Friday 13 December 2019

Deloitte lands €2m State contract to 'streamline' civil service accounting

Deloitte: €2m state contract
Deloitte: €2m state contract

Paul O'Donoghue

GIANT audit and consultancy firm Deloitte has landed a major government contract worth almost €2m.

The company will provide consultancy services to the Department of Public Expenditure and Reform while it looks to set up a Financial Management Shared Services Centre in a contract worth €1,888,310, excluding VAT.

As it is envisaged, the system will allow 46 bodies in the civil service, Defence and Justice sectors to share information and streamline financial processes such as invoice processing and preparing accounts.

The Government claims that, once fully implemented, the service will result in savings of €14.6m every year.

A spokesman for the Department of Public Expenditure said this figure is based on "a reduction in the cost of support for finance technology and a reduction in the headcount required to provide financial management processing."

He did not specify by how much the headcount would be reduced, or which bodies would be affected.

Deloitte is being contracted to "carry out a detailed business requirements analysis before going to the market for the procurement of the new single FMS (financial management system) solution. This market information will be used to update and validate the business case before a further return to Government for a decision as to whether to proceed with the implementation phase."

The spokesman also said that any contract awarded for a new financial management system "will be subject to the Government's decision as to whether to proceed to implementation."

Deloitte previously ran into controversy when providing consultancy services for another government project intended to streamline financial administration, the HSE's PPARS (personnel, payroll and related systems) computerised payroll system.

It was intended to centralise the HSE's salary payments, but its establishment was plagued by difficulties. The cost of integrating the system, between 1999 and December 2005, spiralled to more than €130m compared to an initial estimate of about €8.8m.

Some €57m of that amount went on consultants, with Deloitte pocketing €38.5m for its work on the project. The firm charged for 19,200 days up to August 2005 at an average cost of more than €1,500 per day, exclusive of expenses and VAT.

A subsequent report from the C&AG said that there was a "lack of clarity" over Deloitte's role in the project, as well as finding that no fixed price was arranged.

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