Defence Has A Few Cost Overruns On Its Electronic Health Record System - About 300%

An Aust. National Audit Office Audit of the Defence E-Health System (DeHS) was released today.

The best way to read the report is via the detailed summary. Here is the link:

http://www.anao.gov.au/Publications/Audit-Reports/2014-2015/Electronic-Health-Records-for-Defence-Personnel/Audit-summary

The financial bottom line comes here:

“Over time, the approved total DeHS project cost rose to $133.3 million, some $110.0 million higher than the original budget. At each approval stage, the project has been funded internally using Defence’s departmental budget, and Defence did not request supplementary funding from government. Nevertheless, there is an opportunity cost associated with Defence allocating significant additional funds to the project.”

Here are the key recommendations:

Lessons learned and recommendations

“25. As discussed, Defence’s management of the DeHS project was beset, in its early phases, by a range of avoidable shortcomings. A key lesson of this audit is the importance of properly scoping and planning complex ICT projects, as a basis for providing sound advice to Defence senior leadership and government, and establishing the pre-conditions for successful implementation. There are more restricted options for Defence senior leadership and government once a project that is considered beneficial is well underway and clearly requiring funds beyond its original budget. This underlines the critical importance of applying a rigorous approach at the outset of a project to develop the project scope and budget. Project proposals and cost estimates should be based on a full understanding of project parameters and risks, and subject to thorough review.

26. A further lesson of the audit is the importance of adequate coordination of internal resources and expertise—to mitigate project risks and inform effective delivery—and the adoption of sound project management methodologies and practices. Government has endorsed project management methodologies so that entities follow a structured approach in developing, overseeing and delivering intended capability, and these methodologies should be consistently followed.¹⁵ Further, Ministerial approvals, and processes such as Gateway reviews, are specified by government to oversight the effective use of public resources so as to achieve value for money in project delivery, and Defence is expected to apply these requirements.

27. The ANAO has made two recommendations aimed at providing Defence with reasonable assurance that project proposals and cost estimates are reliable; and achieving benefits realisation for DeHS by standardising use of the system and implementing agreed functionality.”

It would be fascinating to know what this team makes of the PCEHR!

David.