The SacBee’s Jon Ortiz reported today that State Controller John Chiang has terminated SAP’s contract to implement the state’s SAP payroll project, jeopardizing the entire $375 million project. After overseeing this project since he took office in his first term in 2007, this marks just over six years that Chiang has had responsibility for this effort. In fact his predecessor, Steve Westly told TechLeader.TV that the payroll project would be up and running in pilot mode in early 2007. Sorry about that.

TechLeader.TV obtained a copy of the Controller’s notification of contract termination.

With state agencies in the news virtually every week since last summer regarding their accounting practices – some sloppy, perhaps some criminal, this news about the state’s failure to successfully design and build an accurate, robust payroll accounting system for some 250,000 state employees is extremely disheartening. More so when you consider it has already spent over $260 million, 70% of their entire project budget. And all they have to show for it are test payroll runs of 1,300 paychecks which contained 400 errors. Well, at least 70% of the test paychecks were correctly produced.

Now perhaps the State Auditor will take renewed interest.

According to Ortiz:

State Controller John Chiang has axed a multimillion-dollar software agreement with Pennsylvania-based SAP after a small roll out of its payroll program failed — and government officials learned of the failures from affected employees.

SAP had taken on an $89.7 million contract to implement FI$Cal [sic] software it developed, but small test runs of about 1,300 paychecks included about 100 types of errors, everything from child-support payment mistakes to outright pay miscalculations. Employees and staff research flagged the problems, said Chiang spokesman Jacob Roper. “It’s frightening,” Roper said.

As is standard procedure, SAP issue a statement expressing disappointment in the Controller’s action, and its contention that all state contractual obligations have been met.

AKA, see you in court.

As TLTV reported exclusively just over one month ago the writing was on the wall for this project: Controller’s Payroll System Living Up to its Tag as “The 22nd Century Project”