California Auditor Blasts UC System Over $942 Million IT System

SACRAMENTO, Calif. (CN) – State auditors blasted University of California President Janet Napolitano’s office again on Thursday, with a finding that a university information technology project is years behind schedule and its costs have ballooned to nearly $1 billion.

In the second report of the week and third of the year on the University of California Office of the President, auditors say that by the time a long-awaited payroll IT project is finished, it won’t end up saving the state nearly as much as once thought.

According to the audit, the project lacks oversight and Napolitano’s office has failed to keep regents and lawmakers aware of the mounting setbacks.

“Weaknesses in the Office of the President’s project management contributed to [the project’s] escalating cost and schedule delays,” the audit states.

The project, known as UCPath, was proposed in 2011 with an estimated $306 million price tag and an August 2014 completion date. UCPath is supposed to align the university’s 11 different payroll systems while reducing human resources staff and budgeting.

But according to Tuesday’s audit, UCPath will now cost taxpayers $942 million and won’t be completed until at least June 2019. The project is also unlikely to save the state money in the long run, auditors warn.

“Escalating cost estimates and eliminating a plan to reduce staff have negated all the estimated saving the Office of the President originally expected,” the audit states.

Assemblyman Kevin McCarty, D-Sacramento, who has recently called for sweeping university reforms, applauded the audit’s findings.

“More UC accountability and oversight questions. Escalating costs equals less money for students,” he tweeted Thursday.

The UCPath audit comes two days after a report by state auditors revealed that the university extended expensive service contracts without soliciting bids at two of its campuses. State Auditor Elaine Howle said the UC Office of the President also allowed campuses to replace full-time employees with low-wage contract employees without adequate justification.

In April, auditors accused Napolitano’s office of failing to report $175 million in reserves. In wake of the scathing audit, lawmakers stripped the office of certain financial responsibilities and increased legislative oversight over the university.

The University of California is the state’s third largest employer with 10 campuses, five medical centers and more than 200,000 employees.

Howle recommends that the regents require stricter reporting standards on university projects and that the office should set realistic cost reporting and implementation guidelines by December.

Napolitano says that since she took over in 2013, the UCPath program has been implemented at some campus locations and that overall oversight of the project has improved. She defended the program in a response letter, and maintains the final price will be $504 million, not $942 million as the state auditor estimates.

“I have complete confidence in the university’s ability to continue successful implementation of UCPath, a necessary project with significant, expansive and long-term benefits to the university,” Napolitano said.

Gov. Jerry Brown earmarked $349 million for Napolitano’s office in the 2017-2018 budget bill, of which $52.4 million is dedicated to UCPath.

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