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Effort to upgrade to California's payroll system failing

August 15, 2013 12:00:00 AM PDT
The 10-year effort to upgrade California's payroll system has been a disaster. After spending $254 million, it doesn't work, and may not be salvageable.

Lawmakers are upset because so many services and programs suffered budget cuts over the last few years.

"It is very painful for me to sit here today and for me to acknowledge that one-quarter of a billion dollars might have been wasted," said Sen. Norma Torres, D-Pomona.

A Senate budget subcommittee is investigating how this could happen. The State Controller's Office, in charge of the project, blames the contractor, SAP, which took over after the first company was fired.

"I think that SAP underestimated the size and complexity of California's payroll with 160 agencies and 21 bargaining units," Jim Lombard with the California State Controller's Office.

SAP did not participate in the hearing, but it has blamed the state for the project's failure. The company has the backing of a Senate investigation, which concluded issues could have been detected earlier but the State Controller's Office withheld evidence from lawmakers.

The Senate Report found quarterly updates to the state that sugar-coated some problems while ignoring others, which compromised Legislative oversight.

"The state isn't blameless when these projects go down," said Carlos Ramos, director of the California Department of Technology. "I think it's safe to say if we were to take on a project like this today, many of the things that were done, the decisions that were taken back then, we would not take today."

Similar technological failures occurred when the court system tried to modernize and the DMV wanted to upgrade the processing of drivers licenses and car registrations.

Lawmakers will take the lessons learned from this hearing and make improvements so that future tech projects don't end up wasting so much time and money.


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