Victoria's integrated court management system project has run 14 months over time and at least $12 million over budget, partly due to poor supplier performance, the Victorian Auditor General has found.
The system was supposed to establish one technology platform and set of applications for all Victorian courts and tribunals. The 2005/2006 budget allocated $45 million for its development and implementation — $32 million for capital costs and $13 million for operational expenditure. The program was started in 2005 and was scheduled to finish this month.
Yet only two of five project parts have been finished, according to the auditor's report released today, with final completion now not expected until August next year. The completed segments, relatively minor parts of the project, are increased audio visual capability for courts and an online knowledge system for judicial staff.
The work remaining to go includes the largest part of the project, implementing a case management system, as well as providing web-based services such as document lodgement and creating a courts data warehouse, the auditor said.
The report said that the capital cost of the program has increased from $32.3 million to $44 million, a 36 per cent rise. As at March 2009, $28 million of the allocated $32.3 million in capital funds had been spent. Only seven million of the planned $13 million in operating expenses for the project have been spent because of delays. The department thinks that the running costs will be increased by almost $4.6 million when the new deadline is reached.
Right from the start, the department made errors, according to the auditor's report, which said that it had not analysed the ability of the industry to meet its requirements or assessed the program costs adequately.
It ditched its plan of adapting an existing system operating in the Victorian courts to instead adapt a new system with an inadequate review to back up its reasoning, the report said. It also decided to have individual contracts with the integrator, Oakton and the case management system supplier, which was US-based Maximus and now is Canadian-based Constellation Software. This limited Oakton's ability to manage the supplier, according to the auditor, leaving the responsibility at the department's door, something it needed specialist resources to deal with.
The department's contract with Oakton was worth $3.9 million while its contracts with Maximus and its Australian subsidiary MaxNetwork totalled $14 million.
The auditor laid prime blame for delays at Maximus' door, although it didn't name the supplier directly. "Unsatisfactory supplier performance has been a major factor in the time and cost overruns," the report said. Not only did the supplier not meet timelines, the fact that Maximus sold its CourtView system with other assets to the Canadian company mid-project meant the Department of Justice had to hold negotiations with the owner, which were concluded in April this year.
The auditor believed the department hadn't conducted adequate due diligence on whether Maximus was able to fulfil its commitments, which the auditor considered to be particularly important since the supplier had been undertaking significant work on its case management system back in the US.
Yet the auditor noted that the department had put in performance guarantees and had received "significant compensation" from the supplier to offset some of the costs of delayed delivery. The supplier also delivered the case management software in February this year, which the department said in its response to the auditor had been implemented in the Victorian Supreme Court and was currently being tested.
The department welcomed the audit's conclusion that the rationale for the system had remained sound. It pointed out that despite supplier issues it had been able to maintain the project's momentum. It also drew attention to the two parts of the project that had been finished.