Criticism grows over $43m Housing NZ project

Two former Housing New Zealand (HNZ) managers and an Australian software firm have backed a whistleblower's claims that HNZ is wasting money on a $43.6 million software project and had allowed a potential conflict of interest to develop.

One of the managers said the state-owned firm had spent about $20m paying consultants up to $600 an hour preparing for its Enterprise Transformation Programme (ETP) project, a business case for which is due to be submitted to ministers later this month.

ETP was designed to make HNZ "more customer focused", but estimates it would save up to $70m a year were "a joke", he said. Speaking on the condition of anonymity, the former manager said the planned purchase of new software to replace HNZ's Rentel and FinanceOne business systems was unnecessary and the money spent to date would have been "far in excess" of that needed to make any changes required to its existing software.

The manager came forward after a whistleblower claimed in the The Dominion Post on Monday that HNZ had created a potential conflict of interest for consultancy Deloitte by engaging it as a strategic adviser on the ETP project without precluding it from also bidding to install software bought as a result of the project.

The whistleblower said HNZ planned to buy software from British company Northgate, plus financial software from Oracle, which is one of Deloitte's specialties, and that the Oracle software was not needed.

Australian-listed software firm TechnologyOne supplied HNZ's FinanceOne software in 1992. TechnologyOne operating officer Roger Phare said replacing it was ludicrous and the decision had been made without due diligence.

"On the surface you would say `we have been using this ancient software for all these years, it is about time it was replaced'." But Mr Phare said HNZ's FinanceOne software was upgraded to the latest version just last year. .

Opposition housing spokeswoman Moana Mackey, who first raised concerns about the ETP project at a select committee meeting in December, hoped to question the Government about the project in Parliament today.

A spokeswoman for acting Housing Minister Maurice Williamson said it was an "operational matter", and would not say whether he had sought further information from HNZ.

HNZ has refused to comment, noting it had not let any contracts. It has acknowledged a steering group comprised of senior executives appointed Deloitte as strategic adviser after an evaluation panel had recommended a different firm for the role.

Corporate services manager Roy Baker said the panel had over-stepped its brief in making that recommendation.

- © Fairfax NZ News