Illinois’ state comptroller has suspended $27 million in payments for a computer technology initiative launched by Republican Governor Bruce Rauner, according to a letter seen by Reuters, opening a new front in an ongoing feud over finances.
The move by Democratic Comptroller Susana Mendoza targets one of the governor’s priorities and comes as Illinois faces a record $12.3 billion backlog of unpaid bills that has more than tripled in the 21 months the state has gone without a full operating budget.
In a letter to the Rauner administration, Mendoza’s office said halting payments, including $21.6 million owed to consultants working on Rauner’s $250 million technology upgrade, is warranted because of uncertainty over how the program will produce long-term savings for the state.
The letter asked why those consulting firms should be paid before services like senior centers, hospice care and universities.
“The comptroller wants assurances that resources are being allocated toward our most critical needs and not toward discretionary initiatives,” Mendoza’s senior policy adviser, Patrick Corcoran, wrote.
* The Rauner administration sent out a response at 5 this morning…
Following a report from Reuters, Illinois Deputy Governor Trey Childress today called on Comptroller Susana Mendoza to continue payments for critical technology upgrades supported by both political parties that facilitates transparency within government, protects sensitive data, and modernizes Illinois technology to a centralized system that will save taxpayer money.
“It is fiscally irresponsible to continue to operate government using our current financial reporting systems in the State of Illinois,” said Deputy Governor Trey Childress. “If Comptroller Mendoza disrupts this process, she will be putting our state, residents and sensitive data at risk by forcing us to function under the current outdated systems and the state will soon be unable to make necessary updates that operate key services.”
Enterprise Resource Planning (ERP) centralizes Illinois’ financial reporting and human resources functions and is one of the few initiatives in Illinois where both political parties recognize its value and importance. The Quinn and Topinka Administrations launched ERP in Illinois. The State of Illinois currently operates a patchwork of more than 260 individual financial reporting systems, most of which are not connected and are costly to operate. For example, buying something as simple as a paperclip in Illinois takes four different programs, including a manual input between the third and fourth step.
Most private sector organizations and states have already streamlined their financial reporting systems, but Illinois is one of the few states still operating in the technological Stone Age. Seventy percent of the state’s systems operate under an outdated technology platform, with the majority of the programmers reaching or past retirement age. An updated and integrated system will increase transparency, protect sensitive data, and provide more accountability in government.
“Illinois’ current financial systems pose a significant threat to our state and residents,” said Hardik Bhatt, Secretary-designate of the Department of Innovation and Technology. “After two failed attempts to implement ERP in the past 20 years, Illinois is finally making progress in record time. In the past 15 months, we developed the ERP plan, designed a statewide system, and launched it within three agencies, which is an unprecedented timeline compared to other states. We are now on target to implement ERP in 16 additional agencies within the next 10 months, bringing more than 60 percent of the state’s financial data into one system and retiring over 100 older systems.”
As Illinois modernizes and streamlines technology systems, the state’s cyber-security team has been able to identify and fix weaknesses. This has led the state to secure more than 5 billion records of sensitive information. As an integrated and modern platform, ERP will help the state establish state-of-the-art control mechanisms and improve the audit process, which currently does not exist in any of the existing financial reporting systems.
“Continued progress in the ERP program is crucial to allow Illinois to provide important services and improve its ability to provide transparency and required financial reporting requirements,” Deputy Governor Childress added.
* But that’s not the whole story. If you click here and read the comptroller’s original letter to DOIT, she points out that the comptroller’s office has been involved with the ERP program since the Judy Baar Topinka days. However, according to her letter, the governor’s people gave her the option of stopping her participation.
And then she wrote this…
In his proposed FY2018 budget, Governor Rauner requested appropriations of $900 million for your agency, including $94 million in additional ERP spending. Last year, the Governor’s staffers put the total rollout cost at $250 million. We would like a description of the evolution of program cost estimates. As an example, according to information shared with the ERP program oversight group, one consultant has requested an additional $5 million in fees per year through 2020, or an additional $20 million.
As you know, the fund designated to pay ERP consultant fees was placed under cash management in late-December. This determination was made after it was discovered that in the final days of her administration, the prior Comptroller expedited $71 million in accelerated fund transfers from the General Revenue Fund to various special funds including $31 million to the specific fund referenced. We have suspended payments from that fund, including over $27 million to five consulting firms, pending review of the ERP program.
The Comptroller wants assurances that resources are being allocated toward our most critical needs and not toward discretionary initiatives. She would like to see a complete justification of this investment in terms of future cost savings and benefits, and wants to know why these consulting firms appear to be prioritized for payment ahead of critical services like senior centers, hospice care facilities and educational institutions.
Our research on ERP initiatives indicates that these concerns may be warranted as the experience of other governmental entities engaging in similar initiatives faced chronic cost overruns, delays, significant audit findings and failure to meet program goals.
Accordingly, we would like to request from you a comprehensive progress report and update on the ERP program.
We are interested in a number of areas including the following: The breakdown of fees already paid and/or committed to consulting firms involved in the ERP; additional fees owed to consulting firms; program expenses to date; an updated program budget estimate; an itemized list of legacy accounting systems, if any, that have been decommissioned and replaced to date; a schedule for the replacement of additional legacy accounting systems; the number of staff (FTEs) and the name, title and salary of staff assigned to the ERP program; the names of the pilot agencies involved in the ERP and an updated timeline for the addition of other State agencies; and a program timeline including an estimated completion date. Importantly we would also request the most current program cost savings analysis.