Analysis: Auckland Council’s $1.2 billion IT shambles
Reports have filtered through about the $1.2 billion blowout by Auckland Council on IT since the supercity was formed in 2010.
This level of overspend is phenomenal and it is unclear whether the council has anything to show for it.
What is clear is the council has failed in its governance responsibilities to Aucklanders and ratepayers.
Last year, the auditor-general raised some serious concerns around the project – NewCore – which has received attention for its $100m overspend, saying the project carries “an almost certain” risk with a “major impact”.
At the time the council responded by saying all was under control citing the following reasons: “this includes quarterly reporting to the finance and performance committee, project steering group meetings held each fortnight in line with best business practice, and independent ongoing quality assurance reporting from EY to identify issues.”
So I took a look at the reporting mentioned, and while shocked, wasn’t surprised at what I found.
A review of the finance and performance committee meeting agendas and minutes show just how badly our leaders have failed us in governance.
In 2015, the same information on the IT transformation programme was regurgitated four times when updating this committee (in February, May, September and December). A quick review of the minutes of each of those meetings shows no overview of any discussions, except in September when the public were excluded for reasons of commercial confidentiality.
There is no mention of how investment is turning up in actual operational savings, except broad statements around targeting savings. Any type of rigorous risk reporting framework is completely absent.
Additionally, I find it astounding there was no mention of the vast gaps in governance highlighted by the auditor-general in 2015. This is a complete failure not just by council staff accountable but the governors of Auckland.
Having worked in the IT and communications sector in senior management and governance positions during my 20-years in business, I have never seen such gross negligence at all levels of project management and people must be held accountable for this, including the cost blowout and lack of governance oversight.
For $1.2 billion, you would not only have transformed your IT systems and processes, migrated your whole staff to modern-day computing solutions, such as cloud-based communications, and have built new network infrastructure, such as a mobile network. The fact the council is attempting to combine systems is an inaccurate justification for this level of investment.
We need strong leadership focused on delivering results for Auckland. There’s quite a few steps that need to be taken in order to address this level of incompetence.
Here is where I would start:
Demand the appropriate level of reporting from those accountable in the council to governance. This includes updates on benefits realised, milestones and gating which decides whether the project is moved to the next phase, rigorous risk assessment and monitoring, and a thorough update on scope changes driving costs and benefits, as a start;
If governance reporting is not addressed satisfactorily in a short time frame (i.e. 3-6 months), then replace those individuals to get the level of accountability that is a fundamental tenet of large capital investments like this;
Ensure the risks highlighted by the auditor-general are taken onboard by council staff accountable for this programme and risk mitigation strategies are embedded not just in the programme but governance reporting;
Ensure the benefits, outcomes, project scope, business and technical requirements were aligned and reported on regularly at both an operational and governance level;
Not take at face value that management is doing this. It’s clear from the significant gaps in what the council says it is doing and what is turning up at the committee meetings that the most prudent assessment would be to assume the appropriate levels of reporting and risk management are just not in place; and
Ensure management is running an incredibly strict capital prioritisation process around scope changes required.
This blowout is completely unjustifiable, especially when residents in Riverhead and Maraetai can’t even afford decent footpaths in their communities.
The irony of reading the committee meetings is the talk about deferring millions of dollars of desperately needed investment that has been put on hold while the IT funding goes unmonitored and ungoverned.
I will provide strong leadership, fresh ideas, and deliver real results for Aucklanders. I have the governance and operational experience to ensure Auckland has the right level of reporting and questions in place to avoid debacles likes this.
Victoria Crone is a candidate for the Auckland mayoralty race