Revised €115m financial project on course to come in on budget, PAC told

A delayed financial management system for the Government that has seen costs spiral is expected to meet the revised target budget of €115 million, the Dáil’s public spending watchdog has been told.

The new Financial Management Shared Services (FMSS) project was expected to cost about €54 million, including VAT, and was due to begin its rollout in 2018.

The Government last year approved a new budget of €115 million – also inclusive of VAT – for what is being described as an enhanced project with a completion date of 2025.

Hilary Murphy-Fagan, chief executive of the National Shared Services Office, the agency overseeing FMSS, defended the project during an appearance at the Public Accounts Committee on Tuesday.

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Green Party TD Neasa Hourigan asked if the revised €115 million budget for the project will be the final cost. Ms Murphy-Fagan replied: “I believe that that is the case, yes, after all the work that we have done on the programme.”

The goal of the FMSS project is to replace 31 disparate financial reporting systems across 48 Government departments and offices with a single financial management system.

‘Underestimation’

Earlier Ms Murphy-Fagan told the committee the project began in 2016 and said it is “now making good progress”. She said implementation has taken longer than in the original “ambitious” plan “primarily due to underestimation of the work required to bridge the gap from the current predominately-cash accounting system to build a comprehensive system in compliance with international standards”.

She said the “breadth and depth of work” necessary to deploy the FMSS “has turned out to be significantly more challenging than originally envisaged”.

The project has “now remobilised under an updated timeline and budget that has been approved by Government,” she added.

The Government decided last September that the timeline would be extended to 2025 and approved a budget of €115 million for what Ms Murphy-Fagan described as an “enhanced design”.

Complexity

Fianna Fáil TD Paul McAuliffe quizzed Ms Murphy-Fagan on the timeline and costs. She said the options were “limited” adding: “We could have continued on against the timeline, let the system go live, but all of the best advice that I had received since would have said that was the wrong thing to do because we would have been trying to fix this airplane in flight effectively.”

Mr McAuliffe put it to her that the level of complexity of the project surely had been scoped out and understood. She said this was understood but said that the project is dealing with 48 Government departments and agencies that don’t have a single chart of accounts and this was just one aspect of the complexity.

Ms Murphy-Fagan said additional requirements emerged due to GDPR data protection laws that were “an awful lot more complex than was originally envisaged”. She said she doesn’t believe anyone could have anticipated this at the time. She also said there had to be significantly more investment in cyber security than “we originally understood and could have anticipated” in 2015 and 2016.