RALEIGH, N.C. (AP) — North Carolina state government does a poor job estimating what the actual costs of an information technology project will be and how long it’ll take to complete the job, State Auditor Beth Wood’s office said Monday.
The performance audit, the latest in a series of reports from Wood’s office highlighting shortcomings in how state government builds or manages computer systems, reviewed 84 projects. Their actual costs were $356 million higher, or more than twice as much than the state agencies originally estimated, auditors wrote. The projects also took 389 days longer than initially estimated, or 65 percent longer, according to the analysis.
State government has a state chief information officer who approves or can veto projects sought by other agencies, which in turn contracts with vendors to carry out the projects. But decision-making and project implementation by agencies are “all based on the inaccurate and unreliable cost and time estimates,” the report said.
Wood’s office recommended changes to set more realistic goals and make state officials more accountable to meeting schedules.
There were 128 ongoing projects with a combined $1.7 billion budget as of last month.
“Inaccurate initial estimates and inaccurate data could prevent (the state IT office) from achieving its goals of helping state agencies meet project budgets and schedules,” auditors wrote.
State CIO Chris Estes, hired a few months ago at the start of Gov. Pat McCory’s administration, agreed mostly with the recommendations stemming from the performance audit. The audit’s field work of the Office of Information Technology Services, now led by Estes, was performed during Gov. Beverly Perdue’s administration.
Estes said audit recommendations would be included in a “statewide IT plan” to be completed by Oct. 1. “Successful implementation is dependent on funding,” he wrote in a letter attached to the audit.
According to the audit, project costs increased significantly even after the planning and design phase of those projects were completed — a time when cost estimates “should be reasonably close to final cost.
Costs and completion time for projects reviewed remained higher even if three significant and expensive computer systems were removed — including a mammoth Medicaid billing system that’s supposed to go online this summer. Workers within the Office of Information Technology Services suggested the three may have skewed the analysis because the scope of the projects had changed.
Without the three projects in the analysis, actual project costs were still $100 million above original project cost estimates and took 371 days longer than initially estimated, the audit said.
The audit said Estes’ office should develop written guidance to help state agencies calculate project times and schedules. State agencies also should be required to obtain independent validation of project estimates. The state IT office also lacks a way to determine which state agency IT projects must get Estes’ approval. Other agencies have a role in approving or denying projects, the report said.
A 2012 report from Wood said the replacement for the current Medicaid billing computer system would more than double initial cost estimates. State regulations said thousands of software changes needed to comply with federal and state laws contributed in part to higher costs. The current billing system processes 88 million claims and writes $11 billion in checks annually to cover more than 1.5 million Medicaid enrollees.
