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Poor planning and loose purse strings to blame for “scandalous waste” in Victoria

by Paris Cowan •
Free resource

Exactly how much hard evidence and persuasion does it take to get $100 million or more out of the Victorian Treasury for a major ICT upgrade?

According to Deputy Ombudsman John Taylor the answer is not enough, leading to what he has described as “scandalous waste” in evidence given to the Victorian Parliament’s Public Accounts and Estimates Committee.

Erin Barlow, also from the Ombudsman’s office, detailed several of the inadequate and misleading business cases that formed the basis of some of the State Government’s most embarrassing and expensive ICT projects.

She said that Victoria’s public transport electronic ticketing system, Myki, was originally funded for a two year implementation, but that no-one should have been surprised when this deadline was missed.

“There was the assumption that this project could be completed in two years, and yet the evidence was that no similar system had been implemented in less than five,” she told the Committee, according to recently released transcripts of the August hearings.

Her investigations also revealed that the Department of Education and Early Childhood Development (DEECD) had taken its plan for the $99 million Ultranet project to the Minister for approval, despite strong evidence suggesting that it would never be able to meet project milestones within the projected budget.

“There were going to be delays; it was never going to be achieved in the time frame that they had set, and that evidence was there,” she said.

In another hearing that day the Committee heard how the now cancelled $500 million HealthSMART program that was given the go-ahead with only a flimsy business plan described by one Committee member as “basically a couple of pages”.

One of the other high-value projects on the Victorian Government’s blacklist, the Victoria Police’s LINK operational policing system replacement, notoriously hit its first turbulence when its funding process was undertaken in reverse.

“[A business case] was developed to fit within a funding decision that had already been made. So the decision had been made to fund the project for, I think it was around $50 million, so you had a few contractors come in to try and develop a business case to fit that,” said Barlow.

The LINK project has since been cancelled, after a KPMG review estimated it would cost at least $100 million more than originally budgeted to transform it into a working system. The Victoria Police is still using its 20 year-old LEAP program in the absence of an alternative, which Taylor described as being “on the verge of failing”.

The Committee expressed concerns that there was an “optimism bias” at play when department staff presented the case for a project that they really wanted to see funded, which could underplay real world risks and implementation timelines.

Overall, Taylor and Barlow agreed that the key lesson to learn from the State’s project failures and cost overruns was to rigorously test and analyse ICT business cases before a single cent is committed to their implementation.

“Agencies are not spending enough time in planning. If they spent more time in planning, it is likely that a lot of the problems that we have identified would have been avoided,” said Barlow.

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Too many cooks spoiled HealthSMART, Parliamentary Inquiry hears

  • VIC
  • Policy
  • Erin Barlow
  • HealthSMART
  • John Taylor
  • Link
  • Myki
  • Ultranet
  • Victoria Police
  • Victorian Ombudsman