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November 30, 1999

Computer problems cost county Officials promise to cover lost interest and penalties

Dan Hansen - Staff writer

Spokane County faces fines, interest payments and a few angry employees because of payroll foul-ups blamed on a new computer accounting program.

Since August, the county has been unable to pull from the computer system the information it needs to make about $2 million worth of payments into the state retirement plan. That affects 2,400 county employees and those from 27 junior taxing districts, mostly fire districts.

A few employees also have not gotten paychecks on time.

And three fire districts whose payroll is handled by the county are being fined a total of $1,000 for missing payments to the state Labor and Industries insurance pool.

County commissioners promised Monday to cover all the costs, including the interest employees have lost by not having their retirement payments deposited on time. That interest amounts to about $2.60 for an employee who makes $25,000 a year, said Auditor Vicky Dalton.

While the total cost of the problems isn't known, Dalton said the fine from the state Department of Retirement Services could top $50,000. Dalton and county computer expert Vickie Birkenthal said they're confident they can tweak the software enough to get the needed information before any more penalties accrue.

A bigger issue is the future of the PeopleSoft computer system the county bought in 1997 for $730,000. County officials estimate the transition from the old mainframe system has cost about $2million, including employee costs and installing compatible computer systems for the treasurer, assessor and other departments.

Birkenthal said she's certain any bugs in the computer system can be fixed. Part of the problem, she said, is that it was installed relatively rapidly so its predecessor could be retired before Jan. 1, 2000. The old mainframe system wasn't Y2K compliant, worked slowly and couldn't perform some basic functions, Birkenthal said.

But county fire chiefs who attended Monday's meeting with commissioners said the new system isn't working for them as well as the old one. Although their districts raise their own money and are not part of county government, state law makes the county auditor responsible for cutting the districts' paychecks and making the necessary employee-related deposits into state funds.

Jim Graue, assistant chief of Fire District 9, said the new computer can handle no more than one pre-tax payroll deduction -- such as a voluntary retirement contribution -- for any single employee. Employees could have multiple deductions when their checks were issued under the old mainframe computer system.

"Why would you buy a system like that?" he asked. "It didn't make some of our employees very happy."

Dalton complains that every time the system finds an accounting error, it freezes until the problem is fixed. Then it forces the user to start over.

"Every two weeks, it takes every ounce of strength we have to get the 2,400 paychecks out," said Dalton, who plans a study to determine whether PeopleSoft should be replaced.

So much effort goes into payroll that other tasks are neglected, Dalton said.

Dalton isn't the only one fed up with the system.

After six months of problems getting bills out on time, county utilities director Bruce Rawls said last week that he intends to stop using PeopleSoft.

The Associated Press reported in July that the cost of a PeopleSoft system being installed at Boise State University has risen from an expected $5.6 million to $12.6 million.

A PeopleSoft spokeswoman contacted after business hours Tuesday at the company's California headquarters said no one was available to comment on the county's problems. The company, which posted $1.3 billion in revenue last year, boasts on its Web site that 96 percent of its 3,000 customers report they'd choose PeopleSoft again.

Spokane County purchased the accounting program for about half PeopleSoft's initial estimate because the company is trying to capture more government business. It planned to use the county as a showcase.

But the PeopleSoft warranty, which is similar to those offered by other software providers, leaves the county little opportunity for a refund. In fact, Commissioner Kate McCaslin cited that as the main reason she voted against purchasing the system in 1997. She was outvoted by Commissioners John Roskelley and Phil Harris.

-- Homer Beanfang (Bats@inbellfry.com), December 03, 1999

Answers

Thank You, Mr. Beanfang!

Someone I know, who works for a VERY large multinational corporation, told me they're unable to pull pension funds (401k). The reason is, the fund manager (company) does not know how much funds they're managing anymore, as well as what' in each individual account. AND, the corporation does not even know how much money it has, has made, or what'll will make. How's that for one of the worlds largest Oil companies?

Systems Drift?

Best Regards,

-- Tom McDowell (bullriver@montana.com), December 03, 1999.