An Auditor-General report found the Department of Defence’s management of a new health database was $110 million over budget, plagued by shortcomings, and exposed the department to reputational damage.
In mid-2009, the department finalised a business case to launch an electronic management system to centralise the health care data for close to 80,000 ADF personnel.
But the Auditor-General’s report, which was published earlier this week, found the department underestimated the challenges inherent in the program and did not mitigate key risks until mid-2012.
“The initial June 2009 budget of $23.3 million increased almost five‐fold to $133.3 million by February 2014 in response to a different ICT hosting model and a better understanding of business needs,” the report said.
The report found Defence’s planning, budgeting and risk management was deficient and resulted in “substantial cost increases, schedule delay and criticism within government”.
“Defence’s planning and management of the initial phases of the project were well below the standards that might be reasonably expected by Defence’s senior leadership, and exposed the department to reputational damage,” the report said.
“During the initial phases of the project, Defence did not scope and cost key components of the project; validate project cost estimates and assumptions; obtain government approval when required; follow a project management methodology, or adequately mitigate risk by adopting fit for purpose governance and coordination arrangements.”
The report found the project had been funded internally using the departmental budget and Defence did not request supplementary funding from the government.
“Nevertheless, there is an opportunity cost associated with Defence allocating significant additional funds to the project,” the report said.
“The principal reasons for the increase in … project costs were: a one year extension of the funded sustainment period; hosting the system externally rather than internally; and the inclusion of previously unbudgeted items such as training requirements.”
But the audit found the task of providing services to 80,000 ADF personnel was a difficult task, with members moving regularly with deployments and a mix of military and civilian health care systems.
“The number of serving personnel, their multiple locations, mobility, and access to different channels for health care increase the complexity of maintaining complete, accurate and up to date medical records,” the report said.
Despite being launched nearly six years ago, the audit found the program required further improvements and lessons needed to be learned.
“An ongoing focus on system and business enhancements is required to realise the anticipated benefits of the system given the substantial investment made to date,” the report said.
“A key lesson of this audit is the importance of properly scoping and planning complex ICT projects.
“Project proposals and cost estimates should be based on a full understanding of project parameters and risks, and subject to thorough review.”