The Health and Welfare Agency Data Center (HWDC) provides information technology services, including computer and communications network services, to the various departments and other organizational components of the Health and Welfare Agency. The center also provides services to other state entities and various local jurisdictions. The cost of the center's operation is reimbursed fully by its clients.
The budget proposes $103.3 million for support of the center's operations in 1995-96, which is an increase of $2.6 million, or 2.6 percent, over estimated current- year expenditures.
We withhold recommendation on $20 million proposed for services to the Department of Social Services (DSS) for the Statewide Automated Welfare System (SAWS) project, pending legislative review of the revised costs and benefits of the project and several major issues regarding it.
The budget proposes $20 million and 39 positions for continued support of the SAWS project. These funds are contained in the budget request of the DSS and would be used to reimburse the HWDC for its cost of computer and related services associated with an interim system involving 14 counties.
Background. The SAWS project, estimated to cost in excess of $800 million over 12 years, is the most expensive application of information technology ever undertaken by the state. The purpose of the project is to provide a uniform, computer-based system for administering health and welfare programs in all counties except Los Angeles County, which has statutory authorization to implement its own system. The DSS plan approved by the administration and funded by the Legislature is based on an automated system currently in use by Napa County, known as NAPAS. According to the plan, counties would be phased-in with all counties operational on the new state system by the year 2000. Statewide implementation would follow the completion and assessment of the 14- county interim SAWS pilot project, which is known as ISAWS.
Proposal Should Conform to Action Taken in DSS Budget. In our analysis of the DSS (please see the Health and Social Services section of this Analysis) we discuss several major issues regarding SAWS, including the interim project at the HWDC. In that discussion we withhold recommendation on all funds proposed for the SAWS project, pending a review by the Legislature of several major issues associated with this important project. Accordingly, we withhold recommendation on the $20 million requested to enable the HWDC to continue to provide services for the SAWS project.
We recommend deletion of $6.7 million and 13 positions requested to continue computer-based information kiosk programs because continuation of these programs as currently designed is inconsistent with prior legislative action. (Reduce Item 4130-001-632 by $6.7 million.)
Background. In 1994, the Governor proposed $7 million for the continued implementation of the Info/California and related kiosk projects. These projects are designed to deliver governmental information and services via free- standing computer-based kiosks stationed throughout the state. The Legislature considered the proposal, and determined that the project should be canceled. Accordingly, all funds for Info/California and related kiosk projects were deleted from the HWDC budget in the 1994 Budget Act.
On July 13, 1994, the Director of Finance notified the Legislature of his intention, pursuant to Section 27 of the Budget Act, to fully restore the deleted funds, citing contractual obligations as the basis for the action. On August 2 the Chair of the Joint Legislative Budget Committee wrote to the Director of Finance, recommending that the director not authorize the funds, because to do so would be inconsistent with the Legislature's action in passing the 1994 Budget Act. The issue was heard on August 30 by the Joint Legislative Budget Committee, and the hearing resulted in no change in the Legislature's original decision to delete the funds. Despite these repeated confirmations of the Legislature's intent, on September 15, 1994, the Director of Finance ordered the restoration of $7 million to the HWDC's budget. The administration has increased the number of kiosks to be deployed, from 15 when the Governor introduced his budget in January 1994, to 189 kiosks by the end of the current fiscal year.
Proposal Inconsistent With Prior Legislative Action. Notwithstanding the action of the Director of Finance to restore funding for the kiosk program in the current year, the Legislature has been clear and consistent in its actions to delete all funds for the project. Thus, we recommend deletion of $6.7 million and 13 positions proposed to continue the kiosk program in the budget year.
Alternative Approach for Providing Kiosk Services. If the Legislature wants to pursue a similar goal of delivering governmental information and services via computer-based kiosks, but in a different implementation strategy, an alternative approach is for the state to contract with private providers for kiosk services, rather than expending capital to acquire and operate a state-owned system.
Although the true effectiveness of kiosks to both government and the citizens it serves has yet to be determined, we believe that to be effective in any significant manner thousands of kiosks may have to be deployed in California, given the state's large, dispersed population. Consequently, continuing the HWDC's plan of state ownership carries significant cost implications and risks. Moreover, kiosk technology, like information technology in general, is constantly improving, with the result that every several months or so the cost of the technology relative to performance improves significantly. Given these factors, the ability to buy a kiosk service, and thus avoid a significant initial and ongoing capital investment, is on the surface an attractive alternative which warrants consideration. Other governmental jurisdictions throughout the nation, such as Texas, have decided to buy a service in lieu of establishing their own systems, and others are considering doing so. For all these reasons, should the Legislature decide to pursue a different implementation strategy, we recommend that contracting for a service be a part of any such consideration.
We recommend that the Legislature adopt supplemental report language requiring the data center to adopt and submit a plan to reduce customer dependence on costly mainframe solutions and increase the use of less costly "open" systems.
In our analysis of the budget of the Teale Data Center (please see the State Administration section of this Analysis), we note the continued trend at both the HWDC and the Teale Data Center to add expensive "mainframe" computer capacity. We note that this trend is counter to a nationwide trend toward reducing the dependence on the traditional mainframe platform. We conclude that it is important for each data center to develop an effective plan for reducing customer dependence on the mainframe by actively assisting clients to develop new computer applications on alternative platforms where practical, and to move existing applications, off of the mainframe, where doing so would reduce customer's costs. Accordingly, we recommend that the Legislature adopt supplemental report language directing the HWDC to adopt such a plan and provide a copy to the Legislature by December 1, 1995.
Specifically, we recommend the following language:
The data center shall adopt a plan to reduce customer dependence on traditional mainframe solutions by (1) assisting customers to develop new applications, where feasible, on alternative systems, and (2) moving existing applications off of mainframes where doing so would reduce customer costs. The data center shall submit the plan to the Legislature by December 1, 1995.
We recommend deletion of $236,000 and two positions budgeted in support of Internet activity, because the case for additional resources has not been made. (Reduce Item 4130-001-632 by $236,000.)
The budget includes $236,000 and two positions to support workload associated with the Internet--commonly referred to as the information superhighway. According to the HWDC, these resources are necessary to expand the capabilities of the HWDC to help its client agencies distribute computer-based information about their programs to the public via the Internet.
Although we support facilitating public access to state-maintained information, the department has been unable to demonstrate the amount of workload which may materialize, nor that it is unable to accommodate that workload with existing staff. For these reasons, we recommend deletion of $236,000 and two positions budgeted for Internet-related support.
The Supplemental Report of the 1994 Budget Act directed the HWDC to cooperate with the DOF to produce a study addressing the feasibility of consolidating state data centers to reduce costs and improve computing effectiveness. The study was to have been submitted to the Legislature by December 30, 1994; however, no such study has been received. According to the HWDC, the administration's position on this matter was addressed in (1) the October 1994 report by the Governor's Task Force on Government Technology and Procurement and (2) the DOF's response to a report issued by the State Auditor in December 1994 entitled The State Needs to Reengineer Its Management of Information Technology.
Although the Governor's task force report recommends consolidating "utility type" state information technology operations, particularly the data centers, the report does not constitute a study of the issue. In fact, the report acknowledges that the concept of data center consolidation should be studied by a new state Chief Information Officer to determine whether the data centers are viable candidates for consolidation. We were unable to find any mention of data center consolidation in the DOF's response to the State Auditor's report. Consequently, the Legislature's question as to the feasibility of data center consolidation remains unanswered.
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