PPARS became ‘money pit’

THE PPARS computer payroll system for the health sector turned into a money pit that soaked up ever-increasing quantities of cash while making very limited progress, the report of the Comptroller and Auditor General (C&AG) found.

Full implementation of the system throughout the entire health sector would cost at least €240 million, or an incredible 29 times the original costing, health chiefs calculated last year.

The latest estimate currently under consideration is for a reduced sum of €195m, but this would only allow for a scaled-down version that would exclude health workers employed in voluntary agencies.

This figure is the seventh estimate of the cost of the project which, the C&AG found, never benefited from a detailed analysis of costs until it was already way over budget.

Initially costed at €9.14m in 1998, this first estimate was flawed as it only covered part of the health sector - five of the 10 health boards plus St James’ Hospital in Dublin - and did not take into consideration the need to upgrade infrastructure to accommodate the new system or post-installation support from technical experts. At the time, it was estimated the system would cost €1.5m per year to run after installation, but it was also expected this could be offset by €0.5 million in annual savings in payroll staff.

The C&AG concluded there had been no savings in staff costs.

By the end of August this year, five weeks before the unfinished system was suspended pending review by the Health Service Executive, the costs already incurred had reached €131m.

Consultants and contractors accounted for the greatest single item of expense, costing €57m, of which €38.5m went to consultants, Deloitte, who had begun their relationship with the project in 2002 on a fixed-price contract of €400,000.

Other major items of expense to date include: software licences €10.7m; computer hardware €11.6m; and staffing of national project team €11.6m.