The State Worker

California controller ‘gravely concerned’ about state’s $1 billion accounting program

State Controller Betty Yee is “gravely concerned” that problems with the state’s accounting software could undermine California’s credit worthiness, she wrote in a recent letter to legislators.

Efforts to tie a new computer program into the state’s legacy systems have delayed monthly cash reports and are threatening the accuracy of the state’s annual financial report, which is typically published at the end of April, Yee wrote.

If the annual report is inaccurate, it could negatively affect the state’s credit rating, which influences borrowing costs for spending on things like infrastructure projects.

The computer program, called Fi$Cal, has cost the state more than $900 million and has repeatedly been delayed since its 2005 launch. Yee, echoing a January recommendation from the state auditor, said more delays are needed.

“We need to pause and direct resources to making Fi$Cal work as it was intended to work,” she wrote. “Continuing to push ahead by adding features that do not work or bringing more departments into the troubled system will cost taxpayers exponentially more in the long run.”

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Yee addressed the state Senate and Assembly budget committees in her March 18 letter.

Assemblyman Jim Patterson, R-Fresno, a member of the Assembly’s budget committee, said Yee’s letter should add new urgency to the state’s efforts to improve its use of technology.

“It’s amazing to me,” Patterson said. “We are the fifth-largest economy on the planet, we’re almost 20 years into the 21st century, we’re the home of Silicon Valley and we have such a fouled up accounting system that it jeopardizes our credit rating.”

Sen. John Moorlach, R-Costa Mesa, who sits on the Senate budget committee, said the state should consider closer scrutiny of the third-party vendors tasked with implementing most of its new technology.

“It’s just getting to be too much of a common thing, whether it’s Fi$Cal or the DMV or name the department,” Moorlach said.

Yee sent a follow-up letter March 22 clarifying that while she is concerned about the state’s reporting abilities with the new program, she has “no concern about the state’s cash position or overall fiscal health.”

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Wes Venteicher anchors The Bee’s popular State Worker coverage in the newspaper’s Capitol Bureau. He covers taxes, pensions, unions, state spending and California government. A Montana native, he reported on health care and politics in Chicago and Pittsburgh before joining The Bee in 2018.