State Probe of CSU Project Urged

Three state lawmakers called Wednesday for an attorney general’s investigation into a possible conflict of interest in connection with a new computer system at California State University.

In addition, faculty and staff union leaders called for a suspension of the nine-year project because of its escalating costs at a time when Cal State’s 23 campuses already face cutbacks due to a state budget crisis.

The reaction came one day after California Auditor Elaine M. Howle issued a report declaring that Cal State’s management software system is expected to cost $662 million, exceeding an official estimate made four years ago by more than $200 million.

Howle’s office also found what it termed an apparent conflict of interest related to a key software purchase involving David J. Ernst, Cal State’s chief information officer and assistant vice chancellor.

Ernst has said he recused himself from any discussions involving the purchase.

Colleen Bentley-Adler, director of public affairs for Cal State, said Wednesday that the university believes it has been “on budget, on time and very upfront about what we’re doing” with the software project.

She said, however, that “we are not making light of the seriousness of the findings” and that the university is in the process of adopting many of the auditors’ recommendations for improvements.

Cal State officials maintained Tuesday that the auditor used unconventional methods to tally costs of the new software system, counting maintenance and operational expenses that normally aren’t included.

Howle, in an interview Wednesday, disagreed, saying those expenses added substantially to the cost of the project and ought to have been figured in to any projections. She said that $42 million of the $200-million discrepancy was due to apparent cost overruns on the software.

“They need to have some kind of systemwide funding plan so that they can track and monitor costs.... They need to make sure they’re monitoring so that [$662 million figure] doesn’t go even higher,” Howle said.

Lawmakers and union leaders said Wednesday that they were stunned by the university’s position that the audit found “no wrongdoing.” Chancellor Charles B. Reed made that remark Tuesday.

“I could not comprehend how the representatives of the CSU system could in any way, shape or form think that the auditor did not raise serious concerns,” said state Sen. Richard Alarcon at a Sacramento news conference.

The San Fernando Valley Democrat, along with Assemblyman Manny Diaz (D-San Jose), who heads a budget committee on information technology and transportation, called for the state audit last year.

Alarcon urged state Atty. Gen. Bill Lockyer to launch an investigation into the conflict-of-interest allegation involving Ernst. He was joined in that appeal by Assemblywoman Rebecca Cohn (D-Saratoga), who heads the Joint Legislative Audit Committee, and Diaz.

Leaders of the California Faculty Assn. and California State Employees Assn. called for a halt of at least one year in the project to determine whether it should be completed. Cal State already has spent $173 million on the work, which is intended to help the university handle personnel, financial and student records more efficiently. It was due to be completed in three to four years.

“Particularly at a time when we’re going to be reducing class offerings with thousands of new students coming into the system, we think the money is better spent in other ways,” said Susan Meisenhelder, president of the California Faculty Assn.

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Times staff writer Virginia Ellis contributed to this report.