The budget for the Change Program has again been bumped up as the Australian Taxation Office says it needs $105 million to finish the project over the next two years on top of the $749 million it has already spent.
ATO CIO Bill Gibson
The budget started out at $445 million over six years in 2004, according to a report released today by the Australian National Audit Office (ANAO) on the program, which aimed to replace the ATO's legacy taxation systems and combine them into a common platform. The program was scheduled to be completed in June 2008. However, there were delays to the program and scope increases following legislative changes which saw the budget increased to $774 million.
The expansion of the business case was responsible for $234 million of the $304 million budget growth, the report said, which left the tax office to absorb the remainder.
Yet there was more budget slippage on the horizon. In June this year the tax office had spent $749 million on the project, and considered it would likely need to spend another $105 million to finish the project, including the extra $25 million the government had given it to complete the out-of-scope first home buyers account. This upped the forecast total project cost to $879 million, which would see the tax office absorb additional expenditure of $247 million for the life of the program.
The audit office said that the tax office's schedule had been "ambitious" and in hindsight "optimistic".
It pointed out that the project wasn't over yet, and there could be more budget overruns. "The Change Program is now entering the most difficult and complex phase of the project and there are signs of increasing challenges in achieving a satisfactory outcome," it said. "There is significant risk that the deadlines for the completion of further releases may be put under pressure or that functionality in the original scope of the Change Program will be reduced so as to meet the current budget and timetable expectations," it said.
ANAO recommended that the tax office give high level reports to the Change Program steering committee detailing costs and benefits to fight this.
Another problem the audit office saw was that the relationship between Accenture and the Tax Office had become very tricky. "In practice, features of the contract (joint conduct of work and the liability of risk) blur the roles of the Tax office and Accenture. Complex negotiations between the two parties therefore became an essential feature of day-to-day contract administration," the auditors said. According to the auditors, the tax office needed to amend its contract.
The auditors also believed that the Australian Taxation Office had not adequately tested the fringe benefits tax release and had inadequately involved end users in the process.
It recommended that the tax office test and validate releases against standards and requirements in conjunction with the business, as the fringe benefit tax experience had revealed the "need for end-to-end testing, business pilot with actual production data and full involvement of tax office business lines".
In general, ANAO believed that the tax office should make better use of its assurance framework, including internal audit and its external assessor Capgemini. It also wanted the management framework adjusted to better measure the performance of the systems.
The taxation office accepted the recommendations, while also pointing out the increase in scale of the program and the benefits of the releases which had been completed.
The program is now expected to be completed by next year. The income tax component is due to be completed in January 2010, while the Business Activity Statements and excise will be done by December 2010.