Five years after the state went live with a software system aimed at improving its financial reporting functions, the system has come under fire yet again from the state auditors.
It’s the latest in a string of scathing auditor reports of the state comptroller’s office, which maintains the Core-CT system that has yet to live up to expectations or to its $129 million price tag.
“Our current review found that the Core-CT system still has certain deficiencies in functionality that should not exist considering the $129 million investment in the new accounting system,” the auditors said in the 43-page report released May 7.
The report made 10 recommendations, of which four were made in prior audits.
That’s the bad news, state Auditor Robert Jaekle said.
The good news is that Core-CT is getting progressively better, he said. The state auditors have been tracking Core-CT and its problems since fiscal year 2004. Jaekle said the current report, which looks at fiscal year ended June 30, 2007, is the least critical of them all.
Improvements Noted
The current report shows that several issues from reports past have been rectified; the system has been upgraded to comply with federal reporting deadlines, to improve financial reporting procedures and to control interagency financial transfers.
“This is a really big business operation,” Jaekle said. “As with anything new, you’d expect problems.”
Core-CT replaced 20 separate financial reporting systems throughout the state.
The software was purchased from the software company PeopleSoft, which was then purchased by competitor Oracle.
Critics of the system point to the fact that Core-CT was developed to serve the private sector, not the public sector. The subsequent adaptation it required “left certain necessary functions less effective, and other, unnecessary ones adding to the complexity for system users,” the report said.
John Clark, director of budget and financial analysis for the Office of the State Comptroller, said the customization did present problems. But he believes the system is performing as it should.
“I think it’s just about where we would like it to be,” Clark said.
The auditors, however, found the system continued to be deficient in several areas.
Four-Headed Monster
The state has yet to produce an updated State Accounting Manual to provide effective training for the Core-CT system. And Core-CT is allowing some state agencies to bypass proper procedure for processing purchase orders.
Another problem cited by the auditors is that control of Core-CT is split between four different agencies. That has created what Jaekle calls a “four-headed monster.” Operations, the auditors advised, should be consolidated under the Office of the State Comptroller.
Also, too many of Core-CT’s processes require work to be done manually, which the report said is “a more labor-intensive method.”
Clark agreed with the need for an updated State Accounting Manual. And the state comptroller is on board with making her office mission control for Core-CT operations, he said. However, that reorganization is a budget issue, he noted. And in light of the projected state deficit, it’s likely the issue will have to be revisited next fiscal year.
But as for the claim that too much work must done manually, Clark said the auditors and the comptroller’s office might just have to agree to disagree.
“No system is going to do absolutely everything for you in an automated way,” he said.
Plus, manual processes are cheaper in some instances and also prevent errors, Clark added.
And as for agencies disobeying the proper purchase order procedures, Clark said he is pleased with Core-CT’s abilities.
“If anything, Core has helped us see where that’s occurring,” Clark said.
Misbehaving Agencies
Clark said the comptroller’s office brought Core-CT’s ability to track offending agencies to the auditors’ attention. It was hoping that the auditors would take the Core-CT findings and cite the agencies for misbehaving.
“We found it ironic that it made its way back,” Clark said. “Because we were really going to them seeking their help.”
Jaekle has been told, by sources he would not name, that it “would be a measure of success” when the Core-CT system can do what the old system could. That would suggest the state paid $129 million to have fewer system capabilities than it had years ago. But Clark said that “a lot of functionality has been brought that we didn’t have in the past.”
