Europe's largest city council: Oracle ERP allocated £2B in transactions to wrong year
- Reference: 1726834807
- News link: https://www.theregister.co.uk/2024/09/20/birmingham_oracle_finance_woes/
- Source link:
Europe's largest local authority has been made effectively bankrupt by a combination of the self-inflicted messy ERP rollout and historic equal pay claims. In its latest report to the council's Audit Committee, external auditors Grant Thornton disclosed that Oracle's cloud-based Fusion ERP system, which [1]has failed to produce auditable accounts since its implementation in 2022, continues to cause disruption to the council's financial management and operations.
The auditors found significant risks in cash management in the most recent financial years, for example. Cash allocations posted to Oracle were recorded as a transaction on the same day.
[2]
"If the transaction it relates to is from the prior year, this means the cash posting is sitting in the wrong year and the accounting records would be incorrect. In [the financial year] 23/24, £2 billion in transactions [were] posted in the wrong year which required correcting manually," the report says.
[3]
[4]
The Register already reported that expected project costs for the Oracle ERP project have [5]mushroomed from around £20 million ($26.5 million) to around £131 million ($173 million).
[6]City council faces £216.5M loss over Oracle system debacle
[7]Europe's largest council could face £12M manual audit bill after Oracle project disaster
[8]Mega-city's Oracle system won't have effective cash management until 2025
[9]Brit council gives Oracle another £10M for professional services amid ERP fallout
Despite red warnings on its project review, the council went live with the replacement to its aging SAP finance system, highly customized software from 1999. The system went live with modifications, and problems emerged. The council now plans to reimplement an "out-of-the-box" version of Oracle while it does its best to fix the current system.
In their latest report, the auditors highlighted the struggle to retain skills and knowledge regarding the original implementation.
"Since the start of the program, there has been significant turnover of personnel," the report reveals. "Of the current staff, none of them were involved in the original implementation. The council's current focus is on fixing issues going forwards rather than addressing former problems.
[10]
"Birmingham City Council had a large team supporting SAP. The current Oracle team size is in flux as [the council] are not sure what a stable Oracle solution looks like and therefore what sort of support they would need in place."
The Reg [11]previously reported that security and audit functions in the council's Oracle system were not initially implemented, leaving it unable to detect potential fraud for around 18 months.
The council has been contacted for a statement. It previously said it plans to go live with the reimplementation of Oracle in 2026. ®
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[1] https://www.theregister.com/2024/04/17/birmingham_city_councils_oracle_erp/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zu2cJJdnNFiKilPfb6c5IgAAAE0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zu2cJJdnNFiKilPfb6c5IgAAAE0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zu2cJJdnNFiKilPfb6c5IgAAAE0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/10/04/birmingham_city_council_oracle_project/
[6] https://www.theregister.com/2024/08/20/birmingham_oracle_cost/
[7] https://www.theregister.com/2024/07/18/europes_largest_council_could_face/
[8] https://www.theregister.com/2024/07/17/birminghams_oracle_system_cash_management/
[9] https://www.theregister.com/2024/07/08/oracle_professional_services_birmingham/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zu2cJJdnNFiKilPfb6c5IgAAAE0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2024/04/25/birmingham_oracle_audit_trail/
[12] https://whitepapers.theregister.com/
GNU
Not fit for purpose
We, and especially the citizens of Birmingham, should expect a full and complete reimbursement of money wasted on this shitshow.
Re: Not fit for purpose
And who is going to pay that bill???
All parties will simply say that they were paid for services rendered. The contract may have originally stated that the result must work as advertised, but the target shifted so many times that the clause was rendered unobtanium and rendered ineffective. See, we, the hard working software class and consultancy parties can not be blamed in any way.
It would have been funny if it wasn't so sad.
Re: Not fit for purpose
You might want that but ti expect it indicates the same level of optimism and the council did in going down that route in the first place.
Did the system do this on its own?
Did the system do this on its own? Or was it wrongly configured and wrongly used in a way that resulted in this wrong posting?
Re: Did the system do this on its own?
Having seen first hand a different council's ERP cock up...I would bet real money that the default allocations in Oracle would work, but the implementation team wrote their own instead, and that went wrong.
Re: Did the system do this on its own?
This is how ERP providers make all that lovely cash that allows Larry to keep buying islands:
* 01: Create an ERP system where everything can be configured, customized, and controlled
* 02: Pitch it to potential customers, all of whom have exceptionally complex existing ERP systems that have a number of flaws
* 03: Sell them on the low low cost of the unmodified system, with a small additional cost for "minor customizations"
* 04: Begin implementation, which will take 2+ years
* 05: Collaborate with the client. If they are a public body, talk to everybody, especially elected people
* 06: Gather a thousand new requirements and change requests
* 07: Nullify any existing clauses on performance, delivery, correctness due to so many change requests
* 08: Deplete the original budget, leaving the platform 50-80% integrated - you tell the client its 80%, but you know its really 50% done
* 09: Force the client to either extend the budget or cancel, leaving them with their currently unsupported legacy ERP
* 10: Deplete the new budget
* 11: Complete/cancel the project, or go back to step 09
* 12: Go to step 1
Oh look
An update on a complete failure of management.
Just what I needed to make me feel good on a Friday evening.
ITIL + Shitshow
Makes me wonder, how the UK Gvt came up with ITIL and can then, on a regular basis come up with complete shitshow's like this
Re: ITIL + Shitshow
This is not UK govt, this is local govt. UJ govt has its own shitshows.
Re: ITIL + Shitshow
UK dammi!!!
My tryping is getting worse and worst. Completely offal.
That's what happens with Oracle, it's to be expected. You can't rely on them to implement a system, they make more money correcting mistakes they see being made than they do by doing it right the first time.
This is nothing new, this is how companies like Oracle become so large and wealthy - screwing the customer to the point they drain the cash, making it difficult to migrate elsewhere. It's one of the benefits of an ERP system, for the vendor.
Birmingham Council
make the Dibley council look professional
Hubert lavish will update the glooper and return the money. Malvolio bent will update the books. Go and fire oracle.