined benefits of these
enforcement strategies. That's why we're seeing more money coming
in and being collected and disbursed to families. I think that's
also why we are seeing arrears stabilize, and we expect that
they'll decrease.
Mr Cleary:
Did I hear you correctly when you said that once the money is
received it will be turned around and sent out in two days?
1350
Ms
Karakatsanis: In 95% of the cases, we turn it around and
send it out within 48 hours. That's compared to 10 days. It used
to be 10 days.
Mr Cleary:
Or more.
Ms
Karakatsanis: Or more.
Mr Cleary:
About the suspended driver's licences, I just want to make sure I
heard that correctly. You said you sent out 12,500 notices?
Ms
Karakatsanis: It was 12,600 notices if they don't pay,
and that resulted in $28 million coming in. In 5,200 cases, we
actually had to proceed to suspend the driver's licence, and that
brought in an additional $4 million. So that's a total of $32
million.
Mr Cleary:
You mentioned 80,000 cases earlier.
Ms
Karakatsanis: The exact number is 78,800 delinquent
payers who are reported to the credit bureau. That is very
important. It makes family support a legitimate debt and it
affects their ability to obtain credit and loans. It's an
enforcement tool that is very cost-effective. It drives payers
in.
Mrs Claudette Boyer
(Ottawa-Vanier): I just want to come back a little bit
to the matter of payments: postdated cheques versus
pre-authorized payments. Have the payers who were doing postdated
cheques been notified that they should not go with the postdated
cheques?
Ms
Karakatsanis: They are being notified, yes.
Mrs Boyer:
They're not all notified yet?
Ms
Karakatsanis: Every time a cheque comes in that is
postdated, they are notified that in future there will be a
charge for that. There are about 450 postdated cheques that come
in per week, which is about 2,000. These are numbers we were able
to obtain over the lunch hour, Ms Martel. There are perhaps a
little more than 6,000 payers who use postdated cheques. It's
already reduced from the numbers you heard earlier this morning
because of the introduction of electronic options. In fact, at
the time of the auditor's report he noted that 25% of receipts
were being received by electronic means. That's up 36%. So we
already see more people using electronic payment options.
Mrs Boyer:
I think my question was, are they being told that if they go on
with the postdated cheques, there is going to be a user fee of
$35?
Ms
Karakatsanis: Yes.
Mrs Boyer:
The postdated cheque method versus the pre-authorized payment-are
they told they should go to pre-authorized?
Ms
Karakatsanis: Definitely.
Mrs Boyer:
I guess not all of my people have been notified yet, because they
didn't seem to know that.
This user fee is
implemented right now? If somebody sends a postdated cheque, the
user fee will start?
Ms
Karakatsanis: The fees are not yet implemented. We are
working toward an April implementation. That's the target. It
will be sometime this spring. But we've started to notify people
that the fees are coming and that there are other options.
Mrs Boyer:
If I may come back to what my colleague Richard Patten said, you
were saying in your presentation earlier this morning that you
were very efficient toward the recovery of payments from payers.
But I find that the enforcement should also change. We were
talking about the human voice and everything. An automated voice
system is great if you just want an update, but sometimes you
have a person who is very discouraged and really needs to talk to
somebody. What I'm getting from my constituency office is that
they can stay half an hour on the line before they get somebody,
or they get the busy signal. Do you have a number that tells you
how long these people wait? I'm sure at the end of half an hour,
when they get on the phone, they surely say that. What I get from
my constituents is that the wait is very long. I wonder if
efficiency shouldn't only be toward recovering the payments but
toward answering these people.
Ms
Karakatsanis: We have made solid progress. I don't want
to leave the impression that we think there is no more progress
to be made. We accept that we need to make more improvements, and
we are working toward them. We have made improvements, solid
progress, but there is more to be done, and I want to freely
acknowledge that.
With respect to the call
centre, more people are getting through to the Family
Responsibility Office more quickly than ever before. We are now
answering more than 2,000 calls every day, compared to the 400
who got through in 1996 and the 1,700 who got through on average
last year. We've also expanded the hours by 30%. The hours are
now available from 8 am to 7 pm, Monday through Thursday, and the
very best time to call is 5 to 7 pm, Monday to Thursday. We do
try and encourage people to call at that time. That's the least
busy time to call, from 5 to 7, Monday to Thursday.
The wait times are down. We
monitor that. The average wait time now is nine minutes. That's
down from 30 minutes in 1997, and that is actively monitored by
managers at the program. If that number starts to grow, people
are reassigned to the phones to be able to answer more numbers
and keep those numbers down. We also track the maximum wait time,
and that is continuing to improve, although I don't have that
handy right now.
The Chair:
OK, thank you very much. Before turning to Ms Martel, I just have
one very quick clarification. If I sent you 12 cheques, you'd
charge me $35 a cheque to process each, but if I sent you one every month,
you don't charge. Is that right?
Ms
Karakatsanis: That's correct.
The Chair:
That's correct, OK. Ms Martel.
Ms
Karakatsanis: So you can continue to send in cheques
with no fees; it's the postdated cheques that will attract a fee.
And you can pursue other alternatives, electronic alternatives
that are just as convenient.
Ms Martel:
I want to return to the private collection agencies and say that
I regret that you've left the impression, again, this afternoon
that as a result of all the work that private collection agencies
did, there's some $8.7 million coming in, because I suspect we
will find that as a result of work being done by FRO staff now,
money is coming in. I don't know why you would be saying it has
to do with private collection agencies. I think that's kind of a
dishonest way to frame it.
Let me ask about the second
round. Have the private collection agencies now been hired for
the second round, the cases from six months to three years?
Ms
Karakatsanis: The tenders are in and we are evaluating
them, and we hope sometime this spring to enter into agreements
with a number of collection agencies. They haven't yet been
selected.
Ms Martel:
How many agencies do you plan to select?
Ms
Karakatsanis: We anticipate that it will be three or
four agencies, but that's not a firm number.
Ms Martel:
Would you know from those agencies how many staff they would
intend to allocate to this particular project? Was that part of
the RFP, that they would indicate that?
Ms Angela
Longo: I think that was part of the RFP, that they would
have had to describe how they're going to do it, how many people
they would apply, the process they would use, and that would be
part of the evaluation activity.
Ms Martel:
And you would not be at liberty right now to give us that because
they haven't been chosen.
Ms Longo:
It's in the process.
Ms Martel:
Let me ask, how many cases are going to be transferred to the
private collection agencies?
Ms
Karakatsanis: It's 24,000 cases, representing $275
million in arrears. Those are the cases that are in arrears from
six months to three years.
Ms Martel:
And are the contracts one year?
Ms
Karakatsanis: It's a three-year program.
Ms Martel:
So they have three years to collect $275 million of arrears for
24,000 cases? That's what the RFP is right now?
Ms
Karakatsanis: The $275 million is the total amount of
arrears. We will be working with them to set performance targets,
how much of that arrears they can commit to recovering.
Ms Martel:
Let me ask you about FRO's own efforts on collection. At the same
time as you did the first pilot project, you also did a project
internally where 20 enforcement staff were allocated with cases
where there had never been a payment, so I would assume they'd be
some of your most difficult cases. This is in July 1998. The
auditor reported that you were assigned 40,000 cases. By February
of 1999, 16,000 had been contacted. I have a couple of questions.
Were these 20 enforcement officers assigned full-time to recover
these arrears?
Ms Longo:
Yes. I had to think back; I'm sorry.
Ms Martel:
Can you tell me how much money they were trying to collect? What
were the outstanding arrears assigned to those 20
individuals?
Ms Longo:
I can't tell you without going back to check. We assigned cases
where there had not been any activity, but we'd have to go back
to check how much money was involved in those cases. I can't tell
you off the top of my head.
1400
Ms Martel:
Could you tell me how much money was collected from that internal
project?
Ms Longo:
I'd have to go back and check.
Ms Martel:
I would appreciate it if you would table this information with
the committee, because I would like to make a comparison between
the work done by your own staff, targeted, versus what the
collection agencies have been able to do in the pilot project you
already had.
I'd also be interested in
the collection agencies that did the work in the first pilot. Can
you tell me if people were assigned full-time by the collection
agencies, and how many, to recover whatever was recovered?
