This is the second part of my look at recent local government reforms in the Northern Territory.

In the first installment I looked at the testimony given to the NT parliamentary committee known as the Council for Territory Co-operation (the CTC) by senior staff from several of the recently-established Shires.

In particular we saw their testimony in relation to a software and IT project that consisted of three discrete components known as ShiresNet, CouncilBiz and ShiresBiz.

The contract, valued at $6.3 million, was awarded to a Brisbane-based firm, TechnologyOne. Shortly after winning the contract in 2008 the firm issued a media release stating that their systems would:

“…enhance the way local government operates in the Northern Territory by streamlining processes and improving the way councils deliver services to their constituents. It will improve efficiency and reduce costs…”

In the same media release the NT Local Government Minister Rob Knight was quoted as saying:

“TechnologyOne’s software solutions are designed to support core local government business by providing a framework for sound financial management and enabling quick, easy and accurate reporting. The new technology will make local governments more effective – delivering better results for our remote communities.”

But, as was clear from the various accounts quoted in part one of this series, the TechnologyOne project, as rolled-out in the new Shires, has failed to deliver a “framework for sound financial management” or “quick, easy and accurate reporting“.

Far from it.

And it appears that, at least in respect of this project, ordinary and quite sensible commercial and business practices and standards were ignored by the bureaucrats administering the project.

As Clair O’Brien, Deputy-Mayor of the Roper Gulf Shire told the CTC, the red-flags about the TechnologyOne project were waving for all to see early in the process:

Ms O’BRIEN: Council, I think, on our January or February meeting, right back then, flagged that we should be walking out of here if this was corporate world; that we had been put in here and asked to do this job by the government…but we put it on notice then that …

In late April 2009 Des Kennedy was engaged by the NT Government to run what what is known as the ShiresBiz Remediation Project. The contract for that project was, according to the NT Government Gazette of 12 August 2009, valued at $600,000.

I note that there is no evidence that the software or any other service supplied by TechnologyOne was in any way deficient. As Des Kennedy told the CTC:

“[The] TechnologyOne suite was a good idea, ShiresNet was a good idea…I do know that the TechnologyOne suite is very effective, as a standard, robust financial system. It has weaknesses and strengths, like any other piece of software, but the problem was not the software…”

According to Des Kennedy, the fault for the failed implementation of the Shire’s IT suite lies fairly and squarely with the NT’s Department of Local Government and Housing or that department’s Minister.

Des Kennedy’s assessment of the planning and implementation of the Shires IT project is scathing:

From every perspective, timing, project management, from every perspective it was doomed to failure. The configuration was wrong. there was no consultation with shire councils about what sort of accounts they had…The one things the department has not done is planned at a business level, at a technology level. I have seen no evidence of proper project plans and commitments.

Where it fell down was in how it was put together; there was no commonsense applied to what was being done; there was no overall business management of the process. There were people involved from the department but a number of those key people left the project before the shires were due to go live.

There was no-one, in my view, who was looking at how the shires would operate in a holistic way…there were some very strange things happening.

The time-frame was crazy…there is no way on this earth they could have effectively implemented a solution for a stable shire council in that period of time.

That comes back to a lack of planning, proper control, and engagement; it was just never going to work.

…if no-one is looking at it holistically and saying ‘Does this make sense? Does this time-frame make sense? Does the funding make sense? Are there people who know how to manage this when it goes in?’…From a commercial point of view, those things were not thought through.

CTC member Mr John Elferink, MLA, Country-Liberal member for Port Darwin asked Des Kennedy if he knew if there was anyone performing such an analysis.

I am not aware of any single person who would have been held accountable, or has been held accountable for the implementation of the ShiresBiz system.

