The team behind the ACT's digital health record was focused on delivering the project without any regard to cost and were operating millions of dollars over annual budgets, audits have found.
One audit has revealed a massive blowout of more than $160 million in the cost to deliver the digital health record with the delivery and maintenance expected to cost $378 million. It was initially expected to cost $213 million.
An extra $80 million in extra funding will also be needed to support the record over the next three years. But a report has warned even with changes to financial controls there is a risk of runaway costs with the program.
"This cost growth will be difficult to fully restrict during the remainder of the solution's useful life, even with improvements to financial management controls," a report said.
The report said the ACT Health's digital solutions division delivered the project with "ineffective financial management and cost control".
It found deficiencies in the program's governance and a program board did not have sufficient visibility for it to be considered effective.
Health Minister Rachel Stephen-Smith has released two additional audits into the management of the territory's digital health record after an audit released earlier this month found invoices may have been incorrectly paid.
The digital health record collated 40 separate paper and digital records into the one system, and is used to manage individual health records. It came into place in late-2022.
'Shortfalls have increased the risk of budget overspends'
One of the audits showed workforce expenses increased by 83 per cent over three years despite the budget growing by only 3 per cent a year over the same period.
The audits found shortfalls in the oversight of expenses which led to budget overspends.
"Once budgets are approved, we found process and reporting shortfalls in how project employees, project offsets and project commitments are approved, monitored and re-profiled," the report said.
"These shortfalls have increased the risk of budget overspends, in particular to the operating budget. The budget exposures become more pronounced as significant projects conclude and there is not a forward pipeline of projects and capital funding to absorb resources and cross-subsidise commitments."
The reports were both undertaken by KPMG. One was completed in 2023 and the other was completed this year.
The 2023 report from KPMG found supplier costs and other expenses contributed to an overspend of $20.6 million in 2022-23.
KPMG found workforce numbers, including the cost of overtime, penalties and allowances had grown significantly. It was estimated this would cost an extra $4 million in the 2022-23 year.
There was no contingency plans in the budget for the digital health record, the audit found.
"The absence of a contingency allowance increases the risk of budget overspend and means that any cost overrun has to be subsidised from elsewhere in the ACT Health budget or via a submission to government," the report said.
The digital health record went live in a "big bang approach" over one day but the reports found this decision was made without clear documentation.
'One of the most disgraceful admissions'
It was publicly revealed earlier this month that ACT Health bureaucrats may have wrongly paid a series of invoices for IT services as part of a multimillion-dollar contract with a company hosting the digital health record.
The questionable payments were highlighted after the ACT Health directorate received 118 invoices from the company in June 2023. The invoices totalled $7.9 million. There was $3.6 million paid during the month and the remaining $4.3 million was accrued.
But further reviews have found invoices may have been wrongly paid as recently as June this year. These include invoices paid for travel and work hours without sufficient third-party supporting documentation, poor financial compliance and over-payment of invoices due to the mistreatment of GST in a program used by the record.
Ms Stephen-Smith tabled reports into the Assembly on Tuesday morning. She outlined the findings of the three audits and outlined findings from another review undertaken by ACT public servants. This review was not tabled with the Health Minister saying it was still being considered by cabinet.
She told the Assembly a program has been established to address the issues raised in the reports and she said officials were taking active steps to review and addressing the budget and financial issues.
"Overall, from a health service delivery and health care consumer perspective, the DHR has been incredibly successful, and the benefits of the system will continue to be realised well into the future," she said.
"In relation to financial management, the government and the Health Directorate are taking the findings of the audits and reviews very seriously and we are committed to improving governance, systems and processes, including progressing the work of the DSD Business Improvement Program."
Opposition health spokeswoman Leanne Castley said the Minister had passed the buck to her directorate and her statement was "damage control".
"This has to be one of the most disgraceful admissions from a government who has overseen hundreds of millions of dollars of waste of public money," she said.
The ACT Integrity Commission is investigating the conduct of Health executives during the rollout of the digital health record.
Ms Stephen-Smith claimed she was not made aware of the full details of the first audit until the first was released through the estimates committee earlier this month.
She said she first heard about the audit in May but it was only referenced in material related to funding pressures associated with the implementation of the digital health record.
But Ms Castley said this was an oversight of responsibility.
"What did the responsible Minister have to say when this story broke?," she said.
"She said that she 'was not explicitly briefed on the audit and the circumstances that led to it being undertaken'. This is despite the fact that she was actually briefed on this audit in May, after the final report was released.
"I think what she meant to say was I was briefed but I did not ask any further questions, I did not do my own follow up or investigation, or in other words I did not do my own job."
