IBM's QLD Health payroll contract to be tested

IBM Australia's former contract for the failed Queensland Health payroll system is to be examined by a State Government inquiry that has been handed "the powers of a Royal Commission" to get to the bottom of the scandal.

The Commission of Inquiry, announced today, will begin work in February 2013 with a view to lodging a "detailed report" of findings and recommendations with the state's premier by April 30 in the same year.

It is to be led by the Hon. Richard Chesterman QC, who retired from the bench earlier this year.

State Premier Campbell Newman said today that the commission has been directed to — among other things — "analyse the contractual arrangements between the State of Queensland and IBM Australia Ltd and determine why and to what extend (sic) the contract prices of the Queensland Health Payroll system increased over time".

An IBM spokesperson told iTnews that "IBM will actively participate in the full scope of the Commission of Inquiry".

The commission is also expected to assess all aspects of the project, from procurement and contract management through to governance and implementation, and determine if "any laws, contractual provisions, codes of conduct or other government standards may have been breached".

It has been instructed to identify "who may be accountable" for any breaches found.

The State Government is also hoping some of the recommendations might help it streamline handling of future "major Queensland Government ICT projects... to ensure the delivery of high quality and cost effective products and systems".

"We need to ensure this never happens again," Queensland Health Minister Lawrence Springborg said.

"We need to find what went wrong and why; we need to find out who is responsible and if there is any chance of recovering hundreds of millions of dollars lost to the health system; and we need to ensure those who have lost their jobs as a result of Labor's payroll debacle get the answers they deserve".

The original SAP-Workbrain payroll system resulted in more than 35,000 payroll anomalies after going live in March 2010.

A KPMG audit commissioned by the current state government found the system would cost the state $1.25 billion between 2010 and 2017, including $220.5 million to fix its problems.

The issue came to a head again last month when previously secret documents containing legal advice obtained by the previous state government were tabled in parliament.

The documents showed a previous state government that was paralysed with fear of being sued over the way it dealt with the IBM contract.

The current Newman Government had been pressing for the release of the documents to determine whether it should initiate fresh cost recovery action against IBM.