The State Worker

$96 million California IT project late, flawed, busting budget

The Sacramento Bee

Another flawed multimillion-dollar state computer project has busted its budget and made work it was supposed to streamline even less efficient, according to a scathing state auditor’s report released Thursday.

Bills for the BrEZe system stand at nearly $37 million, and the Department of Consumer Affairs estimates it will ultimately cost $96 million – more than three times its initial estimate of $28 million in 2009. The department runs 40 state entities that do everything from licensing podiatrists to registering and regulating car repair shops. Only half of the 19 licensing and regulatory boards and commissions that originally planned to implement the system are using BreEZe.

Consumer Affairs’ problems add to the state’s history of troubles with technology, which includes a failed state payroll program and computer glitches that stopped unemployment checks for thousands of Californians two years ago.

In 2013, Consumer Affairs moved boards and commissions for registered nurses, physician assistants, doctors and respiratory care practitioners into BreEZe. Delays ensued. Some nursing school graduates, for example, lost work because the Board of Nursing fell three months behind assigning test dates. Before the online BreEZe system, the old paper process took six weeks or less.

“The BreEZe project has been plagued with performance problems, significant delays, and escalating costs,” State Auditor Elaine Howle stated in a letter introducing the report. “Consumer Affairs failed to adequately plan, staff, and manage the project for developing BreEZe.”

Among the findings in Howle’s report:

▪ BreEZe first-phase testing took 11 months instead of the planned eight weeks.

▪ More than 1,000 defects remained in the system even after testing.

▪ The Department of Technology failed to intervene for more than a year, “despite being aware of significant problems with the project.”

▪ Contracts approved with vendors “did not adequately protect the state” by making it tougher to terminate services.

▪ Of the 10 boards and committees using the system, none were satisfied with BreEZe reports and data accuracy. Three said overall satisfaction with the system was “poor.”

Howle also noted that some BrEZe contracts contained altered terms that put taxpayers at greater risk. If, for example, project contractor Accenture LLP used copyrighted software instead of writing its own code, “Consumer Affairs could be liable to the copyright holder, depending on the facts of the case” because the state altered a contract that transferred the copyright violation risk to the state.

Consumer Affairs officials told auditors that the department agreed to assume more risk to keep Accenture from pulling out of the bidding process.

In a written response to the audit, Consumer Affairs Director Awet Kidane said his department “is committed to implementing the auditor’s recommendations” to fix the problems, which include better oversight, annual project reports to the Legislature and a cost-benefit analysis of keeping the project vs. axing or suspending it.

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043.

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