State Senate President Pro Tem Darrell Steinberg (D-Sacramento) talks… (Rich Pedroncelli / Associated…)
SACRAMENTO -- Fallout from the state's stalled effort to upgrade its payroll system could extend from the Capitol to the courtroom as officials struggle to get the $371-million project back on track.
On Friday, the California controller fired the contractor responsible for the overhaul, saying early tests conducted last summer revealed too many problems.
Senate President Pro Tem Darrell Steinberg (D-Sacramento) called for a hearing to examine what went wrong.
“I am deeply concerned to learn that the overhaul of the state’s government payroll system has suffered yet another setback, perhaps indefinitely," he said in a statement. "Worse, over $250 million of public money has been spent, with apparently little to show for it."
Sen. Bill Emmerson (R-Hemet) said he was glad the controller pulled the plug on the contract instead of "continuing to throw good money after bad."
"However, I have serious concerns regarding the state's continued inability to implement major information technology projects," he said in a statement. "The level of inefficiency is shocking."
The controller's office said it will try to recoup the $50.7 million it paid SAP. However, that could require litigation, and the company defended its performance on Friday.
"SAP stands behind our software and actions," a spokesman, Andy Kendzie, said in a statement. "SAP also believes we have satisfied all contractual obligations in this project."
Kendzie did not directly address the controller's concerns about errors during testing, nor did he say whether the company would fight the state's efforts to recoup payments.
The California Technology Agency, which is responsible for monitoring computer projects, will work with the controller's office to figure out how to proceed with the payroll upgrade. For now, work has been suspended.
Asked how so much money could be spent on a troubled system, a spokeswoman said the agency has raised concerns in the past.
“It’s not as easy as turning on or turning off a switch once you see a problem,” said Christine Lally, assistant secretary for communications.