Ms Longo:
Yes. I think they did assign full-time people in the collection
agencies, but I can't tell you off the top of my head.
Ms Martel:
If you could table with the committee how many people were
assigned through that year, that would be helpful.
Ms Longo:
Some of the cases that we started looking at, that had not been
looked at in years before, would also be cases that went to the
collection agency if we were not successful, because they would
have fallen into the criteria.
Ms Martel:
If the 20 enforcement officers started in July 1998, when did
they end their work?
Ms Longo:
I have to confirm that for you. I'm going by memory.
Ms
Karakatsanis: It is important to note, though, that the
cost of the FRO staff enforcment was borne by the taxpayer. The
cost of the private collection agency project was borne by the
payers.
Ms Martel:
I understand that. My assumption would be that there is not as
much in it for people in private collection agencies to go after
some of this money, especially if it's difficult to get at,
whereas the FRO staff don't have that same restriction. They are
there because it's their job to try to recover some of this
money. That's why I'm interested in finding out what was
collected by each group. I would clearly like to see if there was
a difference in the amount that was collected by public sector
staff, whose job it was entirely to do this, or private sector
collection agencies staff, who may or may not have been
motivated, depending on if it was easy money in terms of
return.
Ms Karakatsanis: We'll get that
information for you. The collection agency project, though, was
in addition to all the enforcement tactics being taken by staff
and was with respect to debt where monies hadn't come in.
Ms Martel:
My understanding was that these 20 people were assigned
specifically to cases where there had been no payments. That's
all they were supposed to do. They weren't on the phones acting
as client service associates. Am I correct that all they were
supposed to do was go after this money?
Ms Longo:
And examine those files, yes.
Ms Martel:
Then they would have essentially the same role as people in
private collection agencies?
Ms
Karakatsanis: We'll get you the information.
Ms Martel:
Let me ask now about the federal government. Do you receive money
from the federal government at the FRO?
Ms Longo:
The answer is yes, but let's to be clear on the context of that.
We receive money that is garnisheed from federal sources of
income for payers who owe money to recipients here. We don't
receive money directly from the federal government generally.
Ms Martel:
Can you tell me what this fund is: the development of justice
child support implementation and enforcement fund?
Ms Longo:
There is a specific fund that the federal government set up,
which was to support the implementation of the child support
guidelines. It supported provinces across the country on a couple
of fronts. One was to help develop the promotion and information
around the new child support guidelines. That's not money that
went to FRO but assisted in our courts program, for example. We
also received money from that federal fund on a year-by-year
basis to help implement some our technology changes. That's what
we used it for in Ontario; other provinces used theirs
differently.
Ms Martel:
So, to implement technology changes. Can you tell me how much
money you have received from the federal government to help you
implement technology changes?
Mr Costen:
The figure is $1.6 million for the fiscal year 1998-99.
Ms Martel:
Did you receive money before that?
Mr Costen:
There was some money. I don't have figures with me on that.
That's the present budget.
Ms Martel:
Could you provide this committee with the amount of money you
have received from the federal government for technology
improvements, not just in the last fiscal year but at whatever
point the feds started this program?
Can I ask this question?
Are there federal audits-
The Chair:
Excuse me for interrupting. You'll have to speak up-that is, yes
or no or whatever the answer is-because Hansard cannot report
head-nodding. Thank you.
Ms Martel:
Are there now federal auditors at the FRO auditing this
money?
Mr Costen:
I don't believe they are there now, but there is a plan that they
will be coming in to look at how their money is spent, as they
would with all programs in all provinces.
Ms Martel:
Is this department of justice staff?
Mr Costen:
To my understanding, yes.
Ms Martel:
Is this part of something they regularly do with provincial
jurisdictions?
Mr Costen:
That is my understanding.
Ms Martel:
Have they given you an idea of the purpose of the audit? Have
they given you their guidelines, what they want to work with?
Mr Costen:
I assume it's for the value of the monies they have spent, which
we talked about earlier.
Ms Longo:
When the federal government set up the child support guidelines
funding so all the provinces could implement the new rules, they
set aside funding for, I think, four years. Part of the process
would be to evaluate the spending of that funding at the end of
it. I think the end of it is one year from now. This is year
three of four.
Ms Martel:
Are the department staff now in all the other provincial
jurisdictions as well or just in Ontario? Are they auditing all
the provincial jurisdictions right now?
Ms Longo:
That would be part of the whole program.
Mr Costen:
I believe I was wrong in the information I gave you earlier. They
have in fact been to our place and have found no problems with
the way the money has been spent on the child support guidelines
as it pertains to technology improvements.
Ms Martel:
So they have confirmed that the money was spent on technology
changes. When were they in? Just in the last couple of weeks?
Ms Longo:
Yes, within the last month.
Ms Martel:
Will they be making a report public that would show what they
were doing, or is this an internal audit?
Mr Costen:
That I don't know.
Ms Martel:
But it was justice department staff; it was not the federal
auditor?
Mr Costen:
Yes, it was justice.
Ms
Karakatsanis: It's their program.
Ms Martel:
I want to ask some questions now about enforcement.
The Chair:
I'm sorry, but I wonder if the witnesses can speak up. Hansard is
having a bit of problem picking up the various comments.
Ms
Karakatsanis: We'll do our best.
Ms Martel:
I want to look at some of the enforcement tools that have been
used. You have given us some information; I'd like to see if I
can get some more. Firstly, can you tell me how many cases are
currently registered with the FRO? Perhaps you can give that to
me at the end of the calendar year 1999? The auditor reported
170,000, but that was as of March 1999.
Ms
Karakatsanis: It's 172,609 cases.
Ms Martel:
Can you tell me the number of those cases which would be in
arrears?
Ms
Karakatsanis: I have 128,000. That would be as of the
same date. I believe it's 128,000.
Ms Martel: The auditor used
128,000 cases in arrears as of March 31, 1999.
Ms
Karakatsanis: I'll have to confirm for you the number as
of December 1999.
Ms Martel:
That would be helpful. You've said that by the end of 1999 the
arrears were 1.227, so that has not been changed
significantly.
Let me ask, with respect to
the enforcement tools-you've given us some information about
drivers' licences. I'd like to know how many passports you have
suspended as an enforcement tool.
Ms
Karakatsanis: Four hundred and ninety-nine passports
have been seized since 1997.
Ms Martel:
What is the amount of money that has been collected?
Ms
Karakatsanis: I don't have the amount of money that has
been collected specifically attributable to passports. I don't
think that's available.
Ms Martel:
Do you keep that information as a matter of course? Is that
something you track, because I'm going to ask the same question
about a number of others?
Mr Costen:
On the federal passports, it may be difficult, first, because
it's in conjunction with federal statistics, but also it may not
necessarily lead to more money. It may well be that a person has
left and we've suspended the passport, so it's difficult to
actually give a figure as to how much that particular initiative
brought in. We're not tracking that.
Ms Martel:
If you can get it, that would be great.
Let me ask about other
federal licences. Do you have a category that would indicate
that?
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Mr Costen:
That number we gave you includes all federal licences. Most of
those are passports.
Ms Martel:
So 499 since 1997?
Mr Costen:
There may be a few like aviation licences in that group, but for
the most part they're are all passports.
Ms Martel:
Second category: garnisheeing the payer's bank account. You said
you were doing $100 per month. Can you give us a total since that
tool went into effect?
Mr Costen:
The tool that went into effect was the joint bank garnishment,
which is an expansion of the traditional garnishment power. The
figure that we have given you was the total number of
garnishments. I don't believe we have a figure for you on the
joint bank account.
Ms Martel:
Sorry, let me clarify. I had two different tools: one
garnisheeing a payer's own individual bank account, which I
thought was $100 per month, and the second tool would be
garnisheeing up to 50% of a bank account with a third party. Are
those two different enforcement activities?
Mr Costen:
They're two different things, yes, but they are all collected
together because they're all garnishments. They all go through
the same process.
Ms Martel:
So I should assume $100 per month for both categories?
Mr Costen:
It would be $100 to $135.
Ms Martel:
OK. What would be the total since that change in the legislation
went into effect?
