A new computer system to manage all animal movements that is essential to Northern Ireland's £5 billion agriculture sector is millions of pounds over budget and years behind schedule.
A report by the Northern Ireland Audit Office published today says a contract to replace "a business-critical records system" will take more than five years longer and cost 10% more than originally planned to deliver.
The Northern Ireland Food Animal Information System (NIFIAS) was designed to replace a previous traceability system.
The system is crucial to Northern Ireland's agricultural sector to ensure that livestock movements are recorded, and products comply with food safety and animal health rules.
Ensuring those standards has been a key part of debates between the British government and EU in negotiations about the post-Brexit trade protocol.
Stormont's Department of Agriculture, Environment and Rural Affairs (DAERA) awarded the contract for developing the system in 2016, based on a 15-year term that included three years to build the system and 12 years of operation.
But the system will not be ready to go live until next year, more than five years behind schedule and with less than half of the operating contract remaining, although the report says there are options to extend by up to six years.
The original cost was to be £58 million, but the final cost of the 15-year scheme is now expected to be £64m.
If the department opts to extend the contract for a further six years to secure the intended 12-year operational period, it will cost an estimated additional £11m.
That would bring the total overspend on the project to £17m.
"These delays were due to several issues, including a lack of understanding of complex system functionality, DAERA staff without appropriate skills assigned to the project, and communications with the supplier broke down when serious issues arose on the project," the report states.
In the meantime, the department has been relying on the previous system which has been operating beyond its contract since 2008 but cannot be switched off until its replacement is operational.
"The technology is well over 20 years old, placing the department's ability to deliver its operations at greater risk and significantly reduces its business efficiency," the audit office states.
The report says the need for a replacement system was known for many years before the contract to develop one was awarded, with DAERA advised in 2008 that it should procure a new animal health system in order to comply with procurement regulations.
The audit office acknowledges action taken by DAERA in response to the delays, including changes to leadership and pausing the project for a year in 2020 to re-evaluate the business case, but doing so added £6m to the department's costs.
"The department took decisive action on the results of the 2019 Gateway Review. This was an important factor in rebuilding confidence amongst key stakeholders. However, earlier intervention ... may have prevented the project from drifting into failure in the first place," it states.
By the time DAERA paused the project it had already spent just over £25m, and then effectively had to go back to the drawing board.
Northern Ireland's Comptroller and Auditor General Dorinnia Carville said the lessons have relevance to many other public sector projects.
"Appropriate governance and having the right skills and experience in place from the outset, are vital to ensuring risks at both the procurement and development stage can be quickly identified and managed," she said.
"In the case of the NIFAIS project, not having a modern system in place has resulted in benefits for stakeholders not being realised, and staff time not being spent on other departmental work, representing poor value for money for taxpayers."
In response, a DAERA spokesman said: "The department has received the NIAO report, which it is currently considering."
