It was supposed to turn the island state of
Tasmania into a beacon of Australia's ICT industry, but six years
later an audit report has blamed poor management and monitoring
of the government-backed BITS Intelligent Island program for
repeated delays that have made the program something of a lame
The AU$153 million Building on Information Technology Strengths
(BITS) program was one of a number of ICT and telecommunications
infrastructure initiatives funded through an AU$830 million
drawdown from proceeds of the first two Telstra share offers.
The stated goal of the five-year, AU$40 million BITS Intelligent
Island initiative, administered by Tasmanian state government and
Australian Department of Communications, Information Technology
and the Arts (DCITA), was "to further develop an internationally
competitive (information technology and telecommunications)
sector in Tasmania".
Years later, however, most of the original funding -
originally earmarked for the fiscal years ending in 2000 through
2004 - was still unused. It was only last December, 18 months
after the funding was originally intended to have been depleted,
that the government dipped into the fund to commit AU$15 million to
support development of a CSIRO ICT Centre in the state.
This May, up to AU18 million was finally made available through
the Tasmanian government-driven Market Access and Partnership
Program (MAPP), which will provide between AU$200,000 and AU$2
million to local startups that submitted their cases before the
June 21 deadline.
To judge DCITA's competence in managing the various programs,
ANAO looked at seven projects including the BITS incubator, BITS
Advanced Networks Program, and BITS Intelligent Island Program;
the National Communications Fund and Towns over 500 programs; the
ICT incubators program; and the Advanced Networks Program 2.
Although generally positive about DCITA's handling of the
programs' funding and goals measurement, ANAO singled out the
Intelligent Island program for "significant delays" that had
prevented it from even getting on track to achieve its
The main source of these delays, ANAO found, were systematic
failures to comply with best practice in the management of the
government grants. Issues identified with Intelligent Island
included a lack of formal risk management methods for program
management; use of performance indicators linked with project
objectives; use of those indicators to measure program
performance against key performance indicators; and timely
disbursement of grant funds.
"Although the performance monitoring regime for the
Intelligent Island Program was well established, DCITA has not
monitored the achievement of the program's objectives using the
agreed performance measures," the report found. "This does not
represent sound grant management practice. The ANAO also
considers that DCITA could have taken earlier action to progress
the Intelligent Island Program, which has experienced significant
delays throughout its life."
A common problem with the programs was the setting of
inconsistent and non-taxing standards for funding applications,
which had seen many aspiring incubator participants falling far
short of the detail and performance measures that would have been
expected under best practice.
"DCITA set low standardised performance targets that did not
present a challenge to most ICT incubators," the report
concluded. "The risk with setting performance targets too low is
that, once achieved, grantees will not make every effort to
maximise their performance."
DCITA accepted the two ANAO recommendations stemming from the
report, which suggested the department develop guidelines to
improve the quality of submissions, and document its evaluation
of the relative merit of those submissions.
ANAO also highlighted the need for independently audited
financial reports for Intelligent Island participants, and
suggested that DCITA force grant recipients running "complex or
high risk operations" to develop and enforce formal risk
management plans at the start of the grant and throughout its
process, and to report regularly to DCITA on the identification
of risks throughout the project's lifespan.
DCITA was contacted to comment about the ANAO report but had
not responded to ZDNet Australia enquiries by press time.