By Julian Bajkowski

Legacy computer systems at the Australian Taxation Office that extract crucial reporting data on the Goods and Services Tax (GST) and Fringe Benefits Tax (FBT) have again been found to have serious shortcomings that pose a threat to the quality of data the taxman produces for the government.

In a new report issued on Thursday afternoon, the Australian National Audit Office found that a combination of manual and ad-hoc workarounds needed to extract reports from the BAS and FBT systems “continue to present risks to the integrity of the ATO’s reporting processes.”

The troublesome legacy systems date back to the ATO’s epic almost decade-long IT transformation project dubbed the “Change Program” that doubled in cost from $445 million to $814 million and was finally finished in 2010.

The essential purpose of the Change Program was to build a single Integrated Core Processing (ICP) system to replace and unite various disparate legacy systems for different kinds of taxes.

However delays and the length of time taken to deliver the new system saw key elements of it – including systems for the GST   never delivered because of the pressing need to respond to the Henry Tax Review and the Cooper Superannuation Review.

“As noted by the Inspector-General of Taxation in 2010, notwithstanding the substantial changes brought forward by the Change Program, major work remained uncompleted,” the Audit report said.

“Most notably, the Business Activity Statement (BAS) and the Superannuation Guarantee components of the ICP system were not delivered.”

As the project drew to a close, senior Tax officials candidly admitted that some of the systems under development could potentially be obsolete before they were delivered   an ignominy normally reserved for the Department of Defence.

Now the delays and decisions to draw a line under the Change Program’s key objectives have come home to roost in the form of a hairball of reporting systems.

“Data extraction, transfer, conversion and synchronisation must still be conducted between multiple systems. A number of systems had to be duplicated to accommodate the parallel operation of the new ICP system and the legacy systems,” the Audit report said.

“Importantly, the data generated by both systems requires the ATO’s enterprise data warehouse to be separated into two logical views—ICP system data is in the ‘new’ data warehouse and legacy systems data is in the ‘old’ data warehouse. From a reporting perspective, reports must be extracted and reconciled from all data sources—the legacy and ICP systems and the old and new data warehouses.”

The Audit also found that while reporting of GST and FBT data needs effective capture, processing and storage of taxpayer information by IT systems the ATO’s “arrangements to extract data and transform it into collated reports lack consistency in processes and practices, formalisation and supporting documentation, and, as a consequence, do not support the production of standardised reports.”

The Taxman took further flak for the level of manual intervention needed to extract reports and data that should originally have been automated.

“The lack of standardised and automated processes has required ATO staff to conduct extensive manual activities (or work arounds) to extract data and collate reports. These activities include gaining assurance that appropriate data is being used, that it is complete, up-to-date and accurate, and has been processed appropriately for the purposes of the particular report,” the Audit said.

“In a context where approximately 300 data analysts extract and manipulate data and where reports are generated by reporting teams across most ATO work areas, there is substantial overlap and duplication of tasks, a lack of supporting documentation, and data quality control and assurance is inconsistent. Current reporting practices also rely on ad hoc, localised and often informal strategies that are not consistently efficient or robust. This increases the risk that some of the data published in ATO reports is not accurate, with potential consequences for users of that data.”

There was some solace on the dodgy data front however. Despite many criticisms, the Auditor found that that “the sample of GST and FBT data examined by the ANAO was generally reliable, indicating that users can be confident that the information provided is accurate.”

Of the 11 data items the ANAO investigated “it was possible to reproduce the exact figure contained in the selected GST and FBT reports in five instances, and to reproduce an indicative figure—close to but not exactly the same as that in the ATO’s published reports—in the other six instances.”

“Further, six of the 11 data items were repeated across several reports, with one instance identified where the same data item was reported differently across two reports,” the Audit said.

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