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August 16, 2013
Editorial: Payroll snafu is a symptom of larger problem

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(Aug. 16 -- By the Editorial Board)

Controller John Chiang was not as forthcoming as he should have been as the state's decade-old effort to modernize its antiquated payroll system slid into expensive disarray. But the issues surrounding the failed computer system go deeper, as Californians know all too well.

Chiang's office, which oversees the payroll system and issues checks, insists that he kept key legislative staff and the Legislative Analyst's Office apprised of the serious problems facing the project. But a report by the California Senate Office of Oversight and Outcomes on the state's latest IT failure includes the controller's own reports to the Legislature that painted a much rosier picture of the project's progress than was warranted.

The very fact that the Legislature and analyst's office were surprised when Chiang pulled the plug in February on its payroll-modernization effort demonstrates that the controller was not as direct as he needed to be. Beyond that individual failure is a systemic failure. California, a tech giant, has a state government that can't seem to do tech projects.

This latest failure, a new payroll system called MyCalPAYS, was intended to replace a system that is 40 years old and at risk of serious breakdown. Most state computer experts who know how to work on it have retired. A new system is needed to keep track of pay and benefits for 240,000 state workers in 160 departments.

Chiang suspended work on the MyCalPAYS system after a decade of work at a cost of $373 million. He acted months after state court administrators pulled the plug on their information-management system, a $500 million debacle.

Chiang was well aware of the previous IT failures. So were Gov. Jerry Brown and the Legislature. An outside private consultant was hired to monitor the payroll project. Also providing oversight were the California Department of Information Technology, General Services, the Legislative Analyst's Office and the Legislature. Still, MyCalPAYS went off the rails.

The latest Senate oversight report offers clues why. Turnover among officials tasked with directing the project was a problem. The controller's team had at least five project directors and four different project managers. At key points, some of the most important positions were vacant.

Chiang's own stewardship was less than diligent.

SAP, the firm hired to build the state's new payroll system, made headlines when its payroll system for the Los Angeles Unified School District experienced serious problems. Chiang sent a team to Los Angeles to investigate. But Senate investigators were never able to find any record of Chiang's findings.

The Legislative Analyst's Office is again calling for a high-level outside review of what went wrong and what parts of the payroll project can be salvaged. But even that is likely to be delayed because the controller's office and the private vendor have sued each other.

The shortcomings go beyond one agency or individual. The way state government is organized, how it hires, sets pay, manages its workforce, contracts for services and monitors those services all contributed to the latest IT failure, and many others that preceded it.

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