From a €9 million start budget, how could a health service computer project wind up costing up to €400 million? Liam Reid reports
They don't call it Angola for nothing. On June 1st in the Department of Health, as the Minister Mary Harney and her team of advisers fought desperately to control one landmine, another was being primed.
That morning in the Department's headquarters in Hawkins House, senior civil servants and advisers were most concerned about preventing the imminent collapse of talks with Prof Brendan Drumm to take over the Health Service Executive.
Meanwhile, in another office, two health officials were preparing for a meeting with the Department of Finance and the HSE on what was then a fairly obscure IT project, called PPARS (Payroll, Payment and Related Systems).
Later that day this meeting would be attended by another civil servant, Dave Ring.
Ring is one of the foremost senior officials in the Cmod division of the Department of Finance. Essentially Cmod is the Government's IT expertise division, comprising 64 computer and IT experts.
Ring is one of the most experienced IT experts within the civil service, and has a specific expertise in the implementation of large-scale systems dealing with payroll issues.
With a troubleshooter of this experience on hand, it was amazing that this was the first time in seven years of development that health officials had called him in specifically for a detailed briefing on the problems with PPARS.
What Ring learned at that meeting about the vast sums of money being spent on the project - most of it going to consultants - evidently alarmed him.
Four weeks later he was the author a memo from the Department of Finance outlining concerns about the level of fees being paid to consultants, and about how the project was being managed.
The memo ordered an urgent review of PPARS and its sister system FISP, (the Financial Information Systems Project) which have cost €150 million between them to date and could end up costing up to €400 million if fully implemented.
The memo effectively ordered the Department of Health to suspend the development in the meantime.
Its contents came as no surprise to Harney, who had earlier that month in June been briefed on the rising concerns about the system.
However, the memo helped trigger a series of events drawing in both Harney and Prof Drumm, before the landmine that was PPARS exploded in spectacular fashion earlier this week.
The PPARS fiasco has sparked the first big political row of the latest Dáil session, which leaves the Government somewhat bloodied.
The scale of public controversy generated is largely down to Fine Gael, which succeeded in ambushing the Government and keeping the issue at the top of the news agenda throughout the week by releasing a series of damming and revelatory documents about the scale of the problem and the overspend.
This culminated in a separate but timely (for the Opposition) decision on Thursday by the HSE to suspend the roll-out of both PPARS and FISP.
For Fine Gael, and the Opposition, it was a dream topic, combining two key issues of the moment: the post-Eddie Hobbs rip-off Republic agenda of Government waste, and the health service.
The genesis of the PPARS system dates back to the mid 1990s, when the chief executives of the various health boards began to discuss how they might work together on areas of common interest.
Computer management systems were quickly identified as one such issue. It was an international trend, and the potential cost savings of preventing duplication were obvious.
The idea of developing a common payroll system for health boards arose and in 1998 the PPARS, the Payroll, Payment and Related Systems project was born, with a budget of €8.8 million.
Four health board areas and one hospital, St James's in Dublin, would be involved in the pilot, with overall responsibility for developing it resting with the North Western Health Board.
Two years later, health board chief executives decided to begin a similar project for their financial and budget management systems, and FISP, came into being. This did not fully get to development stage until last year, and to date €30 million has been spent on the €176 million project.
Contrary to what was claimed earlier this week, the PPARS system was envisaged from the outset as more than a payroll computer package: it was seen as a centralised system for keeping staff records, from rosters to payments.
Three years and €17 million later, however, it had achieved few of its objectives, with basic payroll and record systems up and running in just a few health boards.
The health boards and the Department of Health decided that consultants were needed to tell them what was happening, and the Hay Group was drafted in.
The report was delivered in January 2002. In it the consultants praised the project but said the scope and cost of the project had been seriously underestimated, and it would cost an additional €95 million to complete.
There was also a stark, but prophetic warning, that if the project was to continue at this level, there were significant risks and the project had to be carefully and closely managed.
The proposed national system was due to provide exactly what the Department of Health was looking for, in that for the first time there would be exact details on how many people would be employed, how much they earned and what they did for that money.
It would also effectively act as a technological backbone to plans to create a single health service, and help to push through a standardisation of terms and conditions for various staff grades.
The €100 million funding for PPARS was approved in late 2002 by the Government as part of the capital budget, and a national steering group was set up, headed by the chief executive officer of the North Western Health Board, Pat Harvey, with a project director from within the health board system.
The main work, however, was to be done by consultants, Deloitte, which had been working on the programme since its inception.
By the summer of 2004, however, serious problems were emerging with the system. By this stage it was predicted that the entire €100 million budget for the project would be spent by the end of 2004, but that less than one third of the estimated 140,000 staff in the health services would be on the system.
By this stage there was growing concern among some staff about the trial phase of the system, with numerous complaints from those trying to work with PPARS.
"It was like putting 11 different carts in front of one horse, and with nobody even in charge of the direction they were supposed to be in," said one person familiar with the project.
