State auditor slams Consumer Affairs’ computer project

A failure to ride herd over a major state computer project more than tripled the cost, led to numerous delays and allowed scores of warnings to slip by without being addressed, according to a sharply critical report from the state auditor.

The report by State Auditor Elaine Howle said the project at the state Department of Consumer Affairs, which has jurisdiction over some 40 boards, bureaus and commissions, carried a $29 million price tag in 2009 that ballooned to $96 million by January 2015. In part, the goal of the project was to create a system to better handle licensing and other chores, which hitherto had been fraught with delays.

Nearly 180 significant project concerns were raised, yet officials allowed the project to continue without significant intervention,” according to the audit.

Howle serves as the Legislature’s auditor of state operations and reports to the Joint Legislative Audit Committee. Her audit and summary can be seen here.

According to Howle’s report, the state relied on a “faulty assumption”  when it decided to use a “commercial ‘off-the-shelf’ system” for the project — a move that contributed to an increase in project costs … for half the entities originally planned.”

The auditor’s report also noted that the department lacked sufficient staffing to carry the project, known as breEZe through key phases and that when concerns were raised about the project’s development, they were ignored.

“Between December 2010 and September 2014, the California Department of Technology’s (CalTech) independent oversight raised nearly 180 significant project concerns, yet both CalTech and Consumer Affairs’ officials allowed the project to continue without significant intervention,” according to the audit.

The technology project targeted the core of Consumer Affairs’ regulatory function, which includes processing some 350,000 applications a year for an array of professional licenses and handles some 1.2 million in license renewals. The department’s jurisdiction extends to dozens of occupations, including medicine, automotive repair, accountancy, guide dog training,  court reporting, landscape architecture, optometry, dentistry, barbering — to name just a new.  Each of the occupations is regulated by semi-autonomous boards, bureaus or commissions that are part of the Consumer Affairs Department’s overall authority.

Eight entities more plan to make the move by the spring of next year, and it is “unknown if the remaining 19 regulatory entities will implement BreEZe.”

The audit noted in its summary that the regulators historically “have used multiple computer systems to fulfill their required duties and meet their business needs,” but that led to “excessive turnaround times for licensing and enforcement activities, impeding the ability of the regulatory entities to meet their goals and objectives.”

The processing delays, along with earlier unsuccessful efforts to create a better system, led to the proposed BreEZe project 2009. The state’s Department of Technology approved the plan.

Howle said that through January, only 10 of Consumer Affairs’ 37 regulatory bodies that had been envisioned as ultimately using the system, had actually  transitioned to BreEZe. Eight more plan to make the move by the spring of next year, and it is “unknown if the remaining 19 regulatory entities will implement BreEZe.”

Most of those who are now using the BreEZe system “reported that it has decreased their regulatory entity’s operational efficiency,” she noted.

In response the Consumer Affairs Department noted that it already is putting in place recommendations to address the issues raised by the audit.