In ten years not a single agency has completed all six stages of the Victorian Government’s ‘mandatory’ Gateway Review Process for major projects, the State’s Auditor-General has found.
Serious shortfalls in the Department of Treasury and Finance’s (DTF) monitoring of the program add to the already lengthy list of project management issues that the State Government will need to address if it is to ensure that expensive disasters like Ultranet and HealthSMART are never repeated.
The Gateway Review Process (GRP), a six stage model for monitoring the progress of complex projects developed by the UK Government, was adopted by Victoria in 2003 and was intended to be applied to all public sector projects deemed high risk.
However an audit released this week has found that a less than proactive approach to identifying high risk projects on the part of DTF, and an overreliance of agency self-assessment has allowed reluctant project managers to side-step the process altogether.
The audit identified 62 projects commenced between 2005 and 2012 and worth a combined $4.2 billion which “should have at least been assessed for review”, but which instead fell through the gaps in the scheme’s central oversight.
“DTF cannot demonstrate that over that period it actively and consistently identified projects that may have been candidates for the GRP. This meant the process was largely applied on an opt in decision by agencies and not all high-risk projects were subject to review,” says the report.
Of those projects which did make it onto the DTF’s radar, every single one dropped out of the process early and 70 per cent only made it as far as the second stage, meaning that independent oversight ended before preparation for an approach to market had commenced.
By comparison, 20 per cent of all projects going through the Federal Government’s Gateway Reviews completed all six steps.
In December 2010 the incoming Victorian Coalition Government expanded the GRP to include all projects worth more than $100 million, even those not identified as high risk, and bolstered the policy by requiring that projects obtain sign off from the Treasurer before moving on from each of their reviews.
While this process represents an improvement, the Auditor-General acknowledged, the DTF’s ad-lib project identification process still means that complex and risky projects under $100 million are likely to be missed.
And as anyone familiar with Victoria’s ICT project history will know, projects that begin with a budget under $100 million don’t necessarily end there. The Department of Education and Early Childhood Development’s notorious Ultranet project had cost the State $162 million and rising as of December 2012, despite having an opening budget of $60.5 million. The Victoria Police’s replacement of its core policing system LEAP was cancelled when it became apparent that the $60 million initiative would cost $187.2 to complete. Under the GRP, projects are not re-assessed for inclusion beyond the initial review.
Since 2003 the GRP model has also been adopted by the NSW, Queensland, WA and Federal Governments. In the Federal Government all agency self-assessments are verified and often changed by the Department of Finance and Deregulation. NSW does not rely on agency self-assessments at all.
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