Auckland Council will spend at least NZ$80 million more than budgeted on enterprise processes and systems over the next six years, as well as overspending its total IS budget.
However, at least on paper, the Council is planning to recoup all of that extra spending from deep cuts to IS operations, starting in 2016 and stretching all the way out to 2022.
The budget juggling is revealed in an IS update report presented to Council’s Finance and Performance Committee in late 2013, and through subsequent Local Government Official Information Act requests made by ZDNet.
Further, the project appears to be falling further behind, with budget earmarked for the 2014 financial year now shifted forward to 2015, because the work has not progressed as planned (see charts).
Council's New Core project appears to be driving the cost blowout. It is a six-part project due to be completed by the end of 2016, and is a direct result of the Supercity amalgamation of all or parts of eight previous local authorities.
That timeframe is now in grave doubt, and the extra costs will be highly unwelcome at a time when a significant rate rise is looming for many homeowners and when Council is trying to trim its expenses.
On Thursday morning, The New Zealand Herald reported that council bosses had confirmed a 12-month delay.
According to the charts, spending on enterprise processes and systems, of which the New Core system is a part, over the next five years is likely to be around NZ$210 million, compared with a budgeted NZ$131 million. However, that does not include spending in the 2013 and 2014 financial years.
An IS Update report (PDF) presented to Council's Finance and Performance Committee last December spoke of additional complexity being identified in the process design of the core systems. It also included heat maps indicating that many areas across council were considered at risk, and needed to be addressed more urgently than expected.