Northern Ireland IT disaster leads to £130m arrears

Shortcomings in an expensive IT system has led to rate arrears of £130m, the Northern Ireland Audit Office has revealed.

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Shortcomings in an expensive IT system has led to rate arrears of £130m, the Northern Ireland Audit Office has revealed.

The Rate Collection Agency's (RCA) £11.5m IT system was inadequate to meet needs, which lead to a series of accounting problems, Comptroller and Auditor General John Dowdall disclosed in a report.

"Some basic functionality of a new IT system has not been adequate to meet operational needs," Dowdall said.

"The problems with the new IT systems have had a significant impact on my ability to complete my audit work in the 2006-07 year," the Auditor General said. "I have been unable to place reliance on an adequate system of internal control or obtain an adequate audit trail for many of the account balances presented."

Rolled out in October 2006, the Abbacus IT system was supposed to improve rate collection and housing benefit payments. But from day one, the new system did not have the necessary functionality to issue final notices or process debt proceedings. This meant no computer generated recovery action took place during the 2006 to 2007 financial year, said the audit office.

Rate arrears across the province climbed sharply from £35 million three years ago to £48m in March 2006 and, 12 months later, jumped to £88m by March 2007. By March 2008 this year, this figure had reached £130 million.

Landlords also received payment discounts totalling £5 million, whether or not they had paid on time.

The IT problems were compounded by a Government reform package that led to domestic rates bills being calculated according to the capital value of household properties, and a revaluation of homes across the province.

Troubles with the IT system also resulted in £7.2 million of unallocated cash in the 2006 to 2007 financial year. This is cash received from ratepayers but the IT system was unable to allocate to the ratepayer, and remained unallocated, by the year end.

The auditor found there were no prompts or controls built into IT the system to check the input of values into key data fields.

In one significant incident, an incorrectly input number resulted in the system calculating a Disabled Persons Allowance of £2.9 million for a single ratepayer. The error was only picked up as part of a manual check.

Inadequacies in the original specifications was one of the biggest factors to blame for the poor performance of the IT system. The auditors also said initial testing was not finalised in time for the introduction of the government reforms.

Four separate Gateway reviews, conducted by government peers, were conducted on the Abbacus project. Three were assessed as red, requiring the project team to take immediate action to address shortcomings.

Nevertheless, the system went live with manual workrounds in place. The RCA was forced to rely on workarounds to receive the functionality from the IT system the agency needed. What's more, the cost of the system was originally expected to be £10.5m, but fixing the inadequacies in the original specification has cost a further £1m

A spokesperson from Department of Finance and Personnel (DFP), which oversees RCA, said the system was supplied by ICS Computing Ltd, based in Belfast. Calls to ICS Computing were not returned at time of writing.

The DFP spokesperson said RCA has reduced rate arrears from £130m in March 2008 to £85m by June 2008.

"Officials have been working closely with the Audit Office on the issues identified. Considerable progress has been made in the interim in terms of the computer system and all of the significant control weaknesses were promptly rectified," said the spokesperson.

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