The Financial Information System for California (FI$Cal) is proposing an additional $110 million in project spending during the next three fiscal years, two more years for the project’s design and implementation, and to make the IT project a state department by itself.
The plan is proposed within a Special Project Report (SPR #6) and documents submitted to the Department of Finance. FI$Cal declined comment Thursday afternoon, as SPR #6 is currently being reviewed at the California Department of Technology and could be modified.
FI$Cal is attempting to create a central financial platform for the state, streamlining 2,500 legacy financial systems used across more than 120 departments. Approved in 2005, the system was initially projected to cost $1.6 billion but was revised down to a total cost of $672 million. Adding $110 million in new spending would increase the project to $782 million.
If the project changes are approved in their entirety, one more release would be added in July 2018 to move over all remaining state agencies and departments onto FI$Cal, an ERP and business transformation project overhauling the state’s budgeting, accounting and procurement systems. Knowledge transfer activities would continue for another 12 months thereafter, meaning system integrator Accenture would continue its work though summer 2019 – two years later than originally scheduled.
FI$Cal executives concede there have been “major challenges” for the project, according to a Budget Change Proposal submitted for the 2016-17 fiscal year: “During this time the project has gained a greater understanding of the work required to implement complex Control Agency functions (i.e., statewide procurement, Accounting Book of Record, General Ledger Book of Record, etc.) while addressing the requirements of diverse state entities. As a result, leadership has identified the need to revise the implementation approach for the remainder of the project.”
Besides scheduling concerns, an annual FI$Cal status letter from the State Auditor publicly released on Jan. 7 found the project has been challenged due to “widespread” turnover in its management team in 2015. Miriam Barcellona Ingenito was named the project’s new executive partner last fall. FI$Cal also has a new project director and the project executive retired.
The project could also be reorganized into the “Department of FI$Cal.” FI$Cal executives report via state records that the organization has “gradually transitioned away from the DOF [Department of Finance], becoming its own entity, with increasingly more authority, effectively transitioning to a fully functioning state department.” Enabling legislation would be necessary to create the new department.
FI$Cal also proposes to move away from project “waves” in favor of major “releases.” “As with waves, the project will continue to perform necessary activities to support implementation for each major release. However, with the term ‘releases,’ the project becomes more consistent with other major IT projects, aligning the proven concept of major and minor releases. The advantage over ‘waves’ is that the project can deploy functionality in minor releases as it becomes available.”
FI$Cal has provided detail about how the additional $110 million would be spent over the next three years:
FY 2016-17: $41.6 million increase in project costs and 25 full-time equivalent staff. This would include $34.1 million more for contracts, including $21 million in new costs for Accenture and $10.9 million for additional project contracts.
FY 2017-18: $57.2 million increase and 21 FTE. Accenture would receive an additional $39.7 million and $6.8 million would go toward new project contracts.
FY 2018-19: $7.5 million more would be spent to extend Accenture’s contract to engage in knowledge transfer activities.
Over the next two years, FI$Cal would incur $11.8 million in additional staff costs.
Gov. Jerry Brown’s proposed FY 2016-17 budget would set a $135 million budget for FI$Cal; the governor’s budget plan appears it would fund FI$Cal’s proposal for more spending.
Some parts of FI$Cal already have been rolled out. The projected has implemented accounting, budgeting and procurement functionality for Wave 1 and Wave 2 state agencies and departments. The State Controller’s Office and State Treasurer’s Office are both accounting in FI$Cal. The Governor’s Office processed the 2015-16 budget in FI$Cal using the Hyperion solution, and last month the Department of General Services and FI$Cal launched an online portal for statewide procurement, called Cal eProcure.
Reporting from Government Technology was used in this story.
