Thursday, 21 November 2019

Ceisteanna (66, 67, 68)

Barry Cowen

Ceist:

66. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the status of the financial shared service centre project; the amount spent on the project to date; the amount spent on consultants for the project by consultancy; if the EY report will be published; the expected cost to complete the project; the date the project was stalled; the date it is set to resume; the date it is expected to be completed; and if he will make a statement on the matter. [48461/19]

Amharc ar fhreagra

Barry Cowen

Ceist:

67. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the original budgeted cost of the financial shared service centre; the original expected completion date; and if he will make a statement on the matter. [48462/19]

Amharc ar fhreagra

Barry Cowen

Ceist:

68. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform when he was first informed of the cost overruns in relation to the financial shared service centre project; and if he will make a statement on the matter. [48463/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

I propose to take Questions Nos. 66 to 68, inclusive, together.

The Financial Management Shared Service Programme will see the migration and upgrade of 31 separate Financial Management Systems (FMS) to a single FMS, with a single common Chart of Accounts, and standardised accounting processes for all of Central Government.

This Programme is necessary, not only to address the upgrade requirements for these legacy systems, but also to support a number of interdependent reform initiatives and to position the Government to be responsive to evolving national and international requirements, including fiscal transparency and digital innovation. The existing distribution of financial processing across Public Service Bodies (PSBs) and systems does not support the automated consolidation of data at a central level. The continued use of legacy systems could not meet existing and emerging requirements without considerable duplication of effort and at a potentially significant cost/risk to the State.

The implementation of the single FMS, aligned with the standardisation of processes across central government, will provide the necessary supporting framework, and is an essential enabler, for the financial reporting reform outlined in the 2019 OECD Report on "Financial Reporting in Ireland". A single best-in-class finance technology platform will provide greater flexibility and strategic capability to respond to new and emerging requirements in a more consistent, agile and cost effective manner, while future proofing the Government’s Finance Function. It will also provide significantly improved financial information and data insights, on a real time accruals basis, which will strengthen informed decision making across PSBs and Central Government.

The original business case anticipated that the Programme would return cost savings of some €15.4m per annum once fully operational.

In addition to the projected operational cost savings, it is also important to consider that the programme negates the costs of upgrading the existing 31 legacy systems which would be significant (benchmark estimates suggest a range of €50m-€80m), and would not deliver the reporting reforms or rich source of centralised data available from this single FMS programme.

With respect to timelines, a decision was made in mid-2018 to pause entry into user acceptance testing and review the design of the technology platform.

I am informed by the National Shared Services Office (NSSO) that the design review of the new financial management technology platform was completed recently. This has highlighted a number of process and technical opportunities for improvement of the single finance platform for Government. This will ensure that the quality of the solution implemented will support the reform of public finance management and reporting. Changes are not unusual in a programme of this scale and complexity that will replace and upgrade 31 existing different systems with one new finance system for Government.

As a result of the design review, and the work to realise the improvements identified by the review, the project will not be completed by 2021 as originally planned. This is a large scale complex programme that will take longer than originally anticipated to deliver the new system for 48 Public Service Bodies over a number of years. The timeline will be worked through in consultation with the system implementation partner and each Public Service Body.

The original Business Case recognised the level of complexity in this Programme and envisaged that the costs to support a full deployment, taking account of potential delays that were liable to arise for a system of this complexity, could range from €47.4m to €62.25m excluding VAT. The total amount spent to date on the project is €36.5m excluding VAT.

A project of this scale and complexity requires a wide range of skills and expertise from within and outside the Civil Service. I am informed by the NSSO of the following spending on consultants, recruited to provide advice on the development of the project to date:

Consultant

Spend to date (ex VAT)

EY

€814,000

Deloitte

€4,461,000

I am informed that EY was engaged by the NSSO to provide expert advice on programme governance. The work referred to by the Deputy included a confidential (not for publication) internal review of the governance arrangements for the Programme focused on making improvements and the recommendations have been implemented.

I am updated on matters pertaining to expenditure, including in respect of a range of organisations such as the NSSO, on an ongoing basis. A revised timetable and cost for completion of the Programme will be finalised when the consultation referred to above is completed.