会計検査院

Board of Audit of Japan (BAJ)

Status of Development, Operation and Use of Government Information Systems Read full summary in English

2021 report
Background

The budget for information systems has been on an upward trend in recent years, and the initial budget for FY2020 was 796.7 billion yen (over 7 billion USD).

Domination of single bidders

High ratio of single bidder bids for 423 competitive contracts (The percentage of single bidder for public contracts throughout the State in FY2018 was 30%).

The average successful bid rate for bids from more than two bidders was 13.5 points lower than for single bidder bids.

The percentage of single bidder for system upgrade is higher than for new development.

It is assumed that this is due to that “vendor dependency” (a.k.a. “vendor lock-in”) is more likely to occur in system improvement contracts while new development contracts allow relatively much room for new venders to enter the market.

Recommendation 1 Improving competitiveness and economy by making efforts to create specifications that do not inhibit competition.
Poor project management

Many large-scale IT systems lacked project plan, properly goals and indicators. Some large-scale IT systems were found to lack monitoring even though goals and indicators were set.

Recommendation 2 Setting appropriate goals and indicators by creating a project plan and working on improvements to achieve the goals. Continuous improvements shall be made to achieve the targets.
Low use of systems

The achievement in information linkage was less than expected.

Some systems were with low rate of registration (...)

Some functions have not been used as designed.

The maximum CPU utilization rate was low for some IT resources.

Use of electronic bidding is being promoted but use of electronic contracts is less than 1%.

Many of the procedures that cannot be completed electronically and those that require attachments have an electronic application rate of less than 1%.

For most of the procedures where API functions are available, the effectiveness of such functions cannot be verified.

Recommendation 3 Providing advice and support to promote the use of systems, which bring benefits of scale: in electronic contracts, social security, management of administration.
Inadequate reduction

The total cost of 14.6 billion yen in maintenance and operation expenses in FY2018 included expenses for functions that did not have the intended effect of the project (...)

The reduction rate of the operational cost borne by each ministry and agency was only 2.3% through the migration into the Government Shared PlatformSystem (first phase) (77 systems audited).

Some IT resources were not fully utilized: - 6,351 cores which take up approximately half of the total 12,950 cores were not used. There were 79 systems (91.8% of 86 systems audited) for which the monthly average CPU utilization rate was lower than 30%.

The Government did not check the adequacy of the calculation of the actual reduction amount which was done at ministry’s own discretion.

There was a considerable gap between 13.6 billion yen and 102.8 billion yen:

- the former (13.6 billion yen) is the actual difference between FY2020 budget (386.3 billion yen) and FY2013 budget (400 billion yen);

- The latter (102.8 billion yen) is the expected reduction without considering "incremental costs due to changes in business" (increased operational cost in accordance with changes in operational requirements from the estimated cost).

Recommendation 4 Verifying the calculation of the actual amount of reduction in the operational cost, and striving to calculate the actual amount of reduction cost appropriately.
Objectives

In June 2019, the National Diet requested the Board of Audit (SAI Japan) to examine Government Information Systems and report about:

1. Status of budget execution for the development and operation of Government Information Systems.

2. Status of competitiveness and economy of contracts concluded by each ministry and agency.

3. Status of use and effectiveness of government information systems.

4. Efforts to improve the efficiency of the overall government information systems and to reduce costs.

The items above were selected and named by the e-Government Subgroup of the EUROSAI IT Working Group on the basis of publicly available report of the author Supreme Audit Institutions (SAI). In the same way, the Subgroup prepared the analytical assumptions and headings. All readers are encouraged to consult the original texts by the author SAIs (linked).