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Ombudsman to probe billions

of dollars thrown at IT projects

David Rood

April 18, 2011

VICTORIA’S [Australia] chief corruption and integrity watchdogs have launched a joint investigation into a string of failed state information technology projects, including myki and the police crime database, currently costing taxpayers billions of dollars.

Ombudsman George Brouwer has used his powers to launch his own inquiry into the handling of the projects following serial cost blowouts and mismanagement of technology programs under the former Labor government.

The Age has learnt the investigation was triggered by the disappointment felt by both the Ombudsman and Auditor-General Des Pearson that major information technology projects continued to run over budget and have not delivered on their goals, although the two bodies have consistently warned about the problems. 

Insiders have told The Age that the Ombudsman and Auditor-General are also frustrated by a lack of accountability for project failures and cost over-runs.

There is also concern about the ability of the public service to manage multimillion-dollar projects and learn from their mistakes.

A Victorian Treasury report, released last week, listed myki, the HealthSmart hospital computer system and the new police crime database as key factors in a predicted $2 billion hit to the state budget.

With the government still to decide on the fate of the trouble-plagued myki ticket system, the cost of the project has already blown out by $350 million, with a current price tag of $1.35 billion to create and run the system. Some estimates put the final cost at $1.5 billion for myki. State Treasury has put the cost overrun of the new HealthSmart system at at least $80 million, which would bring the total project cost to approximately $430 million.

The original 2005 budget for the new LINK police database to log, track and analyse crime was $61 million. The project was due to be completed by 2010 but was suspended in March last year, with a reported new cost of approximately $85 million.

Last week, The Age revealed that the child protection information technology system was threatening the care of vulnerable children and putting case workers at risk.

Premier Ted Baillieu said the projects had been left in a shambles, with massive cost blowouts that had contributed to a $2 billion budget black hole.

“This will be an important investigation which will assist the government in identifying how these massive losses and mismanagement occurred, and how we can ensure they are not repeated,” he said.

Opposition spokesman for finance Tim Holding said Mr Baillieu had inherited a triple-A credit-rated budget and his government had invented so-called black holes in a dishonest attempt to justify slashing jobs and breaking promises.

”Last week’s discredited economic statement failed to contain any costings or almost 90 per cent of Treasurer Kim Wells’s so-called black holes,” Mr Holding said.

Since 2005, the Ombudsman and Auditor-General have investigated more than 10 IT systems or projects including the LEAP police data base, Victorian crime statistics, the child protection IT system, HealthSmart and myki.

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