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Auditor General says better monitoring needed for BC government’s IT spending

Eight major projects worth C$2.27 billion (US$1.72 billion)

PUBLISHED : Wednesday, 05 October, 2016, 11:05am
UPDATED : Wednesday, 05 October, 2016, 11:08am

The good news for British Columbia’s government is that it’s not alone in grappling with expensive and complex information technology projects.

But the province’s Auditor General Carol Bellringer, in a report said both capital and operating projects need better monitoring and periodic reviews to determine whether they meet accountability and transparency expectations.

In Getting IT Right: Achieving Value from Government Information Technology Investments, Bellringer cited a 2013 internal survey by government that found more than 40 per cent of the 1,600 ministry IT systems were needlessly expensive, no longer supporting service delivery or at risk of failure or data loss. BC’s Office of the Chief Information Officer is updating its inventory of ministry IT systems.

The report listed eight current or recently completed public sector projects, worth C$50 million (US$38 million) or more, that are costing taxpayers C$2.27 billion (US$1.72 billion). It also cited problematic health, social and education projects. Last year, Bellringer singled-out the seven-year, C$182 million (US$138 million) social services Integrated Case Management database project, which had a C$74 million (US$56 million) cost overrun.

ICBC admitted to a C$110 million (US$83.5 million) billing error in 2014 and blamed it on a glitch in its vehicle description database. The government kiboshed the crash-prone, C$100 million (US$75.89 million) BCeSIS student records tracking system for children in kindergarten to grade 12.

In the 2014-2015 fiscal year, government spent C$668 million (US$507 million) on IT capital, of which C$246 million (US$186.7 million) was spent by schools, universities, colleges and hospitals and C$301 million (US$228 million) by Crown corporations. Bellringer found gaps in tracking operational spending.

“Government’s corporate accounting system records IT operating spending for core government only,” Bellringer wrote. “In 2014/15, this was C$392 million (US$297 million), which is over three times the C$121 million (US$91.8 million)of IT capital spending. Broader public sector IT operating spending was not available as it is not centrally tracked.”

The report said the BC government is not alone in facing challenges. IT-enabled projects require substantial change in any organization’s business processes, they impact diverse user and business groups and must be integrated with existing systems.

They also take “several years to implement against a backdrop of rapidly changing technology that can make IT investments quickly obsolete.”

Bellringer cited a 2015 study by Standish Group that gauged 5,000 IT projects, finding only 29 per cent were deemed successful. It said 52 per cent had challenges and 19 per cent were failures.

“In particular, that study found that large projects—those that also tend to cost the most—are more prone to failure.”

In another study, McKinsey and Company found large projects provided 56 per cent less value than originally expected, “and 17 per cent went so badly they threatened the very existence of the organisation involved.”