Des Kennedy described his conduct of the review to the CTC, including his observations of the apparently justifiable anger of staff at the Shires, much of which was directed at him:

I spent a lot of time talking to the department [of Local Government], a significantly more amount of time [sic] talking to the shire councils and the staff, most of whom showed a lot of animosity – and probably rightly so – to someone being paid by the department to do a report for the department…The report, when it was completed, really annoyed everyone , and no-one felt comfortable with it, and I guess that made it very clear that I had hit the mark.

I spent twenty days going around visiting the shires and talking to people. I was abused by quite a number of the CEOs, like verbally abused.

Ms Scrymgour: Why were you abused?

Mr. Kennedy: Because they thought I was the enemy because I was being paid for by the NT government. They did not believe that someone could be in and do a report that was independent, irrespective of who was paying the bill. They had great doubts about my ability to put out a report that was…

Governments, in general, have a habit of getting reports written to say what they want them to say. In fairness to the Department of Local Government and Housing, it was straight and honest…the Northern Territory government told me very clearly that I was to be absolutely open, straight and honest in my reporting, that i was not to hide anything, and they would accept the output and they did.

Finally, Des Kennedy was asked about the global cost of the Shiresbiz remediation project.

It will be somewhere, at a guess, between $3.5m and $4.5m. If I could make comment to that given the mess that it was in, right, and the mess that had to be fixed, there were two ways you could fix the mess…so, from a sensible use of funding, given the mess [that] was made, the most sensible use of funding was to do the remediation, in my view.

So, that clears up a few things doesn’t it?

The ShiresNet, CouncilBiz and ShiresBiz system fails – not because of anything to do with the system as supplied by TechnologyOne but, apparently, because of systemic and administrative shortcomings on the part of those charged with administering local government reform in the NT.

And at least three issues remain outstanding – will Des Kennedy’s reports (by his own account there were two reports prepared on separate aspects of these issues) be made public? Secondly, will anyone be held accountable? Thirdly, how much will the whole system cost once it is finally ‘remediated’?

As Des Kennedy told the CTC, he has a pretty good idea of who was responsible for this farce and he understands they still employed in senior positions either within the local government sector or by government agencies.

Kennedy deserves praise for his frankness and courage in writing a report that apparently pulls no punches and sheets home responsibility. Whether the NT government will match that honesty and release it remains to be seen.

I’ll keep you posted. There are many other aspects of concern about the recent administration of local government in the NT; the design and implementation of the reform process and the current administration of several of the Shires are just two of them on my radar.

And if you have anything to contribute please do – I would welcome any additional insights into the conduct of the matters discussed in these posts.

And of course, if you disagree with me or anything that has been said or reported in the CTC transcripts I welcome your views.

As I noted previously the transcripts of proceedings of the CTC come with the qualifier that: “This is an uncorrected, unrevised proof copy of the transcript and is made available on that basis. NOTE: the unauthorised publication of any extracts from this transcript does not necessarily attract the protection of parliamentary privilege.”

As a footnote I add the following exchanges between the CTC committee members and Des Kennedy in relation to what appears to be a distinct, though related issue of poor administration arising more from expediency that cost-effectiveness.

This relates to the provision of desktop and laptop support services for the eight new Shires and is an issue touched on by the staff from Barkly Shire in the first installment of this series.

Mr Kennedy: The cost of the TechnologyOne software is not particularly expensive…Where the big hit is, right now for the shire councils, is not in the computer system itself, but it is the way the NT government has a deal for providing desktop services to all the departments. To get the desktops in quickly for the shire councils they signed them up to the NT government deal.

Ms Scrymgour: That is what I’m trying to get to, the…

Mr Kennedy:…So, they signed them up for that deal…So for example, they had 12 to 15 project managers and their costs were built into the cost of every desktop. None of the shire councils have access to those project managers because they are all extremely busy doing work for the departments. So the shire councils are paying an inherently high cost for something that is a commodity.

Mr Elferink: Can you give us an example of the cost?

Mr Kennedy:…The contract put together for the shire councils had support for desktop devices for 7 days a week, 24 hours a day…The shires do not need support for their laptop equipment outside office hours…