PPARS- a comedy of errors
By Niall Hunter-Editor
Severe criticism of the financial and organisational management of the controversial PPARS health payroll and personnel system is contained in an examination of the system by the Comptroller and Auditor General.
Tanaiste Mary Harney, in response to the report, has said a anumber of 'classic mistakes' were made with PPARS and the detail of the report bears this out. It details a litany of administrative and financial inefficienies and a lack of accountability and monitoring in relation to escalating costs.
The PPARS project was reviewed by external consultants on five occasions since its instigation in the mid-1990s, but not one of the reviews provided a meaningful challenge to the case for continuing with the controversial payroll project, the C&AG’s report on the project states.
It says the reviews tended to justify the continuation of the project, although a wider review scope might have focused attention on the escalating cost, reduced scope and the risks to timeliness and coherence experienced with the development of PPARS.
The report points out that PPARS, whose further roll-out is suspended and is being reviewed by the HSE, has experienced a number of problems since going live.
Major matters requiring attention were still being highlighted by staff in the areas where the project was being piloted in June of this year, prompting the drawing up of a 'top 10' issues list.
The report says that while some of these issues related to bugs or system errors, others related to demands for additional functionality over and above that previously provided.
This, it says, is indicative of a failure to properly define business requirements prior to the system going live.
It adds that a major frustration for staff is that work has not yet been carried out to enable the production of standard reports from the integrated system to assist in the management of human resources.
It appears that where the payroll system has gone live, little or no redeployment of staff has taken place and additional resources are required for the system, especially for the recording and entering of time.
There is no evidence of staff savings having been achieved by the introduction of PPARS, according to the C&AG.
The report says the total cost incurred on the project at August 31 of this year was around 131 million euros. Out of this, 57 million euros went to consultants and contractors, 20 million to project infrastructure, 17 million to national administration and 37 million euros on local agency costs.
The Deloitte firm was paid 38.5 million in respect of advice and support, according to the report.
It says the latest estimates for the cost of the project to date are 195 million eurothis is the cost to completion of the rollout in St James’s Hospital and eight HSE areas in the period to December 31 of next year.
Tracing the history of the PPARS system, which was first, mooted in 1995, the report says a fixed price contract for implementation services was awarded to the firm Bull Information Systems Ltd (BISL) in 1998 at a budgeted cost of just over 9 million euros.
It was estimated that the implementation of PPARS in the initial pilot health agencies would take two years. However, not long into the BISL contract is became obvious that it would not be possible to have the system implemented in that timeframe, and the work involved had been 'seriously underestimated'.
Following a dispute about the basis for the contract, the agreement with BISL was concluded. The dispute was over whether BISL’s work was fixed price or based on 'time and materials'.
By the end of 2001, more than three years after commencement of the BISL agreement, only the personnel administration elements of the system had been implemented, according to the report.
In 2002, the Department of Health insisted that national coverage with PPARS, in spite of the difficulties to date, was essential.
Deloitte Consulting were hired, largely on a ‘time and materials’ cost basis to assist with the project implementation.
At this stage the estimated cost of PPARS was 109 million euro with an expected completion date in 2005.
Appraisals of the project were then carried out, but both appraisals fell short of the requirement of a full business case for the project, according to the C&AG.
One of the appraisals 'was seriously deficient' with regard to analysis of costs, according to the report.
While annual estimates were produced, there was no definitive overall budget extending over the life of the project which linked money to ‘deliverables’.
The C&AG says he found that the estimates prepared in the course of the project were not supported by detailed costs analysis and were mostly framed in the context of funding requests.
The report says there is evidence of a lack of clarity regarding the role of Deloitte, and this militated against clear direction and control.
Because of the uncertainty around funding and other issues, the PPARS National Project Team entered into a series of short-term agreements with Deloitte and this procurement approach is unsuited to a multi-annual project on the scale of PPARS, according to the report.
The C&AG also points out that a competition for the procurement of technical configuration and support contractors was held in November 2002, one year after the Project Team began to engage personnel on an ad-hoc basis.
"Notwithstanding the result of the competition, there does not appear to have been any change in the companies engaged in this work", according to the report.
Companies that had not been involved in PPARS until then, but who ranked well on price, were not engaged.
Evan after this procurement round, the actual rates paid to a number of companies who submitted tenders was higher than their tendered rates, according to the report.
The C&AG says the desire of the Department of Health to implement the project as quickly as possible overstretched resources and resulted in a failure to fully complete two declared pilot sites before moving on to new sites.
The failure to learn from experiences with pilot sites and adapt this to subsequent sites impacted negatively on the project.
The report says issues with PPARS included a failure to develop a clear vision of what strategic personnel management actually meant for the health service; substantial variation in pay and conditions and processes between and within health agencies; and the lack of readiness of health agencies to adapt to the change management required.
The report says that while a good deal of work needs to be done to improve PPARS it does have achievements which can be built on, including having a single system across the whole sector and the creation of expertise within the system which may be available for other developments if it is not dissipated.
Discussions on this topic are now closed.