The Legislative Analyst’s Office, which has served as the “eyes and ears” to the Legislature for 75 years, per its website, assesses “topics common to several IT project-related proposals” and offers “options for legislative consideration” in the Budget and Policy Post published Friday. Among the takeaways:
- In total, Newsom’s proposals for IT projects add up to 275 positions and $641 million, the LAO found, with $432 million of that coming from the General Fund. Per the California Department of Technology (CDT) and the California Department of Finance (DOF), no fewer than 40 budget proposals within Newsom’s budget are “related to IT project proposals,” though some may also contain non-IT project-related funding and/or positions. These include the Employment Development Department’s EDDNext Modernization project; the California Department of Corrections and Rehabilitation’s Statewide Correctional Video Surveillance Continuation; the Department of Industrial Relations’ Workers’ Compensation Information System Upgrade; and the Department of General Services’ Procurement Division E-Marketplace Implementation.
- Among these projects, the LAO identifies an “increased use of challenge-based procurements without evaluation,” mentioning by name the State Water Resources Control Board’s Water Rights Modernization Continuation proposal. Some of these procurements, it said, may need state funding up front for proofs of concept, prototypes or demonstrations, adding: “However, we have seen no evaluation performed by the administration of challenge-based procurements to determine whether, for example, additional planning costs for these demonstrations, proofs of concept, and prototypes led to improved project D&I (development and implementation) outcomes.”
- The office points out that larger projects on the order of an enterprise-level modernization can make delivering legislative oversight more challenging. Two such proposals in the governor’s budget — the Department of Health Care Services’ MES Modernization proposal and the EDDNext Modernization proposal — are, LAO said, “enterprise modernization efforts that contain a number of IT projects in different phases” of the Project Approval Lifecycle (PAL) and other metrics. For both these projects, the office said, the Legislature has approved “quarterly reporting requirements” and, for the MES Modernization, CDT initiated “portfolio-level independent project oversight reports to track IT efforts and projects that are part of the larger modernization effort.”
“In both cases, we find these oversight tools to be insufficient to monitor complex and costly modernization efforts with significant programmatic effects,” the office said in the post. “For example, while individual efforts and projects are tracked within the portfolio, what efforts or projects are most critical to the success of the modernization effort and/or pose the most risk if they are not successful often is unclear.” - LAO notes that these IT projects “increasingly use combined agile and traditional D&I approaches with mixed results.” The office said it finds more project management staffers are now familiar with agile, and that more projects are mindful of the realities of annual state budgeting and “continued programmatic responsibilities” that would make this combined approach more valuable. The Department of Social Services’ Child Welfare Services – California Automated Response and Engagement System project shifted to using agile and traditional approaches “because county eligibility workers needed to limit the amount of user testing and training required,” the LAO said. And releasing new functions discretely rather than continuously can enable workers to focus on primary workloads. Still, said the LAO, “we find that new oversight tools from CDT for agile or combined agile and traditional projects are insufficient.” CDT’s annual iterative project report, as introduced, said it “may compromise legislative oversight if the project cost, schedule, and scope change on an annual basis without clear measures of success.”
- The LAO recommends lawmakers “adopt supplemental report language” directing CDT and DOF to lead the evaluation of “challenge-based procurement changes” — at a minimum, “whether additional planning costs requested by state entities for challenge-based procurements have led to improved project D&I outcomes.” The LAO recommends electeds call for such a report by April 1, 2024, to make use of it during FY 2024-25 budgeting. The DOF, the LAO said, could use project planning expenditure reports for proposed IT projects done quarterly as a way to inform its analysis. The office also recommends CDT and DOF work with lawmakers on “oversight of enterprise modernization efforts and projects using an agile approach.” A report could consider, the LAO said, whether “new standardized reports for these efforts and projects” are needed, to the Legislature and to CDT. Such a report could also examine whether changes to the PAL process are needed, and could also be requested in time to inform FY 2024-25 budgeting.