Mr Costen:
I don't believe I have that number.
Ms
Karakatsanis: I think that a number of these enforcement
activities are things where that we use multiple tools, so that
we would be proceeding with the lotteries, with the federal
garnishment, with a number of these simultaneously, and so it
isn't always easy to track what recoveries are precisely by what
enforcement tool. We are tracking a number of them individually,
such as the driver's licence, which I talked about, and a number
of them that I highlighted. They are more aggressive tools and we
are able to track how much money comes in as a result of those
specifics. But generally speaking, many of these others are
simultaneous and it isn't easy to track which particular
enforcement tool has resulted in money coming in. We've got the
numbers, the money coming in, but I'm not sure that we can
provide them broken down discretely by each particular tool.
There are some that we can and some that I don't think we can
provide.
Ms Martel:
OK, for those two items then, what you're saying to me is that
you probably couldn't tell me what the amount of arrears
collected was by using either of those two activities-the
individual bank account garnishment or the third party?
Ms
Karakatsanis: We will look to see how specific we can be
about how much each of these tools does generate, but I know in
advance that we won't be able to be precise, because in a number
of cases there's more than one action taken at the same time.
Ms Martel:
Let me just give you the other ones I'd appreciate some more
information on. You talked about lottery winnings, but also you
have the ability to garnish lump sum payments which would be
severance payments. Do you have some information about how many
of those, and how much money has been collected? Second, the next
one is with respect to default hearings. You said there's been
100 initiated per week. I'd like the overall. Now default
hearings were something you had before 1997, in any event. Am I
correct?
Ms
Karakatsanis: Yes we used to initiate four a week, we
are now doing more than 100.
Ms Martel:
Perhaps you could give us your default hearings in the fiscal
year 1998-99, how many went forward and how much money was
collected for defaults? Court orders against third parties who
are sheltering assets, how many have been applied and if that's
generated any money? And the credit bureaus, I would suspect that
even though a lot have been done, I'm not sure that you could
track how much money has actually come in as a result. That's a
whole different matter.
Let me go back to something
the auditor said about the enforcement tools. I'd like to get
some information about them because I hear you, Deputy, when you
say you really are trying to go at this more aggressively. The
problem I have is with the ministry's own response to the
auditor's concern and criticisms about enforcement, the ministry's own response that
it was going to take the FRO two years to fully realize the
impact of its more aggressive enforcement activity. I can't
understand, with all these tools at your disposal, why it's going
to take two years before we realize some very significant
enforcement activity. I go back to what the ministry provided as
a response in the auditor's report.
Ms
Karakatsanis: The auditor was there in the very early
days of some of these new tools. That's why we believed it would
be a while before we would be able to fully implement and fully
gauge the effectiveness of these tools. We're coming up to the
two years soon. I think what you see is that a number of these
tools have really matured. We are using them more aggressively
and money is coming in.
Ms Martel:
It would be your submission that in fact the two years is almost
over. I thought the auditor was in by the end of March 1999.
Ms
Karakatsanis: Maybe not. I believe we were looking at
the period 1997-98. In any event, certainly a year has gone by
since beginning a number of these, and it does take a while to
get a sense of how aggressive we can be in these areas and how
effective they will be. This is something we continue to
monitor.
Ms Martel:
You've said to us one of the changes is that after 60 days in
arrears the payers are contacted by a live body and then more
enforcement is undertaken. Can you give us some idea of how
people are tracked after the 60 days? The auditor's criticism was
that because you had different case managers who were involved in
different cases, there were huge gaps between enforcement
actions. I want to know what new system you've put in place.
Perhaps it is that people are hanging on to their own files now.
What system are you putting in place so that after the first
contact with a payer you are sure that the same individual is
then following through with any number of enforcement activities
to make sure money comes in?
Ms
Karakatsanis: There are a number of reports that the
Family Responsibility Office uses to manage cases. As I mentioned
earlier, when enforcement is required, the client services
associates are assigned to a case and stay with that case while
the enforcement is necessary. That is something that assists.
They bring forward reports and user logs that do bring back the
cases that require action according to the type of action that's
required.
There are a number of other
reports that are used. We are also looking at some new reports
that will assist in tracking some of the cases. With the Y2K
freeze now lifted, we'll be in a position to start to implement
some of those reports to assist us in the monitoring.
Ms Martel:
Can I ask when your 60-day policy went into effect?
The Chair:
Can we get back to that later on? I think the 20 minutes are up.
I've been more than generous. The government side.
Mr
Martiniuk: I will be sharing my time with Mr Johnson and
Mr Hastings.
I understand the ministry
will be implementing a computer-telephone integration initiative.
Could you tell us how that will work and what are the time frames
involved in its implementation?
Ms
Karakatsanis: That's coming soon. We're very excited
about it. It integrates the computer and telephone system so that
as a call comes into the office, the case information is brought
to the screen immediately. That saves valuable time, so that the
client services associate doesn't have to search for and bring up
the file. That gives them a head start as soon as they're on the
phone.
That is something we're
hoping will be implemented within the next couple of months. We
believe that will help us provide more efficient service and
hopefully will assist us in bringing the time that we need on the
phone down and bring those wait times down as well.
Mr
Martiniuk: That program would be based on and supported
by the imaging monitoring program. What's the state of that? Do
you have all the data in? What's the time frame?
Ms
Karakatsanis: We have just been upgrading the data
software imaging system. That does allow us to scan documents so
that they're available to client services associates as they need
them and can therefore provide the information to the caller
without having to go search a paper file. We have just completed
some upgrades that will allow for a greater volume of users, and
that is being implemented this week-on Monday.
Mr Bert Johnson
(Perth-Middlesex): I want to I understand some of the
terms and so on that you use. The term "in arrears" was used.
When do you consider someone in arrears? What I'm getting to is
that in the project that you're working on, those cases, as I
understand it, haven't had a payment made between six months and
three years. How does that differ from arrears?
1420
Mr Costen:
Basically, arrears are when a debt is due and payable in
accordance with the court order and money has not been paid. It's
as simple as that. So you may have arrears of two or three days
when the payment is late, and that may show up on the system as
arrears temporarily. When the cheque comes in, it would adjust
accordingly.
Mr
Johnson: When you're using the term "arrears," you're
using zero tolerance for a late payment?
Mr Costen:
Yes. We don't wait, like, 30 days.
Mr
Johnson: So that doesn't have anything to do with the
six months to three years and the $275 million that you're doing
under the three-year program?
Ms
Karakatsanis: That's right. We have targeted arrears in
cases where payments have not been made for six months for this
enhanced private collection agency program. The Family
Responsibility Office staff continue to work on cases to ensure
that money is flowing and that those arrears do not build up. We
agree that the sooner you can get to a payer, the more likely you
are to be able to collect that debt. So we are continuing the
efforts to keep cases in compliance, and we are providing to this
project those cases where payments haven't been made for more than six months.
We're not forgetting about the arrears of less than six months. I
want to assure you of that.
Mr
Johnson: The other thing I wanted to get to is the
enforcement tools, and I guess what I would call threats. We were
told, I believe it was this morning, that although you have the
enforcement tools for suspending somebody's driver's licence, you
would notify that person and they would have to make a payment or
arrangements for payments within 30 days or you would implement
that suspension?
Ms
Karakatsanis: There's a third option. They can go to
court for a reframing order. That is an order that would stop the
Family Responsibility Office from proceeding with the licence
suspension. In order to do that, they have to at the same time
apply to the court to review the arrears or a motion to vary the
arrears, to reduce them. In other words, they would be disputing
the amount of arrears that they feel should be paid in that
case.
Mr
Johnson: Is that a common law right or is that a
legislated right?
Ms
Karakatsanis: The legislation gives them the right to do
that.
Mr
Johnson: That is in this legislation?
Ms
Karakatsanis: It's in this legislation.
Mr
Hastings: Let's go back to some of the matters we
started to look at this morning. You mentioned in your
presentation that the FRO now has some kind of e-commerce
orientation. This frightens me. I would like to know then, if
you're going to have some kind of-what did you call it?-an
E-CLIPS security system, what is the format of this security
system? Is it a 128 standard?
