Department of FI$cal director Miriam Barcellona Ingenito testifies in front of a Senate oversight panel on Thursday, State CIO Amy Tong is at far left. Screen cap: CalChannel

Discussions surrounding California state government's largest and costliest IT project continued Thursday at the state Capitol.

Amid some indications that the state's financial and accounting system modernization project could possibly top $1 billion and face further delays, Department of FI$Cal director Miriam Barcellona Ingenito told lawmakers that the IT system itself is functioning and in production, but she acknowledged that onboarding state departments, not the technology piece, is the project's biggest challenge.

"And at this point I am not before you asking for additional resources or additional time to implement the remaining functionality. But I am here to ask for that continued support and the ability to be flexible to, again, focus on that end game, the outcome of what we are trying to do," Ingenito said during a a lengthy Senate oversight hearing of more than three hours.

FI$Cal is attempting to create a central financial platform for the state, streamlining 2,500 legacy financial systems — mainframes, databases and spreadsheets — used across more than 120 departments. Initially approved in 2005, the system was initially projected to cost $1.6 billion but was revised down to a total cost of $672 million.

Last year California approved a $237 million budget increase for the project, bringing the overall price tag to about $910 million. The additional funding will stretch out the project timeline for two more years to give extra time for knowledge transfer and testing activities, and to enable a staggered rollout for departments.

Ingenito noted Thursday that the amount going to the system integrator, Accenture, "is less than $300 million for this entire project." The majority of the spending increase, therefore, is going toward state staffing, change management, business re-engineering and other functions.

In practice, FI$Cal is forcing about 15,000 state employees to change how they do their jobs, to learn new skill sets, and in some cases to fill gaps and roles. Ingenito said it's been a bigger challenge than what project planners expected upfront.

Nonetheless, California is already doing procurement and budgeting through FI$Cal. And cash management functionality for the project's four control agencies — State Controller's Office, Department of Finance, Department of General Services and the State Treasurer's Office — is scheduled to launch in July 2017.

"We are in general agreement that the project's priority right now is to finish its functionality, is to finish its commitment in terms of the scope of what the project should deliver," said state CIO and Department of Technology Director Amy Tong. And then from there, they'll re-look at how they're onboarding departments "so that it's not so much of a burden," she added.

State Auditor Elaine Howle reiterated her office's concerns that the project's schedule could face further slippage because the departments that have rolled out so far onto FI$Cal are small agencies with small funds. The big departments, such as the Employment Development Department and Franchise Tax Board, are yet to come. Consequently, Howle said, the schedule "is in jeopardy."

"We really do have concerns about [whether] it is reasonable and feasible for the state of California to think this is going to get done by July 2018," Howle said.