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Review: Using Periodic Audits to Prevent Catastrophic Project Failure


January 14, 2010

Paul Dorsey of Dulcian has written a paper in the most recent International Journal on Governmental Financial Management published by ICGFM. Dr. Dorsey is well-known in ICGFM circles for fascinating observations from personal experiences. In this case, the value of IT audits despite significant costs.  He is quick to jump into very practical, rather than theortical matters: politics, project management and knowledge transfer.  And, the audit structure advocated in the paper is comprehensive.

Dr. Dorsey believes that custom developing government Integrated Financial Management Information Systems is preferable to customizing a generic ERP system. He asserts that “COTS projects fail with the same regularity as custom development projects.”  There are advantages and disadvantages to either approach as we have pointed out in the past. Our view is that Government Resource Planning (GRP) systems – designed for governments –  is the preferable option.  This has resulted in more on-time, on-budget and sustainable implementations than alternatives. The FreeBalance Accountability Suite is Commercial Off-The-Shelf (COTS) but does not require much, if any customization. Dr. Dorsey suggests that “COTS projects have enough customization that they need the same level of scrutiny as a custom development project.” IT audits are recommended regardless of the level of cusomization. The audit can identify configuration issues in the GRP. And, the GRP sits on a technology stack of middleware and networks and databases.  He suggests that “only 30% of systems typically receive a review”, according to a 2007 ICGFM survey.

There are 4 case studies presented in the paper from Ethiopia, Tanzania and two “anonymous” countries. It is interesting how the audit results presented by Dr. Dorsey for Ethiopia and Tanzania do not match the general perception in the wider PFM community. This suggests that more work is needed to formalize IT audit standards, perhaps providing an IT audit framework similar to Public Expenditure and Financial Accountability (PEFA).

Using Periodic Audits to Prevent Catastrophic Project Failure

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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