Florida School District’s Tech Project Costs Explode

Manatee County’s ERP system is already $10 million over budget and one year behind schedule.

by Giuseppe Sabella, The Bradenton Herald / August 21, 2018
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(TNS) — The School District of Manatee County is likely to spend more time and money on a software project that was already $10 million over budget and a year behind schedule.

Its new system for business management, known as enterprise resource planning software, started to go live on July 1 — the same day Cynthia Saunders started as superintendent. She was immediately contacted by district employees who wanted another $2 million for the ERP project, said Scott Hopes, the school board chair.

“Her intuition served her well, that there is something awry,” Hopes said.

He spoke at a press conference on Monday evening, alongside the superintendent and board member John Colon. They addressed a new report that was commissioned by Saunders and received on Sunday night.

“At the same time, I want to emphasize this has not had any negative impact on students or the job of our instructional staff,” Saunders said in a prepared statement before the news conference.

“However, the processes required for hiring people, securing contracts, paying bills and other basic functions on the business side of the district are being disrupted,” she continued.

George Kosmac, a retired deputy superintendent of operations for Seminole County Public Schools, started his assessment of the project on Aug. 10.

“Existing identified problems will need to be fixed promptly,” he said. “However, it is likely that new problems will continue to surface as time progresses and these problems will need to be addressed.”

At least $107,000 was spent without the school board’s approval, and the district owes $1.36 million in unpaid invoices, according to the report.

The project started under former Superintendent Diana Greene and former Deputy Superintendent Don Hall.

“I think the district did feel — the superintendent as well as the board and many others — that we did have a lot of safeguards in place,” Saunders said at the press conference. “Unfortunately, as discovered, sometimes things do occur.”

Deputy Superintendent Ron Ciranna is on paid administrative leave while the district investigates “payments and scope of work related to the ERP process that may not have gone through proper authorization.”

Though he would not comment on ongoing investigations, Hopes said the Florida Department of Law Enforcement is meeting with district officials on Wednesday.

And state auditors are expected to launch their own review of the project.

The project’s estimated budget spiked from about $10 million in March 2016 to at least $19.3 million by October 2017. The amount is likely $20 million or higher now, but Saunders did not have an updated number on Monday.

Basic operations, such as payroll or vacation requests, were previously done on paper. The new system was meant to modernize a process that went unchanged for nearly 20 years, but it seems the current program has done little to improve the lives of district employees.

Its payroll feature still requires employees to work on “many hours of manual data entry” when logging certain information, according to the report. And more training is needed before district staff can fully grasp how to use the software.

“Some employees are continuing to have difficulty using the system even with repeated instruction,” the report states.

Despite years of work and the “enormous expenditure of District funds,” the project is still a work in progress, according to Kosmac’s report.

Only 50 percent of “businesses processes” were developed, according to the report, which called the existing processes “insufficient and useless.”

“Off-cycle payroll runs” are payments made outside of the normal payroll schedule. They are often used for overtime hours or summer work, but off-cycle runs were needed to correct payroll errors for “several hundred employees,” the report said.

The next payroll cycle is Friday, but Saunders said district employees have nothing to fear.

“I can assure you by Friday morning if there are glitches they will be fixed and people will be paid by the end of the day,” she said.

Kosmac’s report said the district had three options to support its employees during the transition. Each requires the continued work of consultants, and the costs range from $270,000 to $1.5 million.

The district was not considering those options as of Monday evening, Saunders said.

Such problems are the result of high turnover, poor communication and a lack of planning, along with issues at Ciber, the project vendor, according to Kosmac’s report.

Saunders called on Ciber to finish its work. Though the company’s contract with the district ends on Friday, she said the agency had a duty to fulfill its obligations.

The same issues were addressed by internal auditors one year ago, which was indirectly cited in this week’s report.

“Note that these problems were identified very early in the project implementation but nevertheless were not significantly addressed throughout the project,” it states.

Hopes said ongoing issues were likely clouded in the “mixed messages” sent by auditors, district employees and department heads. And though the district has internal auditors and a volunteer audit committee, both are primarily focused on money that was already spent.

The newly formed Citizens’ Financial Advisory Committee was meant to review money before it’s expended, Hopes said.

Though the committee is still responsible for oversight of money generated by a voter-approved property tax rate increase, a majority of the school board voted to restrict the group’s broader authority, which previously included “a review of other areas of financial concern.”

The district, Hopes said, would pursue anyone responsible for wrongdoing in the ERP project, whether it be vendors or district employees.

“These are capital dollars,” he said. “These are dollars that could be used to improve science laboratories, dollars that could be used to add new classrooms.”

©2018 The Bradenton Herald (Bradenton, Fla.) Distributed by Tribune Content Agency, LLC.