BIRMINGHAM, Alabama -- A server that runs Jefferson County's financial software system has crashed and halted financial activity in a number of county departments, officials said Thursday.

Since Tuesday, the hardware problem has slowed or stopped transactions in the finance, treasurer and purchasing departments, preventing vendor payments and deposits and delaying preparation of the fiscal 2011 audit, according to county officials.

The server runs SAP, the accounting software system the county uses to track financial activity.

"The SAP functionality is so diminished that it does not allow us to do the day-to-day financial operations of our county," Commissioner Jimmie Stephens said. "It's the financial backbone of the county. It's the language that we use to communicate with all of our vendors and all of our financial contacts throughout the county. And to have it go mute to where we can't communicate is a tremendous problem."

County Manager Tony Petelos said all of the servers that run the SAP program have outlived their useful life, and of the 16 servers in the Information Technology Department, only one has any life left.

"The rest of them are outdated and they need to be replaced," Petelos said. "When one server crashes it causes the whole system to go down. I've said this over and over again: The county has to reinvest in its infrastructure, and this is only one key example."

Workers were able to restore the server but are looking for a way to load SAP programs and data, Petelos said. "If successful, SAP should be available within 24 hours," he said. "If unsuccessful, a complete rebuild of the system will be required and could take up to five days."

Stephens blamed the problem on staff reductions and decisions to reduce maintenance contracts to save money.

The cash-strapped county laid off hundreds of workers last year to conserve cash until a fix could be found for a shortage of general fund revenue. Wayne Cree, director of information technology, has said his department lost approximately 30 budgeted positions in the past year because of layoffs, retirements, transfers and resignations.

Cree referred questions about the hardware problem to the county manager's office.

Problems mount

Stephens said contracts countywide have been either terminated or reduced to save money, and the toll is mounting.

"You do away with people and you do away with outside maintenance contracts that take care of that proprietary equipment, and you're left with the inability to operate government," Stephens said.

Without access to SAP, Travis Hulsey, interim finance director, and other department heads say they cannot pull budget reports or update financial projections.

Hulsey said his department relies on the SAP system for a variety of services.

"We normally write vendor payments on Thursday nights, so right now we don't have that capability," Hulsey said.

Also, the finance department has delayed work on a fiscal 2011 audit because employees can't make or post journal entries needed for financial reports to the auditors, he said. "It's pretty devastating right now," Hulsey said.

County Treasurer Jennifer Parsons Champion said her office has been unable to "receipt anything for the county. All of the departments bring their deposits to our office. We can't enter that. We're just having to hold on to it until the system comes back up. It's brought everything to a halt."

Michael Matthews, director of the county's purchasing department -- which is responsible for obtaining goods and services for the county -- said his staff can't process orders for entities such as the Emergency Management Agency and the Personnel Board, which are trying to meet grant deadlines and prepare budgets for the upcoming fiscal year.

"It's going to be a strain for us to process those orders really quickly to make sure we are able to meet those deadlines," Matthews said.

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