State budget still produced on system from Perpich era

As Gov. Mark Dayton prepares to unveil his budget this week, the computer system being used to produce it is more than two decades old, a relic destined for retirement three years ago.

But state officials have spent those years trying to get its replacement to work. The new system was supposed to make it easier to produce and analyze the budget and finances.

So far, little has gone right. The project has already cost $2.5 million, may cost millions more and remains far from ready.

Instead, Dayton is relying on a system that has produced Minnesota's budgets since 1988, when former Gov. Rudy Perpich was in office.

That system still works, but "the technology's very outdated, and it hasn't been updated for many, many years," state Budget Director Kristin Dybdal told a legislative panel in January.

The documents produced are among the state's most vital: the state's capital budget, fiscal costs of bills, the base budget for the current and upcoming biennium and the governor's budget proposal.

A new project manager now hopes to have the replacement, known as the Budget Information System (BIS), running by the summer -- of 2012.

The story behind what went wrong with the BIS has frustrated state officials. It's filled with overstated promises, vexing technology and, according to one top official, an inability to persuade legislators that state-of-the-art technology is important in processing millions of bits of information.

Indications of flaws were evident from the start. State officials were at odds with Deloitte Consulting, the Minneapolis firm hired to produce a prototype, over what was to be delivered.

State officials said they were promised a system that was "supposed to be comprehensive," but said that instead "what was delivered is simply a data collection tool, with most of the system programming handled on the back end."

A 2009 report noted that by February of that year, "state staff came to realize that its selected software solution may be undersized for its application."

The report noted that the project team believed the effort to install the new system was "sacrificing quality in the interest of time and cost."

The 2009 report showed that the project was listed officially as "three-quarters done," but one staff person estimated it was no more than a third complete at the time.

Clay Perschall, a spokesman for Deloitte, said recently that the company worked "collaboratively" with state officials and that Deloitte successfully completed what Perschall called a "challenging" project.

At a legislative meeting last month, Rep. Morrie Lanning, R-Moorhead, who chairs the House State Government Finance panel, began by saying that "we have heard that there's some real anxiety about this new system."

Dybdal told the panel that the new system isn't "as user-friendly as we would have liked." State officials say they were confident they could keep the system's ultimate cost under $5 million.

Lanning later said he was frustrated. "I think anybody who's had anything to do with it has to accept some responsibility," he said. "We're certainly not happy about it."

There is no evidence, she said, that having state workers undertake more of the project led to the delays. Despite the report detailing the differences between the state and Deloitte, Weber said state officials were satisfied with the company.

An aggressive timeline

"We were limited [in the] amount of resources we had available," said Weber, who was named project manager in September. "Initially, our timeline was very aggressive."

Tom Hanson, former head of the Minnesota Management and Budget Office, which oversees the project, said problems were evident early. "No way was it going to be ready for the biennial budget two years ago," he recalled.

He said the project never had the funding it needed. "It is very difficult, in good or bad times, to convince legislators or anyone that new technology is needed," said Hanson, former Gov. Tim Pawlenty's top budget official. "I think that's one of the things that happened with this."

Much remains at stake. State officials are waiting to integrate the troubled project with another new system, Statewide Integrated Financial Tools (SWIFT), a $65 million upgrade to the state's 18-year-old accounting and procurement system.

A report last month said that a 150-member project team, a blend of state employees and contractors, is now working on SWIFT and that performance testing is scheduled for May.

For BIS, Lanning said, time is running short. The information produced by BIS, he said, "is absolutely critical as we do budgeting going forward."