ATO wins qualified approval for Change Program


The Australian Taxation Office has received a qualified pat on the back for its lengthy implementation of one of the nation’s most complex technology projects – its $756.7 million Change Program – in one of the most comprehensive examinations of the project yet undertaken.

This week, Assistant Treasurer and Minister for Financial Services and Superannuation Bill Shorten published a review of the program delivered in December by Inspector-General of Taxation Ali Noroozi. The review was initially commissioned in mid-2010 by Shorten’s predecessor Nick Sherry, who had requested a review of the project after a disastrous series of glitches resulted in extensive processing delays in the opening months of last year.

The glitches resulted from the implementation of one of the largest tranches of work as part of the Change Program – the income tax component. The issue came to widespread public attention after the ATO was unable to provide a number of tax returns on time, causing chaos in the taxation ecosystem and being forced to employ significant extra manpower to get its annual tax return work done.

The release of the income tax component of the Change Program also heralded what has widely been regarded as the conclusion of the Change Program, which was initially commenced in 2004 to reform the ATO’s core supporting systems. The cost and length of the project has ballooned since that time following constantly changing requirements, with most of the funds being allocated to IT services partner Accenture.

In his report, Noroozi wrote that the ATO generally developed appropriate mitigation strategies to deal with the program’s risks – which were significant in such a large and complex ICT project.

In relation to the botched income tax release, Noroozi wrote that the ATO faced little choice but to go live with the upgrade when it did, despite the problems it faced. “However, as acknowledged by the ATO, significant risk of potential adverse impact on taxpayers and tax practitioners could have been better communicated to them,” the inspector-general wrote.

In general, in relation to the Change Program as a whole, Noroozi made a number of recommendations which he believed could improve the situation with respect to the ATO’s approach to technology – as well of that of other agencies – in future.

For starters, he said, the ATO could employ a ‘modularised’ design approach, avoiding over-reliance on a single contractor as it did in the case of Accenture. In addition, the ATO could establish more concrete governance arrangements, communicate with the wider community better, improve its reporting and update the tax community on the mechanisms for making compensation claims after the ATO’s difficulties.

Local company CPT Global has also conducted a post-implementation review of the final Change Program release, and Noroozie recommended the ATO publicly report on the implementation of recommendations stemming from that report.

The ATO has agreed to do so, as well as publishing in full the report which its independent assurer on the Change Program, Aquitaine, has provided it with in terms of the costs and benefits of the program. In addition, it agreed to most of Noroozi’s other recommendations.

“I would like to thank the Inspector‑General for his work on this review,” said Minister Shorten in a statement.

Image credit: Matt Aiello, royalty free