Audit finds almost a third of Central Bank projects went over budget, including two by €5.5m

The internal audit said the Central Bank had also established a Major Projects Committee to better streamline oversight of complex work. File photo: Leah Farrell/Rollingnews.ie

An internal audit at the Central Bank found nearly 30% of key projects were going over budget, with some getting bogged down in over-complicated bureaucracy.

The report said that of 28 key projects, one in five had missed their deployment deadline, and a small number cost far more than anticipated. A key problem identified was the need for projects to pass through no less than six separate governance committees.

It said this caused delays in approvals of up to four months, as well as an unnecessary drain on staff resources. The internal audit also said the technical complexities of major IT projects were frequently underestimated, leading to overspends.

Nine projects went over budget by a combined €6.1m, with two projects responsible for €5.5m of that overspend.

One of them, phase two of the Unity IT project, ran into “unforeseen technical complexities” and was “extremely challenging” to deliver. The work went from green to red on the Central Bank’s project management monitor as costs began to mount.

The audit explained: “By the time the challenges associated with the project were addressed in a change request … the project had incurred an additional €4.1m in expenditure bringing total expenditure to approximately €9m.

“Therefore, the project incurred additional expenditure of €6.7m between September 2021 (when the project first moved from a green [alert] status to amber) and October 2022 when the challenges were addressed through a change request.” 

There were similar difficulties with an eDiscovery IT project where costs rose from €2.94m to €4.58m as the project developed.

The report said: “This represents a 56% increase in these costs between July 2022, when the charter was approved, at which point €1.13m of expenditure had already been incurred, and March 2023 when the plan (including the revised budget) was approved by the commission.

“Additionally, the project completion date was extended by seven months between the charter and the plan.” 

The 2023 internal audit did point out, however, that savings had been achieved on 71% of closed projects, which offset many of the cost overruns. It said the Central Bank had also established a Major Projects Committee to better streamline oversight of complex work.

Management at the Central Bank did query some aspects of the report’s findings saying that troubled projects had been identified and were being dealt with before the internal audit began. They said nearly four-fifths of projects were completed on time and more than two-thirds were done within budget.

However, officials accepted that governance for major projects could be simplified, and better reporting structures put in place.

Further issues identified

Auditors also identified lower-risk issues including the lack of a central project management database, weak demand forecasting, and inadequate audit trails for some project approvals.

Asked about the report, Marcella Flood, the Chief Operations Officer of the Central Bank, said: “We operate a robust internal audit process, which in this case highlighted issues that were known to us and which we have already addressed.

“The Central Bank of Ireland holds the personal and financial data of hundreds of thousands of people, and our systems have thousands of end users. It is our responsibility to safeguard this data, and our IT spend reflects this.” 

She said most projects were delivered on time and on budget and that since the completion of the audit, they had streamlined governance processes and continued to closely monitor project delivery.