In 2005, the State of California began a project called the Financial Information System for California (FI$Cal) that was planned as a single replacement for a multitude of existing budget, accounting, cash management and procurement systems. The cost was estimated in 2012 at $617 million with a completion date of July 2016. Today the cost is estimated at over $1 billion and the “end date” is June 2020.

But the problems with FI$Cal are worse than cost overruns and blown deadlines, according to State Auditor Elaine Howle, who recently sent a letter to the governor and legislative leaders raising “urgent concerns.” FI$Cal threatens to endanger the state’s credit rating, Howle said, because many state entities using it are submitting late financial statements, and sometimes only estimated statements, to the State Controller’s Office. This delays the preparation of annual financial statements and risks damaging the state’s credibility among investors.

The problem seems to stem from management issues more than technology.

“Some departments and staff have struggled with learning a new way of doing business,” the director of FI$Cal wrote in April. “FI$Cal is a true accounting system that requires significant user training, as well as expertise in accounting concepts. This is a fundamental shift for many state departments and their employees.”

Related Articles Democrats shouldn’t be so hysterical about the Supreme Court: Gloria Romero

Explaining the confusing Proposition 19 to Californians

New housing goals stir opposition

A trip to the totally fictitious dystopia of California

Gov. Newsom’s bid to drive California to a greener future: Doug McIntyre It would have been a good idea for someone in the governing committee that runs FI$Cal – the State Controller’s Office, the State Treasurer’s Office, the Department of Finance and the Department of General Services – to have considered the challenges of training before committing a billion dollars of the taxpayers’ money to a system state employees can’t figure out.

The true cost of the system is higher than it appears, Howle wrote, because it doesn’t include “significant contract and staffing costs” that state entities incurred in the transition from legacy systems. And the project’s “end date” of June 2020 isn’t the end of the spending, because key features of the system, such as bond and loan accounting tools, will not yet be working.

The State Controller plans to run the old legacy systems side-by-side with FI$Cal until at least 2022, even though this double process is already causing “significant operational inefficiencies.”

FI$Cal was supposed to create accountability and transparency in California’s government spending. Maybe that’s the reason state officials are not rushing to make it work.