Admin system overshoots budget by millions

May 7, 1999

A computerised administration and financial management system for Denmark's higher educational sector is so overdue that few institutions want it - but three universities need the system because their own systems are not Y2K compatible.

Called VUE, the system was budgeted at DKr 45 million (Pounds 4.05 million) in 1992, but has cost more than DKr 250 million; it should have been finished in 1993.

The time and financial over-runs resulted in a sharply critical report from the auditor-general's Office in 1995, when the project had cost more than DKr 130 million. According to the report, Parliament had been misinformed about the project for four years by the ministry of education (then responsible for higher education and VUE). The ministry had delayed telling parliament for 16 months that the project would be considerably dearer than budgeted, and had failed to inform it that a pre-project report prepared by McKinsey & Company said VUE was "a high-risk project with little chance of success".

DKr 12 million went to waste when the ministry decided to buy an off-the-peg program, although ministry programmers had used 18 months developing their own program; fees of DKr 46 million were paid to computer consultancies for work that was poorly documented.

The Parliamentary Ways and Means Committee, which granted DKr 38 million in extra funds to the project at the end of June 1995, said it would not entertain a new request for funding VUE. But that is what minister of research Jan Trojborg is now preparing, so the system's future can be finalised.

Mr Trojborg has also directed that the higher education institutions must contribute to all extra operating and maintenance expenses this year. He has asked for a detailed time plan for the implementation of the rest of the system from the VUE centre, which operates, and from Aalborg University, the South Danish University (formerly Odense University) and Roskilde University Centre.

These three universities, which represent about a fifth of Denmark's higher education students, will depend directly on VUE, as their student and course administrative systems cannot survive the change to the year 2000.

Other universities - including Copenhagen and Aarhus - decided to develop and implement their own systems several years ago.

Mr Trojborg has asked a consultancy to prepare a paper on the future of VUE, asking whether it should be closed, privatised with or without contracts with the institutions, turned into a public company with contracts with the institutes, or turned over to the higher education sector? According to the consultancy, each solution involves considerable risks.

The auditor-general's office is preparing its second report on VUE for publication at the end of May. A ministerial reprimand is on the cards.

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