An initial budget of €2.2 million for a now terminated IT system for processing student grants “did not represent in any way a full or realistic estimate of costs”, the Department of Further and Higher Education has said.

Secretary general of the department Colm O’Reardon said in a report to the Dáil’s Public Accounts Committee that it was “clearly deeply frustrating and regrettable that the Integrated Grants Processing System (IGPS) project did not successfully deliver a solution, despite repeated interventions over the project timeline”.

In January, the Comptroller and Auditor General told the committee that an initiative to develop the new grant processing system began in 2015 with an initial approved budget of €2.2 million.

He said by the end of 2024 the project, which had by then been rebranded MySusi, had incurred costs of €6.4 million although it remained in a pre-project or initiation phase.

O’Reardon said while the comptroller treated overall spending on the development of the new grant processing system as “cumulative expenditure”, the department considered there were “substantively two separate IT projects”.

“While both relate to the Susi [Student Universal Support Ireland] grant management system, the two projects are fundamentally different in scope, have different business cases and governance arrangements and separate budgetary allocations.

“The first project, the IGPS, commenced in 2015 and the vendor contract was terminated in 2022 after the project had not, despite several interventions, delivered the expected benefits”, he said.

The department said there remained, however, a compelling case for a new IT system given the risks associated with the Susi – which is the national awarding authority for further and higher education grants- having to rely on external contractors.

O’Reardon said the later project had been entirely re-scoped and had significantly strengthened governance and oversight as well as enhanced staffing resources. He said the MySusi project was “expected to move to the procurement phase in the near future”.

O’Reardon said the initial budget for the earlier IGPS project was €2.2 million but this was later increased to €4.8 million in 2021.

“Approximately €3.8 million was spent on the IGPS project between 2015 and April 2022. [A total of] €1.15 million of this was paid to the procured contractor, the contract for which was eventually terminated.”

The City of Dublin Education and Training Board (CDETB) is responsible for Susi operations across the country.

The department said problems with IGPS emerged as early as 2017. It said CDETB had “engaged collaboratively” with it and the Department of Education in early to mid-2021 on the basis it was not on track to deliver and that a full range of options, including termination, needed to be considered.

It said following legal advice and consultation with the department, CDETB in 2021 ended the vendor’s contract.

O’Reardon said an independent review of IGPS had found “the scoping of the project underestimated the complexity and scale of what was ultimately required”.

“Similarly, the review found that at ‘the outset internal resourcing was underestimated on the basis that it was conceived as a technical rather than a transformation project.”

He said between April 2022 and December 2025, approximately €3.48 million had been spent on the new MySusi project.

O’Reardon said unlike with IGPS, significant investment was “being made upfront before procurement and implementation to ensure proper scoping and resourcing of the project to best position the project to deliver a successful result”.

He said these costs were part of the scoping phase they are not considered to be “over-runs”.

Dublin Fine Gael TD Grace Boland who raised concerns about the Susi grant IT project in January said on Friday that across various Government departments and agencies a waste of taxpayers’ money was being seen as a result of failures to plan projects properly, to map out timelines and to ensure that stated requirements were fit for purpose”.