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.