Future Costs Dropped From Report to Legislature on Court IT Project
SAN FRANCISCO (CN) - The council that governs California's courts heard a new set of financial numbers Tuesday for the amount spent so far on an IT project that has generated intense criticism within both the judiciary and the Legislature.
The IT project's champion, Justice Terence Bruiniers, told the governing Judicial Council that the project costs total $521.5 million up through June of 2011. Those are the figures prepared by court administrators for Wednesday's report to the Legislature on the IT project.
A different figure was included in a "fact sheet" distributed to reporters earlier this month by court administrators, saying the IT project, called the Court Case Management System, "took nine years to refine and develop at a cost of $315.5 million."
In turn, figures reported to the Legislature last year put the total cost at $546 million up through June 2011. The difference between that total figure in last year's report to the Legislature and this year's total figure would suggest a few million had been saved. But a tendency of the administrators has to been to push the cost estimates into future years.
This year's report to the Legislature goes a step further and altogether omits future costs.
Regardless of the precise figures, the bulk of the money is coming out of a fund dedicated to the trial courts, a particularly sore point in a time when the trial courts are being starved for funds. The spending on the IT project is also front and center in debate over a bill pending in the Legislature, AB 1208, that would reform the way money is handled by the court administrators.
At Tuesday's council meeting, Judge David Rosenberg from Yolo County asked Bruiniers what this year's $521.5 million total included.
Bruiniers replied, "These are total program and project costs through this current fiscal year. It includes nothing in terms of deployment activities going forward. This is what we have spent from the inception of this program."
An independent accountant who reviewed the numbers said critical dollar figures have been left out.
"This time around, it appears they didn't provide the Legislature with any cost information for future years," said Karen Covel, an independent accountant with Lauer Georgeatos & Covel in San Diego. "They did not tell you what lies ahead."
She said a similar tendency was on display when last year's report to the Legislature was compared to the previous year's report. Costs for the IT project appeared to go down in the near term but then they ballooned enormously in future years. "They are just pushing the costs forward every year," she said.
In a phone interview, Judge Daniel Goldstein from San Diego was surprised that the administrators would report to the Legislature with no estimate of future costs at all. "The number they're not commenting on is what will it cost to deploy?" asked Goldstein incredulously.
"That's where the auditor said it's a $2 billion project," he continued, referring to last year's scathing critique by California's Auditor of the project's management. "And they're not discussing that number. Not including the total cost of the system is dangerous, because costs can get away from you. They should set a ceiling."
"That's where organizations with fiscal prudence start," he added. "What's the total cost and how do we afford it, not this piece by piece, ever-changing cost estimate system. The numbers they give are not consistent and we're asking the Legislature to fully fund our branch. When you don't have consistent, thorough numbers it makes the Legislature skeptical of your funding request."
At Tuesday's meeting of the Judicial Council, Bruiniers said the discussion of future costs is being put off until next month when an accounting firm will present a cost-benefit study for putting the system into 10 more California courts.
The Administrative Office of the Courts has provided a list of 20 of the county courts expected to participate in a survey for that cost benefit analysis, as a result of a public records request by Courthouse News. They include: Alameda, Calaveras, Fresno, Kern, Kings, Los Angeles, Marin, Mendocino, Mono, Orange, Sacramento, San Diego, San Joaquin, San Luis Obispo, Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou and Ventura.
The ten additional courts selected for the new IT system are expected to come from that list.
Court administrators explained their failure to provide future costs estimates by saying they were waiting on Grant-Thorton's analysis of that possible 10-court deployment.
But San Diego accountant Covel was skeptical.
"They make is sound as though they are helpless until Grant Thornton comes up with a suitable deployment and cost alternative," said Covel. "If I recall correctly, the previous Grant Thornton relied very heavily on projected costs and assumptions provided by the AOC."
"Since the AOC is the source of many if not most of the underlying facts and assumptions in Grant Thornton's report," she continued, "it doesn't make sense to me that they would be so clueless about costs and deployment until the report comes out."
In jockeying over the project, the Judicial Council voted last summer to suspend the whole endeavor. Officials from the Administrative Office of the Courts came back at the next council meeting and said they were going ahead with the project. At the time, they gave cost estimates of an additional $265 million for the three-year period from June 2011 through July 2014.
At Tuesday's council meeting, Rosenberg from Yolo County quizzed Bruiniers from the state Court of Appeals on the numbers. Their exchange included references to the different versions of the program, V-2, V-3 and V-4. The last version has yet to be adopted by any court in California.
Rosenberg: With regard to the numbers that you shared, you shared one number in the $300 million dollar range.
Bruiniers: $333.3 million dollars.
Rosenberg: Then you shared another number in the $500 million dollars range.
Bruiniers: $521.5 million dollars that includes all of the ongoing maintenance and operations for V2 and V3.
Rosenberg: So that number, the $521 million number does not include any portion of the 333, correct?
Bruiniers: The 521 includes the 333.
Rosenberg: Okay. That's the first clarification. So it includes that and includes future expenditures.
Bruiniers: No. These are total program and project costs through this current fiscal year. It includes nothing in terms deployment activities going forward. This is what we have spent from the inception of this program.
Rosenberg: I was under the impression that the number was in the $300 million dollar range, but you're saying the number is $521 million.
Bruiniers: $333 million is the development cost, the deployment costs, for V 2 and V 3. The development costs for V 4 and the development costs for the document management system. Those are all of the development and deployment costs so far.
Rosenberg: If I'm spending money for groceries or gas, it's still money out of my pocket. What's the number?
Bruiniers: $521 million dollars is everything spent on CCMS total including the ongoing maintenance and operation.