Report 14

Information Systems Audit Report

Application Controls Audits

  • Management of Water Pipes Applications – Water Corporation
  • Management of Wood Pole assets Applications – Western Power
  • Local Area Data Set and Provider Administration and Information Data Applications – Disability Services Commission

Management  of  Water  Pipes Applications  –  Water Corporation

In February this year we reported on the Water Corporation’s Management of Water Pipes2. In that report we identified gaps in the Water Corporation’s information that needed to be addressed to ensure pipe replacement decisions are fully informed. This report provides more specific information about some of the IT applications that support the Water Corporation’s management of water pipes.

Conclusion

In general, the five water supply pipe applications we assessed enabled the Water Corporation to adequately manage aspects of the water supply network.

However, we identified control weaknesses relating to the completeness and accuracy of information on the condition of water pipes that is entered through the MDS system and which ultimately affects the reliability of the information held in the SAP system. In the absence of accurate and reliable information, the Water Corporation’s ability to effectively manage water pipes is reduced.

In addition, we found staff had different views about how the various applications link and share information. One cause of this is that the Water Corporation did not have an appropriate Enterprise Architecture diagram for the applications and systems that support the management of their water pipe systems. This diagram would provide an overview of their systems and how they interoperate. It also shows workflow and data entry points which will assist with risk identification and improvement opportunities

Background

In 2012-13 the Water Corporation supplied over 357 billion litres of drinking water across Western Australia. To deliver this water the Water Corporation manages over 34 000 kilometres of water supply pipes across the state.

Approximately 20 applications and processes are used for the management of water supply pipes. This audit assessed the five main applications:

Systems, Applications and Products (SAP)

This system is used to manage a wide variety of water supply pipe information. This includes pipe installation, refurbishment, replacement dates and a schedule of water pipe maintenance work.

Supervisory Control and Data Acquisition (SCADA)

This is a variety of computer systems and devices used to monitor water quality including management of pumps and valves for the supply of water throughout the state.

Facilities Mapping System (FMS)

This is a Geographical Information System (GIS) used to specifically locate water pipe infrastructure on a map with relevant detail.

GRANGE (Customer Management System)

This application is the initial entry point for recording faults and incidents. The system also records details of the person reporting the fault or incident and related details.

Mobile Device System (MDS)

Field staff working on location use this system which sends and receives data about the condition of water pipes and work orders. Field staff respond to issued work orders and enter information through mobile handheld devices.

Key Findings

High level view of water supply pipe applications

The Water Corporation advises that it has a clear picture of its enterprise architecture although this would not usually be broken down and focused on an asset class (e.g. water pipes). It thus did not have a sufficiently detailed high level picture of its critical applications, system interfaces and information flows related to the management of water supply pipes. The systems used to manage the water supply pipes have evolved over time with the addition of new applications and modules to help improve the management process. The environment is now very complex and there is uncertainty amongst key staff about how the various systems interrelate. Without a good understanding of how the different applications interrelate, it is difficult for management to identify where potential risks exist or areas for improvements can be made.

Integrity and accuracy of water pipe information needed improvement

The Water Corporation has a variety of issues that affect the integrity and accuracy of the water supply pipe information.

Operational staff reported that work order information entered into the MDS by field staff routinely contained errors or is not entered. Data we analysed confirmed the occurrence of errors and incomplete information. The problem for the Water Corporation emerges when the error feeds into the SAP system, which harms its understanding of the condition of its water supply pipes.

FMS is the Water Corporation’s primary source of information about the age of pipes. We reported earlier this year3 of errors found in the recorded installation dates of old pipes in the Perth CBD. The errors came to light after an incident in Wellington Street in April 2013 when a cast iron pipe burst three times in one week. A data quality review found these pipes were in excess of 100 years old rather than the 60 to 70 year range recorded in the FMS. The Water Corporation subsequently verified the age information for all cast iron pipes in the Perth CBD and now plans to undertake data quality reviews for similar aged pipes in Fremantle, Guildford, Northbridge and Victoria Park.

Data integrity and accuracy issues have a negative impact on the efficiency of staff and business operations. These issues also increase the risk that mistakes and incorrect decisions will be made. Despite knowing about these problems the Water Corporation has very limited processes to review and validate the accuracy of water supply pipe information entered into the systems.

We noted that the Water Corporation has identified data integrity as a high risk item in their risk register and a project is underway to improve data integrity throughout their systems.

System inefficiencies result in time consuming manual processing

We observed that the Water Corporation relies on manual processes to manage the water supply pipe information. Rather than data being maintained in a centralised system or information being automatically linked across systems, staff have to manually track and update the information.

In one instance we noted staff having to copy and paste control system alarm responses from SCADA into SAP to generate maintenance work orders. In another example we noted the GRANGE system does not prevent duplicate work orders from being entered for the same fault. As a result, staff have to manually check a shared Microsoft Outlook Calendar to see if a work order for the fault had already been created.

