Cabinet Office had a duplicate ERP scheme, it is revealed.
The Ministry of Justice (MoJ) has had to write off £56.3m spent on a shared service IT project after discovering it was already being done by another Government department.
The MoJ's shares services programme (SSP) aimed to create an enterprise resource planning (ERP) system for HR, payroll, procurement and other services, but was also found to be over budget and late.
The department was also forced to shelf the project when it realised the Cabinet Office had duplicated the project with one of its own in 2012.
A spokesperson told the Guardian: "We wrote off the money because we discovered in 2012 that the Cabinet Office was planning to implement a similar scheme. We could not recoup some of the costs, such as staffing."
The department's Annual Report and Accounts document reveals the extent of the problems SSP suffered.
It read: "The programme has endured significant time and cost pressures to complete the original solution under the initial framework design and a combination of complex contractual arrangements and weaknesses in programme governance has resulted in poorer value for money."
Designed for the MoJ, the scheme aimed to deliver savings of £28m a year by 2014, after French firm Steria became one of three outsourcing companies to win the contract for SSP.
But after the MoJ realised it had been duplicated by the Cabinet Office in its Shared Services Connected Limited (SSCL) service, also developed by Steria.
The MoJ will now negotiate with SSCL in an attempt to outsource the shared service starting this autumn.
The report read: "A decision was taken at the MoJ Departmental Board on June 16, 2014, to enter negotiations with Shared Services Connected Limited, the Cabinet Office/Steria joint venture, with a view to outsourcing MoJ Shared Services in the autumn of 2014."
An MoJ spokeswoman said: "This work is central to the Government's ongoing reform programme, which was put in place to create a more accountable and unified Civil Service.
"We are currently in discussions with Shared Services Connected Limited with a view to signing a contract later this year, which will save the taxpayer millions of pounds a year."