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California state Auditor Elaine Howle on Thursday released another warning about a $918 million budget technology program, finding that it’s running up costs in the government departments that are using it and that some organizations are reluctant to adopt it.
The budget program, known as the Financial Information System for California (FI$Cal), has been under development in some way since 2005. It aims to replace a patchwork of hundreds of various accounting programs used by different state departments with a single financial management system.
This time, the auditor reported that 41 of 89 state organizations using FI$Cal did not meet month-end deadlines for financial statements in April.
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That could foreshadow trouble if departments miss important year-end deadlines. Delays would hinder the state’s ability to produce audited financial reports, which could increase the cost of borrowing in the future.
Sixty-four more departments are supposed to begin using FI$Cal this summer.
Twenty-one of them plan to continue using their legacy accounting systems alongside FI$Cal for three months to one year. Some of them are worried about conflicts with how they report to federal agencies that give them funding.
“Six have such significant concerns that they plan to operate only in their legacy systems,” the auditor wrote.
The auditor surveyed 17 state departments that are using FI$Cal and found that seven of them have absorbed expenses for support services since they switched to the new program outside FI$Cal’s reported budget.
The Department of General Services spent more than $6 million, the auditor reported. The Department of Parks and Recreation spent $2.6 million on support services.
“When individual entities bear these costs and they are not included in the project’s budget, it understates the true costs of FI$Cal and diminishes the transparency of the project’s full costs,” the auditor wrote.
FI$Cal and Gov. Jerry Brown’s administration in January published a comprehensive project update that looks ahead to upcoming milestones, such as tying the program into in the State Treasurer’s Office and the State Controller’s Office.
It noted that the program recently has received recognition for excellence by the Center for Digital Government, and it said it had been “successfully onboarding state entities for departmental accounting” over the previous 18 months.
FI$Cal officials were compelled to write the January project update, its seventh, because of a significant delay it encountered last year. The program was not ready for use by the State Controller’s Office, which produces key financial reports. Brown’s 2018-19 budget included funds for the controller to hire 49 employees to work on the program by next year.