Damning audit for Victorian government ICT spending

35 per cent of projects over budget, nearly half running late

Victoria's auditor-general, John Doyle, has released a damning report on government ICT spending in the state.

Not only are government agencies unable to demonstrate that are realising the expected benefits from IT projects, they are also in general unable to provide in-depth reports on how much IT projects actually cost.

The audit, released today, found that government ICT spending was significantly greater than previous estimates.

The state government spends around $3.02 billion a year on ICT — a 2010 industry report had estimated the government was spending only $1-$1.5 billion per year.

Around 35 per cent of the 1249 projects analysed for the audit went over budget, the report found.

Almost half the projects had either missed or were anticipated to miss their initial planned completion dates.

Business cases were prepared for around 70 per cent of projects, but only 38 per cent of business cases had the "minimum required elements, such as financial analysis and expected benefits," the audit found.

During the audit were challenges in obtaining data on public sector ICT spending, as there is no centralised reporting on it, the report stated.

"While obtaining overall agency ICT spend is a difficult exercise, getting information on ICT projects is even more challenging," it added.

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"Agencies and entities indicated that the issues that prevent comprehensive reporting on ICT spend equally apply to ICT projects."

"The current financial and project management processes do not make it possible for government to provide a full and accurate account of actual project costs — particularly those of significant ICT projects," the report states.

"Without knowing the full actual costs, it is not possible for government to assure Parliament and the Victorian community that its ICT projects represent value for money."

The report notes that HealthSMART and Registration and Licensing (RandL) Program — two of the most expensive government IT projects — were not even included by agencies in their initial response to the audit.

"Further, the initial project cost for the most expensive ICT project, the myki Ticketing Solution was only partially reported," the report states

"At the request of the audit team, information on these projects was subsequently provided by the former Department of Health, VicRoads and Public Transport Victoria, respectively."

The audit recommended a number of measures to improve transparency of ICT spending, including annual reporting of government ICT spending and establishing "public-facing reporting mechanism that provides relevant project status information on ICT projects across the public sector—key metrics and project information reported should include, but not be limited to: costs, timelines, governance, and benefits realisation."

In 2013, in the wake of ongoing fallout from the Queensland Health payroll debacle, Queensland launched what it said was the first dashboard for state government ICT projects.

The audit cited Queensland's dashboard as well as similar tools in the US and the Netherlands as mechanisms for increasing transparency around government ICT spending.

A dashboard published late last year by the former Department of State Development, Business and Innovation didn't deliver sufficient information because it included only minimal information and covered just six high value projects.

"The Victorian public sector does not have a good track record with ICT projects," the auditor-general, John Doyle, said in a statement.

"A number of [the Victorian Auditor-General’s Office's] previous reports have highlighted significant weaknesses in the planning and implementation of ICT projects, which often incur substantial delays and cost overruns.

"Despite this, there is no strategic central agency leadership or effective oversight across government"

The initial phase of the audit involved surveying 417 government agencies or other entities.

The Victorian Auditor-General’s Office has indicated it will undertake "a rolling program of more focused examinations of selected ICT projects, which we will select on the basis of cost, scope and impact, as well as the extent of any delays and/or deviations from the initial project approval."

"I urge the Department of Premier and Cabinet, as the agency now responsible for the leadership and oversight of ICT use in the Victorian government, to task agencies and entities across all sectors to better account for the significant expenditure of taxpayers funds for ICT projects," Doyle said.

"This audit does not end here. In subsequent reports, I will focus on examinations of the performance of selected ICT projects.

"The survey component of the audit will also be repeated periodically to ensure that the information collected remains current and relevant."

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