South Australian IT projects run $90m over budget

South Australia’s Auditor-General Simon O’Neill has uncovered $90 million worth of cost overruns across the state government’s four worst-performing IT projects, with the situation projected to get worse before it gets better.

O’Neill has released the findings of his review into SA Health’s Oracle Corporate System (OCS) and Electronic Patient Administration System (EPAS) rollout; Treasury’s Revenue SA Information Systems to Enable Compliance (RISTEC) rollout; and the Department of Communities and Social Inclusion’s (DCSI) Concession and Seniors Information System (CASIS) development.

The report, handed down last week, reveals that the largest of the four projects, the $422 million EPAS rollout, has had its projected completion deadline pushed back to “well into 2017” – years beyond its original deadline of mid-2014.

The main reason for the delay is a six month pause in implementation to take stock and remediate some serious defects in the system, that are forcing workarounds from clinicians in hospitals currently using the system. In October 2013, SA Health had received 4833 defect reports throughout the life of the program, 338 of which remained unresolved.

The stabilisation phase is set to cost the state another $28 million, and will require the team assigned to EPAS to be boosted from the current 167 full-time equivalent employees to 195.5.

But the project managers should probably count themselves lucky that the program will recommence at all.

The audit reveals that in June 2014 SA’s health reform cabinet committee received a submission outlining four options for the future of EPAS – one of which included halting the rollout for good, and another which would see the project dumped altogether and the Allscripts software it is based on decommissioned out of the hospitals already transitioned on to EPAS.

The Cabinet, however, opted to add a six month remediation phase to the staged rollout instead. The delay adds a new level of pressure onto the construction of the state’s new Royal Adelaide Hospital, originally designed to be digital from the ground up, with only minimal paper storage facilities included in the blueprint.

“The delay in the EPAS program presents a heightened risk that EPAS functionality will not be ready for the rollout to the nRAH,” the Auditor has warned.

As a result, he said, the nRAH team is already developing contingencies for an underdeveloped patient record, including additional paper storage and transport functions, and changed clinical processes.

SA Health’s IT woes don’t stop at EPAS, however. The Auditor-General has also revealed that the benefits realisation projection for its new Oracle financial and procurement system has been downgraded by $30 million over ten years due to costs involved with delays and the forced dumping of some software modules, and the subsequent maintenance of the legacy systems they were due to replace.

Over in Treasury, the government has been forced to write off another $4.5 million as it abandons release three of its SAP-based RISTEC revenue management system – which was to cover off the management of stamp duty and sundry taxes. The Department of Treasury and Finance has put the de-scoping down to “the unforseen complexity” of release three components, including a data analytics engine.

The Auditor has asked Treasury to prepare a submission to Cabinet on RISTEC’s progress, including a status update on how its arrangements with the contracted systems integrator is tracking, suggesting that the relationship could be on the rocks.

In response to the results of his investigation, O’Neill has sought to remind senior bureaucrats to keep their ministerial superiors properly informed about any changes in the progress of the project, and to maintain the highest integrity in terms of the assumptions and information that they hand over to Cabinet in the form of a business case.