Senior officials tried to stop spending
In a letter sent by one of the principal civil servants in Finance to his opposite number in Health, in the wake of a June 1 meeting between both departments, it was stated: “It is unclear how the costs were, and continue to be, apportioned as between current and capital pending and that current items were being treated as capital. This must stop.”
The meeting was attended by senior civil servants from both departments who were told that the 1999 to 2004 costs had totalled €100.6 million. By the end of this year the system will carry a price tag of €150m.
Costs for 2005 included €13.5m for the consultants, DeLoitte & Touche and €5m to IBM for providing the technical development.
At the June meeting, the Department of Finance stressed the HSE would have to answer many questions when the system was subjected to scrutiny.
Those questions, the meeting was told, would include “what was the project intended to deliver? Estimated final costs? And an explanation of divergences from original estimate.”
Following the meeting, the Department of Finance sent a letter to Health expressing serious concerns in relation to the implementation of the PPARS.
“We have concerns that the cost of the implementation seems to be out of line for a system which appears focused on HR administration problems and on standardising HR processes.
“No evidence was presented that the system is or will be used to any significant organisation development interventions or as a means of reducing the cost base in HR or other areas of the organisation. Indeed there is some evidence to indicate that HR administrative costs may increase and the HSE needs to urgently look at economies that might arise from the use of shared services in this area,” stated the letter, addressed to both the assistant secretary and the principal officer in the Department of Health and Children.
The letter added: “It is imperative that the PPARS implementation is part of a more strategic re-organisation in the HR agenda within the HSE and that it represents value for money in this regard.”
The Department of Finance principal officer in the IT Control section, who composed the letter, said: “We have serious concerns at the nature and cost of the support services being provided by DeLoitte. It seemed to us that this support is mainly focused on implementation and configuration issues rather than on planning and shaping significant organisational change.”
The extent of “backfilling”, the replacing of staff assigned to the project, “could also be an indication of a lack of commitment from HR areas to this project. The long-term funding consequences of this, if true, would be a major concern,” the letter stated.
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