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After spending billions, state remains hampered by outmoded, unreliable computer systems

California may be known as the cradle of computer innovation, but several state agencies can’t get their computers to perform essential functions despite hundreds of millions of dollars in cost overruns for repair and upgrade work.


FOR THE RECORD:
Computer woes: An article in Sunday’s Section A about flaws in the state’s computer systems misstated the last name of former state chief information officer John Thomas Flynn as Quinn. —


Although taxpayer money has been flowing to corporate consultants and software overhauls, some computer systems are on the verge of collapse, and some replacement projects are years behind schedule or have been scrapped because they didn’t work.

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The antiquated systems have even been cited by top finance officials as a contributing factor in the difficulty the state has managing its money. A lack of shared databases results in a sluggish information flow that can hamper financial decision-making. Budget officials may have trouble obtaining accurate, up-to-date numbers, and the information lag can hinder purchasing and investment decisions.

“It’s embarrassing,” said Tracy Westen, chief executive of the Center for Governmental Studies in Los Angeles. “If California can’t get it right, who can?”

Among the computer flops:

* The wheezing, 1970s-vintage computer system that prints paychecks for the entire state workforce is held together by software patches and jury-rigged connections and is in danger of failing, according to officials in the state controller’s office. A $130-million overhaul called the 21st Century Project was supposed to have been activated two years ago, but instead state officials have been locked in a lawsuit with the contractor and say it will now cost 39% more.

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The Legislature’s chief budget analyst said the project was a mess. One option: pull the plug and start over -- leaving taxpayers with a $70-million bill and nothing accomplished.

* Similar setbacks have plagued a colossal project intended to enable state budget and accounting databases to interact. The existing, obsolete system forces workers to spend hours manually processing data and doesn’t allow agencies to coordinate their purchasing and contracting, according to H.D. Palmer, a spokesman for the state Finance Department. If a contractor does shoddy work for one agency, there is no automatic warning system to advise other departments against hiring the company.

Called The Financial Information System for California, or FI$Cal, the system is $300 million over budget and three years behind schedule, according to the Legislative Analyst’s Office.

* State officials predicted that a centralized computer system for California’s courts would cost $260 million and be done this year. But they weren’t even close. The expanded project won’t be done until at least 2013, according to court officials, and its cost has ballooned to $1.3 billion.

The problems are part of a long history of technology fumbles by Sacramento, which has spent billions of dollars on projects that have fallen short in performance or cost much more than promised.

In 1994, then-Gov. Pete Wilson pulled the plug on a DMV computer project after the state spent $50 million on a system that never worked.

In 2001, the state awarded a $95-million computer contract for software to link information and services across government agencies to Oracle Corp., without competitive bidding. The state auditor later concluded that Oracle’s service was overpriced and involved a system for which there was little demand from state agencies.

In 2008, a computer system began operating to allow better tracking and collection of child support payments, but it had taken so long to be completed that California had to pay $987.8 million in penalties to the federal government. And after spending $1.5 billion on the project, California still has one of the worst collection rates in the nation: 53.1%, according to the federal government.

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The child support database is part of a plan to spend $6.8 billion overhauling state computer systems. But an Assembly panel is launching an investigation into the entire effort, Assemblyman Hector De La Torre (D-South Gate) told The Times.

De La Torre, who is heading the probe, attributes California’s computer woes to “a lack of sophistication . . . and in some cases consultants taking advantage of that lack of sophistication.”

State bureaucrats repeatedly award work to contractors who promise smooth fixes for low prices but later determine a project to be more complicated and expensive, he said. The 21st Century Project contractor won the work with a bid of $69 million, but doing the project right will probably cost $500 million, according to former state chief information officer John Thomas Quinn.

Red tape and contractors who don’t deliver are both elements of the legal dispute over the 21st Century Project, which is intended to replace payroll and personnel management systems installed in the 1970s and ‘80s.

The payroll system is so old that state employees cannot get electronic statements of their payroll history, and state officials warn that the entire network could collapse, which would be a bookkeeping and legal catastrophe. In addition, the systems use the COBOL software language, developed in the 1950s, in which a dwindling number of state-employed programmers are fluent.

The state chose a contractor, BearingPoint, that it now alleges -- after paying the firm $25.8 million -- botched the job.

“From the inception of the project, BearingPoint misrepresented the complexity and level of effort necessary” to complete the project, state officials said in a letter notifying the firm that it was being fired.

BearingPoint said in an appeal to the Department of General Services that there was plenty of incompetence and foot-dragging on the project -- and it was all on the part of the state.

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State officials “actively frustrated BearingPoint’s performance,” the firm wrote. It charged that State Controller John Chiang’s office failed to meet its obligation to co-manage the project and took too long to make key decisions. And the company filed a lawsuit seeking $20 million from taxpayers for wrongful discharge and breach of contract.

The state Legislative Analyst’s Office suggested in February that officials could scrap the work and start from scratch, noting in a report to lawmakers that the project “has expended about $70 million with few tangible deliverables to show for this.”

But lawmakers decided to try to salvage the work. A new contractor is to be selected early next year. But one state analyst estimated that the improvements envisioned in the 21st Century Project may not be online until 2013.

patrick.mcgreevy @latimes.com


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