SACRAMENTO, Calif. (CN) — In the land of botched bullet trains, scrapped underwater tunnels and failed court docketing systems, another billion-dollar California public works project is causing more problems than solutions.
Billed as a money-saving update to outdated accounting systems, a software project decades in the making that most Californians have never heard of continues to steamroll deadlines and soar past budget targets.
Though the accounting software known as Fi$Cal is now in wide use at California state agencies, watchdogs are warning its well documented, lengthy list of past and current troubles could end up stymying the state’s financial recovery as it trudges through the pandemic-induced recession.
The massive IT project
The $1 billion project goes back nearly 15 years, outlasting multiple governors and several legislative sessions. Despite a handful of missed completion dates, project costs that have ballooned by more than $200 million and troubles implementing the software at the myriad state agencies, Fi$Cal has flown relatively under the radar.
Developers began working on the Financial Information System for California, dubbed FI$Cal, in 2007, with the goal of streamlining accounting and procurement processes for the state’s 152 departments. Project managers have coined Fi$Cal as “one of the largest and most dynamic IT undertakings” in state history.
Fi$Cal has been launched in phases over the last several years and the state says it has helped eliminate hundreds of old legacy systems and finally brought agencies under one accounting umbrella. The new program is being used by the State Treasurer’s Office to track the state’s over $2 trillion annual banking transactions while both the governor and Legislature utilize it during budget negotiations.
“It’s a big job to support the financial management of California, which serves 40 million residents and boasts the fifth-largest economy in the world,” Fi$Cal director Miriam Barcellona Ingenito noted in a recent project update. “The Fi$Cal system modernized how the state of California manages its finances.”
Outside of bureaucratic uses, Barcellona Ingenito boasts Fi$Cal has “opened California’s books” and allowed taxpayers to peruse how their money is being spent. An accompanying October 2020 status report to the Legislature paints a similar rosy picture, stating the Fi$Cal launch was becoming so efficient it came $25 million under its 2019-2020 expenditures budget.
Project managers are now telling the Legislature the final target completion date is June 2022.
Auditor zeroes in on Fi$Cal
The project has largely dodged scrutiny or intense oversight from California’s leaders, but it hasn’t been able to escape State Auditor Elaine Howle.
A perpetual thorn in the side of Fi$Cal’s project managers, Howle has audited the project over a dozen different times. In her latest update, Howle uncovered the usual budget concerns but this time she warns the wayward project could harm the state’s credit rating and ability to recover money spent fighting the pandemic from the federal government.
“Financial reporting delays may ultimately prove costly for the state,” Howle said in her latest Fi$Cal investigation. “We remain concerned about agencies’ late reporting in the future, given that late reports increased over the last two reporting cycles and the project office has acknowledged that some large agencies are still experiencing delays.”
As for the latest Fi$Cal update, Howle says lawmakers shouldn’t be fooled by the self back-patting as there are still plenty of flashing alarms.
In a bit of shifty accounting, the auditor counters that Fi$Cal managers are obscuring the real project cost and have decided to defer features such as automating cash transfers for departments. More distressingly, Howle notes 12 major state agencies weren’t able to produce their year-end financial reports on time, causing State Controller Betty Yee to release the state’s comprehensive report late for the second straight year.
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