Agencies spend big on ICT, accountability falls short in Victoria

By Stephen Easton

April 15, 2015

To satisfy the ever-increasing technological needs of Australia’s state and federal bureaucracies, torrents of money flow from the pockets of taxpayers into the ICT industry every year. A stinging audit out of Victoria today demonstrates that with such big cheques being written, the community needs to know it’s getting a good return on that investment, which is about $3 billion a year in the garden state.

In a statement accompanying a service-wide review of ICT that revealed a serious lack of accountability around ICT spending, Victorian auditor-general John Doyle said today:

“Victorian agencies and entities are currently not in a position to assure Parliament and the Victorian community that their ICT investments have resulted in sufficient public value to justify the significant expenditure of taxpayers’ money. Not only are agencies and entities unable to demonstrate the achievement of expected benefits from ICT investments, they are also, in general, unable to comprehensively report on actual ICT expenditure nor the status of projects.”

The gap in accountability must be urgently addressed, he said. He also pointed out an interesting inconsistency in the Victorian system:

“It seems incongruous that there are financial reporting directions requiring agencies to report on their consultancy and government advertising spend and yet there is none for ICT, which costs government significantly more.”

Survey responses provided the auditors with some data on 1,249 projects, 70% of which are complete. Of those, 35% went over budget or are already over budget and yet to be finished. Almost half were delivered late or are expected to be. A disappointed Doyle laments that despite this poor track record of cost blowouts and delays, which was also indicated in previous VAGO reports:

“… there is no strategic central agency leadership or effective oversight across government.”

Noting that responsibility for whole-of-government ICT has been transferred between departments twice in 18 months, he urged the Department of Premier and Cabinet to take charge of urgently improving accountability in the area, given the huge outlays. He lambasted the whole public service for its blasé attitude towards ICT accountability, which meant his office had to drag the information out via a survey process:

“I am also particularly disturbed that the certified and attested information submitted by agencies and entities for this report is, in some instances, clearly incomplete and inaccurate. It should not be my responsibility as Auditor-General to seek basic information from 417 agencies and entities on their ICT spend and projects. But because the central agencies tasked to provide effective leadership have not taken on this responsibility, and particularly because no public value has been shown for significant ICT investments, I have come in to seek accountability.

“While many smaller entities welcomed and supported the audit objectives from the onset, I found it concerning that a number of larger agencies initially questioned the benefit of identifying and reporting their ICT expenditure and determining the status of their ICT projects.”

Finding information on the status and outcomes of ICT projects was difficult for the audit officers and most Victorian Government entities make “little, if any” available publicly. Doyle also notes the lack of any “central data gathering, monitoring or reporting on ICT spend across the public sector” and states:

“This lack of transparency means that it is difficult to determine whether ICT investments have enhanced government services or addressed the problems they were meant to resolve, and whether public resources have been spent in an efficient and effective manner.”

The audit calls for improvements to financial oversight and project management processes such that full and accurate details of where all the money goes.

Almost one third of the 1,249 projects did not have a business case, and only 38% of those that did met the minimum requirements. Evidence of planning, targets evaluation of expected benefits and how they can be achieved was scant.

Only 110 of the 788 completed projects have been assessed in relation to their expected benefits.

Doyle says he wants this audit to “make it harder for underperforming projects to go unnoticed, and easier for government to focus effort on the projects where it is most needed” and to encourage better monitoring, recording and evaluation. He added that this report was far from the end of the matter.

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[…] A frank Victorian auditor-general report reveals a severe lack of accountability around the $3bn a year the state's taxpayers fork out for ICT projects.  […]

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