Auditors: Virginia wasted $75 million on failed systems

After reviewing 15 major information systems projects in seven of Virginia's nine secretariats, auditors found that the state had wasted at least $75 million and incurred an additional $28 million in cost overruns. The General Assembly's Joint Legislative Audit and Review Commission said some major IT projects had progressed well but that the state's record in systems development was mixed.

Virginia spends more than $900 million annually on IT, according to a draft report by the commission. Auditors identified three steps to creating cost-effective projects: developing a business case, securing support from executive leadership and managing system development properly.

Many of the project management problems the commission found have been identified in previous audits and studies, according to the draft report, but continue to fester. "Significantly improving the systems development process will require the strong commitment of persons in responsible positions to make the proposed new process work," the commission said of its reform recommendations.

The commission proposed a model for systems development reform that includes:

* a strong, independent CIO

* project approval by a high-level technology investment board

* project management specialists in the Department of Technology Planning

*implementation of technology standards.

The board said many of its recommendations are similar to reforms that Virginia's technology secretary, George Newstrom, has proposed in a plan that stretches to 2006.