Manual processing is inefficient and time consuming. It also increases the risk of data being entered incorrectly which in turn could lead to incorrect business decisions affecting system reliability and costs.

System reliability and availability impacts business operations

There were a range of issues affecting the overall reliability and availability of the Water Corporation’s water supply pipe systems. For instance:

  • the interface between GRANGE and SAP was poorly configured and susceptible to information transfer failures. Management advised that failures occur regularly causing delays in issuing work orders for water infrastructure maintenance and correction of faults
  • the Water Corporation’s IT group carries out system maintenance during busy periods resulting in the SAP system being unavailable to log fault calls. During system maintenance periods staff have to record work orders manually on paper which results in a large backlog in the processing of work orders. When the systems become available, up to three additional staff are required to process the backlog.

Reliability and availability issues increase the risk that key business operations or activities will be impacted, which can affect staff efficiency, increase costs and cause errors in data input.

Security over sensitive information

We established that by default all Water Corporation staff have been given read access to large amounts of sensitive information stored on one of their systems. This includes census data, customer account information and other government agency information. Granting this broad level of access to information increases the risk of unauthorised disclosure or misuse.

Recommendations

The Water Corporation should by the end of 2014 commence action to address the following recommendations:

  • Develop an enterprise architecture diagram to provide visibility of applications, interfaces and processes that support the management of water supply pipes. The diagram then needs to be regularly maintained and updated.
  • Based on a full understanding of the architecture, address the following areas in a systematic way to maximise benefits and minimise risks:
    • Identify and address key areas to improve the integrity and accuracy of data held on their systems. This work should be sufficiently resourced to ensure areas for improvement are addressed within a timely manner.
    • Implement automated processes and interfaces where applicable, to help ensure the timely transfer of accurate information between systems.
    • Complete  a  review  of  each  business  area’s  application  availability  and  reliability requirements. Where appropriate,  applications  should  be  configured  and/or  fixed to ensure they meet business requirements. Consideration should also be given to scheduling maintenance windows of a shorter duration or at less busy periods when work order volumes are lower.
    • Undertake a review of user access privileges to the system which we identified as allowing broad access to the sensitive information the system contains. As part of this review, relevant controls should be implemented to prevent or detect unauthorised information access or disclosure.

Agency Response

The Water Corporations Act 1995 requires the Corporation to act in a commercial manner and must take this into account when spending on systems and integration between systems. This being said, the Corporation will act on the findings as outlined in our response to the management letter.

Management  of  Wood  Pole  assets Applications  – Western Power

In November 2013 we reported on Western Power’s Management of Wood Pole Assets4. In that report we identified that Western Power still needed to make progress to ensure its data collection is complete and accurate. This report provides more specific information about some of the IT applications that support Western Power’s management of it wood pole assets.

Conclusion

The applications we assessed generally enabled Western Power to adequately manage its wood pole assets.

However, we identified control weaknesses that impact on the accuracy and integrity of asset maintenance information entered through the DMS system. These weaknesses affect the reliability of the information held in the Ellipse system. In the absence of accurate and reliable information, Western Power’s ability to effectively manage its wood pole assets is reduced.

We also found that further work was required to ensure Western Power had clear end to end visibility over the applications that make up the wood poles management system.

Since this audit was completed late last year, Western Power has advised that they have undertaken a detailed review of their end-to-end organisation, processes, systems and work practices. This review has led to a number of actions designed to drive improved operational performance and are being completed within the context of a broader business program.

Background

Western Power transports and delivers electricity to the south west corridor of Western Australia. Its network is made up of 42 000 transmission towers and poles that transport electricity from generators to substations, and 758 000 distribution poles delivering electricity from substations to consumers. There are approximately 629 000 wood poles in the network.

The information technology system to manage the wood poles infrastructure has expanded and developed over time and currently comprises around 15 applications. This audit assessed the five main applications:

Ellipse

This system manages all the work orders and the equipment register (asset management) and is the core financial system.

ADAPT

This system is used to verify the equipment defects and generates work order requirements prior to loading into Ellipse which subsequently creates the work order.

Document Management System

This is a document management system used between Western Power and contractors undertaking work on their behalf. It is used to transfer the invoices between third party contractors and Western Power as well as communication of work orders.

COGNOS

COGNOS is the reporting layer used to consolidate information and generate reports such as KPI’s and monthly performance management reports.

Handheld Device System

Field staff working on location use this system to send and receive data about the condition of wood poles and work orders. Field staff respond to issued work orders and enter information through mobile handheld devices.

