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Friday, 2 November, 2001, 17:40 GMT
System failures cost Cambridge 9m
graphic
Staff were "distressed" by the system's failings
Cambridge University's "amateur" management by committees of academics is criticised in reports on the bungled introduction of a computerised accounting system.

The system has cost more than 9m - almost twice the original budget.

A review of the Capsa project by two academics from other universities concluded that it had been an "unmitigated" failure.

They said Cambridge's management, with a committee system that seemed unwilling or unable to make decisions and solve problems, was in danger of "lapsing into cosiness".

The university said it was determined to address the shortcomings that had been highlighted.

Rising costs

The Capsa saga began in the mid-90s when the university decided it needed a modern, integrated financial accounting system and asked software company Oracle to develop one, with a budget of 4.7m.

Most of the senior members of the university's finance division sought early retirement.

As the project changed and costs increased - despite promises to the contrary - an independent review was undertaken by consultants KPMG.

The project manager resigned and KPMG took over, with a revised budget of 7.6m.

Capsa went into operation in August 2000 - and crawled along.

The university's ruling council complained of "major functional problems".

Staff problems

As well as these, it said the implementation of the system required a very different approach to financial management from that which it had used for many years.

The detailed procedures and some of the necessary skills were new to those using the system - causing distress to many "dedicated staff".

The university's finance director - a new post created in July 1999 - resigned.

A joint review was set up by Anthony Finkelstein, professor of software systems engineering at University College London, and Professor Michael Shattock, visiting professor at the Centre for Higher Education Studies at London University's Institute of Education.

Their reports, published on Friday, concluded that the university was incapable of accounting properly for the funds it was given.

'Ineffective'

Although its turnover, at 350m, was twice that of Warwick University it had only half as many accountants.

It had no clear management structure and its committee system was ineffective.

Cambridge , priding itself on being a "self-governing community of scholars", appeared to believe that academic success excused it from the need to be run effectively.

That was not a suggestion that international competitors, such as Harvard and Stanford in the USA, would tolerate, Prof Shattock said.

Corrective action

But Cambridge's management shortcomings meant that "a risky proposition was transformed into a surefire failure".

The project's costs up to July 2001 were put at 9.192m.

"The difference between the actual costs incurred and those originally projected are startling," says Prof Finkelstein.

The system still is not working properly - "It is fragile with significant risk of failure in handling day-to-day operations" - and is not likely to do so for two years.

Prof Shattock says the saga showed the problems of long term under-investment.

Unless Cambridge invests urgently in qualified staff, it "will not only fail to recoup even part of its investment in the new system but will not be able to meet its national and international obligations to account for the funds made available to it."

A statement from the university said that a number of significant measures had been taken already, including the appointment of a new director of finance.

The ruling council would consider the reports in detail at its next meeting on 27 November and "incorporate relevant recommendations" in their ongoing review of systems and governance.

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