California’s billion-dollar accounting software continues to plague taxpayers

Howle says another late report from Yee could make it harder for the state to borrow in years to come, as credit agencies rely heavily on the sweeping document. A credit impact would be particularly damaging as the government expects deficits in coming years due to the coronavirus pandemic and may need to borrow to balance its budget.

The failure of agencies to produce complete and timely reports could also complicate state efforts to recoup the billions spent fighting the coronavirus.

“Reliable tracking of spending is an issue of growing importance during the Covid-19 pandemic because it allows state agencies to take full advantage of federal relief funding,” Howle told lawmakers.

In a statement to Courthouse News, Yee said if agencies familiarize and become more efficient with Fi$Cal, state finances could be released again in late 2021.

“The Office of the State Comptroller continues to provide sustained oversight of the FI$Cal project and is actively working with the Ministry of Finance and FI$Cal on earlier engagement and training of departments on faster reporting for the full annual financial report,” Yee said. “The departments are significantly ahead of reports for the same period last year, but it is too early to provide an estimate for release.”

In its latest review, the S&P gives California a stable general bond rating of AA-, though it points to the fact that last year’s report was submitted “late.”

Déjà vu

“That’s beyond me,” says Karen Covel, certified public accountant at San Diego-based Lauer Georgatos Covel Devine & Feiles. “Previously, California had never had a problem releasing the reports on time. Then we spend $1 billion on new software and suddenly we can’t publish our reports anymore? »

Covel, who has provided Courthouse News with professional services in the past, said Fi$Cal induces memories of another bloated, delayed and ultimately failed IT project that was supposed to standardize the state’s 58 trial courts. .

Widely trashed by judges as a “fiasco” and a “mess,” the California Judicial Council abandoned the Court Case Management System, developed by Deloitte Consulting, in 2012. Instead of a revolutionary system owned by the State, the $500 million project was tossed aside with individual courts left to implement their own role programs.

With the finish line extended again, Covel wonders if Fi$Cal will suffer the same fate.

“Oh my God, it’s CCMS again,” Covel said of his first reaction to Howle’s audit. “Are they going to turn around and say ‘We can’t do this’.”

Of all the problems facing Democratic leaders in the state, from unemployment fraud and school reopenings to the potential recall of Gov. Gavin Newsom, Fi$Cal is clearly not high on the priority list of the most legislators.

But some, including Assemblyman Rudy Salas, who chairs a committee commissioning Howle’s audits, are promising increased scrutiny.

“Like many Californians, I am frustrated that another department is experiencing delays and costing taxpayers more,” the Bakersfield Democrat said in an email. “We need people working on these projects to focus on solutions, not excuses. I will work closely with the state auditor to hold FI$Cal accountable because Californians are fed up.

The transparency group cries foul

Fi$Cal’s list of critics includes a major transparency watchdog dedicated to the disclosure of government spending.

Adam Andrzejewski, CEO of Open The Books, scoffed at manager Barcellona Ingenito’s assertion about increased transparency. He says California is by far the worst of all states when it comes to disclosing financial information.

After seven years of denying public records and requests for sunshine, the nonprofit sued Comptroller Yee last year in state court.

“It shouldn’t take subpoenas and lawsuits to force open spending on California state checkbooks. Comptroller admits to paying 49 million individual bills last year and has none not divulged a single one,” Andrzejewski told Courthouse News.

While he applauded the state for working to improve the financial disclosure website, Andrzejewski notes that information about major agencies such as the state teachers’ pension system, the of Public Employees and the Department of Corrections and Rehabilitation have been postponed so far.

“We don’t have much confidence when it comes to the comptroller’s office and financial reporting,” he continued.

In response to last month’s audit, a Fi$Cal spokesperson said it was focused on the finish line but was “looking forward to continuing to work with [Howle’s] office as we complete the final phase of this extraordinary project.

In the latest audit, Howle acknowledges that it’s not uncommon for major state projects to run into “unforeseen problems” and applauds Fi$Cal managers for acknowledging and accepting his recommendations. Nevertheless, routine audits will continue.

“Agency difficulties in implementing and using FI$Cal, in addition to ongoing concerns about project scope reductions and significant unreported costs, represent a significant risk to the state,” Howle concluded.

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