Mishandling of State Government HR and payroll ‘quite extraordinary’

by 13 Dec 2011

It’s been a week of stunning admissions – New South Wales’s state government auditor-general revealed yesterday in a report that a massive SAP-based project to replace finance, HR, payroll and student administration systems across the public education sector has failed to the tune of millions.

The project, known as the Learning Management and Business Reform (LMBR) program was initially rolled out in 2006, with the aim of replacing the systems over the following seven years, in schools, TAFE institutions and the Department of Education and Communities’ head and branch offices.

However, the audit report published by NSW auditor-general Peter Achterstraat, noted that the project had been significantly delayed, had gone over budget, and had not provided all of the expected benefits to the departments where it had so far been implemented.

The HR and payroll aspects of the project had not been deployed, despite the fact that it was scheduled to be in place by mid-2011, and the student administration system overhaul was also delayed.

According to the report, where the project had been fully implemented, the new systems had been disappointing.

“The finance system did not fully meet the department’s needs and users had to build some manual workarounds, which resulted in lost time and additional effort and costs not included in the original business case,” the report noted.

“System users had some difficulty obtaining accurate and/or relevant and timely information; the Shared Services Centre did not have the required skills, resources and knowledge to fully support the system; system users did not have sufficient knowledge of the new system and its functionality.”

As a result, the cost of the first phase of the project had jumped from $153m to $210m, although the estimated cost of the second phase had actually dropped — from $218m to $176m. A further $14.4m has also been allocated by the NSW Treasury to fund additional staff and training.

 “This reflects the decision to deliver an integrated solution across the Department rather than separate implementations for finance, human resources and student administration and learning management,” the report stated.

The report comes as Queensland Premier Anna Bligh announced today that the government would completely overhaul QLD Health amid revelations of fraud, on top of other problems including payroll failures and the jailing of former surgeon Jayant Patel.

Bligh said in a statement that she is fed up with the scandals and will split the department in two, saying the department needs “a new beginning”.

“Queenslanders can no longer tolerate the sick administrative performance of this mammoth organisation. No more reviews, no more task forces or committees; Queensland Health as we know it is over,” Bligh said.

Tony Morris, QC, who investigated the department under former premier, Peter Beattie, told ABC radio the debacle was “quite extraordinary”.

“I mean the whole Jayant Patel crisis began because Queensland health didn’t do a five minute Google search to find out his past criminal problems, and it seems precisely the same thing has happened with [the accused Joel Barlow], who according to media reports, had a criminal record that nobody found out about.”

Premier Bligh said two new entities will replace Queensland Health.

Shane Solomon, the lead partner of KPMG's healthcare practice, has been commissioned to advise on how to split the department, which will likely have one focusing on frontline services including payroll, HR and IT, while the other manages the hospital system.

“This is not an exercise in downsizing the agency. This is an exercise in radical restructure that will put more people onto the frontline,” Bligh said, adding the restructure will not result in job losses.


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