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California's IT Department Removed from Bill that Promised Revival

Committee takes action and avoids deciding fate of DOIT's sunset, but rescues key data centers.

SACRAMENTO, Calif. -- The fate of California's Department of Information Technology (DOIT) remained uncertain after a committee hearing Tuesday that had been slated to consider a bill that would have extended the June 30 sunset of the department.

Assemblyman Manolo Diaz's AB 1559 originally contained language that would have given a reprieve to DOIT. But in a last-minute move, Diaz eliminated all references to the department. The final version applied only to the state's three data centers that were scheduled to sunset along with DOIT.

DOIT Under Fire
A spokesperson from Diaz's office cited recent negative findings from the state Legislative Analyst's Office and a critical audit of a controversial enterprise contract with Oracle as reasons for amending the bill.

"Before the Oracle audit, I was willing to support a partial extension of DOIT to December 31, 2003 to improve its overall performance," Diaz said in a press release. "However, its blatant lack of oversight in the Oracle contract proved to me that DOIT cannot do its primary responsibility of protecting taxpayer's money in major IT investments. It is time for the administration to re-evaluate what type of entity should be held accountable for the state's overall IT plan."

Lacking legislation to extend the sunset or to establish a new, reorganized information technology department, the seven-year-old agency created under former Gov. Wilson will close its doors, potentially returning technology management to the state's more than 120 department and agencies or to the Department of Finance, where it was previously housed.

Originally created to handle the challenges of Y2K, DOIT was also focused on developing cross-agency cooperation, leveraging shared information systems and encouraging best practices to save the state money and increase efficiency. The department received several accolades for its work during Y2K but subsequently became controversial and politicized.

State CIO Elias Cortez was the target of negative press and heightened attention, peaking with the signing of a $95 million enterprise license contract with Oracle that has been challenged by some legislators.

As the end of the legislative session nears, options for dealing with California's IT organization become fewer. Although several legislators on the GO committee agreed the state's technology systems needed oversight, no one stepped forward to propose a potential solution to DOIT's imminent sunset.

With the session ending August 31, new legislation would have to be included in a pending bill. According to capitol sources, an executive order is not an option because of financial implications.

A spokesperson for Gov. Davis, would only say that the governor is "looking at options" to handle the current dilemma.

No Rescue in Sight
Although Davis and his e-gov point man, Arun Baheti, have scored some wins with the development of the state's award-winning portal, the governor has had a hands-off policy when it comes to paying attention to DOIT.

While Davis dealt with high-profile issues such as the recent energy crisis, the department's work was challenged by a committee on information technology and grew increasingly controversial. Now, with Davis facing a November bid for re-election, insiders doubt that he'll launch an eleventh hour rescue of DOIT.

Prior to the creation of DOIT, technology management had been the purview of the state's Department of Finance. Because IT functions would have to continue, one member of the committee suggested responsibility should return to Finance.

The state suffered major IT losses -- between $300 and $500 million, according to a DOIT source -- when IT oversight was in the hands of the Department of Finance. The suggestion was not endorsed by other committee members.

According to DOIT, the total cost of IT failures that preceded passage of SB 1 -- the bill that created DOIT --cost the state's taxpayers $500 million, and, since the passage of SB 1 and the establishment of DOIT, no IT failures have occurred.

Since January 2001, DOIT reviewed and approved 112 IT projects worth over $2.2 billion, according to internal documents. At the same time, 18 "ill-conceived or troubled projects" totaling over $138.3 million were disapproved. How oversight and approval of such significant projects will be handled if DOIT discontinues business at the end of June is a question no one appears ready to answer.

If the Legislature approves Diaz's bill as heard by the GO committee the Teale Data Center that handles DMV registration and driver's license databases, Board of Equalization functions and other business activities; the Health and Human Services Data Center; and the Hawkins Data Center that manages law enforcement information will continue operation and no longer have reporting responsibilities to DOIT. Among the three data centers there are approximately 2,600 employees. DOIT employs 68, mostly civil service, personnel.

AB1559 is next headed for the Appropriations committee and then to the Senate floor where -- because it is marked as "urgency" legislation -- a two-thirds vote will be required for passage.

According to a DOIT source, the bill will also have to return to the assembly because of substantive changes made to the original bill. A two-thirds vote will also be required in that house.

Cortez and his key staff members declined invitations to comment on the developments.

Darby Patterson, Editor in Chief