Judicial Bureaucrats Unveil Positive Analysis of Much Maligned Case Management Project

SAN FRANCISCO (CN) - A new report claims a troubled and massive IT project will eventually save at least $300 million per year, if it is installed in the state's 58 trial courts by 2016 without any hitches. The long-overdue cost-benefit analysis was unveiled Friday and reflects a largely rosy outlook for the Court Case Management System based on a multitude of positive assumptions.

The positive cost-benefit analysis by the English accounting firm Grant Thornton follows a blistering audit by California's state auditor saying the IT project had been mismanaged, that it had no funding source, that the large majority of trial courts did not support it, and that the judicial bureaucrats had not revealed the full cost of the $1.9 billion project to the legislature.

The cost-benefit analysis report was presented on Friday to the judiciary's governing body, the Judicial Council, before many of its members had been able to read through it. The Administrative Office of the Courts, nominally underneath the council, promised through a press release that the report would be posted Thursday afternoon.

But it was not posted until Friday morning shortly before the Judicial Council meeting with the result that very few members of the council had read the report and no critics could prepare for public comments at the same meeting.

Presenting the cost-benefit analysis, Graeme Finley with Grant Thornton said it was unusual that a major court IT project would be conducting a cost-benefit analysis "several years into the development." He said, "Normally, this is something you would do early on."

The dense, 129-page report is filled with a number of scenarios and assumptions.

The most positive combination of assumptions finds that CCMS will eventually save the state roughly $300 million annually, starting in 2016. However, Grant Thornton also estimated that from 2002 to 2014, the AOC will have spent almost $1 billion just for deployment.

Finley said it will cost about $1.5 billion to develop and deploy the latest version of CCMS by July 2011.

"There are a lot of assumptions here," said judicial council member and Los Angeles Superior Court Judge Burt Pines. "I've seen higher numbers than this in terms of costs in the auditor's report."

Courthouse News obtained an independent analysis of the cost-benefit report from CPA Karen Covel with the San Diego firm Lauer, Georgatos & Covel, APC, which provides accounting services for Courthouse News Service.

Covel said the report addresses none of the "serious concerns" raised by state uditor Howle.

"In fact, the scope of the cost-benefit analysis specifically excludes an evaluation of current or prior CCMS work, and does not include an assessment of the AOC's ability to successfully deliver the system," said Covel. "Cost assumptions were based on figures provided by the AOC, and Grant Thornton did not audit these figures."

"Given the State Auditor's report and the AOC's past performance, the CBA report should be taken with a grain of salt." In an interview, Covel added, "If I was a decision-maker and I read the state audit then dug into this, I'd throw it in the trash."

State auditor Howle had written that the project would cost at least $1.9 billion, not including the costs that individual courts would incur trying to implement it. "Thus, the AOC will need roughly 24 years to recover the investment in the

project once CCMS is deployed to all 58 superior courts," Howle wrote.

Howle's office was contacted for comment on Grant Thornton's cost-benefit analysis, but Howle was unavailable.

AOC Finance Director Stephen Nash said the roughly $500 million discrepancy was accounted for in Grant Thornton's decision not to count the costs of two interim versions called V-2 and V-3 of the IT system.

Finley added, "We consider it reasonable to consider V-2 and V-3 separate systems."

To arrive at the numbers presented in the report, the Grant Thornton team electronically surveyed 48 courts, conducted telephone interviews with 28 courts and personally visited courts in Los Angeles, San Diego, Santa Cruz, Solano, Plumas and Ventura counties. The electronic survey was gathered through a common program, called "Survey Monkey," used widely in college projects.

The consultant did not include a copy of the electronic survey in the cost-benefit analysis.

In his presentation, Finley also said the computer project could generate an additional approximately $197 million in revenue by 2021, provided that the AOC and individual courts are able to charge the public $4 for name searches, $7.50 for electronic document requests and $10 for credit card transactions.

Regarding the name search and document request fees, the report said, "Grant Thornton assumed that the AOC will be legally permitted to assess such fees."

The report makes a series of additional assumptions about the project's cost-effectiveness, including that the latest version of the system works, that all 58 courts will be on board with using it, that the system will face no delays in deployment and that AOC staff will be able to handle much of the deployment workload.

But the project still faces a major funding hurdle. The legislature has not established funding for CCMS, and most of the financing for it has come from funds for trial court operations. "We have some major issues here with funding," said Judge Pines. "Whether its $1.3 billion or $1.9 billion, we have to have some confidence that the money will be there."

Judge Charles Horan of Los Angeles Superior Court tried to obtain a copy of the report in order to request to speak during the Judicial Council meeting's public comment period, but was told by Justice Richard Huffman, Executive and Planning Committee chair, that a copy was not available.

In his response to Justice Huffman, Judge Horan said it would be impossible for him to make his request to speak within four days of the meeting, as required by the Judicial Council, if he did not have a copy of the report, as the council requires an extensive summary from public commenters of the topic on which they are requesting to speak.

"How do you expect anyone to write a cogent request to speak on the cost benefit analysis without reading it?" said Horan. "We can't read it since the AOC hasn't released it, we cannot reply to a brief we have not read."

Mark Moore, newly-appointed head of the project's technical end, said the current budget approved by the Judicial Council for developing the latest V-4 version of CCMS is $25.4 million, $5.1 million of which has already been spent. "I can say confidently that we will not go over budget," said Moore.

In August of last year, the deputy director of the Administrative Office of the Courts, Ron Overholt, promised legislators in a public hearing that the entire IT project would not go over $1.3 billion, saying that the figure of $1.3 billion was "an absolute cap" for the IT project.

But last month, the state auditor told the legislature that the AOC would spend at least $1.9 billion on the IT project, well over the promised cap amount.

In Friday's presentation to the Judicial Council, Finley said, "Courts usually start out by digging a hole for themselves. Productivity goes down and there's a backlog. You have to assume it's going to take some time. It could be a full year before any of these benefits start to kick in."

Finley added, "As a general rule, there are always more things that can go wrong."

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Judicial Bureaucrats Unveil Positive Analysis of Much Maligned Case Management Project

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