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EDITORIALS |
EDITORIAL: CALIFORNIA FISCAL SYSTEM NOT GOOD…


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EDITORIALS |
EDITORIAL: CALIFORNIA FISCAL SYSTEM NOT GOOD ENOUGH FOR GOVERNMENT WORK


FI$CAL PROJECT IS SIX YEARS BEHIND SCHEDULE, WAY OVER BUDGET, WITH QUESTIONS
ABOUT WHETHER IT WILL PERFORM AS PROMISED


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Source: California State Auditor
The integration of California state government’s old financial systems with the
new one has led to the state publishing late financial statements three years in
a row.
By Mercury News & East Bay Times Editorial Boards |
PUBLISHED: January 14, 2022 at 5:30 a.m. | UPDATED: January 14, 2022 at 4:12
p.m.

In 2005, when Arnold Schwarzenegger was in his first term as governor and the
iPhone had yet to be introduced, state officials came up with an idea to develop
an integrated California government computerized budget system.

The following year, the scope was expanded to connect the state’s accounting,
budgeting, cash management and procurement into a single modernized and
transparent system to track hundreds of billions of dollars of spending.

In 2012, the Financial Information System for California, dubbed FI$Cal, was
slated for completion in 2016 at a cost of $620 million. Today, with the cost
exceeding the latest $1 billion estimate, the project remains only partially
done. Deadlines in 2016, 2017, 2019 and 2020 were missed.

And now the project — currently being overseen by a committee representing Gov.
Gavin Newsom, state Controller Betty Yee and state Treasurer Fiona Ma — will
blow through the July 2022 target date with no new deadline set, according to
the latest scathing report on FI$Cal from the California State Auditor’s Office.

Meanwhile, state agencies are struggling to use the parts of the system that are
operational. Once again, the government of the state that’s home to Silicon
Valley has demonstrated its technology ineptitude.

Apple is now selling the iPhone 13. But California government, from the DMV to
high-speed rail to FI$Cal, repeatedly demonstrates its inability to deliver big
projects.



FI$Cal was originally meant to improve the state’s financial controls by
speeding the timeliness of information. But according to the auditor’s report,
released last week, questions about the integrity of the new system have cast
doubts on the reliability of the data. And the integration of the old systems
with the new one has led to the state’s publishing late financial statements
three years in a row.

While that might seem like insider stuff for financial wonks, consider that the
delays could end up costing taxpayers big money. Late financial statements could
endanger receipt of federal funding and weaken California’s high credit rating,
which would increase the state’s borrowing costs.



And then there’s the cost of the system: $1 billion is real money. Taxpayers
should get what they’re paying for.

A big reason for the latest delays, according to the auditor’s report, is the
need for the state Controller’s Office to verify that FI$Cal data is accurate by
comparing it to the numbers in the legacy system. Staffing shortages have led to
a backlog in that process.

While the deadlines keep getting pushed back, the scope of the project has been
narrowed. Or, put another way, what constitutes completion has been redefined.

Key features, such as statewide loan accounting, have been jettisoned or
indefinitely postponed. That means that the state controller must continue using
the legacy system as well as FI$Cal. That’s concerning “given that one of the
original goals of the project was to replace standalone systems with a single,
integrated system,” according to the audit.

So much for efficiency.

Then, as anyone who has undergone a computer system change at work knows, there
comes a time when the vendor leaves and in-house staff must take complete
control. The problem in this case, according to the audit, is that the state has
struggled to hire and retain workers qualified to do those jobs.




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Finally, there are deficiencies in FI$Cal’s safeguards, concerns the auditor
mentioned in past reports and repeated last week. As a result of those
deficiencies, “the state may not be able to rely on the financial reports FI$Cal
generates.”



It’s been nearly 17 years since the inception of this project. And, right now,
it’s not even good enough for government work.





--------------------------------------------------------------------------------

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