Richard Halstead
Posted: 06/22/2009 07:52:11 PM PDT
Marin County's installation of a new computerized financial management system, which has cost more than $28.6 million over five years, was "botched" due in large part to insufficient attention to the county's system of internal controls, a new Marin County civil grant jury report states.
The grand jury concludes that the system known as MERIT, Marin Enterprise Resource Integrated Technology, "is not working smoothly almost three years after it went live, and the botched implementation has left a trail of troubles, many of which could have been avoided or minimized if oversight systems had been working effectively."
The grand jury reports that problems with the computer system have delayed the issuance of annual financial statements necessary for the county to claim about $2.5 million in reimbursements from the state. The jury warns that because audited financial statements have not been issued on time since fiscal 2006 the county could find it difficult to borrow money or might have to pay higher interest rates.
County Administrator Matthew Hymel said many of issues raised in the grand jury's report have already been acknowledged by the county.
"I think the good news is we're addressing the issues," Hymel said, "and the hiring of a financial director and the implementation of this citizen's advisory committee will basically address all the concerns that they've raised."
The county is in the process of hiring a director of finance who will assume the responsibilities formerly shouldered by two elected county officials: auditor-controller and treasurer-tax collector. Because the director of finance will be appointed by county supervisors and not elected, to ensure the director of finance's independence a new financial audit advisory committee - consisting of county supervisors, county staff and residents - is being created to review the annual audit.
As for the computer system's current state of operation, David Hill, the county's director of Information Services and Technology, said, "There are things that can be improved upon to make the system work more smoothly, but fundamentally we've corrected the system."
The oversight systems that the jury referred to are the Marin Audit Advisory Board and the Internal Audit Group.
Formed in 2004, the Audit Advisory Board has the responsibility of monitoring the county's financial and performance audits. The Internal Audit Group, which was chartered by county supervisors in the 1970s, is responsible for monitoring the design and proper functioning of internal financial controls and procedures.
The grand jury reported that "The Marin Audit Advisory Board has been moribund and the Internal Audit Group has been functioning at a low level." The Audit Advisory Board, which has met formally three times in its five-year existence, has functioned as "window dressing," according to the grand jury.
The jury found that the county implemented the MERIT system with too many features, too quickly, and with insufficient resources, testing and input from users. The report states, "It is possible that if better decision-making and planning processes had been in place, some of the setbacks could have been avoided."
Even though the county has scaled back its use of the MERIT system and is using only a few of its 20 modules, it continues to rely on consultants to make the system work properly; it spent more than $1 million on consultants in fiscal 2009, the grand jury report says.
Hill said the county has budgeted $400,000 to pay consultants for work on the system in the fiscal year that begins on July 1.
The grand jury recommended the county redouble its efforts to ensure that the computer system is working properly, reevaluate its use of consultants, determine which additional MERIT functions are cost-effective and when they should be activated; and make sure that employees are trained in how to use the new system. The jury also urged the county to reinvigorate the Audit Advisory Board and the Internal Audit Group.
Contact Richard Halstead via e-mail at rhalstead@marinij.com
http://www.marinij.com/marinnews/ci_12668093
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