Auditor blasts oversight of IT system

DENVER - The state auditor’s office blasted the Department of Labor and Employment for failing to oversee the development of a new computer system earlier this decade, saying problems that cost Colorado $24 million could have been found and addressed sooner.

The Labor Department contracted with a private firm in 2001 to create a computer system, known as Genesis, which would process unemployment benefits and taxes. After a series of missed deadlines and failed tests, the department canceled the project in December 2005 and received back just $8 million of the $32 million it had paid to Accenture.

It’s the latest in a series of computer-related problems that have beset state government. In the past two years, expensive problems have surfaced concerning computer systems used to manage welfare benefits and driver’s licenses.

Labor Department officials are studying how other states have completed similar projects, and they expect to request bids to restart the project in about 1½ years, said Mike Cullen, the division’s director of unemployment insurance.

State auditors looked at the way the first project was handled to learn lessons for the next time around, said Kevin Sear, information technology audit supervisor.

An audit released Tuesday found that the department did not establish a project-management structure that involved three levels of oversight on the contractor, relying instead on Accenture to oversee and manage its project. The department also did not monitor the contractor in a timely or rigorous fashion, and it did not inquire into Accenture’s knowledge, skills and experience with similar projects when awarding the contract, the audit stated.

The auditor’s office recommended that future contracts for information-technology projects be monitored closely and that the department strengthen its record-checking process for vendors. Labor Department officials agreed to the changes at a Legislative Audit Committee meeting.

“We can’t just continue, I think, to go on with IT projects and never produce anything,” said Rep. Dorothy Butcher, D-Pueblo.

CONTACT THE WRITER: (303) 837-0613 or ed.sealover@gazette.com