Audit study raises major concerns over ACC security

A damning Audit Office computer assurance review at the Accident Compensation Corporation has identified control weaknesses that expose the corporation to the risk of unauthorised or unintended modification of its business systems and data also increase the opportunity for fraud or error to occur.

A damning Audit Office computer assurance review at the Accident Compensation Corporation has identified control weaknesses that expose the corporation to the risk of unauthorised or unintended modification of its business systems and data.

The review, in the 1995-96 year, is a key component of the annual financial review of the corporation by the Social Services Select Committee, which draws Parliament’s attention to what it describes as another example of a major computer project not performing to expectations.

The Audit Office report says the control weaknesses also increase the opportunity for fraud or error to occur.

The select committee says it will monitor the situation and that it expects ACC to quickly take appropriate steps to address the weaknesses. “We will be seeking a report from the corporation on the actions it has taken.”

The committee also confirms the cost blow-out associated with the ACCtion project. “We believe the substantial variation between the board approval of $19 million and the projected cost of completion of more than $100 million points to inadequate reporting and accountability.”

As of June 30, 1996, $11 million of expenditure on the ACCtion project had been spent on scoping and research. Costs of approximately $2 million had been capitalised and related primarily to the purchase of new PABX systems.

“We are concerned that of the approximately $15 million in total that was spent, only a small percentage has been capitalised to date,” the committee says. “We would expect to see a much higher level of capitalisation for a board-approved project. The lack of capitalisation indicates that the money spent on scoping this project has not delivered results that could then be treated as final capital costs.

ACC has scaled down the ACCtion project significantly and the residual IT initiatives have been renamed the Pathway project.

In response to written questions from Computerworld, ACC says Pathway is being designed to receive claim registration data electronically via EDI or from a scanning/OCR source, or via conventional data entry. Pathway thus automates the process from the point of receipt of registration data.

“Pathway has already delivered much of the technology infrastructure, particularly the national network upgrade and systems management components, and the roll-out of Microsoft NT to the desktop is advancing rapidly,” ACC says. “The progressive delivery of further infrastructure elements will continue throughout the coming year.”

New business software is expected to be delivered under Pathway in August, with increments to be implemented six months and 10 months further out. The timing of further implementations after June 1998 has yet to be agreed internally and approved by the board.

ACC says the main technical benefit is the replacement of failing systems, which would begin to fail in 1998 because of year 2000 errors.

Business benefits include improved outcomes for claimants and funders through the use of tools to support case management decision making. Paper work will be reduced, and there are expected to be fewer errors because of the automation of payment calculations.

It’s expected that systems replacement will be completed during 1998.

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