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ANAO delivers scathing report on ATO’s Change Program

by Staff Writers •
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The Australian National Audit Office (ANAO) has handed down a scathing report on the Australian Taxation Office for the implementation of its Change program.

The Report found the program is running almost 2 years late for delivery of its final Release and $434 million over its original budget established as part of the endorsed December 2004 business case. In both cases, the Auditor-General notes that Government-approved scope changes have contributed extensively to the Program’s budget and schedule blow-out.

The Report makes reference to the extensive third party project assurance and review that was undertaken in the initial planning stages of the project. It also draws comparison between the Change program and the poorly managed major ICT project implementation by governments highlighted in OECD reports. These were all available to the ATO as part of its initial planning process.

Despite all the time and investment undertaken, the ATO may nevertheless be ill-equipped to deal with taxation changes that are expected to flow from the current Review of Taxation, being led by Treasury Secretary Ken Henry. In his conclusions, the Auditor General notes:

"the scale and complexity of the tasks yet to be completed means that the Tax Office still faces significant challenges in finalising the project to a satisfactory standard required for the systems which automate most of Australia’s tax administration"

In the Change Program, the ATO planned to replace all tax processing ICT systems with one Integrated Core Processing (ICP) ICT system. Further, the ATO planned to replace the large number of specialised ICT systems that supported internal administrative functions with a single management system.

In 2004, the ATO intended for the Change Program to be completed by June 2008. The original estimated cost was not to exceed $445 million, starting in 2003-04 and finishing in 2008-09 to be paid for by internal funding.

Underscoring the extent to which this schedule has not been met, the Auditor General further notes there is "a significant risk that the deadlines for the completion of further releases may be put under pressure or that functionality in the original scope of the Change Program will be reduced so as to meet current budget and timetable expectations".

The ANAO made four recommendations directed at ensuring that the Tax Office:

  • Fully utilises its available assurance framework for the Change Program work to be completed;
  • Strengthens aspects of contract management;
  • Establishes a robust performance management framework related to Tax Office activity transformed by successfully implemented Change Program products; and
  • Improves the strategic management of the Change Program in relation to the work to be completed by 2010–11.
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