In this post, we analyze the Governor’s proposal to provide $6.2 million for the California Student Aid Commission (CSAC) to continue its Grant Delivery System Modernization project. Below, we (1) provide background on the project and the state’s information technology (IT) oversight process, (2) describe the Governor’s proposal to fund the second year of the project, (3) assess that proposal, and (4) make an associated recommendation.
Grant Delivery System Is How CSAC Administers Its Financial Aid Programs. CSAC uses an IT platform known as the Grant Delivery System to process student financial aid applications, make aid offers to students, and manage aid payments. Students, high school staff, and college financial aid administrators also use the system. Most notably, students and high school staff use the system to submit information needed for financial aid applications, and college administrators use the system to process aid payments.
CSAC Is in the Process of Replacing Its Existing System. CSAC is replacing the Grant Delivery System because of concerns regarding its usability and performance. Since the system was developed about 30 years ago, the state has made substantial changes to CSAC’s financial aid programs. Because the system has been unable to fully accommodate these changes, CSAC has needed to adopt numerous manual processes, which have in turn increased staff workload. In addition, the system is experiencing frequent unplanned outages, during which students and high schools cannot submit application information and colleges cannot request payments.
Project Recently Completed State Approval Process. Most state IT projects are required to go through the Project Approval Lifecycle (PAL), a four-stage planning process overseen by the California Department of Technology (CDT). CSAC completed the final stage of PAL in October 2018 and has since started implementing its system modernization project. The initial anticipated completion date for the project was November 2020. CDT is providing independent project oversight during implementation of the project. As part of its oversight, CDT releases monthly reports that assess the project's overall health and provide ratings (green, yellow, or red) in ten focus areas, including time management, cost management, scope management, and resources.
State Has Provided $7.3 Million for Project Through 2018-19. From 2015-16 through 2017-18, the state provided CSAC with a total of $1.8 million for project planning. In 2018-19, the state provided $5.5 million for the first year of project implementation. In addition to these new resources, CSAC has redirected some current staff (the equivalent of ten positions) from working on the current Grant Delivery System to assisting in developing the new system.
Governor Proposes $6.2 Million One Time for Second Year of Project. Of this amount, $5.3 million would go to vendors to develop and test the new system, conduct project management, and provide related staff training. The remaining funds would go toward hardware, initial software licensing, and required services from other state agencies (including CDT for project oversight). CSAC anticipates requesting additional one-time funding in 2020-21 and 2021-22 for any remaining project costs, with a potential future funding request for certain ongoing operational costs.
Project Generally Appears on Track. As of March 2019, CDT reports the project is in good health overall, rating it "green" in all ten focus areas. An earlier monthly report (January 2019) had rated the project “yellow” in the focus area of resources, reflecting delays in hiring certain contractors. Since that time, CSAC’s progress in hiring contractors has resulted in an improved rating. CSAC indicates the delays have had a minor impact on the project schedule, with a new estimated completion date of March 2021. At this time, the project remains within its original scope and budget.
Approve Governor’s Proposal. Because CSAC’s Grant Delivery System project is generally on track, we recommend approving the Governor’s proposal to provide a second year of funding for the project in 2019-20. During the budget year, the Legislature can continue to monitor the project through CDT's monthly oversight reports, summarized on CDT's IT Project Tracking website. We anticipate the Legislature will have another opportunity to provide project oversight when CSAC requests additional funds as part of the 2020-21 budget process.