Tasmanian digital transformation program fails to deliver, costs soar

The Tasmanian government spent $47 million on a digital transformation program that failed to deliver any intended modules after four years, the auditor-general Martin Thompson has found.

In his report on the program's rollout, Mr Thompson also warned the program remained "at risk", with total costs now estimated to reach $119 million before the new system was implemented.

The program began in 2020, when the Tasmanian Health Department embarked on a major upgrade of its aging human resources and payroll systems.

It was then known as the Human Resource Information System (HRIS) program, and in 2021 its scope was expanded to become a system solution for all government agencies.

But in 2024, following an external review, responsibility for the project was transitioned to the Department of Premier and Cabinet (DPAC).

It was then rebranded as the Human Resource Transformation Program (HRTP).

"Health's planning, early implementation, and program governance for the HRIS Program was not effective or economical," Mr Thompson said.

"Health spent approximately $47 million over 4 years on the HRIS Program prior to its transfer to DPAC in mid-2024.

He said the reasons for this were:

The business case, and other critical documentation, were "never finalised" following changes to the scope of the program.

The project evolved as an "IT system project" despite its aims to deliver an "organisation change program".

Mr Thompson also said the Health Department did not have an appropriate communications strategy to keep the public and stakeholders informed.

"Health did not provide sufficient briefings to Ministers, meaning Parliament was not adequately informed on impediments to progress and the decision made by Cabinet to expand the program to whole-of-government," he wrote.

Program 'remains at risk'

The auditor-general found that since taking over the program, DPAC had strengthened governance for the HRTP, and the planning and early implementation had improved.

However, he said the program "remains at risk" because DPAC had not yet resolved the "significant issues that Health failed to address".

He also noted the business case for the HRTP had not been finalised and approved by all relevant stakeholders by March this year, when preparing his report.

As such, he was "unable to provide assurance at this point in time that the program will succeed in its current form."

He said DPAC had spent $19.7 million since taking over the program from Health, and anticipated requiring a further $53.1 million to complete it.

"This results in a total expected program cost of $119.8 million," Mr Thompson said.

The auditor-general made three key recommendations:

The Health Department only progresses current and future IT projects if the department ensures approved business cases are developed before substantive work begins.

DPAC finalises its business case before moving forward with the HRTP.

DPAC uses "well-defined project gates" to resolve key design issues.

"Programs such as these are complex business transformations," Mr Thompson said.

Both departments accepted the recommendations and said they had already been completed, including the HRTP business case, which was approved this month.

Premier rejects 'potentially misleading' findings

In response to the auditor-general's scathing assessment, Premier Jeremy Rockliff said some of the conclusions were "incomplete" and "potentially misleading".

"I consider it necessary to state, in clear terms, that I do not agree with the observations or conclusions as presently framed [in the report]," Mr Rockliff said.

"In my assessment, the report does not adequately or accurately characterise the program's context, the basis for key decisions, or the extent of work undertaken to date.

"Nor does it sufficiently reflect the complexity, sequencing, and risk profile inherent in a reform of this nature.

DPAC secretary and head of the state service, Katherine Morgan-Wicks, who previously led the Health Department, also rejected the report's key findings.

She said the HRIS/HRTP program was "one program of work, not two" and the auditor-general's decision to treat it as two separate stages of work had "affected the analysis and conclusions".

She said the decision to pause the HRIS program to undertake an external review in 2024 was "a hallmark of good governance".

But independent MP Peter George said millions of taxpayer dollars had gone to waste.