State announces digitization order for budget management

network cable

Network cables in a data center. Photo: Marijan Murat/dpa/Symbolbild

© dpa-infocom GmbH

The state government has been waiting for a new IT solution for the entire budget for a year and a half. After ongoing delays, the country is now withdrawing from the contract. In the opinion of the contractor, the state is jointly responsible for the delay.

The plans for the complete digitization of the housekeeping of the state of Mecklenburg-Western Pomerania have failed for the time being. The Lübeck-based company Mach AG, which was commissioned with the IT project in 2018, failed to provide contractually agreed services on a “very large scale”, stated Finance Minister Heiko Geue (SPD) on Thursday in Schwerin. Due to the backlog and ongoing application problems, it cannot be assumed that the agreement can be contractually fulfilled by the end of the project period on December 31, 2022. “A continuation of the project is thus excluded, the country will withdraw from the contract,” announced Geue.

The finance committee of the state parliament had previously been informed that the government was pulling the ripcord after previously granting the IT company an extension of the deadline. For the project were noisy geue more than 30 million euros planned. According to the contract and the progress of the project, around 7.5 million euros have flowed to the company so far. The state’s own data processing center (DVZ) also incurred costs of around 5.5 million euros. The reclaim of the money already paid to the company as well as claims for damages are being prepared, said Geue. How big the financial losses for the country will be is unclear.

The new IT solution was originally intended to replace the outdated ProFiskal process, which has been in use since 1995, by the end of 2021 at the latest. The state government had hoped that the Havel process would unite the state’s entire budget, cash register and accounting system, completely digitally and legally securely. This includes the entire budget cycle, from planning and implementation to budget billing, currently amounting to a good nine billion euros a year. Geue assumes that the previous method can continue to be used with a few adjustments.

Mach AG blamed “differing opinions between client and contractor regarding individual points of the scope of services and the project procedure” for the delay. However, this is not unusual for projects of this magnitude. The IT system has now been largely set up. “The project has progressed so far that from our point of view the completion of the last project phases would be possible without further ado,” the company said on request. However, the “cooperation and willingness to implement on the part of the client are decisive success factors”.

According to Mach AG, there were also additional demands from the state during the course of the project development, which is not unusual. “Normally, the client and contractor negotiate on a partnership basis, so that an agreement is usually reached quickly,” the reply said. However, attempts at conciliation and offers of mediation were rejected by the client. It remains to be seen to what extent the state government is willing to reach an out-of-court settlement. “We are still open to talks,” said Mach AG. According to the company, Thuringia and Saarland use software from Mach for their financial management.