Payroll meltdown keeps costing California

SACRAMENTO -- California officials are still cleaning up the mess after halting an expensive and troubled overhaul of the payroll system for public employees earlier this year.

Roughly two dozen workers are responsible for sifting through the rubble to determine exactly how many errors were made while the upgrade was tested on 1,300 employees for several months.

The faulty tests led the controller’s office, which was overseeing the upgrade, to fire its contractor, SAP Public Services, in February.

During the testing, some workers were paid too much, others too little. Money was not sent to retirement accounts. Health coverage was inadvertently canceled.

The controller’s office tried to make up for some of the errors during testing, such as cutting extra checks to workers who were underpaid. But other problems haven’t been fixed yet, said spokesman Jacob Roper.

He was unsure how long it would take to get everything straightened out and how much money was in question.

If the problems aren’t fixed, “the state could face litigation from harmed state employees or vendors,” said the nonpartisan Legislative Analyst’s Office in a Monday report.

The two dozen workers untangling the mistakes are slated to cost the state $2.3 million in the next fiscal year, which begins July 1. Gov. Jerry Brown’s proposed budget also includes $1.6 million to pay outside consultants to assist the process.

The overhaul of the state payroll system, known as the 21st Century Project, remains suspended. At least $254 million had been spent on the project, and more than $50 million had gone to SAP.

The state hopes to recoup some of that money from the company, possibly through litigation.

This post has been corrected to show the accurate dollar amount for a consulting contract. It is $1.6 million, not $1.6 billion.

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Twitter: @chrismegerian