The order was released simultaneously with a preliminary report from Clark Kelso, the governor's interim director of DOIT.
Over the past several months, the department has been plagued with controversy over an enterprise licensing agreement with Oracle that critics charged was made without any competitive bidding at huge costs to the state. As a result, four top state officials were forced to resign or were fired.
Kelso, a McGeorge Law school professor who was also tapped to step in to head the state's Department of Insurance when its director was forced out, said he spent several weeks analyzing DOIT's operations. As part of that process, he said he convened a board of stakeholders including state officials, private sector representatives and other state CIO's before presenting the governor with his recommendations.
"I am here to announce that DOIT is done," Kelso said at a press conference in the Capitol.
He said the governor's executive order creates an interim strategy for handling technology in the state, giving agencies the authority to manage their own IT projects, and directing them to report to the Department of Finance within 30 days about their procedures.
Kelso said the current budget, which has not yet been passed by the legislature, contains about $2 million for IT oversight and security.
The order also contains clear language about ethical standards in the procurement of technology, reflecting concerns highlighted in a string of hearings that focused on the power of lobbyists and questionable contributions to the governor's upcoming re-election campaign.
The interim IT structure closely resembles the one established in 1994 under former Gov. Pete Wilson.
Kelso said technology has evolved since then and that the plan is not a return to the past. He added that legislation to create a permanent technology strategy and structure for the state is being developed. That potential legislation may contain some of the recommendations from Kelso's report to the governor.
"It is not ripe for implementation or formal legislative consideration," Kelso said of the report. "It's more important to do it right than quickly."
The hub of Kelso's plan is a Government Technology Oversight Board. The board would be responsible for statewide policies, plans, recommendations, standards and guidelines. Departments would retain the authority to develop separate strategies and plan their own projects. Most of the recommendations contain language about implementing clear ethical guidelines throughout the process.
Kelso originally said that a CIO was not a necessary role but later clarified that position by adding that the board would have a Chief Technology Executive Officer.
"There are things that can be done structurally that mitigate the fact that people are going to make mistakes," he said. "But the real goal is to avoid those mistakes in the first place."
Kelso recommends against the technology officer and board being given cabinet-level stature. The chief responsibility for review and approval of IT projects would return to the Department of Finance under Kelso's plan. The Department of General Services would retain authority over procurement activities, unless the purchase was within department procurement limits.
In all cases, the report advises participants to create competitive opportunities for vendors that offer the lowest prices to the state.
Kelso also announced there will be a change in the way the state's portal, MyCalifornia, is managed. Currently under contact with Deloitte, Kelso said that over the next six months, state employees would be trained to take over portal management saving the state about $300,000 per month.
Kelso also said it was good policy for the state to have ownership of both operations and information.
"If we are going to be having government information and services provided electronically, the state has to have control over that," he said.
Some of Kelso's recommendations conflict with those made by the head of a legislative committee that heard weeks of testimony about DOIT.
Assemblyman Dean Florez called DOIT a "toothless, meaningless agency" that would always remain ineffective unless it was elevated to a higher position in the state and given authority.
Kelso said the idea of "executive sponsorship" was perhaps true "six years ago" but that today's technology issues are operational and "not policy questions that belong at a cabinet level."
