The California State Controller’s Office (SCO) 21st Century Project, also called MyCalPAYS, made headlines recently when a multimillion-dollar software agreement with Pennsylvania-based SAP, the company hired to implement the project, was cancelled.
The Legislative Analyst’s Office (LAO) recommended on Wednesday, March 6, that ongoing problems call for pausing the program entirely for at least a year while state government evaluates its oversight procedures. The non-partisan fiscal and policy agency also questions whether or not integrating the state’s payroll systems is even feasible.
"After the termination of the project’s contract with its primary vendor, the state has spent roughly $260 million on [MyCalPAYS] with few tangible deliverables," the LAO report states.
The LAO recommended the SCO, the California Technology Agency (CTA) and the Department of General Services, which also have some oversight over the program, to assess their own oversight procedures and how to fix these issues. The report also calls for CTA to contract with an independent firm to access SAP’s performance and the potential of simplifying the state’s payroll practices.
SCO issued a notice to SAP on Oct. 15, 2012, citing 13 grievances and prompting SAP to fix problems regarding planning, quality assurance and inadequate scheduling. Ultimately, the contract with SAP was terminated on Feb. 8, 2013.
"The SCO worked with SAP in good faith to go through the errors and ensure that SAP was addressing them," wrote Jim Lombard, SCO’s Chief Administrative Officer, in a Feb. 8 email to SCO employees. "However, eight months of payroll runs have yet to produce one pay cycle without material errors and have instead exposed a system riddled with grave errors."
Lombard also said the SCO is rolling back the first wave of 1,300 employees on MyCalPays to the legacy system that is working reliably to pay the state’s other 240,000 employees.
In a Feb. 8 Los Angeles Times article, SAP spokesman Andy Kendzie said the company was "extremely disappointed" about the contract termination. "SAP stands behind our software and actions," Kendzie said in a statement. "SAP also believes we have satisfied all contractual obligations in this project."