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Costs soar on county agency projects

Overruns and delays hamper efforts to upgrade computers at the Office of Education, which oversees spending by school districts.

January 29, 2007|Jim Newton | Times Staff Writer

A series of mistakes and unrealistic estimates has put the Los Angeles County Office of Education more than $20 million over budget as it attempts to upgrade its computer systems, delaying one aspect of the project so much that it is more than a year late with no end in sight.

"This has been a source of much frustration," said Tom Saenz, a top aide to Mayor Antonio Villaraigosa and a member of the board that oversees the county's educational agency. "This project has gone on much too long."

The costly computer travails are just the latest sign of difficulty at the county's low-profile education office. The office is responsible for the fiscal management of Los Angeles County schools -- overseeing $16 billion a year in spending by various districts in the county -- and has an operating budget of $750 million a year, which it spends on programs that include those serving special-needs children and juvenile offenders.

Because it merely provides special programs and services to area school districts, the office receives little public attention even though its superintendent and board are appointed by the county Board of Supervisors.

So for years the computer woes have largely gone unnoticed. In that time, the problems have deepened and have cost staggering sums of money that otherwise could have gone toward children in need.

According to officials familiar with the computing issues, the county experienced its first troubles as it attempted to adjust its accounting codes to new ones required by the state. That project, launched in 2000, was supposed to cost $18 million but ran into repeated obstacles; by the time it was finished, it was more than two years overdue, and so much money had been spent that the total cost is difficult to calculate with precision.

Today, Ken Shelton, assistant superintendent for business services, says only that it "just about doubled" and concedes that the total tab may have approached $40 million. Still, he and others say the new system works well.

As that project was wrapping up, the office launched a second computer undertaking, this one to shift its payroll onto a new system.

That project was budgeted for $3.5 million and scheduled for completion in July 2005. It is still not finished and is well over budget as costs continue to climb.

In the fall, the education board was warned that the project was $728,000 over budget, according to minutes from its Oct. 17 meeting. In an interview, Shelton conceded that the amount has grown since and that the estimated cost exceeds $6 million.

The office, Shelton said, "has had some good success stories." That said, he adds ruefully: "This has been less than that."

The reasons for the delays and cost overruns are complicated and in some cases still being figured out.

In the first phase of the computer upgrade, the state's accounting code change required county offices and school districts to conform.

At first, the county office surveyed local districts to see whether their approaches could be adapted, but none approximated the size and complexity of the Downey-based agency's system, Shelton said. As a result, the county decided to contract out the job and ended up buying new hardware and software.

Once underway, the dual mission of installing hardware while upgrading software swamped the original cost estimates. The state gave districts about $5 million to help the county defray its costs, but that did not begin to cover the eventual expense, Shelton said.

The second upgrade, which involves payroll systems, is far less complicated, but it too has hit many snags. The county office is responsible for issuing checks to about 175,000 school employees in Los Angeles County.

Education officials are mindful that they may not allow their project to interfere with those checks; so far no employee has missed a payment during the upgrade.

But the county has become embroiled in complicated negotiations with the vendor it hired to manage the project.

Shelton said he hoped to conclude those negotiations within a few weeks and to have a firmer sense then of why the project has been delayed for so long and is so far over budget.

"Our board has raised some real concerns on this one," Shelton said.

Given the embarrassing spectacle of misgauging not one but two computer projects, county government officials are unwilling to go to bat for the district and its board. Zev Yaroslavsky, the normally accessible chairman of the Board of Supervisors, declined a request for an interview about the problems.

And Darline Robles, the county school superintendent, would only agree to release a written statement, not to field questions from a reporter.

In that statement, she said that the extra money spent on the projects was taken from within the district's business budget, not from classroom expenditures. And she compared the first project to remodeling a home, "where changes and requirements make the work grow beyond original projections but the end results are worthwhile."

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jim.newton@latimes.com

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