Ms
Karakatsanis: I can't answer that question. We've worked
in partnership with the Royal Bank. It is an Internet-based
system. It is a secure system. There is no personal information
available on that system. It is a system that allows employers to
remit payments from the payer directly to the Family
Responsibility Office. It is a system that I understand is secure
and that 171 employers are now participating in. But I think I'm
going to get the answer to your specific question.
Mr
Hastings: Do you want to go back and check your software
or whatever you're using, because if it's an on-line thing
connected to the Internet, we've just seen some of the stuff
that's been happening there in terms of these sites that are
supposedly really secure, all the industry in the US said, and
yet that's not the reality of the situation.
Ms
Karakatsanis: As I said, we've worked with the Royal
Bank. It's their system and they deal with security on the
system.
Mr
Hastings: If it's a system that involves a private
virtual network, something that's off-line, then that would make
me feel much better, if that is the situation. That would be my
first question.
Ms
Karakatsanis: With your indulgence, Toni Mazur, who is
in charge of our technology, is available and would be happy to
answer questions.
The Chair:
Would you identify yourself, please.
Mr Toni
Mazur: I'm Toni Mazur. I'm the senior manager of
information systems at the Family Responsibility Office.
The connection to the Royal
Bank and the income source is done through a secure socket layer,
the latest in information technology security on the Internet.
The entire development process was undertaken by a subsidiary of
the Royal Bank on our behalf and it was part of the requirements
from the Family Responsibility Office that this be a very highly
secure operation.
Mr
Hastings: Does that mean that it's on-line or
off-line?
Mr Mazur:
It is on-line.
Mr
Hastings: That means there is some kind of encryption
used?
Mr Mazur:
That is correct.
Mr
Hastings: Have you or the Royal Bank actually tested it
so that we don't have to face the potential downside on this, if
there is one?
Mr Mazur:
Testing was undertaken both within the context of the
government's Year 2000 program and also by the Royal Bank with
respect to all functions within that connection for security.
Mr
Hastings: I'd like to go back to the organizational
stuff. Are you satisfied in terms of the information you're
using, the enforcement strategies you have in place, to ascertain
where you will be, say, in a year or two years from now in terms
of not only handling the incoming number of cases but also the
ones you're dealing with so that we have some benchmarks, some
standards by which we can measure real progress? In your report
we get some snippets of information, that driver's licences, for
example, provided about $32 million in monies back to kids and
families, but it would be nice to have some kind of material
brought to this committee that would show the next two to three
years contrasted with what it was back six or eight years ago.
That's what I would like to see.
FRO is now on a case
management system to a great extent, but not totally?
Ms
Karakatsanis: That's right. For those cases that require
enforcement actions, they are assigned to a particular CSA. It's
a case management system for that particular function during that
time.
Mr
Hastings: To what extent or when will the case
management approach be the full focus of the FRO instead of the
old issues management approach you used to use whereby the
auditor said you could have up to at least three enforcement
people or client service reps involved in tracking down the
disappeared?
Ms
Karakatsanis: There are a number of questions. Perhaps I
can start with your last question first.
Mr
Hastings: Before you do, I'll give them all to you,
because some of these you may have to bring back.
What I'd also like to know
is, how did the issue management approach contrast with the case
management approach in terms of the delays, in terms of the
collection of monies, in terms of the return of phone calls?
There is a whole set of indicators you could use. I think you're going to have to
go back and look at how the organization was functioning from
when it started up to 1995. I'd like to get some information in
that regard. The focus of this committee has only been the
auditor's report, which is fine, but I think there is always a
prior history involved in this stuff. It would be nice to get
that kind of material in terms of how issues management slowed
down or advanced the handling of cases, from the most simple
through to the most difficult, versus the case method you're now
using. That would be an interesting situation to see.
1430
My final question comes out
of experience with constituents in terms of their-I don't know
whether it's the lawyers or the courts or both. In some of the
older cases I've seen in the last year or year and a half,
roughly, the court orders that were developed by the family law
lawyers or their assistants and what was brought about by the
crowns in some instances weren't very clear as to who was to pay,
what the frequency of payment method was-all that kind of
stuff-and when children became adults. I just had a case where a
gentleman is still paying for his 21-year-old son, who is not in
university or not designated support by that family. In other
words, he's off on his own, but he's still receiving payments. I
know there are very few cases like that. You may not be able to
answer that kind of a question today. How does how the court
orders are written improve or delay your administration in
executing what has to be done in a particular file?
I talked to a judge once at
a social gathering who said that in some instances, the court
orders are not clearly written. I think that question would be
very difficult to answer today, because I think you'd have to go
back and look at some of them to get an anecdotal approach as to
whether the lawyers don't help their clients or do help,
depending on what the set of circumstances are of some of these
situations. Those would be my questions.
Ms
Karakatsanis: I'll go in reverse order, and then I will
save some time for Dave Costen to tell you about the efforts to
standardize court orders. You're quite right. Inconsistent court
orders, unclear court orders, court orders that are not precise
about when the support starts, when it stops, how much money's
involved-those all pose huge operational challenges for the
program and huge areas of disagreement between the parties. That
is an area where we have done considerable outreach and we are
really trying to influence those who, at the end of the day, help
to draft court orders. I will save some time for Dave Costen to
respond to that.
If can just touch on the
other two questions that you asked, the first is about case
management, and it is something that we need to review with
respect to the efficiency and the cost-effectiveness of that
approach as part of our ongoing, continuous improvement. It's
hard sometimes to isolate what impact one particular factor has
on the overall efficiency of the organization. It's early days
yet to be able to contrast the effectiveness of a case-managed
enforcement approach to the earlier approach. We do agree with
the auditor that having several different people on enforcement
matters, particularly within a period of time related to
enforcement of an order, was not as appropriate as the approach
we're currently taking.
It is something we will
continue to evaluate as we look at the overall effectiveness of
the organization. It's early days yet, though, to provide any
specific contrast to the issues management approach.
The one way that we try to
measure the effectiveness of the organization as a whole, in our
effectiveness in meeting our goal of getting more money to more
families as fast as possible, is the performance criteria that we
have for the program. Those, if you like, are benchmarks where we
measure the amount of money flowing, the percentage increase of
money flowing, the compliance rates. That's a really objective
assessment of whether more cases are in compliance or in
substantial compliance than used to be. That's a good objective
measurement of the effectiveness of the program.
We also measure access to
the program by people who need it: How many calls are getting
through, what's the average wait time and, of course, what's the
turnaround time in getting money to families as fast as we
can?
Those are all objective
performance measures that we have in place, that we have been
tracking. Those help to give us the information to know whether
we're on the right track, and in all of those areas we've seen
improvement.
Mr
Hastings: Could you go back then and contrast those
latest stats you have in these areas with what they were six,
eight years ago?
Ms
Karakatsaris: I haven't-
Mr
Hastings: You can't do it right now, so I would like to
see that kind of information supplied to the committee if you
don't have that, and it may take a little bit of homework.
Ms
Karakatsaris: I can give it to you now, if you like. The
compliance rates: 58% today; 53% in 1994-95. Amount recovered:
$367 million in 1994-95; $532 million projected for this fiscal
year. That's an increase of 47%. Wait times are down; they are
now around nine minutes. Average wait times: I have that compared
to last year, which was 1,700, and I think in the fall of 1996 it
was 400. So there have been improvements. The turnaround time in
payments: 95% of the time we get money out within 48 hours,
compared to up to 10 days back in 1995.
Mr
Hastings: Do you have stats prior to 1995 on some of
these categories?
Ms
Karakatsaris: I don't.
Mr
Hastings: You don't have them with you? That's what I'd
like to get.
The Chair:
That's the 20 minutes. There was a question to the gentleman as
well. So why don't we get your answer.
Mr Costen:
We do a lot of work both with delivery agents, lawyers, the
bench, and through our materials of payers and recipients, trying
to get parties to make their orders very clear as to how much is to be paid,
when it is to be paid, and that the amount of money is very
certain.
