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Ombudsman made to pay up

Details of a difficult year at the Ombudsman’s office have been revealed, including a botched computer system upgrade, heightened security concerns and a bizarre court case to defend the word “ombudsman”. Shane Cowlishaw reports.

The Ombudsman’s Office has been forced to write off half a million dollars after a failed attempt to modernise its IT system.

The office entered into a contract for the supply of its outdated Icase management system in 2017, to be completed by April this year.

But it became apparent that the supplier could not deliver an appropriate product and the contract was cancelled.

Details about the write-off were revealed in a report from the little-known Officers of Parliament Committee, which oversees the Ombudsman, Auditor-General and the Parliamentary Commissioner for the Environment.

“Although the situation is regrettable, we and the Treasury accept that it will be necessary to write off the capital expenditure incurred to date. Efforts will be made to recover some of the payments made.”

A new company is being sought to finish the system and a $2m capital injection and an extra $489,000 in operation funding was recommended to complete the project, with $767,000 in expenses to roll over into the next financial year.

Speaker of the House Trevor Mallard, who is the chairperson of the committee, said it was hoped some of the money could be recovered but it had been decided that it was best to show the lost now and be transparent.

“It was a case of despite a reasonable amount of due diligence being done on the provider the provider failed to deliver and because they missed deadlines the decision was taken to cut the losses rather than continue on with something that wasn’t satisfactory.”

What’s in a name?

Alongside the Ombudsman’s IT problems, several other funding issues were identified.

These included a recommendation for extra $1.5m over four years to improve security at all three Ombudsman’s offices following an “increase in threats” and to deal with sensitive information, and $287,000 in additional annual funding for salaries to retain skilled staff.

In Thursday's budget, the security spending was approved, as was $511,000 a year to retain staff.

To save some money, the office is looking to move to a single Ombudsman model leaving Boshier as the only one holding the title.

The most unusual funding request, however, involved a court case to defend the use of the word itself.

“The Chief Ombudsman has found it necessary in the past year to enter into litigation to defend the exclusivity of this title, incurring costs of $110,000. We understand and support these efforts. We would not want to see the special and trusted “mana” of this Officer of Parliament diluted by indiscriminate use of the title,” the report said.

Under the law, any organisation wanting to use the word ombudsman must have written permission of the Chief Ombudsman.

“From our perspective, it was a slightly surprising decision … and my recommendation to [the Government] is they do a slight tweaking to the Act to make it clear this sort of thing, the creep, can’t be allowed to happen.”

It is rarely granted, with only three applications approved since 1991: the Banking Ombudsman, the Insurance and Financial Services Ombudsman and the almost unheard of Internet Corporation for Assigned Names and Numbers Ombudsman.

But in 2016, Financial Services Complaints Ltd applied to use the word as well, sparked by the Insurance Ombudsman replacing "savings" with "financial services" in its title.

Worried its service would be perceived as inferior, the company also sought use of the name and to call its chief executive a “financial ombudsman”.

Permission was denied by Chief Ombudsman Peter Boshier, who said it was in the public interest that the name remain tightly-held.

The company took its case to the High Court, where it lost, but fought on to the Court of Appeal, which found in its favour ruling that it was difficult to see how granting the use of the word would confuse people when it was already being used in the same sector.

Boshier said he had decided not to appeal and was considering the application in light of the decision.

For Mallard, the situation means something will need to be done to prevent a flood of applications from companies wanting to use the title.

“From our perspective, it was a slightly surprising decision … and my recommendation to [the Government] is they do a slight tweaking to the act to make it clear this sort of thing, the creep, can’t be allowed to happen.”