A €3.6 million project awarded to one of the main companies behind the Arts Council IT fiasco was abandoned after six months, writes Sarah McGuinness.

Garda ombudsman body Fiosrú, formerly GSOC, contracted the firm Codec in March 2024 to overhaul its case management system, with the software to become "a fundamental piece of infrastructure".

However, a Fiosrú spokeswoman has confirmed that the project was abandoned in September of the same year due to "initial challenges", and that the body is currently "engaged in a process with Codec regarding this contract".

Jim O’Callaghan, the minister for justice, failed to disclose that the project had been indefinitely suspended when asked directly in the Dáil about any complications in contracts with Codec under the remit of his department earlier this year.

It follows confirmation from the Health Information and Quality Authority (Hiqa) that an €8m contract for an IT system upgrade awarded to Codec is running numerous months behind schedule.

The Mail previously revealed that Codec also oversaw two Department of Agriculture projects that ran almost €1m over budget. A member of the Public Accounts Committee (PAC) has sounded the alarm over the revelation and has now called for a full review of projects over €500,000 across all State agencies.

In March 2024, Fiosrú, which was then known as GSOC, signed a contract with Codec for the provision of a new case management system. The system was meant "to process complaints and to manage resulting case investigations in an efficient and timely manner in line with the legislation".

The IT project was highlighted in Fiosrú’s 2023 annual report as being ‘a fundamental piece of infrastructure’ at the body as it evolved from GSOC. But it quickly ran into difficulties, resulting in it being suspended indefinitely after six months.

"The Codec implementation was originally estimated to run from April 2024 to June 2025; however ,after initial challenges with the project, efforts were put on hold in September 2024," a spokeswoman for the body stated.

The spokeswoman added: "To date, implementation activities have not recommenced with Codec and as Fiosrú is engaged in a process with Codec regarding this contract, we are not in a position to elaborate further on specifics at this time."

The contract for the project went out to tender at a budget of €3.6m. The spokeswoman said that Fiosrú "did not exceed the approved budget for this contract" in its six-month lifespan.

However, pushed for further details on how much money was paid to Codec and whether any of these sums can be recouped, the spokeswoman would only say: "As Fiosrú is engaged in a process with Codec regarding this contract, we are not in a position to provide specific details at this time."

A spokesman for Codec said that the firm "has a long track record delivering significant projects on time and on budget for both public and private sector clients".

"Codec was appointed by Fiosrú in March 2024 to build and design a new case management system," said the spokesman. "In September 2024, Codec initiated a pause in activity, and has not recommenced work.

"Codec remains in close contact with Fiosrú regarding the project as part of normal working relations."

Minister O’Callaghan has now come under fire for failing to flag the fact that the project had been abandoned when asked about the matter in a parliamentary question earlier this year.

Social Democrats TD Aidan Farrelly asked the minister in March if he knew of any contracts awarded to Codec under the aegis of his department that had gone awry. Farrelly has now said that it is "shocking" that the details of the abandoned project did not emerge then.

The Kildare North TD, who sits on the PAC, also called for clarity from Fiosrú on how much money was awarded to Codec between March and September 2024. He also said that the organisation must clearly state if it intends to recoup any funds potentially awarded to Codec over the course of the project.

He said that he will ask PAC chairman John Brady to consider expanding the upcoming meeting of the Oireachtas committee with delegates from An Garda Síochána to include Fiosrú so members can query the organisation on the project.

A Department of Justice spokesman denied the entire project had been abandoned. "Fiosrú has confirmed that their project team has continued to progress work on the project, and the steering group for the project meets on a regular basis. In addition to the steering group, the project has been guided by an external peer review group," the spokesman said.

Codec was one of three firms that played a central role in the development of the failed IT system at the Arts Council, which was meant to improve the processing of grant applications.

The project’s budget ballooned from roughly €1.6m in 2018 to almost €6.7m last June, when the works were abandoned. In a damning report, Codec was listed as the project’s main technology delivery partner.

The firm was paid a total of €1,967,278, including VAT, for its work on the project – €51,217 of which was withheld as the upgrade plunged deeper into crisis.

The Mail has also learned that a separate project in Hiqa to provide a new ‘integrated regulatory system’ is also running behind schedule. Concerns over the current regulatory IT system at the health watchdog were raised at a board level in 2022, with members describing the existing software as "unstable".

"It is also not fit for purpose in terms of meeting the requirements associated with planned new commencements," according to the min-utes for a meeting of the Hiqa board in December 2022.

The contract to overhaul the system was awarded to Codec in January 2023 at a cost of €8,342,254. It was due to run until December 2030. However, a spokeswoman for Hiqa said that the project is "currently behind schedule by a number of months".

Meeting minutes from March 2024 note that there had been, by that point, two significant interventions by Hiqa in relation to their concerns with the project, which was running behind by 14 weeks at that time.

The board agreed to engage with Codec in relation to the project. "A revised road map would be prepared for the board setting out key deliverables and associated timelines," the meeting minutes note. Hiqa board members also agreed to reject "cost variation requests" submitted by Codec relating to any retrospective costs incurred by the firm throughout the project.

The authority has repeatedly noted that the contract was agreed on a fixed-cost basis, meaning that the €8m value agreed cannot be exceeded despite delays. "The project continues to progress in line with the overall funding allocated for the project," the spokeswoman said.

She added: "It is not unusual for ICT [information and communications technology] project costs to be agreed in advance of a project commencing.

"This is to manage financial risk in ICT projects."

Codec has also been contracted by numerous other State agencies, including the Department of Education, the Department of Foreign Affairs, the National Transport Authority and the HSE, in recent years.

Farrelly has now questioned the level of communication between various statutory organisations in relation to procurement practices and value-for-money exercises. "Do Government departments even talk to each other? More and more projects are cropping up with the same players at the heart of them. We are asking the same questions over and over," the Social Democrats TD said.

Farrelly praised Arts and Culture Minister Patrick O’Donovan for ordering a trawl of his department and bodies under its remit with the aim of uncovering any projects worth over €500,000 which have encountered difficulty.

He said a similar exercise should be undertaken across every department on a routine basis. "There has to be some accountability," Farrelly added.

Meanwhile, the Arts Council is continuing to pursue the firms behind the botched upgrade to its grant management system for costs. At a meeting of the PAC that took place in May, representatives for the arts body confirmed that it is now pursuing legal cases against two of the IT contractors involved in the project, and is in the pre-action stage in relation to two others.

The council is optimistic that it can recoup at least €3m from the contractors and is "vigorously" pursuing the cases to reduce the loss to the taxpayer. The council confirmed that it has spent €60,000 so far on legal fees in relation to these cases.

Arts Council representatives, who appeared before the Oireachtas Culture Committee earlier this month, would not comment on how much legal action against contractors was expected to cost or how long it would take.

(Pic: Getty Images)