Cash below estimates, Payroll report raises questions

by Brian Leubitz

The Controller’s office doesn’t typically make a lot of news, but their normal cash updates weren’t the only news today. The July monthly report covering California’s cash balance, receipts and disbursements in July 2013, the first month of the State’s fiscal year was released. Revenues for the month totaled $4.8 billion, coming in below estimates contained in the state budget by 6 percent.

“Reflective of the State’s improving fiscal health, California’s upcoming cash flow borrowing is shaping up to be the smallest in four years,” said Controller John Chiang. “While this month’s numbers disappoint, reaction must be tempered by the fact that July is often the State’s least significant revenue collection month.”

6 Percent isn’t exactly chump change, as it represents hundreds of millions of dollars. However, expect to really get the important data in a few months as more delayed tax returns come in.

But, speaking of hundreds of millions of dollars, the Controller’s office is now facing a bit of heat after the Senate Oversight Committee released a report (PDF) sharply criticizing the office’s handling of the new payroll computer that was supposed to be released years ago.

A $373 million state payroll system, suspended in February amid recurring errors, suffered from a failure to resolve core issues raised early and often, chronic leadership turnover and lapses in due diligence, according to a report by the Senate Office of Oversight and Outcomes.

In addition, the Senate Oversight Office found the system’s sponsor, the State Controller’s Office, was not always candid about the difficulties facing the 21st Century Project, also known as MyCalPAYS. The Controller’s Office delivered upbeat reports to the Legislature and others that often only hinted at the turmoil churning within the project. …

“The expensive misadventure has once again left many wondering why – in a state that has given the world Google, Apple, Facebook and Twitter – California consistently struggles to modernize its own public computer systems,” the report states.

Let’s call a spade a spade, the payroll system has been something of a debacle. The preparation didn’t go well, and once the checks started going out, it was a mess. California, despite being the home of Silicon Valley, has been plagued by data management issues. (See also Cal-Access) Sure, this is a huge system, but clearly we can do better. Nobody expects John Chiang or Debra Bowen to be coding, but we could do better on managing outsourced efforts. SAP, the vendor for this system, is a big name, and we should have expected more from a company like that. However, they clearly owe some big explanation for a lot of wasted time and money.