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Officials seek multimillion-dollar replacement for accounting system

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Tuesday, Dec. 13, 2011
By Joanne Ingram
Cronkite News

PHOENIX – State officials responsible for paying vendors and public employees are eager to replace an accounting system used for nearly two decades – before it crashes.

The Department of Administration‘s General Accounting Office has managed to keep the system running, even with frequent glitches, but State Comptroller D. Clark Partridge said he doesn’t know how much longer it will hold.

“We’ve done a very good job of avoiding failure,” Partridge said.

But, he added, “When does that string snap?”

The office handles state finances through the Arizona Financial Information System, or AFIS. According to Partridge, in 1992 the department spent $3.2 million on the COBOL, or Common Business-Oriented Language, program developed in 1959 to run the system.

Partridge said cuts to the department, from 87 employees to 50 over the last 10 years, have limited the number of people qualified to run COBOL. Now the department is down to one database analyst and two programmers – one of whom troubleshoots from Oregon – who know how to operate the system.

A replacement system could cost as much as $120 million, according to Partridge.

Facing budget deficits, the Legislature has rejected funding for a replacement system for the past five years.

Sheri Van Horsen, statewide organizer for the Arizona chapter of the American Federation of State, County and Municipal Employees, said she’s seen the system fail on several occasions in recent years, causing concern among employees who rely on it for their automatic check deposits.

“You’ve got families who depend on those pay periods, and they have automatic withdrawals for their house payments or their electric bill or their car insurance,” Van Horsen said in a phone interview. “So if it doesn’t go, and it’s not transferred when it’s supposed to, those employees can incur all kinds of fees and all kinds of problems can ensue.”

Van Horsen said each time electronic payments failed, the Department of Administration had to rush in and provide hand-written checks while repairs were made, something she said was costly to the state and could have been avoided if the system had been updated.

“If you want these systems to function, you have to upgrade them,” Van Horsen said. “That’s the reality of technology.”

Partridge said the system also limits the level of detail his department can contribute to OpenBooks.az.gov, a government website allowing citizens to examine state revenues and expenditures.

Serena Unrein, public interest advocate for the Arizona Public Interest Research Group, said that the outdated system also makes it difficult for state officials to identify potential efficiencies among various agencies. For example, other states have been able to save millions by identifying opportunities to combine contracts for things such as copying.

“I could see where a couple of things like that would very quickly start to make an accounting system pay off,” she said.

Matt Benson, a spokesman for Gov. Jan Brewer, said the governor is aware that the accounting system is antiquated and must be updated soon to avoid failure.

He added that Brewer plans to include funding for it in her proposed fiscal year 2013 budget, which will be released in January, in part because state finances are looking better.

“Some of these much needed projects had to wait,” Benson said.

Partridge just wants to resolve the accounting problems as soon as possible.

“It’s important that we migrate and look to the future,” he said. “You can’t build your future on an environment that cannot be sustained.”