(Chapter 9—Employment Insurance Overpayments—Human Resources and Skills Development Canada—Spring 2013 Report of the Auditor General)
Ottawa, 30 April 2013—Human Resources and Skills Development Canada has worked to minimize losses associated with Employment Insurance income benefit overpayments, though we believe that the Department may be missing opportunities to cost effectively identify and recover tens of millions of dollars more in overpayments each year, says the Auditor General of Canada, Michael Ferguson, in his Spring report tabled today in Parliament. In 2011–12, the Department processed 2.9 million claims and paid out $16.1 billion in benefits.
“With so many beneficiaries and such a large amount of benefits paid out each year, Human Resources and Skills Development Canada has to ensure that it prevents, detects and recovers overpayments so that the program remains fair and costs to contributors are minimized,” said Mr. Ferguson.
The audit found that the Department has conducted analyses and put in place processes to balance the timeliness of Employment Insurance payments with the need for accuracy. It uses a risk-based approach and various tools to identify overpayments. It identified $295 million in overpayments in 2011–12, of which more than a third is the result of false or misleading information.
The audit also found that the Department has not fully used all available information on overpayments to minimize its potential losses. In addition, it has done limited monitoring of the effectiveness of recovery actions to prioritize its activities to identify recoverable overpayments. As a result, the Department may be missing opportunities to minimize costs to the program. For example, it estimates that each year, there are some 18,000 cases in which an investigation is completed and a potential overpayment is identified, but the final review and notification to the claimant are never completed. This translates into close to $10 million per year that cannot be recovered because the cases expire before they are fully processed.
“By improving its analysis and understanding of overpayments, Human Resources and Skills Development Canada could potentially identify more overpayments and improve on recoveries,” said Mr. Ferguson.
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