Another Case of Government IT Gone Horribly Wrong

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Last month, I wrote about the unfortunate tendency of organizations to stick with projects gone bad, something that Baseline terms "deadly project lust."Among the problems that can derail a project: lack of governance, poor communication between IT and the business, and not enough input from the folks who will use a new system or technology. After reading an account of a failed $135 million project that has left the District of Columbia's tax department in a shambles, I'd have to add "general cluelessness" to the list.


According to the Washington Post, the agency paid Accenture more than $100 million over five years to implement a system for personal and business tax processing. With time running out on the contract, "only" $5 million left to spend and real estate taxes not yet included in the system, the agency sought the input of a manager who was, reports the Post, "known among her colleagues as a problem solver with a knack for finding solutions by using the department's antiquated and balky computers or finding a way around them." The result: The manager, Harriette Walters, was able to create and cash fake refund checks.


What comes through clearly in the article is that the system is so bad that the agency still doesn't know exactly how much it lost or how Walters -- and at least five co-conspirators, who have already pleaded guilty -- were able to evade detection for so long. Prosecutors say the theft "might have started in the 1990s," for example.


"It was the things that were not included that cost us," the agency's chief technology officer, Mike Teller, tells the Post -- important things like, say, internal controls that revealed other embezzlement activity. An income tax clerk was charged with creating six fake tax refunds worth $184,000 after a seventh refund attempt triggered controls finally put in place in November.


Such controls are a sign of progress, I guess. But it'd be easier to think so without all of the finger-pointing and buck-passing that comes through in the article. The agency paid consultants the Wendell Group $200,000 to produce a report that puts much of the blame on Accenture and suggests the company should have to upgrade the system for free. The service provider's response is that it only gave the agency what it wanted.


Surprisingly, Teller appears to agree. He says:

Ultimately, it's the responsibility of the customer -- the government -- to make the decision.

Maybe there's hope, after all. Noting that the agency's customer service managers don't like the system, the tech chief's proposed solution is ripping and replacing it with newer and more flexible technology. A simpler system should eliminate the $5 million a year the agency is paying Accenture to oversee it.


I've written about government's generally poor record on IT projects before. It occurs to me that these kinds of stories get more play than similar tales from the private sector because taxpayers' money is involved. Failures of this magnitude happen in the corporate world as well, as evidenced by the botched ERP system that led Waste Management to sue SAP for $100 million.


Still, public agencies appear to have a uniquely convoluted way of solving problems. In the UK, for instance, the Parliamentary Home Affairs Committee is urging government agencies to avoid data breaches by creating databases only when absolutely necessary.