What often happens is that
there are contingencies built right into the clause in the order
which create all kinds of problems for us. For example, you might
get an order that says the support payer is to pay $200 per month
when employed and $50 per month when unemployed. The problem for
FRO is, we don't know when the person is unemployed, so we
continue to enforce, but obviously the payer gets upset when he
goes on EI. Those are the types of calls that come in to the call
centre and create problems within the financial area. Oftentimes
there will be an issue within legal as to how that is to be
interpreted. Oftentimes the parties will sit down and say the
payer is required to pay tuition fees, but nobody ever tells us
what they are, nobody provides the information.
What we try to do is put
out sample clauses of enforceable types of clauses, which will be
a sort of FRO-friendly clause. We spend time with the bar and the
bench. We've circulated these solutions to the judges. They are
free to accept them as they wish, but our basic assumption is to
keep everything simple. A lot of times when parties or lawyers
work together, they have a solution that makes sense at the time
they cut a deal, but when it comes to the office it doesn't make
so much sense. The enforcement officer or the financial officer
wasn't in the room when that provision was put together;
therefore, it's important, so that time isn't wasted on that
particular file, so that the clauses be kept simple,
straightforward, that you know exactly when the payment is due
and by whom and at what time.
The Chair:
The official opposition.
Mrs Boyer:
I want to come back on the enforcement tools. I know that the
payer has a legal responsibility to pay support and that the
Family Responsibility Office has, as you mentioned this morning,
a lot of enforcement tools.
Pertaining to suspension of
a driver's licence or a passport, which is mostly the case I have
in mind right now, as soon as this person who has been told he
will lose his passport or his licence will be suspended pays the
arrears and pays his dues, is his passport given back to him
right away or is there a waiting period to be sure he goes on
with his payments?
I have a case of a person
whose passport was suspended. He paid his dues, got his passport
back and now he's not paying. So right now it's a game that he's
playing. I was wondering: How long can this go on? For how long
is his passport suspended?
1440
Ms
Karakatsanis: I can't answer specifically with respect
to the passport. I can certainly tell you that with a driver's
licence suspension, and in principle if there's a suspension, it
should be lifted when the payment is made or when an agreement is
reached for the payment of money over time. It should be lifted
at that point in time.
Administratively, I'm not
quite sure how long it takes the federal government to reinstate.
That is something we would hope to work with them to do as
quickly as possible. The same thing with reinstatement of the
driver's licence: When the payment is made or when an agreement
is reached as to the repayment schedule, the licence should be
reinstituted.
Mrs Boyer:
I know for a fact that with this passport suspension, as soon as
the payer paid his dues, he got his passport back. But how long
can you do that? This has been going on for quite a long time.
Isn't there something that can be enforced that after so many
times, you lose it for good?
Ms
Karakatsanis: We do have to go back every time, but we
can go to court. We can take a payer to court, particularly if
they are deliberately not paying their arrears. A history like
that would be evidence that the judge would take into account in
determining whether to impose a jail sentence if payment isn't
made.
Mrs Boyer:
So the same thing could happen with the suspension of a driver's
licence. This is a sort of pattern. The payer is playing with the
one who is waiting for the money.
Ms
Karakatsanis: If they go into breach again, if they're
determined not to pay, we would either have to go for a licence
suspension again, or we would likely then consider court the next
step.
Mr Costen:
In a situation where a voluntary arrears payment schedule is
breached, we would issue a second notice, which means that the
person would be on notice that we would suspend the licence
again. In a second-notice situation, they are not entitled to go
for a refraining order. However, if they pay off all the arrears
and take it right back to zero, then we have to start the process
all over again. That's the way the legislation is.
Mr Patten:
I have a couple of quick ones. I'm curious about postdated
cheques. If I understand this correctly, if someone sends in 12
postdated cheques, from now on they will be charged $35 per
cheque or for the year?
Ms
Karakatsanis: Per cheque.
Mr Patten:
That's pretty high. Landlords ask people to do that, and they're
glad to receive them. Are you not vulnerable to someone saying:
"This is a valid way in which it has been done. There are
precedents for it. I've done it before"? I appreciate that it
costs a bit more time, but $35 to take a cheque and put it in a
bank account-if you had staff like that, I wouldn't mind a few of
those wages.
Are you not vulnerable to
someone taking you on on that and saying: "This is
discriminatory. It has been a legitimate form of payment. You've
asked for it in the past, we've provided it in the past, we want
to continue it, and now all of a sudden you are going to-"? I can
see a small fee, but $35 a cheque is a bit much for some people,
especially if they are in a lower category of payment.
Ms
Karakatsanis: The key is that alternatives are
available. There are pre-authorized payments, telebanking,
payroll deductions and the new Internet payment system. There are
simple and easy alternatives available, so we do not think we're
vulnerable in terms of any legal challenge.
In terms of the business
sense, this is administrative effort that could otherwise be
directed to enforcement activities. There are simple and easy
alternatives-making electronic payments. In fact, we have seen
electronic receipts increase from 25% at the time of the audit to
36% today. Given the trend for e-business and the trend in the
banking sector, that's going to continue to rise. There are
simple, easy-to-use alternatives to avoid the cheques. It does
involve extra work for the Family Responsibility Office, work
that could be directed to enforcement. It's the cost of doing
business.
Mr Patten:
My only point is that for every big system, particularly big
government, there are always extenuating circumstances for
somebody that this is a better way for them. I don't want to
waste my time on that issue.
In terms of the collection
agency that is going to be collecting arrears, and they are
finally able to recoup some money-and I know these are accounts
beyond six months, and some of them are a long-shot, so to entice
an agency to do it they would get a fairly health fee. Let's say
they are able to recoup some money. Where does that 30% go? Who
pays it? What are your criteria? Does this go to the spouse, for
example? The 30% you have to pay the agency: Who pays it? Does it
come out of the amount that is being recouped? Is that less for
the spouse who is waiting for the money? How does that work?
Ms
Karakatsanis: The 25% is added to the total amount of
the arrears. As money comes in, it goes to the recipient first.
The fees are the last thing to be paid to the collection
agency.
Mr Patten:
The fee is added to-
Ms
Karakatsanis: It's added to the total debt.
Mr Patten:
I see. OK.
Ms
Karakatsanis: As money comes in, it is applied to
arrears for the recipient first, and only after that is paid
off-
Mr Patten:
So the person in arrears is paying that fee. OK. I understand.
Good.
I have a technical
question-it's how the auditor's office works. There are a lot of
things in this program that revolve around computerization, which
is going to be the ultimate saviour of the program, but there
have been difficulties throughout. My question to the auditor,
first of all is, there are two or three occasions in which you
made comment, waited for response and went back at it. What
happens? Are you still on this file, or once you have made your
report you have a choice of going on to other ministries? Is this
a live file for your office?
Mr Peters:
Yes, it would be a live file. For the moment it's not live. For
the moment it's in the hands of this committee to follow up on
our report. But the next follow-up on this program will be for
our 2001 report. In other words, we're going to follow up in two
years. We always follow up two years after we have audited a
program, as to where it stands.
Mr Patten:
OK, so it's up to us. So you see, you're going to have to relate
to us.
Ms
Karakatsanis: If you like, I could address why we made
the choices we did about technology. I'd be happy to answer that
question.
Mr Patten:
No. Truly it was a question with the auditor's office. I don't
know how long they continue with something, but he has answered
the question.
The success indicators you
gave before-did you ask for a report on that at another juncture,
John?
Mr
Hastings: Yes, I've asked for some statistics on
that-
Mr Patten:
OK, that's on the system itself. Deputy, on the indicators you
were talking about before-in terms of level of arrears, number of
people on the system, the waiting time, the backlog etc; you ran
through a number-could you give this committee a report in a
reasonable time? Let's say in June. Do you have junctures or do
you track this on a monthly basis?
Ms
Karakatsanis: Yes, we do.
Mr Patten:
On a monthly basis.
Ms
Karakatsanis: And we have measures that we are targeting
to meet for the end of the fiscal year as well.
1450
Mr Patten:
Could I then ask that you share that, just for a period of time.
There are some small indications, I think, that it's turning
around.
This is my suggestion, by
the way, on your call centre survey. We would necessarily receive
people who are either desperate or are in the category where
they're not satisfied, and if that is so, you might do a quick
survey of maybe 30 MPP offices, because, believe me, some of that
is not working.
