The Australian National Audit Office has embarked on four joint performance and financial audits of Information Technology in and across federal government agencies as the credibility of the IT Outsourcing Program continues to plummet, Senator Lundy, Shadow Minister Assisting on Information Technology said today.
Cluster 3 (CSC), Group 5 (Advantra) and the Australian Tax Office (EDS) will all be subject to an audit, with findings due mid to late next year.
The terms of reference are wide ranging, with objectives including:
- comparing project management with private industry best practice,
- whether government departments’ information systems can be relied upon for accurate financial data,
- identifying any deficiencies in IT controls that could reduce efficiency and effectiveness of the agency,
- whether the contracts are achieving service levels set by the government,
- provide advice to parliament about risks relating to IT issues in the public sector.
“These audits follow emerging evidence that IT outsourcing contracts are not achieving the savings promised by the Government or the quality of service required by the government agencies, Senator Lundy said.
“The Government has arrogantly and inaccurately claimed that $160 million in savings has already been achieved. This is not true.
“Both the Cluster 3 and ATO contracts required the respective agencies to deliver the so-called ‘savings’ incrementally to Government through a budget cut of $10 and $20 million per annum respectively over the next five years.
“The Group 5 contract awarded to Telstra/IBM/Lend Lease hybrid Advantra, did not include a reduction in the budget allocation specifically attributable to the IT Outsourcing Program, according to evidence from the last round of Senate estimates.
“This inconsistency further reduces the credibility of the program, particularly since the Telstra/IBM/Lend Lease hybrid IBM GSA was awarded the contract for the Department of Finances’ own IT before the IT outsourcing program was implemented, thereby avoiding scrutiny through the program.
“The nominated $10 million worth of savings need only be found within the Group 5 agencies, with no ‘payback’ through a reduced budget allocation, as was the case in the other two contracts.
“There will also be a fourth audit of contract management practices of the IT Outsourcing Program. This audit is also for both the performance and financial aspects and will assess the adequacy of contracts in achieving service requirements of the government.
“There is around $4.2 billion worth of federal IT outsourcing, with the Government originally claiming $1 billion worth of savings. This has been revised downward consistently. Evidence to date shows the longest standing contract Cluster 3 actually costing more.” Senator Lundy said.
Contact: Simon Tatz on 02-6277 3334 or 0418 488295
