Areport by the National Audit Officethis week
criticises an Oracle-based pay system which allows service
personnel to make claims for expenses and allowances without
adequate controls or documentary proof.
Edward Leigh, chairman of the House of Commons' Public Accounts
Committee, said the Ministry of Defence's Joint Personnel
Administration (JPA) system is "not fit for purpose" and is "open
to fraud".
But a National Audit Office (NAO) official told Computer Weekly
that the problems are more to do with inadequacies in the design of
the system and mistakes made by service personnel when using the
system, than faults with the technology.
The NAO found that of about £800m paid in expenses and
allowances in 2008/9, about £130m represented overpayments that had
not been justified. "Service personnel are able to submit their own
expenses claims and payment is normally made without further
checks," said the NAO.
There is an "absence of adequate input controls over the
processing of military pay, allowances and expenses," said the
NAO. The MoD's Defence Fraud Analysis Unit has reported a growth in
suspected fiddling of payments via the JPA system.
The level of errors in expenses, allowances and specialist pay
is "material to the account and therefore I have qualified my
regularity opinion in this respect", said Amyas Morse, the
comptroller and auditor general.
Auditors were even unable to discover how many service
personnel, particularly reserves, are on the payroll.
The MoD told the NAO that it plans to introduce "some input
checks" this month which should help spot any fiddling of
allowances and expenses. But Morse said he did not believe this
will be enough to reduce error to the necessary extent.
Problems with JPA system
In May 2009, the MoD produced internally a "Stocktake" report on
the JPA system which told of the "key gaps between what the JPA
system was intended to deliver and what the system actually
delivers".
Key problems identified in the Stocktake included:
- Complexity. The base Oracle system has 400 extensions which
enhance the off-the-shelf functionality, and it is still subject to
"continuous change".
- Key users who are building their own parallel systems, or
taking other action to "compensate for weaknesses in the JPA
system", said the NAO.
- User
frustration at the lack of immediate access to JPA terminals.
"Inadequate access undermines a key part of the vision for the JPA
system" which was for service personnel to have responsibility for
their own data, said the NAO report.
- Reserve Forces not having access to the system because it was
not designed for their use.
- Poor data quality. Complex rules for claiming expenses,
allowances and pay need to be simplified further, otherwise errors
will continue. A change in culture is needed to simplify working
practices.
- Poor management information on where people are, their
nationality and annual leave, which makes it difficult for the MoD
to monitor spending and pinpoint potential errors. The Stocktake
report proposed replacing the current management information tool
Discoverer with Oracle OBIEE+.
Creating potential reliability issues
Separately, the NAO has expressed concern that the MoD is
rolling out more applications onto the department's main IT
platform, the Defence Information Infrastructure, "without the
necessary associated development of IT capacity". This could hit
the reliability of the JPA system, said the NAO.
The
JPA system is supplied by EDS and is based on Oracle's
Human Resources Management System. It is ambitious because it
melds many of the different pay structures, pensions, allowances
and expenses of the three armed services. Its use requires the
bringing together of working practices in the RAF, Navy and Army.
The application is due to be moved onto Oracle Fusion as support
for the existing system is due to end sometime after 2012, once
Oracle has completed its product switch to Fusion.
A decision to upgrade to
Fusion will need to be taken by mid-2010, but no information is
available on how a switch to Fusion would be funded and managed,
said the NAO.
A spokeswoman for Hewlett-Packard, which has acquired EDS, made
no comment on the report except to say that the NAO's qualification
of the MoD's accounts "does not relate to the JPA IT systems but to
the overall process".
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