PSUs ill-spent money on IT: CAG

Deccan Herald - Bangalore,India
“Lack of complete customization, validation checks, design deficiencies
and non-utilization of various features was noticed in Inventory Management
module ...

The Comptroller & Auditor General of India (CAG) had pointed out faults in IT adoption by central PSUs and said the companies had wasted money on IT applications.

The Comptroller & Auditor General of India (CAG) had pointed out faults in IT adoption by central PSUs and said the companies had ‘wasted money’ on IT applications, reports CyberMedia News from New Delhi.
The report of IT applications in central PSUs tabled in the parliament today included IT Audit of different software in use for different activities in eight Central Public Sector Undertakings under five ministries. Besides pointing out underutilization of the deployed resources, inadequate input, validation and application controls, the report has come out with IT Audit of these software programmes used in central PSUs.

Absence of IT policy in ITI
The CAG audit report on IT applications said Integrated Business Solutions in Northern Coalfields Limited lacked integration among different modules, incorrect mapping of the business rules and lack of co-ordination among various units resulting in purchases in spite of holding stock of same items in other units.
In ITI Limited, it found an absence of an IT policy and strategy, which led to overlap in development of software. “Major activities of the ITI Limited were not carried out through Integrated Material Management System and Baan software resulting in non-achievement of their objectives. The Material Management and Inventory Accounting (MMIA), where data was being captured and used for finalization of accounts, was not integrated with the accounts module of package. The objective of total integration of the computerization functions was not achieved,” CAG said.

Several serious deficiencies
The reported noticed deficiencies in access control, input control and business continuity planning in the Genisys software being used by National Insurance Company Limited, New India Assurance Company Limited and United India Insurance Company Limited.
“These deficiencies made the system vulnerable to manipulations, errors and nonconforming to the relevant provisions. Non-integration of database with other service departments and manual intervention led to inaccurate estimates of provisions for MACT cases,” it pointed out. Similarly, CAG said the investment of Rs 1.51 crore made by Braithwaite & Company Limited for procurement and installation of Enterprise Resource Planning (ERP) system did not yield any benefits because of deficiency in monitoring the computerization process, absence of proper documentation and departure of trained employees.
“Lack of complete customization, validation checks, design deficiencies and non-utilization of various features was noticed in Inventory Management module of JD Edwards software in Hindustan Petroleum Corporation Limited (HPCL),” the report observed. “The objectives of availability of on-line, timely and accurate information for improved decision making, improved working capital management, improved profitability and optimal deployment of human resources were thus not achieved.”In Oil & Natural Gas Corporation Limited (ONGC), the CAG report said adequate internal control procedures had not been put in place in Enterprise Resource Planning (ERP) package to ensure accurate and timely capture of data.
“The master data indicated weaknesses in data conversion plan, methods of collecting and verifying the data to be converted, identifying and resolving any error found during conversion. Inherent design defects resulted in generation of incorrect reports,” CAG said.