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$33.6 million Oracle upgrade continues to plague SA Health

by David Shi •
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The South Australian Auditor-General has told the State’s Department of Health and Ageing that it needs to complete its troubled $33.6 million Oracle upgrade project with haste, or it will face increased project costs, security lapses and the potential for financial misreporting.

“The problems associated with the implementation and operation of the OCS [Oracle Corporate System] need to be resolved quickly so that it operates to provide an effective system for the management of financial operations,” said Auditor-General, Simon O’Neill in his latest report.

He suggested that poor preparation and communication may be the source of the issues facing the Department.

“The review found that Cabinet had not been fully informed of whole-of-life costs and benefits [of the project], no benefit realisation plans had been prepared, the systems were not fully implemented and the legacy systems had not been decommissioned,” said the report.

The OCS project aims to implement improvements to the whole-of-Health integrated finance and general ledger system, including the consolidation and replacement of a variety of financial systems currently in use across the Department.

Whilst these legacy systems were scheduled to have been phased out by November 2011, many continued to remain in operation at the time of the Auditor General’s review.

The first phase of the OCS project was originally scheduled to be completed in June 2010. However, work only commenced on the phase in July 2010. The second phase followed in a similar fashion, having only commenced in December 2010, despite an initial completion deadline of November 2010.

Due to these delays, the Department was forced to use backward legacy finance systems to fill the gap. The use of these legacy systems in conjunction with the partial implementation of OCS increased costs due to the technical complexity of the doubled-up environment.

The report also found that a lack of full OCS functionality led to discrepancies in financial reporting, with the ongoing delays increasing the risk of financial errors and misstatements. 

 “The new enterprise system was implemented and operated for some time without adequate management attention being given to the effective reconciliation of financial accounts,” said the Auditor General.

The Auditor General also highlighted a number of security concerns, finding that a number of users were able to access privileged information beyond their security clearance.

This is not the first time the financial systems project has attracted the Auditor-General’s attention, with similar criticisms emerging from the Audit Office’s Annual Report for the year ended 30 June 2011 Part A, published in October 2011.

In this report he warned that major IT projects would continue to be on his watch-list into the future.


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  • Software
  • Health
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  • SA Auditor General
  • SA Department of Health and Ageing
  • Simon O’Neill