August 16, 2013

Hearing examines what went wrong with payroll project

BY RACHEL UDA | The Press-Enterprise

A Senate budget panel Thursday examined how a revamp of the state’s payroll system almost a decade in the making came in hundreds of millions of dollars over budget and four years behind schedule.

“We have an obligation to California taxpayers to do this inquiry,” said state Sen. Richard Roth, D-Riverside, the chairman of the Senate Budget and Fiscal Review Committee’s general government subcommittee. “We need to make sure that the next time we field an IT platform (for)…payroll systems that we do it right and we do it right the first time.”

The project was suspended for the second time in February 2013 after the state had already spent $373 million — a quarter billion dollars over-budget. After the payroll program continued to calculate errors in paychecks, the state fired contractors SAP, whose payroll system for the Los Angeles Community College District failed shortly after the state hired the company.

“It is very painful for me to sit here today and acknowledge a quarter billion dollars might have been wasted,” Sen. Norma Torres, D-Pomona, said.

The committee heard from representatives at the State Controller’s Office, the entity in charge of the botched project. A recent Senate report said the controller’s office issued rosy updates on the the project’s progress and failed to property vet SAP, the company hired to do the work. SAP has blamed the controller’s office for the problems.

Roth and Torres warned representatives not to turn Thursday’s hearing into a “witch hunt”.

Still, representatives from the State Controller’s Office continued to point fingers at SAP, claiming, among other things, that the IT company failed to thoroughly test the system before its launch and did not adequately staff the program throughout.

The Senate subcommittee is expected to continue the hearing in the coming weeks.


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