The State Worker

Why California’s IT chief pumped brakes on $309 million state project

Department of Technology Director Carlos Ramos testifies during a 2015 legislative committee hearing.
Department of Technology Director Carlos Ramos testifies during a 2015 legislative committee hearing. The California Channel

One state IT leader says the project is ready to move forward. Another says it isn’t. At stake: hundreds of millions of dollars in taxpayer funds.

Last week Department of Technology Director Carlos Ramos explained in a letter why he believes the Centralized Revenue Opportunity System, or CROS, shouldn’t pick a vendor until it submits a more detailed schedule that explains how it will successfully launch.

“Our interest is to minimize the risk of failure of such an important initiative,” Ramos wrote in a July 10 letter to Board of Equalization Chairman Jerome Horton, who has publicly expressed concern about the enormous scope of the project, last month said he wanted Department of Technology officials to speak to the board about CROS.

The board collects a wide variety of state fees and taxes, about $60 billion last year. As a Sacramento Bee report earlier this week noted, CROS Director Eric Steen has publicly criticized Ramos over the detailed planning requirement, which Steen believes will have to be rewritten later once the vendor is selected and some of the finer details get worked out. Plus, he said, a four-month delay will add $2.8 million to the project’s cost.

No one denies that the overhaul is a massive undertaking. Once fully online, CROS will affect “36 different tax and fee programs,” Ramos wrote, so it needs careful planning.

And, Ramos stated, the contract for CROS will be paid from windfall revenue CROS will capture via more accurate collections.

“To secure a return on their investment, the vendor will seek to move as quickly as possible.” Ramos told Horton. “Once a contract is executed, any delays in progress caused by the unavailability of key BOE staff or insufficiency of schedule planning will have an adverse financial impact to the vendor and could expose the state to significant financial consequences.”

Here’s the letter.

  Comments