In terms of the computer
system, the maintenance enforcement computerized accounting
system, that was an adjustment to your computer program from
further requests, right? This was in 1998. The auditor is saying
that it's still not dealing with the original questions that were
identified. But I note that in the response of the ministry
they're saying: "Listen, we're going to get on this. We're going
to develop the archival function that the auditor's office had
identified and the improvements on its function for your staff to
be able to draw on the data when they're working to do that." Did
you report on that this morning? I wasn't here in your first 20
minutes or so.
Ms
Karakatsanis: I touched on it briefly. I'd be happy to
do so in more detail. First, with respect to statistics from 1987
to 1992, I don't think we have very good information, and they
weren't necessarily tracking this or tracking the same thing, so
I'm not very optimistic that we'll be able to provide you with
information. We chose 1995 because it was just before the
transition to the new program, as a way of measuring the success
of the program. It was opted in previously. That was a different
program.
With respect to the
computers, following the auditor's 1996 report, we did look at
the program, at the evolving mandate, the advances in technology
that were available to provide solutions to the problem. For us,
continuity of service is so critical. We decided to take the more
cost-effective and less risky route of implementing technology
solutions that did not involve complete replacement of the
system, but, rather, involved enhancements and improvements to
the system. Performance has improved since the summer of 1998 and we do use
technology. We are among the most sophisticated users of
technology in the public sector. We've been able to implement
many improvements while maintaining that service. I've talked
today about the turnaround time for the receipt and disbursement
of funds. There are a number of new initiatives that I've
referred to: the E-CLIPS project; the computer-telephone
integration project, which we are going to be implementing
shortly; the automated phone system which requires changes to the
program-I've forgotten the fourth one. We are looking, as well,
at secure internet access for the social assistance benefits and
the panel lawyers.
We have completed the
architectural review that we had indicated to the auditor we
would complete. We will be developing data archiving this year
and looking at other improvements. The upgrading of the document
imaging has been concluded, and as I mentioned earlier, we'll be
implementing the upgrade on Monday. So we are constantly looking
at ways to improve the system.
For us, continuity of
service is key. We took the choice that we felt was more
cost-effective and less risky to the continuity of service by
making improvements to the existing system rather than replacing
the system entirely.
Mr Patten:
The auditor had suggested some other indicators in your
performance list and one of them was the age of accounts in
arrears. I gather you've commented that you are able to identify
those now.
Ms
Karakatsanis: We track the age of arrears, and we've
talked about it today. We did the one program for arrears of more
than three years, and now we're expanding for arrears of more
than six months. So we do track the age of arrears. It's a factor
that helps us in determining what kind of enforcement techniques
would be the most effective in that case. We did decide to start
with the hardest.
Mr Patten:
Do you have a person who responds where the person is an
exception? For example, we had a case where a person had
completed their support payments two years ago and the collection
agency was on this guy's neck. In situations like that where all
of a sudden the person is going to be cut off or has been cut
off, but there's a mistake, do you have an emergency response to
a situation like that, either way? In other words, they don't
fall within your normal category.
Ms
Karakatsanis: I was going to say we can't terminate
support orders. That has to be done through the order; it's not
something the program can do. The court order has to be changed
or the parties have to agree that certain facts have occurred.
Both parties would have to agree that some event has occurred
which means that support payments should stop, unless the order
is very clear on the face of it. Sometimes it's that kind of a
dispute. But yes, we do have a system in place to deal with those
cases where we're proceeding against someone who disputes the
arrears, and obviously we would move very quickly in those
cases.
Ms Martel:
Let me go back to a question Mr Patten raised about how private
collection agencies get paid. You said that when the money comes
in, recipients are paid and then money goes to private collection
agencies. What happens in the case where 100% of the arrears
doesn't come in?
Ms
Karakatsanis: If the collection agency doesn't bring in
any money-
Ms Martel:
No, if they bring in some but not all of it, do they still get
paid under that circumstance or are they paid only when all of
the arrears have been paid to the recipient?
Ms
Karakatsanis: No, there's a scale. Dave.
Mr Costen:
This is only under the collection-of-arrears pilot project,
because the enhanced CAP project-these details have not been
worked out. With respect to those situations where there hasn't
been a full payment, there is a scale by which the collection
agency gets some money, up to a threshold of 25% of the payment,
but the total arrears are never taken off the books. If we
haven't got all the payment, we will continue to enforce until we
get all of the money, and the recipient is not out of pocket
because of that.
Ms Martel:
Well, the recipient is out of pocket right up front. Let's say
50% of the arrears comes in, which is supposed to go to the
recipient, and you take 5% of that and give it to the private
collection agency, that's money she's out, right?
Mr Costen:
You have to bear in mind that under the CAP project this was
money that nobody was getting.
Ms Martel:
That's not my question. The deputy said early on, very clearly,
that this system is only being paid for by delinquent payers. She
made that very clear. This was with respect to private collection
agencies. What you are telling us now is that in fact recipients
don't get 100% of all of their arrears first off, before you pay
collection agencies. In fact, if they get some money coming in,
some other money that comes in that's supposed to be for them is
actually being siphoned off to pay for the private collectors,
right?
Mr Costen:
Up to 25%, until such time as the whole payment is made.
Ms Martel:
Then recipients did pay for some of this pilot project, didn't
they?
Ms
Karakatsanis: The payers paid for it. It was their
money.
Ms Martel:
Owed to recipients.
1500
Ms
Karakatsanis: This is on cases where payments hadn't
been received for three years. This is not money that recipients
paid; payers paid for it. The numbers I gave you were numbers
that were paid to recipients.
Ms Martel:
But, Deputy, you said this project was only being paid for by
delinquent payers. My argument is, if money that comes in from a
payer that's supposed to go to a recipient doesn't all reach her,
then she and her family are paying for part of this project,
aren't they? You have no guarantee that 100% is ever going to
come in. Why would you ever be giving the private collection
agency any money until the recipient has received 100% of what
she's supposed to receive?
Ms Karakatsanis: I disagree
with the way you've characterized it. This is money that
recipients would not otherwise be getting. It's money that went
directly to recipients. We've told you the total amount that went
to recipients and that they will be getting. It's money they
weren't otherwise getting.
Ms Martel:
Deputy, you have no guarantee that 100% is going to come in, do
you? You don't. The payer may start paying. He may send a few
cheques in and then he may stop. In the meantime, of the money
that came in, which should be going directly to recipients, some
of that money was diverted to the private collection agencies.
Correct?
Ms
Karakatsanis: In the meantime, money came in that wasn't
otherwise coming in. It came in as a direct result of the
enforcement actions taken by the private collection agency.
Ms Martel:
But it's not correct to say that in fact recipients didn't pay
for this. In some cases, they sure would have. Money that should
have gone to them went instead to the private collection agency,
which wouldn't have happened, for example, if FRO staff were
actually collecting these arrears. Right?
Ms
Karakatsanis: There is no fee for FRO staff to the payer
or the recipient or collection-
Ms Martel:
Right. So all of the money that the FRO staff bring in in terms
of arrears goes directly to the recipient. Right?
Ms
Karakatsanis: Yes.
Ms Martel:
So what you've got happening-
Ms
Karakatsanis: Paid for by the taxpayer.
Ms Martel:
Right, except it's money that's also owed to recipients. They
have a legal obligation to receive it.
Ms
Karakatsanis: And we are assisting them in getting that
money. The taxpayers have determined that this is a priority,
that it is worth investing in getting the money to the women and
children who deserve it.
Ms Martel:
I would argue that 100%.
Ms
Karakatsanis: We are looking for alternatives, though,
that make payers bear some of the cost of enforcement. The fees
that are payable are payable by the payers, and the money that's
coming in under the CAP project is money that wasn't coming in,
hadn't been coming in for three years. The way I look at it is,
at the end of the day those recipients got money in their pockets
that they were not getting before. The CAP project located $8.7
million for women and children who are entitled to that money and
who were not receiving it. We think that's a success.
The Chair:
How much money was that? What was the number again?
