Wellington Regional Council pushes 'Project Optimus' spend out into 2019/20

Wellington Regional Council pushes 'Project Optimus' spend out into 2019/20

Council struggles to get work to date across the line to be recognised as an intangible software asset.

Greater Wellington Regional Council outlines progress on "Project Optimus".

Greater Wellington Regional Council outlines progress on "Project Optimus".

Credit: Dreamstime

A long-running effort to replace financial management information systems has been delayed, with $2.9 million of planned expenditure pushed out into the coming financial year.

A council audit plan from March, contained in a May finance, risk and assurance committee report, said it was currently designing new technologies that will replace its core information system.

"This is a complex project which will lead to a significant redesign of the Regional Council’s financial systems and processes," it said.

Last year, the council inked a deal for its ERP replacement project with Netherlands-based Unit4 and partners.

Several additions have been made to the council's risk register related to the project including that the Optimus project could deliver a "non-integrated solution leading to a poor performing system from a technical performance and a user perspective".

"The design phase methodology has been amended and strengthened to ensure an integrated technical and functional solution. This methodology has been independently endorsed by PwC," the report said.

Further work was underway on the technical integration design to further mitigate this risk, which was classified as "medium".

A further risk, also classified as "medium", was the potential that the Optimus Payroll solution could not be configured correctly.

"We have escalated this risk with the vendor and seeking further information from them to give GWRC assurance that the payroll module of UBW can be configured correctly at reasonable cost for GWRC," the report said.

UBW appears to stand for "Unit4's Business World" software.

The council indicated that as of March it could not meet the accounting criteria to classify work to date on Optimus as an "intangible asset".

"Due to the significance of Project Optimus in particular, and the level of estimation associated with assessing the costs incurred against the required criteria, there is an increased risk of error," it said.

Council planned to review the internal policy for the capitalisation of costs to assess whether it complied with generally accepted accounting practice.

It would also review the project scope for Project Optimus to determine the nature of the costs being incurred.

It would also review the finance team’s consideration of the various costs incurred and the appropriateness of the accounting treatment (including, if significant, any employee time capitalised); and test a selection of transactions capitalised to the project to assess whether the policy and accounting  standards requirements for intangible assets had been met.

"We will also consider the Regional Council’s governance arrangements for this project, specifically how the Regional Council is managing the risks around the transition from the old system," the report said.

"Once the project is at the appropriate stage, we will seek to review the Regional Council’s proposed systems and controls, as well as the process for data migration."

Council began planning its replacement project in 2016 but faced unusual challenges including the impact of the Kaikoura earthquake.

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Tags FMISfinancial management information systemWellington Regional CouncilProject Optimus

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