Inquiry into Qld Health payroll disaster begins

Summary:The inquiry into the IBM implementation of the troubled Queensland Health payroll system in 2010 has commenced.

An inquiry into Queensland's flawed health payroll system has started today in Brisbane.

The inquiry, which is expected to cost AU$5 million , began on Friday morning with a directions hearing at the Magistrates Court.

It will determine who, if anyone, is responsible for the debacle.

The inquiry head, former Court of Appeal Judge Richard Chesterman QC, said his focus would be on the governance and procurement of the system that resulted from a deal between IBM and the Bligh Labor government.

The system, which was rolled out in 2010, resulted in thousands of health staff being underpaid, overpaid, or not paid at all.

Chesterman said that he would recommend ways to improve the Queensland government's process for entering information technology contracts.

"The factual background to the inquiry is notorious," he said.

The contract price negotiated was AU$6.19 million, but by the time the system was in operation, the amount paid to IBM exceeded AU$7 million, and the government's own cost was a further AU$64 million.

Overall, the cost to taxpayers was an estimated AU$1.2 billion.

"The system that was meant to be efficient, economical, and largely automated required more than 1,000 payroll employees to perform about 200,000 manual operations, and process about 2,000 forms every fortnight," Chesterman said.

"The human costs of implementation was very high."

"Some who were overpaid were falsely accused of fraud; it was...a time of great anxiety and hardship."

Counsel assisting the inquiry, Peter Flanagan SC, tendered the Auditor-General's 2010 report and the 2010 KPMG report on the debacle.

Flanagan told the court that the inquiry would shed light into the tendering process, the implementation of the contract, contract scope changes, the decision to launch the system in 2010, and the decision to compromise any potential action against IBM by the state.

"[It] will also have regard to whether laws, contractional provisions, codes of conduct, or other government standards may have been breached during the procurement or implementation process," he said.

The inquiry has been adjourned to a soon-to-be announced date for public hearings.

A report is due by April 30.

Topics: Government, Australia, Government : AU, IBM, SAP

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