Key Findings

High level view of wood pole management applications

Western Power advised it has a clear picture of its enterprise architecture and IT application landscape, allowing the effective management and governance of end-to-end IT solutions. Whilst this enterprise architecture would not usually be broken down and focused on asset class (e.g. Wood Poles), there is value in further work to ensure specific end-to-end visibility over the IT applications focused on Wood Pole Management. This will mitigate the risk of inefficiency in their use and support of Wood Pole Management and the risk that changes in one process / application has a detrimental impact on other processes or components within the system.

The system used to manage the Wood Poles infrastructure has evolved over time with the addition of new applications and modules to help improve the management process. We observed that the environment is now very complex with no overall (end to end) visibility over data input sources and transfers of information between the applications which make up the Wood Poles management system. Failure to maintain visibility over the makeup of the Wood Poles management system and full data flow increases the risk that there is inefficiency in its use and support. There is also a risk that changes against one process / application has a detrimental impact on other processes or components within the system.

Augmenting the enterprise architecture approach already in place to provide end to end visibility over the applications making up the Wood Poles management system, along with the flow of data and key control points, would help management simplify and manage the confidentiality, integrity and availability of data within, and flowing through the system.

Integrity and accuracy of wood pole asset information

Western Power need to address a number of issues that could potentially affect accuracy and integrity of data within the system used to manage Wood Poles.

We found that asset maintenance work, including replacement and maintenance work on Wood Poles and its components, is allocated using an insecure file in the Document Management System (DMS). The data is then sent to and can be edited by multiple third parties who perform the allocated maintenance work. On completion of the maintenance work, the job information is uploaded into Ellipse to close the work orders. This information is at risk of being fraudulently or accidently amended under the current process. A more secure method of sharing information with third party service providers will help maintain the confidentiality, integrity and availability of the data for incorporation back into the Ellipse system.

Each Wood Pole asset is made up of a number of components including the pole itself, the cross arm and transformer. When the pole is replaced these are also replaced. We noted that the ADAPT application, used as part of the work scheduling process, does not link some of the larger component items to the pole when it is selected for work. As a result, when the pole is replaced these component items are not updated through the standard process. A manual work around was required to capture and amend the linked items. Ensuring that the components are effectively linked to the poles will help Western Power maintain a more accurate record of assets and works required and eliminate the need to manually track and record the replacement of component parts.

Unnecessary work orders are created

The collection of data pertaining to Wood Pole inspections is captured on hand held devices by the inspector at the time of inspection. If a pole is inspected whilst a work order remains outstanding, the pole identification number will be available in the hand held device. If the inspector attempts to raise a secondary defect, the system will alert them that there is still a defect outstanding. If however the inspector considers the pole unserviceable and raises a replacement request, there is no such alert. This replacement request and the original work order are both reflected in Workplanner. Failure to implement controls to reduce multiple defect or replace entries against the same asset increases the risk that multiple work orders are generated and multiple visits made where no action is required.

Manual reporting processes increase the risk of errors in reporting

The wood pole management reporting model gathers performance data from multiple systems. This data is consolidated into a master spreadsheet which is used to derive monthly management reports which includes the current status of the wood pole replacement program. We noted that there is a significant amount of manual intervention and data entry required once data leaves the systems, and extensive use of spreadsheets to generate the monthly management reports. These manual processes increase the risk of errors or unauthorised changes. Minimising the amount of manual intervention required to generate reports will help streamline the reporting process and enhance the integrity of the reports.

Recommendations

Western  Power  should  by  the  end  of  2014  commence  action  to  address  the following recommendations:

  • Augment its existing approach to enterprise architecture management to develop a diagram that provides specific visibility of applications, interfaces and processes that support the management of wood power poles. The diagram then needs to be regularly maintained and updated.
  • Based on a full understanding of the architecture, address the following areas in a systematic way to maximise benefits and minimise risks:
    • Identify and address key areas to improve the integrity and accuracy of data held on their systems. This work should be sufficiently resourced to ensure areas for improvement are addressed within a timely manner.
    • Implement automated processes and interfaces where applicable, to help ensure the timely transfer of accurate information between systems and streamline the monthly management reporting process.

Agency Response

Western Power accepts the findings of the audit and would like to express its thanks to the Office of the Auditor General (OAG) for its efforts and advice.

Overall the OAG concluded that Western Power’s applications generally enabled it to adequately manage its wood pole assets.

In response to the two recommendations highlighted;

1. A diagram focused specifically on the applications supporting the management of Wood Power Poles has been created and is being maintained accordingly. This is being done within the context of Western Power’s broader approach to managing its enterprise architecture and IT applications.

2. A detailed assessment of Western Power’s end-to-end processes, systems and work practices has been completed. This review has identified a range of improvement areas in regard to the integrity and accuracy of data, and the automation of processes and interfaces.

Western Power has commenced work to implement and sustain these improvement areas as part of a broader business program to improve the performance of key end-to-end processes, systems and work practices.

