$576 million and “no end in sight”: NSW Department of Education LMBR program under fire


The status of the NSW Department of Education’s long-running Learning Management and Business Reform (LMBR) program was the subject of hot debate recently, as NSW Minister for Education Adrian Piccoli was questioned during a recent NSW Budget Estimates committee hearing over its anticipated cost.

The LMBR program began in 2006, as a program to modernise its finance, human resources, payroll and student administration systems with SAP solutions. While an early phase of the project involving finance systems ran relatively smoothly, difficulties emerged with the roll-out of students administration and learning management systems to schools and TAFE institutes.

While the project was originally budgeted at $483 million, with all 2218 schools expected to be online with the LMBR project by December 2014, a report by the Auditor-General in late 2014 had estimated that $573 million would be spent by the end of June 2015, with the project still not completed.

“The major causes of the cost increases and delays have been changed in business requirements and scope, high level of uncertainty in business cases, weaknesses in governance and insufficient program and contract management. The Department also underestimated the support schools needed to successfully implement LMBR,” the Auditor-General’s report said.

In the Budget Estimates committee, Labor MP Courtney Houssos questioned Piccoli over why issues first identified in 2011 had not been rectified, and “why is there no end in sight?”

Piccoli denied this, stating that the project rollout to the 2000 remaining schools would begin in 2016, which “pretty much the end of it”. He noted that $576 million had been spent on the project to the end of June 2015, but that while a further budget had been approved, the amount would not be disclosed because it “is a Cabinet decision”.

“I am not going to jeopardise the process of procurement by disclosing to the market things that are going to go out for a competitive tender,” Piccoli said.

The Minister also claimed that when the project was initiated by the Labor Government in 2006, the capital construction of the system was budgeted for, but it did not budget for the “implementation, the training, all the updates and the maintenance that occurs with an IT system”.
Labor MP Walt Secord further questioned Piccoli over this lack of disclosure, referring to the expenditure as a “bottomless pit”, but Piccoli stated the project would not cost more than $1 billion.

The committee also raised issues around the governance of the project. This was identified as a problem in the Auditor-General’s report, which found “governance groups have not always had the right people or information to effectively oversee activities and make informed decisions. Financial reporting was limited until mid-2013 when a financial oversight committee and improved financial reporting were introduced. The Department has not always adequately addressed the concerns raised by the independent quality and assurance advisors.”

Michelle Bruniges, secretary, NSW Department of Education, said governance mechanisms had been strengthened following the report.

“We have certainly strengthened the governance by having independents on the steering committee to ensure that we have an objective look at all those things that we are putting in place. I have weekly meetings with the internal team within the Department of Education. We have external reporting… to the expenditure review of Cabinet on a quarterly basis. We have a number of processes in place to ensure that we are doing the very best we can to deploy to schools in a timely manner,” Bruniges said.

The LMBR program included a SAP-based finance system for TAFE and corporate areas in 2010, and a major upgrade in 2014; a human resources and payroll solution to all TAFE institutes, in a phased deployment between 2013 and January 2014; roll-out of the TAFE student administration and learning management solution in October 2014; an interim revenue recognition solution for TAFE NSW in 2014; and a rollout to schools of integrated solutions including budget planning and consolidation, student wellbeing and student management systems, schools finance, and finance and human resources reports to support school-based decision-making.

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