• Governor Brown Apparently Pulls Plug on New State IT Project Funding; He’s not just after your cell phone this time.

    August 8th, 2011 by admin Categories: Blogs Tags: , , , , , , , , ,

    A potentially game changing development for the State of California IT community, both government and vendor, was apparently overlooked last week, perhaps due to all the hubbub over TechLeader.TV’s new fall season which opened last week with a Webcast on Identity Management & Social Networking with Lee Mosbrucker, Enterprise Architect, California Technology Agency and Bernard Soriano, CIO, DMV.

    I am referring to Department of Finance Budget Letter BL11-18 innocently entitled 2012-13 Budget Policy. The most pertinent, eye-popping section I have posted below:

    • Existing or Ongoing Information Technology (IT) Projects

    Departments may submit BCPs related to an IT project only if the project is currently underway or has been authorized to proceed. [underscores JTF]

    Based upon my understanding of English prose, tense, and syntax drilled in to me by Sister Clements some years ago, I would say that this new Budget Letter published July 27, 2011 means that no new IT projects will be included in the new, currently being developed FY2012-13 unless currently underway now, or already have an approved (FSR) prior to the aforementioned date. That means as a week ago, there will be no funding of new IT projects, regardless of their importance, ROI, cost savings or revenue enhancement capabilities in reducing the budget deficit. I just don’t believe that the Governor and his advisors thought this one through properly. This is just mindless state IT policy and budgeting direction. Oh, and of course the Department of Finance’s over-planned and over-scheduled (10 years), over-budgeted ($1.8 billion), FI$CAL Project, along with dozens of other struggling projects (see below) which should have been cut back or even abandoned go untouched.

    The Governor’s Office/DOF’s rationale is elucidated in the beginning of the Budget Letter and not surprising involves continued efforts to close the (still) deficit plagued state budget:

    In furtherance of the Administration’s goal to establish a structurally balanced budget, departments’ ability to submit BCPs or ECP policy changes for the 2012-13 Budget will be limited.  These limits will apply regardless of the BCP’s funding source

    Accordingly, departments (including those not under the Governor’s direct authority) should submit BCPs or ECP policy changes for the 2012-13 Budget, only in the following circumstances…

    The Budget Letter then gets in to the specifics as noted above with the bullet – Existing or Ongoing Information Technology (IT) Projects.

    Of significant note as well are the two phrases with my underscores above, both with additional and controversial consequences. The first one follows the same lame logic prevalent under Governor Schwarzenegger’s Administration whereby even federally funded state programs with 100% reimbursement were cut back equally with totally General Fund (state funded) programs.

    The second one clearly indicates that this new IT project proscription also applies to departments outside the Governor’s Executive offices like the Secretary of State or Attorney General’s Office, perhaps setting off a Constitutional spat…

    Regardless, this Budget Letter opens up more questions than it answers. The CIO’s Project Tracking System lists 65 approved IT projects valued at $5.135 billion, which are apparently spared from the Budget Letter’s ax. Ironically, over half with a total budget over $3 billion are missing a Project Update Report (required) or have a status designation of Yellow, which according to the glossary ”Indicates a project that is slipping”. But that’s grist for another story.

    In addition the CIO also published a summary of IT Project Proposals included in the 2011 Statewide IT Capital Plan, interestingly entitled 2011 Conceptually Approved IT Project Proposals which lists another 187 project estimated to begin over the next five years. The “Conceptually Approved” phrase raises another question in terms of the Budget Letter’s language which stipulates that the project must have already “been authorized to proceed”. Well, clear as mud…

    Regardless, the real questions are these:

    What are the new project plans or FSR’s approved for the next fiscal year and which ones are dead in the water?  What specific project plans are/were being developed and would normally be considered for approval under this current FY2012-13 budget development stage, and are now banned from approval/funding after July 27, 2011?

    As I recall when I was State CIO state departments submit some 150 new FSR’s each year worth billions, with approximately 1/2 to 1/3rd being eventually approved, a process that goes well in to the fall. But ending these FSR approval reviews in July may have a very significant impact, possibly eliminating a major portion of new IT spending, or at the very least postponing it for a year. (Note: I believe TechLeader.TV’s more targeted approach to IT related savings is much more effective than this Administration scatter gun approach: $5 billion IT related budget Cuts/Efficiencies – TLTV Action Items: beats State Auditor & LHC to the Punch.

    But regardless, like we said before, Jerry Brown is going after a lot more than just cells phones this time.

    The Budget Letter submitted under the signature of DOF Director Ana J. Matosantos closes thusly:

    If you have any questions about this Budget Letter, please contact your Finance budget analyst.

    I expect the Finance budget analysts’ phones will be busy soon, as this TechLeader.TV post makes the rounds.

    Here’s the final question, the most important one: Does anyone think that any other Fortune 10 sized business, such as the State of California, the seventh largest economy in the world, the Home of Silicon Valley, etc., etc., that they would categorically, unilaterally and blindly eliminate all new technology initiatives regardless of their potential for addressing the bottom line?

    And a BIG BTW:

    Noticeably absent from the DOF missive is any mention of the California Technology Agency (TA). Given the fact that the TA’s deadline for departments to submit FSR’s to their office for approval was July 18th, just over a week before this new July 27th cutoff date, seems to this observer that there has been a significant lack of coordination between the two agencies (and I don’t blame the TA for this).

    It’s a good thing newly appointed State CIO Carlos Ramos is now on board.  Given these recent developments he sure has his work cut out for him…

    Well, as they say, story developing…                                   Posted by John Thomas Flynn

    1. Anonymous says:

      This decision is terribly short sited. My city and another county has been actively working with the State to move to a protected Government Cloud that all cities/counties/agencies who wanted to participate could benefit from sharing common systems. For instance, can there really be that many different payroll rules between cities where we all need our own unique systems that cost billions cumulatively vs. sharing a vanilla one and customizing it if needed? We are on the cusp of positive change and the economy allowed technology to be used differently and in some ways is forcing municipalities to work together to maximize public funds. The State’s move here will take a HUGE step backwards and hold back some revolutionary and much needed change.

    2. Anonymous says:

      It’s a big slap in the face to approval agencies to say to them, “We don’t think you are capable of applying criteria to project proposals to select and approve only those that meet those criteria so we are banning all new proposals.” If they are sure the approval agencies can’t do their job, disband them and save the taxpayer money!

    3. Anonymous says:

      “…Regardless of funding source” means we refuse to let those stinking Federal dollars enter our economy, better to send them back to Washington. Talk about anti-stimulus…

    4. Anonymous says:

      What does this mean for the consolidation effort? Even thought CTA may have approval to move forward, many if not most Agencies do not have funding in place to pay for the extremely high cost of moving to the data center, let alone the reoccurring annual costs. Does that mean those Departments that have not moved over are now prohibited? I think most of them will gladly take that position.

      • admin says:

        Interesting conundrum. Consolidate ostensibly to save money, but cost of consolidation requires money; not just for data center moves.

        I have heard similar complaints from other department CIO’s with significant multi-year investments in their email systems, regarding the expense of now having to move to one of the two new state email options.

        JTF

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