Two years late and $23.7 million over budget, the rollout of a pathology lab information system by the Western Australia government has been slammed by the state’s auditor general.

Funding for PathWest’s Laboratory Information System (LIS) replacement project was approved by the state government in 2015. PathWest provides pathology services to the State’s public health system and needed to replace its ageing LIS – called ULTRA – which had been in place since 1994.

In a report published today, the WA Auditor General, Caroline Spencer, said PathWest “significantly underestimated the effort and cost of its own staff working to customise the new system” and that management of the project did “not reflect the size, risks and importance of the project”.

The budget blow-out could end up being even bigger, the auditor added, due to “poor tracking”.

A vendor to replace ULTRA – used to order tests, track specimens, prepare and deliver reports and manage billing – was appointed in 2016, with the replacement system expected to be launched by May 2018. Although not named by the auditor, the vendor is understood to be US firm SCC Soft Computer.

The North Metropolitan Health Service (NMHS) had been the accountable authority for the project up to the middle of last year. The Department of Health (DoH) is the system manager for all health services and the Health Support Services (HSS) host both the current and replacement laboratory information systems.

“The LIS project began with major problems. The NMHS did not provide effective oversight, there was weak project governance and reporting, an inexperienced management team and insufficiently detailed planning that underestimated the risks and complexity of the project. Together these resulted in inaccurate project budgets, inadequate reporting to senior management and delays,” the WA Office of the Auditor General report said.

The report also noted a “weak segregation of duties between the various project bodies” and a lack of IT project experience in the project leadership team.

Recognising significant issues with the rollout, in June last year the DoH and the NMHSinitiated two reviews, which uncovered the “major weaknesses”.

Following this review, a new project management team took control in October last year.

The LIS replacement is now expected to cost $50.5 million when it's deployed in April 2020. Around $734,000 is being given to Cirdan, the vendor behind ULTRA (which suffers from “several technical weaknesses including system outages” the auditor noted) to extend its service contract for another 12 months.

The auditor general criticised the DoH, saying it needed a “comprehensive, flexible and adaptive ICT oversight framework”. The department said it began revising current frameworks in April this year. The HSS is also currently formulating a set of detailed project guidance and documentation.

PathWest and the other organisations involved in the project accepted the auditor general’s recommendations to improve project management and oversight, and said new frameworks would be ready to pilot by June 2020.

“I have made recommendations about tailoring governance to meet project risk in a distributed system, in line with changes already initiated by the Department of Health and Health Support Services. These are relevant across WA Health and for other entities embarking on major ICT projects across the public sector," said Spencer in a statement today.

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