Office of the Comptroller and Auditor General - Press release VFM examination report on The Development of the Integrated Short-term Schemes System in the Department of Social WelfareBlank Page

Press release issued on 9 May 1997

VFM examination report on The Development of the Integrated Short-term Schemes System in the Department of Social Welfare

The Comptroller and Auditor General, Mr John Purcell, has carried out an examination on the development of the Integrated Short-term Schemes (ISTS) computer system in the Department of Social Welfare. A report on the examination was presented to Dáil ?reann today and a copy is enclosed for your information.


ISTS is the first system to be developed by the Department on an integrated basis and replaces a number of systems which had been operating independently of one another. The intention was to use the system to support the taxation of short-term benefits, to modernise the delivery of services at Local Offices and to improve controls and management information.

The development of the ISTS system began in July 1992 and the project is expected to be completed in 1997. The total costs incurred by the Department in the development and implementation of the ISTS system amounted to ?25.0m up to 31 December 1996.

The examination sought to establish how well the Department managed the development and implementation of the system. The main findings of the examination are summarised overleaf.

Main Findings

The Department did not carry out a formal cost-benefit analysis of the project because of the urgency of meeting the Government deadline to introduce taxation of short-term benefits and because the likely yield from this source would outweigh the costs incurred in developing the system.

The level of uncertainty in relation to the taxation requirement imposed by Government decisions made it difficult to properly plan and manage the project in the early stages. As a result initial plans for the individual components of the project were inadequate and unrealistic in their estimation of time, costs and resources required. Following a review of the status of the project by consultants it was re-organised to good effect.

Two sets of consultants were engaged to develop the system at a total cost of ?8.8m to 31 December 1996. The extent of the requirement for this assistance and the resulting costs had been significantly under-estimated by the Department. The required approval of the Government Contracts Committee was not obtained for the award of the consultancy contracts during the project. In addition, EU procurement directives were not adhered to.

Due to delays in the development of the ISTS system and the then requirement to introduce direct taxation from April 1995 the Department set up a centralised section in Dublin in July 1994 to facilitate the processing and taxation of Unemployment Benefit payments. Following a Government decision in January 1995 to defer taxation of these benefits the Department disbanded the section. No real value was obtained for much of the expenditure of ?1.08m incurred on establishing this section.

Phase 1 of the ISTS system was successfully implemented in all Local Offices. However, the system has not been implemented in Branch Offices, which are operated on an agency basis, as agreement has not been reached with the managers. As a result, 24% of Unemployment Assistance claims are not processed through the ISTS system.

A positive outcome of the project was that the Department succeeded in converting a number of claim processing and payment systems to a modern integrated system without any disruption of services.

The benefits of ISTS cannot be comprehensively assessed until the system is fully implemented. However, some of the projected benefits may not be realised as the direct taxation of short-term benefits was deferred by the Government in October 1995. Moreover, there had been little change in work practices in the Local Offices visited at the time of the examination.

For further information about the report contents, please contact:

Derrick Rapple

Tel: +353 1 679 3122

Fax: +353 1 679 3288


Publication Details

VFM Report No. 17: The Development of the Integrated Short-term Schemes Computer System

ISBN 0-7076-3846-1

Price ?5

Government Publications Sales Office

Sun Alliance House

Molesworth Street

Dublin 2

Tel: +353 1 661 3111

Fax: +353 1 475 2760

The contents of this page were last updated on 26/09/03