There is a ‘significant risk’ that a £127m Ministry of Justice IT project will fail to be delivered on time and on budget, according to a government watchdog review.

It would be the second postponement for the MoJ’s shared services programme, which is one of eight government projects flagged as high risk in a review of 191 public sector programmes by government oversight body the Majors Project Authority (MPA).

The project was supposed to join the department’s human resources, finance and procurement services in a single system by June 2013. But the deadline was extended to December 2014 after the MoJ identified a number of serious issues.

Last week spending watchdog the National Audit Office revealed said there were still ‘significant risks and issues to be addressed’ the last time the MPA reviewed the project in August.

When asked if the project is on track for the December deadline, an MoJ spokeswoman said: ‘We are still considering options for the future delivery of our back-office functions to ensure they provide the best possible value for taxpayers’ money.’

According to the NAO delays occurred due to the complexity of integrating two ‘very different’ systems; establishing specifications for the new system that satisfied all users; and coordinating the three hardware and software suppliers.

However, the NAO said the problems are still resolvable if addressed promptly.

The MoJ spokeswoman added that the department is working closely with the Cabinet Office and reports progress regularly to the MPA.