The State Worker

California’s new budget program will take millions more to finish

State Auditor Elaine Howle’s report released Thursday warns that the implementation of the Financial Information System for California could be delayed further when the state’s largest departments start using it.
State Auditor Elaine Howle’s report released Thursday warns that the implementation of the Financial Information System for California could be delayed further when the state’s largest departments start using it. Sacramento Bee file

A massive overhaul of the state’s accounting system launched in 2005 will take another two years and an extra $237 million to finish, according to a report released Thursday by state Auditor Elaine Howle.

That estimate may be optimistic.

The new audit includes warnings that the implementation of the Financial Information System for California – commonly referred to as FI$Cal – could be delayed further when the state’s largest departments start using it.

So far, smaller outfits – from the four-employee California State Summer School for the Arts to the 411-employee Department of Alcoholic Beverage Control – are having trouble meeting reporting deadlines with the new accounting program.

And, the state is behind on the timeline it put forward in its most recent project update early last year.

“If these delays continue and start to compound, the project team may find it necessary to extend the schedule yet another year,” the audit says, potentially driving up its cost by another $100 million.

The project’s main contractor is Palo Alto-based Accenture, a firm that stands to earn $298 million in a seven-year contract to integrate the state’s accounting programs into FI$Cal.

Howle’s audit encouraged state offices to work closely with Accenture to learn the program. Otherwise, the state may have to extend its contract with the company.

State officials first proposed the FI$Cal system almost 12 years ago, aiming to create a comprehensive budget program that would expedite financial and policy decisions. It would do away with a patchwork of outdated accounting programs, replacing them with a standard system.

It’s been hindered by turnover in its staff and a persistently high vacancy rate in its workforce. As of October, more than a fifth of the positions in its authorized staff of 352 employees were open.

Howle’s audit was based on an update FI$Cal released in February. That FI$Cal report included the new timeline and put its projected total cost at $910 million.

In 2014, the state estimated that FI$Cal would cost $673 million. When it was first proposed, state leaders described it as a $1.6 billion project.

The project has had regular scrutiny from the auditor’s office, as well as from key state departments. Project Director Miriam Ingenito said the attention will pay off, helping to create a better program.

“The more rigor and scrutiny brought to FI$Cal, the stronger the project will be. FI$Cal has hit all major milestones so far and is on track to meet those that remain. We’re also working closely with all of our oversight entities to ensure a high quality system,” she said.

It has some significant milestones approaching, including its adoption by the state’s largest departments. If it does not increase its staff for those projects, the audit warns that “the project’s resources will be overwhelmed.”

Adam Ashton: 916-321-1063, @Adam_Ashton

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