Local Area Data Set and Provider Administration and Information Data Applications – Disability Services Commission

Conclusion

Both the Local Area Data Set (LADS) application and the Provider Administration and Information Data (PAID) application were operating as designed.

However, the LADS application was affected by a small number of control weaknesses mainly relating to the integrity of client data while PAID is an ageing application which doesn’t support all of the Disability Services Commission’s (Commission) current processes. We do not regard these issues as critical but they do somewhat reduce the efficiency of staff and the Commission’s business operations and moderately increase the risk of fraudulent activity or payment errors.

Background

The Commission helps people with disabilities to live in the community. They also provide help and support to the families and carers of people with disabilities. The Commission achieves this by  providing services  through  specific  funding  to  an  individual or  disability  support organisations.

This audit assessed two applications that facilitate the payment of funding assistance to individuals and support organisations:

  • The LADS application is used to manage direct payments to people with disabilities, members of their family or a carer. In 2012-13, LADS managed support payments of approximately $28 million to nearly 10 000 individuals.
  • PAID  is  used  to  manage  payments  to  about  120  disability  support  organisations.  In 2012-2013, PAID processed payments of around $497 million to these organisations.

The LADS and PAID applications provide payments for the following types of support services:

  • accommodation for people with challenging behaviour
  • care advice and respite for families and carers
  • financial advice, including government payments and benefits
  • health and well-being advice on key services
  • planning for individuals to achieve goals at various stages in life
  • housing, working and training, transport, recreation and leisure advocacy information and planning support.

Key Findings

LADS

Although we found that LADS is working properly, there are two issues that should be addressed.

Existing payment recipients did not always appear on the payment screen of the LADS application and could therefore not be selected for a fresh payment. To address this fault the Local Area Coordinator has to manually re-enter the recipient details as a new record. This results in an unmatched payment request in the financial system. Since 1 July 2009 there have been 4 325 unmatched payment requests, which have to be manually processed. This problem creates an additional overhead cost and increases the risk of fraud and errors.

A flaw in the system inappropriately provided access to some system users to change sensitive client information such as legal name and date of birth. This increases the risk of fraudulent changes and may impact the overall integrity and accuracy of the Commission’s client information.

PAID

The PAID application is working adequately, but it is an ageing system that does not fully support all the business processes associated with paying the disability support organisations.

The Commission has implemented several manual processes to assist in managing their payments to disability support organisations, but these can be inefficient and are a cause of delays to the processing of payments. The lack of full automation also increases the risk of unauthorised changes, errors or fraudulent activity.

Some examples are:

  • The system does not record payment approvals in accordance with manual approval delegations. This is due to the systems limitation of only being able to record the first level of approval
  • A log is not kept of information changes made in the system about a disability support organisation. Such changes could, for instance, include postal address and bank account details. A log provides a record of who made the changes and when.
  • Some Commission staff have been given Administrator level access to the system to enable them to extract information to prepare management reports. Administrator level access is a high level of privilege that is normally restricted to a minimum number of staff because it generally allows users to make significant changes to data and to how the application functions.

Recommendations

The Disability Services Commission should within three months take action to address the following recommendations.

  • For the LADS application:
    • determine why certain payment recipients are not available for selection and then apply a suitable application fix or update
    • ascertain how some system users can change sensitive client information and then apply a suitable application fix. Until the issue is resolved, the Commission should implement stringent controls to prevent or detect any unauthorised changes to information.
  • For the PAID application:
    • undertake a review of the system capabilities against the supporting business processes. This review should determine whether current application functionality meets their business requirements. Based on the outcome of this review the Commission may consider making relevant application modifications or changes to their processes. The Commission may want to evaluate updating or replacing the PAID application.

Agency Response

The Commission has welcomed and accepts all these findings.

The Local Area Data Set (LADS) system software error has been corrected and the Manual Payment Input issue is currently being addressed. The Provider Administration and Information Database (PAID) system is recognized as having inadequacies and using old technology.

Having said this, the Commission is developing and implementing a new system to support the introduction of the State’s National Disability Insurance Agency (NDIA) trials in Western Australia. The trials were committed by the Prime Minister and the Western Australian Premier through a bilateral agreement signed on 31 March 2014. The trials are scheduled to begin on 1 July 2014 for a two year period. A comparative and independent valuation of the trial outcomes will be conducted.

The Commission is fully committed to providing an operational environment that will support the future directions of disability services. The new NDIA-My Way system will overcome some PAID deficiencies but until there is certainty around the NDIS, the Commission will continue to utilise manual processes to remediate the remainder rather than invest in the PAID system development.

Therefore, the Commission cannot action the requested recommendations from the Auditor General at this time, due to practicality and unknown business requirements which will be dependent upon a national reform process underway.

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