The BBC’s governance arrangements have come under fire in a National Audit Office (NAO) report on the failed £100m Digital Media Initiative (DMI).

The public spending watchdog said on Tuesday that oversight of the project, aimed at creating a production system linked to the BBC’s vast broadcasting archive, was “inadequate for its scale, complexity and risk”.

The NAO provided a chastening summary of how DMI was handled by the corporation’s top level executive board, as well as the BBC Trust. It comes just months after the BBC payoffs debacle, which prompted the corporation to install improved governance processes.

The corporation was criticised in the NAO’s 32-page review for failing to appoint a single executive to manage DMI, while reporting on the scheme’s progress “was not fit for purpose”. This echoed the findings of a PricewaterhouseCoopers review published last year.

The executive board failed to submit DMI for internal “audit or assurance reporting” in 2011 and early 2012 because other major projects, including the London Olympics and move to Salford, were occupying its time.

In May 2012 the board, led by former BBC director general Mark Thompson, became aware of the problems and ordered a review of the technology programme. By this time, DMI was already 15 months behind schedule.

The Trust questioned the executive board in September 2011 as to whether delays might impact DMI’s overall benefits, but then “applied limited challenge” until July 2012.

“The DMI’s risk status increased to red for the period October to December 2011. A gap in reporting in the first part of 2012, which neither the BBC nor the BBC Trust addressed, meant that the Trust did not know this until July 2012,” the NAO report said.

Amyas Morse, head of the NAO, added: “The BBC executive did not have sufficient grip on its DMI programme. If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012.”

Trust vice chairman Diane Coyle said the NAO review would provide lessons on running technology projects in future.

“As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system.  This will ensure that serious problems can be spotted and addressed at an earlier stage,” she added.

Executives responsible

The DMI project was passed around top BBC executives, the NAO report said, even though the corporation insisted that ultimate responsibility resided with its chief technology officer John Linwood, who was sacked in July last year.

The NAO revealed that when the business case was approved by the Trust in June 2010, Erik Huggers, the director of future media and technology was responsible for its progress, but this was transferred to chief operating officer Caroline Thomson in March 2011. Chief financial officer Zarin Patel then took on the project in September 2012.

Both Thomson and Patel will appear before MPs of the Public Accounts Committee on 3 February to talk about the failed project. They will be joined by former BBC trustee Anthony Fry, ex-DG Thompson and Dominic Coles, current BBC director of operations.

“For a programme of the DMI’s size, we would have expected the BBC to appoint a senior responsible owner to take responsibility for meeting programme objectives, achieving benefits and ensuring system development and business requirements were aligned,” the NAO said.

It added that the lack of management control did not prevent the BBC from being “too optimistic” about its ability to implement DMI.

Coles said: “As we have previously acknowledged, the BBC got this one wrong.  We took swift action to overhaul how major projects are managed after we closed DMI last year.”