Management controls are essential to achieving organizational success. However, the Department does not have fundamental controls in place to ensure proper conduct of business and accountability for resources used. For instance, it lacks basic information needed to manage information technology projects. Furthermore, laws, regulations, and project management standards designed to ensure quality service and proper supervision are often bypassed or ignored.

The Department's efforts to implement sound management controls have been hindered by long-standing organization and planning problems. These problems include: high turnover in top management positions, constant changes in organizational structure, inadequate strategic planning, lack of guidance and direction from advisory committees, and failure to implement audit recommendations. Recently, the Department has made progress toward addressing its management control problems. However, sustained top management attention and commitment will be needed to ensure long-term implementation of management controls.

2. Although the State spends significant resources on information technology, the results of this investment are mixed. Each of the eight systems we reviewed exceeded the amount budgeted for the project. The total development costs budgeted for these systems were $25.4 million. To date, the total spent exceeds $61 million--more than twice the amount budgeted. In addition, the Department has experienced significant delays in completing projects. On average, the systems took twice as long to complete as anticipated, ranging from 3 months to more than 2 years behind schedule. Furthermore, five systems had major functionality problems. These problems include systems that create errors, do not process critical information or provide needed reports, or do not operate at all. Systems that do not perform as needed create additional resource demands on agency budgets and impact the efficiency and quality of services to the public. (page 18)

3. The Department does not have an information system that provides complete, accurate, and timely project information. Its information system could not generate basic information on the status of projects such as budgeted and actual costs and completion dates, without additional programming. After additional programming, the reports we received were missing critical information. About 40% of the work orders in the Department's tracking system were missing information such as costs, hours, and dates. For example, the Department's billed programming costs for the BISON system were more than $200,000; however, staff recorded only $5,550 in the project tracking system. (page 26)

4. The Department does not always bill agencies for the full cost of developing information systems. Therefore, the total cost of some systems is much more than reported. Four of the eight projects we reviewed had unbilled work. The total actual system costs for the four projects was $542,330. Of this amount, the Department did not bill for $151,620 (28%) in programming work. (page 28)

5. The Department has established regulations to help ensure its services meet the needs of state agencies. However, it does not always follow or enforce these regulations. For example, the Department does not require agencies to submit written requests for services, conduct feasibility studies, or require agencies to evaluate completed information systems. (page 30)

6. Department managers do not provide adequate supervision to employees. Management does not ensure: 1) employees have current work performance standards, 2) employees receive performance evaluations, and 3) overtime is monitored and controlled. For instance, during the 1996-1997 biennium, the Department paid over $500,000 in overtime. (page 32)

7. The Department needs to strengthen its strategic planning efforts. Our review indicated the Department's strategic plan lacks clear, quantifiable objectives. In addition, its plan is incomplete since it is missing critical components such as strategies and performance measures. Also, the Department must maintain information to track its progress toward achieving performance objectives. (page 38)

8. Two committees have been created to provide advice and guidance to the Department; however, neither has met as required. For example, the Information Technology Advisory Board has not met since 1994. In addition, the Information Services Policy Committee was created in December 1995 by Executive Order of the Governor, but this committee met only four times and has not met since 1996. Advisory groups are essential to ensuring the Department's policies are consistently applied to all state agencies. In addition, an advisory group can ensure the polices and services of the Department are in the best interests of the State. (page 40)

9. The Department of Information Technology has not implemented or sustained corrective action on many prior audit recommendations. Some recommendations from our 1984 audit have not been implemented. In addition, only 3 of 17 recommendations from our 1988 audit that are applicable to our current audit objective have been fully implemented. (page 42)

10. The Department has made progress toward addressing some of its long-standing management control problems. The Director has recognized many control weaknesses and has taken steps to address them. However, much work remains to be done. (page 43)
 
 

1   Develop procedures necessary to ensure accurate,
     reliable, and complete project information is
     maintained and disclosed in reports.............................         X

2   Establish policies and procedures to control and
     account for unbilled work.............................................       X

3   Bill agencies for complete cost of developing
     systems.......................................................................        X

4   Establish a formal process to document the date
     projects are completed.................................................       X

5   Enforce existing policy requiring written agency
     requests, feasibility studies, and project
     evaluations..................................................................        X

6   Continue steps to address work performance
     standards, performance evaluations, and
     monitoring overtime....................................................        X

7   Document that supervisors review and approve
     the work of staff............................................................     X

8   Promptly fill vacancies for key positions........................      X

9   Strengthen strategic planning efforts to include
     clear performance objectives, specific strategies,
     and relevant performance measures and data...........           X

10 Seek advisory committee input to ensure guidance
     is received on policies and standards, strategic plans,
     and budgets...............................................................        X

TOTALS                                                                               10                           0