In a letter to the governor and legislative leaders, California State Auditor Elaine Howle said the Financial Information System for California (Fi$Cal) is not implementing several recommendations that may have serious statewide consequences.
Beginning in 2005, the Fi$Cal system was one of the biggest statewide information technology projects, intended to replace existing budget systems that expanded to combine California’s accounting, budgeting, cash management and procurement operations into one financial management system.
According to the letter, “State Controller records indicate that as of November 2018 there were 90 entities covered by this new policy and 48 of them submitted late financial statements for fiscal year 2017-18 … [and] 20 entities had to submit estimated, rather than actual, financial statements.”
Using estimated financial statements increases the state’s risk of submitting a Comprehensive Annual Financial Report (CAFR) inaccurately that informs stakeholders such as credit agencies of the state’s financial condition. Those estimates and a late submission could “erode stakeholder and investor confidence in the State’s financial condition and potentially affect the State’s borrowing costs,” the letter stated.