One of the great mysteries of California politics is why, in a state that boasts of its digital innovation, its government has such a miserable record on using technology.

We’ve seen an endless litany of technology projects that run up enormous costs but fail to deliver promised efficiencies, or in some cases even to function.
It’s one of several knotty, long-standing managerial issues that former Gov. Jerry Brown neglected (think Department of Motor Vehicles) but successor Gavin Newsom has quickly vowed to confront by changing how technology is procured.
Newsom issued his new order as state Auditor Elaine Howle released a new critique of one of the most obvious technology messes, the Financial Information System for California, dubbed FI$Cal.
FI$Cal was launched in 2005 to replace multiple information technology systems that were sometimes incompatible. It was to cost $600 million and take six years to implement, but 14 years later, it’s still a work in progress and the cost, Howle said, has ballooned to $918 million.
“In August,” Howle told Newsom and the Legislature this week, “we reported that many state entities that had implemented FI$Cal before fiscal year 2018–19 struggled to produce on‑time financial statements from within FI$Cal and were dissatisfied with system performance, training and documentation, and technical support. We also reported that some of the 64 entities that were scheduled to begin using FI$Cal in fiscal year 2018–19 could face similar challenges.”

State Bureaucrats Have Ignored Recommendations

“We are concerned,” she added, “that some of our previous recommendations to the FI$Cal project office and the California Department of Technology (CDT) remain unaddressed and that the state is at risk for delayed, and incomplete or inaccurate financial reporting, which may have serious statewide consequences.”
In other words, state bureaucrats have ignored recommendations to fix FI$Cal’s problems.
Howle’s report cites specific deficiencies and reveals, albeit politely, that bureaucrats have been fudging on how much it has been implemented. The reports questions, for example, what the FI$Cal project office “considers implemented to mean.”
“According to the project office, implemented means that the system is ready to use,” the report says. “… Implemented does not mean that those entities have necessarily transitioned from their legacy systems to FI$Cal nor that users within those entities are necessarily fully transacting or conducting the state’s business with FI$Cal.”

Time Will Reveal Whether the New Approach Cures the Disease

Were FI$Cal an isolated example, it would not be so worrisome. But it’s only one of many troubled or failed technology projects.

Traditionally, state agencies design technology systems and then seek bids to develop them. Newsom orders them, instead, to specify what they want new systems to do and then look to others – “state experts, vendors, entrepreneurs, and scientists from a range of industries” – to propose solutions that would “yield more comprehensive and effective results.”
“This new approach to procurement capitalizes upon California’s innovation economy by asking better questions, leading to new and better outcomes for our state’s residents,” Newsom declared.
Only time will reveal whether the new approach cures the disease, but at least Newsom is recognizing and trying to solve it.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.
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