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FI$Cal IT project update—Special project report 8

The Legislative Analyst’s Office has just published the following report:

FI$Cal IT Project Update—Special Project Report 8

The Administration Has Been Developing an Integrated Financial Management System for the State Since 2005. For several years, the administration has been engaged in the design, development, and implementation of the Financial Information System for California (FI$Cal) project. This information technology (IT) project will replace the state’s aging and decentralized IT financial systems with a new system—FI$Cal—that integrates the state’s accounting, budgeting, cash management, and procurement processes. Over time, the cost, schedule, and scope of the project have all changed significantly. These changes have been documented in special project reports (SPRs). The FI$Cal project is currently operating under its eighth SPR.

Administration Recently Made Significant Changes to the Project Plan. The most recent revised project plan approved by the administration (SPR 8) delays the project deadline by one year (to July 2020). In addition, it removes some activities and functions from the project’s scope, while at the same time increasing project cost by $150 million. The administration has created a new arbitrary end date for the project, while proposing to continue additional work related to the project after its “completion” date. This muddles the determination of when the project will actually be fully finished. We find the revised project schedule risky and the planned list of remaining activities and functions until project “completion” to fall short. As a consequence, the project—once “completed”—will not deliver what the Legislature expected when it authorized FI$Cal, and the Legislature will receive budget requests in future fiscal years to finish work that was originally within the project scope.

Changes Set Poor Precedent for Future IT Projects and Impede Legislative Oversight. Deeming a project complete as done under SPR 8 is inconsistent with current state IT policy, as it ends the project before all planned functions of the FI$Cal system are implemented. It is also inconsistent with the “agile approach” to IT project development in that it ends the project before fully incorporating user feedback to guide future development of some of its components. Legislative oversight is complicated when project completion and measures of success are defined inconsistently across projects. Legislative oversight is further limited when the administration submits budget requests for IT projects without first approving the latest project plan, as it did with SPR 8 for FI$Cal.

Recommendations. Based on our findings related to SPR 8, we make several recommendations intended to enhance the Legislature’s oversight of FI$Cal and, in some cases, of IT projects more generally. Specifically, we recommend the Legislature: (1) consider adopting statutory language defining project completion and success for the FI$Cal project; (2) consider adopting statutory language that continues current oversight practices into the operations and maintenance (post-completion) phase of the FI$Cal project, should project completion continue to be defined as under SPR 8; and (3) consider as a future practice adopting budget bill language that conditions the release of IT project funding (in the case of FI$Cal and IT projects more generally) on the California Department of Technology’s approval of the latest SPR and 30-day notification being given to the Legislature that includes the total cost and schedule of the project from the project approval document.

This report is available using the following link: https://lao.ca.gov/Publications/Report/4132?utm_source=laowww&utm_medium=email&utm_campaign=4132

This article was released by the Legislative Analyst’s Office.