$772 Million Over Budget for New Computer System

The University of California’s planned systemwide payroll and human resources system is likely to cost at least $942 million – a huge increase over its original estimate of $170 million – the state auditor reported August 24.

UC President Janet Napolitano’s office predicted that the information technology project, known as UCPath, will cost $504 million ($334 million over the original budget). The office originally estimated that it would complete UCPath by August 2014, but has delayed the implementation date by nearly five years, to June 2019.

“Weaknesses in the Office of the President’s project management contributed to UCPath’s escalating cost and schedule delays,” the auditor reported.

Making matters worse, the auditor stated: “The $753 million in cost savings, primarily from staff reductions, that the Office of the President anticipated would result from UCPath’s implementation, will not materialize.”

Despite the significant departures from the original estimated cost, schedule, and savings, Ms. Napolitano “has not consistently informed” the UC Board of Regents, the auditor added.

In her official response, Ms. Napolitano said that when she became UC president in 2013, the project “was already well underway.” She added: “Significant changes were made to the management of UCPath in 2013, after UC concluded that the IT consulting firm contracted to manage UCPath and oversee the transformation of business processes had failed to perform as expected and to achieve sufficient progress on implementing the project. UC then conducted an exhaustive assessment of the project, instituted better controls, and revamped the deployment approach. As a result, we revised the original business case, cost estimates, and projected timelines. And as we continue to move forward on our implementation, the accuracy of the projections delivered by the reconstituted project team has and will continue to improve.”

(Source: California State Auditor Report 2016-125.2, August 24.)

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