Scathing Audit Blasts $1.9 Billion|Court Computer Project in California

"They reacted with a canned statement trying to defend themselves when it turns out they were horribly wasteful. This is bureaucratic damage control. It is predictable and it's outlined in the audit report how these people do business."

A former federal prosecutor and former presiding judge in Los Angeles, Judge Stephen Czuleger, said he repeatedly warned Vickrey of the reckless manner in which the IT project was being pushed forward, without a business plan and without cost control.

He said Vickrey's reaction was to go around California castigating Czuleger and accusing him of trying to kill the project.

"They did not have business plan or a budget and everything in this audit was exactly what I was saying years ago," said Czuleger.

In her report, Auditor Elaine Howle was sharply critical of the cost estimates from Vickrey's agency.

"Specifically, the four annual reports that the AOC submitted to the Legislature between 2005 and 2009 did not include comprehensive cost estimates for the project, and the 2010 report did not present the costs in an aggregate manner.

"As a result, these annual reports did not inform decision makers about the true cost of the statewide case management project. When asked by the Legislature in August 2010 what the true cost of the project will be upon its completion, AOC officials cited a figure of $1.3 billion," Howle wrote.

But that estimate is inaccurate by a large margin, said the auditor.

"The full cost of the project is likely to reach nearly $1.9 billion," said the audit. "However, this amount does not include costs that superior courts will incur to implement CCMS."

Despite the auditor's statement, the Tuesday press release from the Administrative Office of the Courts entitled "Court Leaders Respond to CCMS Audit," quotes Vickrey extensively justifying the project and continues to repeat the discredited figure. "The total project cost will not exceed $1.3 billion," said the AOC press statement issued about 11 minutes after the audit was released.

In the same press release, the agency took cover behind a statement made last week by the newly enrobed chief justice of California, Tani Cantil-Sakauye. Referring to the computer project criticized by the auditor, the chief justice said, "I cannot think of a better investment in the future of our courts or for that matter our courts here and now."

The chief justice was on the bench hearing oral argument most of the day Tuesday and could not be reached for comment.

In her report, the auditor suggested the administrators had been hiding the ball of cost represented by the computer project for some time.

While they commissioned a study in 2007 to analyze the appropriate cost of the project, Auditor Howle found they continued to pay hundreds of millions to private consultant Deloitte Consulting and even signed a contract amendment that same year committing to pay Deloitte a multi-million, add-on contract.

She concluded that the study was intended to justify the project rather than analyze it.

"The 2007 consultant study appears to have been commissioned to justify actions the AOC and decisions the AOC had already taken regarding the projects scope and magnitude," said the auditor.

The legislator who requested the audit, Lowenthal, said the legislators need to change the rules governing how the administrators report on their activities.

"We need to change the reporting requirements to get a clearer picture of what they do from this point on," she said.

Over the years, administrators have touted the computer system as one that will save money. But the audit concluded otherwise.

"The AOC will need roughly 24 years to recover the investment in the project once CCMS is deployed to all 58 superior courts," said the auditor. "The AOC is unable to demonstrate that the benefits of CCMS outweigh the nearly $1.9 billion cost."

Auditor Howle also criticized the administrators for the lack of any competent cost-benefit analysis.

"The AOC has never conducted a formalized cost benefit analysis of the project," said the auditor. "Without such an analysis, it is unable to demonstrate that the cost of the project, almost $1.9 billion according to its most current estimates, is warranted."

The administrators also failed to control the costs of the project or institute an effective cost oversight system.

They failed to structure the contract with Deloitte Consulting to ensure "sufficient control over the cost and scope of the contract" which later ballooned to include 102 amendments, said auditor Howle.

The system was loaded with defects, according to the audit, that caused individual trial courts to resist implementation.

"Superior courts reported to us that they began to encounter significant difficulties with the civil system after it was deployed, including slow system response times and numerous defects. Altogether, the AOC's records show that, over nine software releases between 2006 and 2010, the development vendor fixed 8,415 civil system defects."

Over 800 defects remain unresolved since January 2011, said the audit.

In a survey of the seven superior courts that have had some exposure to the current version of CCMS, called V-3, the courts courts "revealed that some are skeptical of the AOC's ability to successfully implement the CCMS statewide."

"Both Los Angeles and Sacramento asserted they will not adopt CCMS unless their concerns are resolved," wrote the auditor.

In an email San Diego Judge Runston Maino said, "The present CCMS system as developed by the AOC reminds me of Howard Hughes and his Spruce Goose."

Maino works in a court referred to as an "early adopter" of the system, and one of only four trial courts in the state to have attempted its full implementation.

"The Spruce Goose, as the present CCMS project, was an ego driven project that did not satisfy the needs of its customers," Maino continued.

The Spruce Goose was a fabled effort to build a large plane to transport troops across the Atlantic. At extraordinary public expense, the plane managed to fly a couple hundred yards in Long Beach and was then mothballed.

Maino continued, "In August of 1947 Howard Hughes testified in a Senate hearing and said, `Now, I put the sweat of my life into this thing. I have my reputation all rolled up in it and I have stated many times that if it's a failure I'll probably leave this country and never come back. And I mean it.'

"Our CCMS system works no better than the Spruce Goose," Maino concluded.

In Los Angeles, Judge Czuleger said he had warned Vickrey repeatedly about the lack of controls and Vickrey's reaction was to villify the messenger rather than answer the message.

"In 2006, 07, 08, I was very critical of the AOC because they did not have a business plan or a budget and everything in this audit was exactly what I was saying years ago," said Czuleger. "I was on the oversight committee and I wrote them on multiple occasions saying we should not be entering into another Deloitte contract until we had a business plan."

"They said they'd get one but it wasn't a real business plan," Czuleger added. "I was basically castigated by the AOC and accused of trying to kill CCMS. Bill Vickrey went all over the state and accused me of trying to kill CCMS when all I was trying to do is make sure they had a project that would succeed."

"This audit vindicates the position I took."

Follow @MariaDinzeo

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