Government to implement all seven of the Auditor General’s recommendations

The State Government will implement all seven of the Auditor General’s recommendations contained in his report on the Queensland Health payroll implementation.

The Government has also announced that a number of additional measures will be implemented to provide certainty into the future.

Premier Anna Bligh today said the investigation had concluded there were fundamental failures not only within Queensland Health but more broadly.

Ms Bligh said the Government will take decisive action, including:

• Move to a local health payroll model and re-examine the use of WorkBrain rostering system over the next three months;

• Issue a Show Cause Notice to IBM and reserve its right to withhold final payment and seek damages

• Overhaul Corptech and abandon the one-size-fits-all approach to payroll across government departments

“We are taking decisive action following the delivery of the Auditor General’s report today.”

“The Government will act on each of the Auditor General’s seven recommendations.”

“The Auditor General’s report is thorough and makes key recommendations but there is a need to go further.

“The Government will take a number of additional steps to provide Queensland Health staff with greater certainty going forward,” Ms Bligh said.

“The Auditor General’s report, not surprisingly, has found that there has been a fundamental failure in the process of implementation of the new payroll system.”

“The Queensland Government takes responsibility for ensuring our employees are treated decently.”

“I apologise sincerely to every one of those Queensland Health employees and their families who have been affected by the recent payroll problems.”

The Auditor General found failures had occurred at a number of levels and made seven key recommendations - two in relation to Queensland Health, one in relation to Shared Services and four recommendations in relation to broader government ICT governance and security.

The Deputy Premier and Minister for Health Paul Lucas said that health staff are currently dealing with a centralised payroll system that is removed from the day to day operations of our hospitals.

“What people on the ground, working in our hospitals and their unions have told me is that we need local information and local decision making when it comes to payroll – and we have listened to those concerns,” Mr Lucas said.

“As a result, Queensland Health will phase in a localised health payroll model over the next three months.

“This will mean a hire-to-retire service in each payroll hub and Queensland Health Corporate Services will be restructured to ensure local payroll systems are adequately supported.

“This will be undertaken after rigorous testing and in close consultation with staff and their unions.”

In addition, the Premier said the experience of the Queensland Health payroll implementation had shown a one-size-fits-all approach to payroll across the Queensland Government should be abandoned and Corptech overhauled.

“Larger agencies with complex payroll requirements should be able to use the payroll system which suits them and smaller agencies should have the ability to cluster with similar agencies and utilise the one payroll system,” she said.

“We are today doing the responsible thing – and that is accept the advice of this independent investigation, resolve to implement each of the recommendations and do the right thing by our hard-working staff.”

The Auditor General’s report clearly identifies failings on the part of contracted provider, IBM.

“We have sought Crown Law advice in relation to options for terminating the payroll contract with IBM and it’s only fair that we seek to reserve our legal rights. The Government has issued IBM a Show Cause Notice as to why the contract should not be terminated,” said the Premier.

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Better payroll model

Queensland Health will re-introduce a localised payroll model that features direct service between payroll hubs and hospital unit managers within their local health service.

The Queensland Government acknowledges that one of the flaws of the payroll system is the loss of strong links between individual payroll hubs and their client local hospital districts. By the end of September 2010, each hospital in Queensland will be linked to a specified payroll hub. Each payroll hub will be responsible for every aspect of the employment, rostering, and payroll services of each hospital unit in their local district.

This will mean more personal contact between payroll staff and the hospital unit managers they serve. It will also mean that payroll staff will be more familiar with any specific pay-related contract terms and conditions in place in their district. Finally, hospital unit managers will have greater access to the payroll staff processing their roster and pay forms, so they can follow up on any forms that are being processed.

Implementation of the new localised payroll model will begin this week subject to appropriate consultation with unions and will be fully implemented by 30 September 2010. Two new payroll hubs will be created at Mackay and the Gold Coast.

This move is consistent with the local hospital network health reforms agreed by Premier Bligh at CoAG. The Government is committed to ensuring that Queensland Health returns corporate services and decision-making to the local hospitals, and this new approach to payroll hubs lays an important stepping stone to local control.

Best software system

Queensland Health will also re-examine the decision to implement the WorkBrain rostering system in conjunction with SAP.

The health payroll system consists of two applications that are linked. The two applications are the rostering and award interpretation application (WorkBrain) and the payroll application (SAP HR). The two applications should work together efficiently and effectively to deliver staff an accurate pay each fortnight.

Ernst & Young have been engaged by Queensland Health to provide a review of the most commonly deployed payroll and rostering solutions in the national and international healthcare sector.

Over the next 3 months Queensland Health will work with Ernst & Young in consultation with staff and unions to confirm the most suitable roster and award interpreter configuration that delivers staff the payroll outcome they deserve as quickly as possible. This may involve reconfiguring the current application or introducing alternate solutions.

Queensland Health will also discuss with staff and unions whether there are aspects of the Award arrangements which can be simplified in order to reduce the complexity of the payroll system and deliver a better outcome for staff.

Holding IT advisors accountable

The Queensland Government will today issue to IBM a ‘Notice to Show Cause’ why its contract should not be terminated for breach of duty of care and breach of contract.

IBM was engaged by the Queensland Government to choose appropriate payroll software for Queensland Health, to act as project manager for the payroll implementation, and to design, develop and implement the technology.

However, the system has experienced numerous problems since commencement. System development has not led to a suitable product being delivered at the time of implementation.

The Queensland Government has already issued notices to remedy breaches to IBM on 12 May.

Strengthening QH Corporate Services

Queensland Health will restructure its Corporate Services division to reduce bureaucracy, localise service provision and to ensure there are clearer lines of responsibility at the executive level.

The restructure will be led by Michael Walsh, who will act in the position of DDG Corporate Services to bed down the restructure and finish the job he has started as head of the Payroll Implementation Stabilisation team. Michael will act in that position for a period of three months.

The new QH Corporate Services will actively identify corporate services (including HR, payroll, finance) that should be delivered within local hospital districts, instead of head office. More and more, Queensland Health will be moving to a localised model of service delivery within local hospital services, in line with the principles outlines in the national health reform agreement.

The future of CorpTech and shared services

The Queensland Government will abandon the one-size-fits all shared services model as the exclusive model for corporate services across the whole of Government.

The whole-of-government IT provider, CorpTech, will be overhauled to better match agency needs – this will include an assessment of which agencies are best served by their own technical services.

While the principles behind the shared service model work for some agencies, the Queensland Government recognises there is a place for larger agencies to remain independent in providing corporate services such as payroll and HR.

A formal review of the shared services business model will be conducted by PWC Partner Mr Roger McComiskie to determine the future of the various shared services and make recommendations about more flexible arrangements that may be utilised by client agencies.

Mr McComiskie will commence immediately, will report directly to the Director General of Department of the Premier and Cabinet and will be serviced by a small secretariat in DPC. His final report will be released publicly.

The review will be completed by the end of September 2010.