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Queensland’s acceptance of the Auditor General’s ICT recommendations on failed Health Payroll System will have wide impacts

by Kristen Hammond •
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The announcement by Queensland Premier Anna Bligh that her government will implement all seven of the recommendations of a Queensland Audit Office report has the potential to ripple out into the wider Australian government ICT market as other jurisdictions take stock of the criticism being levelled by the Queensland Government at ‘whole of government’ solutions.

The report, which investigated the problematic Health Payroll System and was tabled in the Queensland Parliament on Monday 28 June 2010, will lead to profound and long-lasting impacts for both Government and industry participants in the Queensland ICT market. 

In a joint statement issued with Deputy Premier and Minister for Health Paul Lucas, Ms Bligh announced that in response to the Auditor General’s report, the Queensland Government will:

  • Have Queensland Health move to a local health payroll model and re-examine the use of the WorkBrain rostering system over the next 3 months.

This move will also impact Queensland Health Corporate Services which will be restructured to ensure local payroll systems are adequately supported and to ‘reduce bureaucracy, localise service provision and to ensure that there are clearer lines of responsibility at the executive level’.  The move to local arrangements will be in line with the principles outlined in the national health reform agreement for the creation of local hospital networks;

  • Overhaul their whole-of-government IT provider CorpTech and abandon the one-size-fits-all approach to payroll across government departments. 

As part of the overhaul, there will be an assessment of which agencies are best served by their own technical services, with a recognition that there is a place for larger agencies to remain independent in providing corporate services , and

  • Issue IBM - the primary contractor - with a “Show Cause” notice.

IBM had been engaged by the Queensland Government to choose appropriate payroll software for Queensland Health, to act as project manager and to design, develop and implement the technology.

Premier Bligh has apologised to affected Queensland Health employees, conceding that there had been “a fundamental failure in the process of implementation of the new payroll system” and proposing to apply all seven of the recommendations encompassed in the Auditor General’s highly critical report.

Of the seven recommendations, four deal specifically with government ICT processes in Queensland:

  1. Chief Information Office Program methodologies should be rigorously applied for the development and implementation of all new information system programs;
  2. IT governance frameworks, practices and frameworks need to be implemented at a whole- of-government level so that outcomes and benefits from IT programs are consistently achieved;
  3. Transparency and end-to-end government structures are vital for whole-of-government IT projects; and
  4. IT security risk assessment, mitigation strategies and control mechanisms need to be documented and implemented at agency and whole-of-government level through the recently established information security committee.

In addition, a fifth recommendation deals with the shared services model in Queensland.

Premier Bligh said she will implement these recommendations while also endeavouring to extend the scope of the overhaul by reviewing the payroll application, SAP HR, and WorkBrain, the rostering/award interpretation software.  Ernst& Young have been engaged to provide a review of the ‘most commonly deployed payroll and rostering solutions in the national and international healthcare sector’ over the next three months and this review may result in a reformulation of the programs or the introduction of alternative software.

The function and scope of Queensland’s CorpTech, will also be drastically altered.  CorpTech, is a business unit of the Department of Public Works was, until the government’s decisions on Monday, ‘responsible for the design, build, implementation and support of whole-of-Government information systems that are used by Government agencies and shared service providers to administer the State’s finances and workforce'.  Its previous scope included payroll, rostering, purchasing, inventory management, asset management, accounts payable and accounts receivable.

However, Premier Bligh now contends that the Health Payroll troubles have illustrated that such a model is inappropriate, as some agencies will respond more effectively to their own technical services.

Apart from issuing IBM with the Show Cause notice, Queensland Health is refusing to pay $3.3 million outstanding while seeking legal advice from the Crown regarding damages for breach of duty of care.

IBM was selected as the prime contractor for the program after a tender process, but numerous problems led to the company being unable to deliver a suitable product within the agreed timeframe or at an appropriate price under the terms of the fixed contract.

The Auditor General’s report states that between February 2008 and March 2010, IBM submitted over 47 change requests, leading to the system implementation being 18 months overdue and 300% over the original cost budget.

The Auditor General’s report was also critical of Queensland’s ICT consolidation Program (ICTC), the Identity, Directory and Email Services (IDES) Project and the Corporate Solutions Program which, despite all being under budget at this stage, had drastically exceeded their time frames and contained no methods for measuring the benefits or successes yielded by the initiatives.

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