There were numerous payment problems in the testing phases of the project, the most startling being a €1 million over-payment to a member of staff in Sligo.
The system identified the anomaly, but a report on it lay on the desk of an official unread, and it went through. It was only picked up when the honest employee reported it.
The money being spent on consultants, some of whom were being flown in from Africa and further afield to work on the programme, was also emerging, with staff complaining that many of the junior consultants were essentially replicating what health board staff were doing.
While there was an implementation board, a project director, and a Deloitte consultant all with responsibility for overseeing PPARS, the growing problems with the system were not addressed until July 2004.
A further consultancy report was ordered from Gartner which said that the costs of Ppars and its sister system FISP were in line with what was to be expected. It did not address the question of whether the system was working.
Then IBM was called in. It reported back in September, outlining serious concerns about how the project was being managed and implemented.
It was then taken on as a "partner" with Deloitte in the implementation process.
In simple language, they were brought in to fix things, with the budget to complete the roll-out of PPARS now estimated at between €150 million and €200 million.
By March 2005, there was a new secretary general at the Department of Health, Michael Scanlon, and a new Health Services Executive, which now had to report directly to the Department of Finance on spending matters.
At this time Scanlon was made aware of the potential problems, and it was only at this stage that the Department of Health decided to consult the Government's own computer experts, Cmod, about the system, and the meeting for June 1st was arranged.
Perhaps the death knell for the roll-out of the system came on June 10th when the chief executive of St James's Hospital, John O'Brien, wrote to the director of IT at the HSE, Seán Hurley, telling him that there were "monumental concerns" about the system and that it should not be rolled out.
He went as far as to say the system was operating so badly it threatened the "basic functioning" of the hospital.
At this stage the Comptroller and Auditor General John Purcell, who had been told about the potential costs last year, decided to carry out a formal investigation or "value for money report" on the project. This is due to be published before Christmas.
Fine Gael had also got wind of the issue, and tested the waters at an Oireachtas committee meeting on July 20th when Dan Neville TD asked about the system and the Tánaiste openly admitted there were concerns about PPARS.
Fine Gael backroom staff then set to work collating information on the project through Freedom of Information requests and other sources, which they used this week in one of the best co-ordinated Opposition attacks on the Government in recent years.
Nor can the Government expect respite from the controversy any time soon, with the Purcell report looming and another one to come from the HSE, on the costs and future of both FISP and PPARS.
Political rows aside, however, the facts that have to date emerged about PPARS and its sister FISP, raise fundamental questions about financial waste as well as management and responsibility in the public service.
How could almost €150 million of public money be spent on systems that may not even work properly, and all unnoticed by the Government and the department in charge until it was almost too late?
Pulse: It has taken nearly eight years for the Garda computer system to come from inception into full operation and in that time it has had to be redesigned. When it was originally mooted, it was to have cost less than €25 million. The total cost now is expected to be closer to €75 million.
There were serious technical problems in the first phase of the system, which computer expert sources said had to be effectively redesigned.
In recent months Garda representative organisations have called for an investigation into the system, amid complaints that Pulse cannot deal with the required work-load, a claim denied by Garda management.
Difficulties with the project led to delays of three years in introducing the full penalty points system. The system was to be operating by 2002, but is still at pilot phase and will not be rolled out nationally until 2006.
Housing grants: In the 1980s the Department of the Environment operated a generous and extensive system of house refurbishment grants, and it was decided a computer system, costing tens of thousands of pounds, would be needed. By the time the project was completed in the late 1980s the housing grants it was supposed to cover had been discontinued.
Prisons Service: In 2003 the Irish Prisons Service introduced a new computer system to manage staff records and payroll at a cost of nearly €600,000. In February 2004 prison governors decided to abandon the new system and go back to the old because they claimed it was impossible to modify the system to meet the requirements of prison staff.
In his latest annual report however, the Comptroller and Auditor General John Purcell said the service had failed to take up an offer by the Department of Finance in-house computer experts to examine the system to see if it could be salvaged
PPARS: Payroll, Payment and Related Systems
€8.8 million: the original budget in 1998
€100 million: the new budget agreed in 2002 for the expanded system
€116 million: the cost to date of implementing it
€40 million: the amount the main consultants, Deloitte, have been paid
€165 million plus: the minimum total cost if it was fully implemented
How far along is it? It has been rolled out to 36,000 staff out of a total of 140,000 in the health sector
What does it do? PPARS is supposed to provide a total, centralised people management system for the HSE, from payroll to rostering, of 140,000 staff.
FISP: Financial Information Systems Project
€30 million: the amount of money spent on it to date
€18.12 million: the amount paid to Deloitte, the main consultants
€176 million: the estimated total cost to implement FISP if it resumes
0: the number of people using FISP on a day-to-day basis at present.
How far along is it? Five years in planning and one in development.
What will it do? FISP is being designed to be a centralised budget and financial management system for the health service, detailing how every cent is budgeted for and spent.