The ATO received a payout from supplier HPE for the disastrous outages over the summer

A guard stands inside an Australian Taxation Office in Sydney. Photo: Getty/ Bloomberg

Australian Taxation Office commissioner Chris Jordan has revealed that the agency has reached a settlement with its technology supplier Hewlett Packard Enterprise over the systems outages that plagued it last summer.

The ATO’s websites and online systems crashed over a number of days in December, with the root cause found to be in the data storage network deployed by HPE. Outages continued in to January and February, inconveniencing a whole ecosystem of users, including tax payers, tax agents, accountants and superannuation firms.

As a preview of a report from the ATO to be released next week, Jordan told a budget estimates session in Canberra that “a commercial settlement” had been reached with HPE, without disclosing how much the payout was worth.

“The settlement recoups key costs incurred by the ATO, and provides additional and higher grade IT equipment giving the ATO a world-class storage network,” he said.

An investigation into the outages revealed the storage systems’ design and configuration had been optimised for performance, sacrificing stability and resilience, which meant what started as a minor failure quickly triggered a chain reaction.

“Only 12 of some 800 disk drives failed, but they impacted most ATO systems,” Jordan said.

“The recovery was slower because some of the recovery tools required were stored on the same (storage area network) that failed.”

A poor fitting of the fibre optic cables into the storage network, software bugs and inactive monitoring systems were all blamed for exacerbating the system disruptions.

Business Insider has contacted HPE Australia for comment.

Jordan also admitted shortcomings with the ATO’s communications about the outage with external parties, saying it needed “to be more inclusive of our partners” in the future.

The commissioner gave assurances that no taxpayer data was lost and the systems have now been restored to working condition.

“We are tracking well for delivery of tax time 2017. We’ve already rebuilt our storage system to the latest in world-class standards, replacing the faulty equipment with new technology and we’re reviewing our IT framework to enhance stability and resilience more generally,” he said.

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