WA Auditor General finds Fiona Stanley Hospital over IT budget by AU$7m

Auditor General Colin Murphy has found Western Australia's largest hospital has blown out of budget by AU$11.5 million.
Written by Asha Barbaschow, Contributor

A report tabled on Wednesday in Western Australia's Parliament from Auditor General Colin Murphy has found IT services have accounted for most of the AU$11.5 million cost variation at WA's Fiona Stanley Hospital.

The Non-Clinical Services at Fiona Stanley Hospital audit assessed whether the delivery of non-clinical services was at the cost expected and if South Metropolitan Health Service (SMHS) effectively monitored and enforced the contract.

The report [PDF] found that overall, non-clinical service delivery at Fiona Stanley Hospital has met contractual requirements, and said SMHS has the resources and processes in place to manage the contract. However, it noted the health service is not tracking overall cost performance effectively, with current contract disputes estimated at between AU$6-7 million each.

Currently, there are seven contract disputes: two in cleaning and one each in helpdesk, management and integration, linen, IT, and internal logistics.

Four formal disputes have been unresolved since October 2015, with more recent disputes in IT and internal logistics from August and October 2016.

"Resolving the dispute over whether the absence of an identity and access management (IAM) system has affected the facilities manager's ability to meet KPIs on answering helpdesk calls may allow them to recover nearly AU$580,000 in deductions," the report explains.

Back in 2014, Murphy was sceptical the project would go ahead.

Another dispute pertains to whether the hospital's asset management system that stores estate and medical equipment asset data, maintenance records, and integrates with other systems to enable whole-of-life asset planning is an integrated site-wide system.

If the dispute is resolved in its favour, the facilities manager estimates it may be able to recover about AU$570,000 in payment abatements.

After two years of full operations, non-clinical services totalled AU$331 million, about AU$24.6 million more than initial base estimates approved in 2011. The report highlighted that this was mainly due to initial estimates not including final prices for four services, including one-off payments for IT.

IT-related equipment and services were costed in 2011 at AU$19.61 million. The actual cost revealed by the Auditor General was AU$26.77 million.

Electronic records management had a fixed management fee but delivery costs relied on future decisions regarding IT initiatives, the report explained.

"One example [of a dispute] was the replacement of 'thin' client personal computers (running directly from a remote server) with conventional desktop personal computers (with a hard disk drive). This was done because 'thin' computers did not provide adequate functionality to run Health legacy applications," the report says.

"Since 2014-15, the replacement program has cost AU$6.9 million."

Fiona Stanley Hospital is the largest hospital in WA and Murphy expects it to cost the once-booming mining state billions of dollars.

"A key message from my report is for SMHS to take a long-term view. Having up-to-date estimates of total contract costs, and using the extensive data and reporting provided under the contract to identify service improvements and efficiencies, would be key parts of that," Murphy wrote in the report.

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