Audit Highlights FI$Cal To-Do List, Tightening Timelines

The California State Auditor’s Office has released its annual audit report to the Legislature on the status of the Financial Information System for California (FI$Cal) project.

That project, which began in 2006, is ultimately meant to serve as the single source of budgeting, procurement, cash management and accounting functions for the state.

Now, nearly two decades on, the State Auditor underscored the need for the State Controller’s Office (SCO) to implement its book of record functionality to the system before July 2026 to meet its target.

The book of records includes two main components: the accounting book of record, which contains daily financial balances and activity, and the reporting book of record, which is used for the state’s financial statements. Of the 122 requirements for that migration, SCO has completed 62.

“There is risk that the SCO may not be able to meet the July 1, 2026 target date related to migrating its book of record functionality to FI$Cal,” the audit reads.

Another issue outlined in the audit is the fact that the California State Teachers’ Retirement System (CalSTRS) believes that it is constitutionally exempt from joining the FI$Cal system and may not adopt it.

“To ensure that it resolves the disagreement with CalSTRS regarding CalSTRS’ status, the Department of FI$Cal, in consultation with CDT and CalSTRS, should obtain an independent written legal opinion on whether CalSTRS is constitutionally exempt from using FI$Cal,” the audit reads.

The Department of FI$Cal is mandated by state law to complete six road map activities by July 1, 2032. Those requirements are as follows:

1. “Ensure that the system is technically optimized and secure according to industry best practices.”
2. “Onboard the remaining deferred agencies and be sufficiently staffed to provide ongoing support and assistance to end users.”
3. “Ensure the integrity and security of the state’s financial data.”
4. “Support the transition of the state’s accounting book of record from the SCO’s legacy systems to FI$Cal, including validation work related to the Annual Comprehensive Financial Report.”
5. “Work with partner agencies to identify and implement additional products, interfaces and add-ons to the system to enhance business transactions.”
6. “Continue to enhance, upgrade and manage the system to ensure efficient and relevant alignment with the state’s financial management processes.”

According to the audit, the department has made progress in completing these road map activities and has created a 10-year strategic plan to guide “its successful completion of all 51 projects and the six roadmap activities by July 1, 2032.”

The full audit, as well as migration schedules and other figures, can be found here.