The governor’s budget proposal to extend the state’s FI$Cal project by two years is a “reasonable plan,” that makes it more likely the project will ultimately meet its objectives, according to a report released Thursday by the Legislative Analyst’s Office.
In its 28-page report, the nonpartisan budget analyst said the administration’s delay reflects a commitment to a quality product rather than strictly adhering to milestones that could result in costly rework and disruptions to the state’s financial systems.
“While this strategy ultimately does extend the project’s schedule and increases its cost, we believe this approach is prudent given the negative impacts to the state should functions and departments be brought on line prematurely,” the report stated.
Gov. Jerry Brown’s budget calls for a $237 million increase to implement FI$CaL, known as the Financial Information System for California project. That brings the total cost to $910 million and pushes the final implementation date to July 2019.
The FI$Cal Project is designed to replace the state’s aging and decentralized IT financial systems, with a new system that will integrate state government processes in the areas of budgeting, accounting, cash management, and procurement.
The new system is intended to eliminate more than 2,500 department-specific applications, make information more readily available to the public and the state’s business partners, generally improve tracking of statewide expenditures, and allow greater transparency of the state’s financial data and management, according to the LAO.
Delays rolling out the system in so-called waves have made the previous timelines unrealistic, the LAO found. In addition, the project has continued to experience difficulties recruiting and retaining staff. Last year, six of eight executive positions saw turnover.
The new project plan proposed by the administration moves to a “release implementation approach” that would allow a department to roll out the system at a later date if it isn’t ready.
Of concern to the LAO, however, is an unchanged strategy that leaves a large number of deployments for the last release in July 2018. That’s troubling when the project is already behind schedule, and it signals the likelihood timelines might need to be extended again, the report noted.
The LAO did agree with the administration that a new entity should maintain and operate the FI$Cal system. However, it did not endorse Brown’s proposal to create a new department.
“It is unclear why a new state department is necessary when an infrastructure already exists to maintain and operate the FI$Cal System,” the LAO wrote in its report.
The FI$Cal Service Center, a group of state staff and vendor staff that have maintained and operated FI$Cal since 2013, could continue its role with lower administrative costs. Or, the financial system could be overseen by one of the four agencies now overseeing its deployment, the LAO suggested.
