An overrun of close to €2 million on a new payroll and human resource system at Beaumont Hospital in Dublin was due to an underestimation of the project’s complexities, compounded by turnover of key staff and industrial relations issues, its chief executive has said.
In a letter to the Dáil Public Accounts Committee (PAC), Anne Coyle also highlighted the cost of continuing support required from the vendor of the system.
Ms Coyle also said the hospital had commissioned in recent months an independent external review of the implementation of the new payroll system, which would cost €115,251.
She said the purpose of the review, which began in August, was to “ensure that the system functionality fully supports its human resources and payroll obligations”.
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In her letter to the PAC, Ms Coyle said the hospital had “also incurred a cost for the legacy payroll system of €133,068 to allow access to historical payroll and human resource data”.
The chief executive said in addition that Beaumont Hospital had made a settlement of more than €66,000 with the Revenue Commissioners.
“As a result of specific implementation issues, Beaumont Hospital failed to meet its full obligations to the Revenue Commission in early 2024, which, when following discovery and disclosure by the hospital, led to an interest and penalty demand of €66,061.”
Ms Coyle’s letter followed strong criticism of Beaumont by members of PAC at a hearing last month following revelations about the cost overrun on the new payroll and human resource system.
The committee was also told that in addition to the overspending, the project had not been put out to tender under public service procurement rules.
Ms Coyle said in her letter to PAC, dated November 5th, that an internal review by the hospital management team in 2025 had “determined noncompliance with procurement requirements owing to an interpretation in 2021 that specific circumstances during Covid-19 were deemed to warrant a derogation from procurement standards”.
The Beaumont chief executive said the hospital had identified serious deficiencies in its human resource and payroll systems in the period leading up to 2022 “because of the lack of integration between its systems, necessitating consideration of its replacement with an alternative integrated system”.
She said these deficiencies had been reported in the hospital’s annual financial statement of internal controls for the previous year.
“The contract for the implementation of a replacement HR/payroll integrated system was signed in March 2022 with the project starting in July 2022.”
“The human resource module went live in October 2023; however, due to implementation complexities as well as recurring national industrial relations issues, the payroll module did not go live until January 2024.”
She said the projected cost of the project at the outset was €1,964,925, “which assumed break-even licence costs”.
“The amount paid to the implementation and support vendor to the end of December 2024 was €3,818,935. This is broken down between €3,326,983 system implementation costs and €491,952 hyper care support costs in the year of go-live.”
“In addition, Beaumont Hospital has paid €823,180 in total system licence fees over the years 2022 to 2024. The equivalent licence costs for the legacy payroll system provider for the years 2022 to 2024 would have been €570,862 had the legacy system been retained.”