Ms
Karakatsanis: Some $8.7 million was located. I know that
about $1.7 million of that is under agreement to be paid. That's
not money they've actually got in their hands yet, but there is
an agreement to be paid. But the rest of it is actual money that
is now in the hands of families who need that money.
Ms Martel:
I would argue that if the office had ever been staffed up fully
and the staff had their own enforcement mechanisms to use, they
could have done the job. I don't blame you for that. I certainly
blame your previous minister and the current one. If the office
was adequately staffed, then people could use the enforcement
tools and get at this money.
How much money did private
collection agencies get from the CAP project that should have
gone to recipients?
Ms
Karakatsanis: We were getting the actual breakdown of
the numbers.
What's the question
again?
Ms Martel:
How much money did the private collection agencies get from the
CAP project because of the fact that they get money on a sliding
scale?
Ms
Karakatsanis: We'd have to check that.
Ms Martel:
Is the same kind of agreement going to be put in the second round
of pilot projects?
Ms
Karakatsanis: We haven't yet negotiated the terms of the
second agreement, but the fees will be payable by the payer, not
the recipient.
Ms Martel:
How will that be done, then? The minister clearly said on more
than one occasion that fees were being paid for by the payer. Now
we find today that in fact some of these fees are being paid for
by recipients because it's money they don't get. Right?
Ms
Karakatsanis: It's never money that recipients pay. It's
always money that payers have paid.
Ms Martel:
It's money they're entitled to receive, and instead of receiving
100% of it, some went to collection agencies.
Ms
Karakatsanis: They're entitled to receive all of the
support payments. It's sad that some parents don't meet their
support obligations.
Ms Martel:
Yes, it is.
Ms
Karakatsanis: We do everything we can to get as much
money as we can as quickly as possible. The CAP project located
$8.7 million on cases where payments had not been made in more
than three years. That's $8.7 million that they received.
Ms Martel:
Deputy, we've already had the argument about how much of that
$8.7 million is truly related to private collection agencies and
their work and how much would be related to work FRO staff did
starting in October 1999.
Ms
Karakatsanis: I will get you the exact breakdown of the
numbers, because they are available-
Ms Martel:
That would be great.
Ms
Karakatsanis: -but I will say again that these numbers
are as a result of that project, and FRO staff are acting on
information that was obtained by the private collection
agencies.
Ms Martel:
But they're doing the work. FRO staff is doing the work.
Ms
Karakatsanis: They're doing some of the work. Of course
they are.
Ms Martel:
That's right.
Ms
Karakatsanis: They'll continue to do work.
Ms Martel:
Which other provinces impose user fees when you send in postdated
cheques for payment?
Ms
Karakatsanis: I don't know the answer.
Ms Martel: Which other
provinces impose user fees, period, for administrative work in
their own support system?
Ms
Karakatsanis: I don't have that information.
Ms Martel:
I would like you to try and find that information for this
committee. I'd be interested to know if Ontario is the only one
that now wants to implement user fees for information that people
should have a right to have without a charge, or user fees for
doing something that they should be doing, which is making
payments.
Let me ask about the
staffing levels. The 96 more client service reps: Are these
full-time, permanent positions?
Ms
Karakatsanis: These are full-time, permanent
positions.
Ms Martel:
Was the $6 million added to the base budget of the FRO?
Ms
Karakatsanis: Yes, the $6 million was added to the
permanent base budget of the FRO. We had had temporary funding in
previous years for specific projects, but this is permanent base
funding.
Ms Martel:
In terms of staffing, you're up to 442. Can you tell me, of
those, how many are client service reps who would do
enforcements?
Ms
Karakatsanis: I think it's 140; 139 is the exact number.
That's up 40% since June 1995. But it's important to remember
that other staff-our legal services staff, the 107 panel lawyers
across the province, the financial support staff-are involved in
enforcement. So I don't want to leave the impression that it's
just the CSAs, the client services associates, who are doing the
enforcement. They all play a key role.
Ms Martel:
Does the 140 include the 96 new staff?
Ms
Karakatsanis: Yes, it does. That's the number today.
Ms Martel:
How many lawyers are on staff at the FRO?
Ms
Karakatsanis: Eleven lawyers are on staff in legal
services. I believe that's lawyers. There are 11 on staff, and
there are 107 panel lawyers across the province. That's another
private sector partnership that we have, with panel lawyers who
are available to act on default hearings for the program.
Ms Martel:
Does the FRO pay their fees per default hearing?
Mr Costen:
Yes, they do.
Ms Martel:
How many people are in your finance branch?
Ms
Karakatsanis: Financial operations support staff is
268.
Ms Martel:
Of those, which ones would be directly responsible for making
amendments to files in terms of trying to get money in with a
federal garnishment etc?
Ms
Karakatsanis: I don't have that level of detail.
Ms Martel:
You said earlier that we've got about 500 cases per client
service rep and that's an appropriate standard. Can I ask what
that would be in other jurisdictions? What would someone in a
similar position have in terms of a caseload in Quebec, Manitoba,
BC, Alberta?
Ms
Karakatsanis: I don't have those numbers handy. I should
say that with respect to caseload, the cases really range in
complexity. The 500 is an average, and it really does depend on
the complexity and the range of cases in that. It's something
that managers do keep an eye on, and they are monitored by
managers. As I mentioned, they are supported by teams that
include the legal and financial officers.
Ms Martel:
Do you know how our staffing levels compare to other
jurisdictions? By "compare," I mean in terms of number of cases
registered and staff dealing with those cases. Do you do that
kind of comparison, that kind of work?
1510
Ms Longo:
That's a difficult question for us. Ontario has more cases than
all the other provinces combined. More of the other provinces
have opt-in programs. We have the only universal program like
this so we have a lot more cases, so it's hard to compare the
apples and oranges; it makes it difficult. They have much smaller
numbers of cases and they don't necessarily have all the
enforcement kinds of tools and therefore the requirement to staff
according to those tools. We've tried for a long time to find
apples and apples and oranges and oranges to be able to satisfy
ourselves, to satisfy the auditor; the auditor tried doing that.
It's been a challenge.
Ms Martel:
Could you make a comparison about how much is spent here to
collect a dollar of support owed versus what is spent in other
jurisdictions?
Ms Longo:
I don't have that here right now. My best recollection is that
the last time we did it, it was about five cents of our dollar to
collect a dollar, and BC was about 27 cents a dollar. Our record
was good.
Ms Martel:
Do you know when that goes back to, that comparison?
Ms Longo:
It's probably six months, 10 months ago. I'd have to go back and
get it; I didn't bring it.
Ms Martel:
If you could provide that to the committee with whatever
comparisons you have to BC and other jurisdictions, that would be
helpful.
Ms Longo:
But I'd just give you the caveat that it's very hard to get
apples and apples.
Ms Martel:
Let me ask you about computers. The auditor has made it clear to
this committee that in fact the changes that you've made to your
MECA system through your FRONT initiative-I'll just use the
acronyms-will not respond to the concerns he raised in both 1994
and 1996. I'm wondering if you could respond to that comment.
Ms
Karakatsanis: The changes we've made with FRONT have
really assisted the client service associates in being able to
provide a user-friendly way of accessing the information in the
system. It was the Family Responsibility Office's assessment that
the best way to go was to make improvements to the system rather
than replace the entire system. We have just recently finished
our architectural review of the system and are now reviewing further
improvements. It is a continuous improvement process and we will
be developing, as the auditor had recommended, an archiving
function. It was the office's assessment that the most
cost-effective and the least risky way to go, bearing in mind the
need to build into the system more enforcement tools and to be
cautious about maintaining continuity of service, that the better
way to proceed was through improvements. So that was the
assessment of the office. The technology has certainly improved
since the summer of 1998, and we have completed the architectural
review and we will be reviewing the findings of that.
I've mentioned a couple of
the new initiatives we have and I won't repeat myself, but the
computer-telephone integration system is one that we think will
be very helpful to this end. I've talked about E-CLIPS and the
other-you know, the full-time voice-automated system.
Ms Martel:
How much money has been spent by FRO on new technology, and I
mean in computers, to try and respond to the auditor's 1994 and
1996 reports?
Ms Longo:
We have to put it right in particular fiscal years, but it's
about $5 million in the last three or four years to upgrade
that.
