The NSW auditor-general has called out “significant breakdowns” in the migration of back-office delivery from ServiceFirst to Unisys and Infosys, telling the NSW government it needs take heed of what it has learnt before its next privatisation exercise.
The outsourcing of IT support, payroll, HR and finance delivery - following the dismantling of the in-house ServiceFirst agency - had been touted as a grand success by the NSW government, which expected to save as much as $19.5 million a year once the changes are bedded in.
Two new delivery centres, in Parramatta and Rhodes, have opened in the past 12 months, from which back-office functions will be provided by a new workforce hired by Unisys and Infosys.
Another offshore unit will deliver services from India.
But the auditor-general has cast doubt over these success claims, saying the switch was marred by “significant breakdowns” that threatened the integrity of some of the transactions delivered by what has been dubbed the ‘GovConnect’ team.
The migration has been hampered by errors in client transactions and concerns about the ongoing security of sensitive data, auditor-general Margaret Crawford said.
In a report handed down last week, Crawford hinted that client transactions and data were compromised during the move between suppliers, and that inadequate controls over processes like payroll, invoice payments and data support put agencies at risk of fraud or privacy breaches.
“Mitigating actions taken to manage transition risks from ServiceFirst to GovConnect were ineffective in ensuring effective control over client transactions and data was maintained,” the report stated.
“The [Department of Finance, Services and Innovation] will need to closely monitor GovConnect’s remedial actions to achieve unmodified audit opinions in 2016–17."
Crawford revealed that the GovConnect consortium had an independent auditor review its operations to provide assurance to its agency customers, but the auditor “could not confirm the effectiveness of GovConnect’s internal controls over transactions or the security of data”.
The report also complained that GovConnect client agencies were late getting some of their financial documentation to the auditor as a result of the hiccups.
The audit office said it couldn't provide any further detail.
A spokesperson for the DFSI said “problems encountered in the first year of GovConnect's operation relate to the complexity of the transition, operational remediation of legacy systems and adoption of new business processes”.
The department said it was “working closely with the service providers, Unisys and Infosys to resolve problems relating to service quality, transaction errors or technology delivery as they arise,” and continues to monitor performance against the pair’s contracted standards.
“DFSI is committed to addressing the auditor-general's findings, and to better realising the service delivery benefits available under GovConnect.”