7 Reasons Why State Technology Projects Are at “High Risk”

Thursday, March 26, 2015

Reviewing the dismal performance of California state agencies on big technology projects is like shooting fish in a barrel with an AK-47.

Taking aim at the slow-moving targets in a suffocating environment, State Auditor Elaine Howle released a scathing report (pdf) last week on the California Department of Technology (CalTech)—no, not that Caltech—that said its failures put IT projects at “high risk.” By “high risk” she means vulnerability to “fraud, waste, abuse and mismanagement, but also those that have major challenges associated with their economy, efficiency, or effectiveness.”

The auditor also slapped the “high risk” label on the California Department of Public Health on March 3 (pdf) and the Department of Health Care Services on March 5 (pdf).

CalTech currently oversees 45 IT projects conducted by various agencies worth $4 billion. That’s four times as much money as the auditor says the state has wasted on failed projects between 1994 and 2013. Howle said six of the ongoing projects, worth $575 million, have problems that could lead to delays and cost overruns.

The poster-child-for-troubled-IT-projects du jour is BreEZe, and Howle uses the Department of Consumer Affairs’ (DCA) misbegotten new computer system as an example of how things go wrong. The $28-million system—designed to provide a common online interface for the department’s dozens of entities to perform numerous tasks, including “applicant tracking, licensing, renewal, enforcement, monitoring, cashiering, and data management capabilities” —is on track to cost $96 million.

Less than half the 40 boards, bureaus, committees and a commission scheduled to be on the system are hooked up. Eight out of 10 of those that have connected, reported it slowed them down.

In a February report (pdf) on BreEZe, the auditor called out CalTech for noting “180 significant and persistent concerns in monthly reports between December 2010 and September 2014 in areas including project management, staffing, system requirements, and vendor performance” but, nonetheless, “allowed the project to continue without significant intervention” and approved additional funding.

That’s just wrong, and CalTech Director Carlos Ramos agreed with all nine suggestions from the auditor for change and improvement. He said many were already underway.

The auditor’s critique of the agency included these insights:

Who’s the boss?—CalTech gets no respect from the agencies whose projects it oversees because it presents itself as a “service provider whose oversight they do not have to follow rigorously.”

Identity crisis—The independence and objectivity of CalTech’s independent project oversight (IPO) analysts are compromised by the conflict between their roles as advisor and overseer.

No complaints—There are no formal guidelines for when IPO analysts should take their complaints to their CalTech bosses.

No end in sight—There are no formal guidelines for when CalTech management should suspend or terminate a project.

Too shy—CalTech needs to make clear to sponsoring agencies that they must submit status reports with “accurate and appropriate information.”

File this—CalTech needs to document the oversight actions it takes and retain the documents it gets.

Know when to hold ‘em—Employee turnover is way too high and CalTech determines job classifications in a way that “may not ensure that they have adequate experience, as required by CalTech’s own policy.”

–Ken Broder


Too Learn More:

California’s State Technology Department Falling Short (by Jon Ortiz, Sacramento Bee)

Auditor Rakes California's IT Department (by Maria Dinzeo, Courthouse News Service)

Audit Blasts State Agency over Failed IT Projects (by Patrick McGreevy, Los Angeles Times)

Audit Rips Another State Computer Project (by Ken Broder, AllGov California)

High Risk Update—California Department of Technology (California State Auditor) (pdf)

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