Ms Martel:
In total.
Ms Longo:
To add one thing to what the deputy said, if we were going to
replace the whole system, as was suggested in 1994, and as some
people thought-because the easiest thought is of course to say:
"Get rid of that; build it new." It sounds easy. It would take
two or three years to build a computer system the size of the
FRO-MECA system. It's a long time and many millions of dollars to
do that. To keep the business running, to implement the kinds of
new initiatives we had in front of us and to try to improve the
enforcement, it was smarter and more cost-effective to fix the
system and build on to it. That's been tried in many other
similar systems where you can improve the system. The one thing
we're going to do out of the architectural review that will help
is the archiving function, because it never had a built-in
archiving function. All the cases in our system-even when they've
terminated, the kids have grown up, it's all over with-stay in
our system, so when we run, say, a batch for month-end it has to
run through all those names, even those who are all gone, they're
all finished, they're fine. So we need to take them out and park
them, because they're finished. That will help speed things up.
Things like that weren't anticipated but they can be fixed now
without having to spend millions and millions and millions of
dollars to rebuild and not have any productivity and improvement
during that building time.
Ms Martel:
Can I ask what would be the estimated cost to redo the
system?
Ms Longo:
I've no idea, except it would be very many millions.
Ms Martel:
Would that not have been looked at when you had a request for
proposals in November 1996 for computer consulting services? It
says, "To review the existing computer system, identify needs,
make recommendations." Would that issue not have been part of
what people were asked to look at at the time?
Ms Longo:
No, that RFP asked them to look at making improvements on the
system we had, in the context of implementing the changes that
came from the new legislation in 1997. That RFP did not ask
people to design a new system.
Ms Martel:
When has the FRO asked someone for a new design so we can get a
good handle on what those costs would have been?
Ms Longo:
They haven't.
Ms Martel:
So how can you make an assessment that it would be-I don't even
know how much you said-millions and millions and millions of
dollars, without having had anyone take a look at that and
provide you with some concrete information?
Ms Longo:
I can't give you an assessment of what it would cost, except that
a computer system of that size and scale would be in the
millions.
The Chair:
With that, the 20 minutes are up. The auditor wanted to make a
comment before I go to the government side.
Mr Peters:
Just to clarify, in 1994 we recommended that the office improve
its computer system and ensure that the deficiencies identified
are corrected. It was at that time the ministry that responded.
I'll read directly from the ministry response. It says, "The
ministry also believes that the current computer system must be
replaced." Those were the words used, and those were used again
in 1996. I appreciate the point you are making now. I just wanted
to clarify for the record that you have decided to go to an
incremental improvement, as opposed to a whole throwing out and
redeveloping. I just wanted to clarify the record on that.
The Chair:
Mr Martiniuk.
Mr
Martiniuk: Considering that we have now been here for
over four hours, no doubt the deputy and her staff are somewhat
tired. Considering also that the opposition and the third party
have had an extra turn, I think it has always been the intent
that we would at some time adjourn to an in camera hearing to
consider our report after hearing from the deputy. I would think
this would be a suitable time. I would therefore move that we
adjourn to an in camera session to consider the committee's
report in regard to the FRO.
Ms Martel:
Mr Chair, I disagree, because I would like to continue with
questions. But I see the government has a majority here today, so
I'd like a recorded vote.
The Chair:
Any other comments? This is debate on the motion. Mr Peters, do
you want to make a comment?
Mr Peters:
I had a few questions that I wanted to ask in relation to some of
the things, if I would be permitted to ask those questions before
there is adjournment.
Mr
Martiniuk: I would stand my motion down until you ask
your questions, Mr Auditor.
The Chair:
All right, Mr Peters; go ahead then, sir.
Mr Peters:
For clarification I just wanted to understand some of the numbers
that were given. One is on the staffing. At the time we conducted
the audit, there were 120 full-time enforcement officers, or
so-called client service associates, and 80 contract or temporary
enforcement officers. You indicated that there has been an
addition of 96. I was wondering how many of the 96 had gone into
this enforcement area.
1520
Ms
Karakatsanis: We will give you the numbers. There are
currently 139 client service associates. Of the contract staff,
some of those contract staff were hired as permanent employees.
The 96 went both to additional client service associates and
backups, assistants for the client service associates.
Mr Peters:
So in total there were 200 at that stage. How many are there now
in total, that is, taking full-time plus contract? You don't have
to have the numbers right now, but if you could supply them I
think it might help.
Ms
Karakatsanis: I'm not sure we're counting the same
categories. There are 442 staff now. As I mentioned earlier, some
of the other staff are involved in enforcement activities, legal
and other. I've given the numbers for the-
Mr Peters:
The numbers I have are the numbers that you agreed were involved
in the enforcement area at that time. That was 200. Maybe if you
could develop new numbers, that would be-
Ms
Karakatsanis: I can't tell you precisely how many of the
financial-I mean, legal services is obviously involved in
enforcement as well.
Mr Peters:
The second question pertains to the $275 million, the 24,000
cases that were turned over to a private collection agency. I
just want to understand a little bit more about that, if you
wouldn't mind. One is, does it continue-
Ms
Karakatsanis: That's what is being proposed for the
enhanced private collections.
Mr Peters:
Oh, being proposed, OK. Thank you very much. But the $275
million-the policy of the ministry continues to be not to
calculate interest on these arrears. In other words, since these
proposed arrears are $275 million, they will not include any
interest owing in accordance with court orders awarded to
recipient people.
Ms
Karakatsanis: It includes interest where that has been
calculated by the recipient and provided to the Family
Responsibility Office. We'd like to be able to calculate
interest, but it's really not practical or cost-effective. We
have orders that are all over the place in terms of interest, and
we would require separate formulas for different kinds of orders
related to interest. We are working to standardize formulas. You
heard Mr Costen talk about our efforts in that regard. We are
consulting with our colleagues across the country about
calculation of interest. But those arrears include interest where
the recipient has calculated the interest and provided it to the
office.
Mr Peters:
I see, because our quick calculation-over the last two years we
found that 60% of the court orders included an interest
component. If you assume 6% on the six months to three years,
we're looking at potentially $8 million that may be owing to
spouses, on that calculation. It's three and a half years at 6%;
three and a half years, average 1.75, at 6%; take 60%. It is
quite an amount. I was just wondering if it could be considered
in the new architecture, that possibly with the new technology in
place interest would be considered.
The last question, you'll
be happy to note, is that you mentioned that the $275 million
that's proposed is arrears where there has not been any
payment.
Ms
Karakatsanis: For six months.
Mr Peters:
For six months to three years, not any payment. What activities
are taking place on those, over the six months to three years,
where there are insufficient payments, that they're still owing
quite a bit of money but they have made some payments? I'm just
wondering, are any of these planned to be turned over to the
collection agency as well, or who is doing the collecting of
those amounts?
Ms
Karakatsanis: Family Responsibility Office staff will
continue with the enforcement tools we talked about this morning
and this afternoon.
Mr Peters:
Thank you very much. Those were my supplementary questions.
The Chair:
Thank you. We have a motion on the floor to adjourn to an in
camera session to consider the committee report in regard to the
FRO. Any further discussion?
Ms Martel:
For the record, I think it's worth pointing out that the
committee has already agreed that we would sit on March 1 without
having any deputations before us, solely for the purpose of
determining what we would put in our report. So we already have
two days scheduled where this could have been done, and there is
no reason for us to have to finish questioning here today. I
regret that the government is moving this motion today.
The Chair:
Just for the record, the schedule that I have, Ms Martel, is that
for February 29, the environment, chapter 4, was going to be
dealt with. On March 1, health, chapter 4, was going to be dealt
with. But there was a discussion at the last committee, in
general terms, that there may very well be times on these two
days to deal with the committee report as well. I just wanted to
correct that those days weren't specifically set aside only to
deal with the committee report.
Any further discussion on
the motion? All those in favour?
AYES
Hastings, Johnson,
Martiniuk, Munro.
NAYS
Cleary, Martel.
The Chair:
It's carried. So we move to an in camera session at this
time.
The committee continued
in closed session at 1526.
