The $35 million that King County poured into a trouble-plagued, unfinished computer system that was mothballed last year was mostly spent appropriately, an outside accounting firm has concluded.

That doesn't necessarily mean it was spent wisely, Horace Francis told a Metropolitan King County Council committee yesterday.

The county auditor, at the council's direction, hired Francis' firm, Francis & Kirschner of Seattle, earlier this year to look into whether money spent on the behind-schedule, over-budget computer system was spent in accordance with the project's objectives and budget.

It was, Francis told the council's Management, Labor and Customer Services Committee yesterday.

But he said his firm was retained to review only the project's accounting, not the decisions those figures reflect. "That really wasn't part of our charge," Francis said. "We're not making an assessment as to the efficiency or cost-effectiveness."

County Executive Ron Sims pulled the plug on the $38 million Financial Systems Replacement Program in June 2000. The new computer system, designed to replace the county's old accounting and payroll systems, was months behind schedule and almost out of money. One recent estimate says it will take $27 million to $40 million to complete it.

The Francis & Kirschner report concluded that about 10 percent of the money expended on the project was spent on transactions that didn't comply with county financial policies or procedures. Consultants did work that wasn't in their contracts. Bills were paid in error. Mistakes weren't caught.

County Auditor Cheryle Broom said some of those problems could have been prevented if earlier audit recommendations for other county programs had been heeded.

Councilman Kent Pullen, R-Kent, chairman of the management committee, said that while the Francis & Kirschner report found no evidence of illegal activity, "there still are some serious concerns. ... There was $35 million wasted, and someone should take responsibility."

Sims has said he is ultimately responsible for the project's failure because it happened on his watch but has declined to assess blame.

He said in a prepared statement that he was pleased the new report found project funds had been spent appropriately. Many of the problems the outside accountants identified already are being addressed, he said.

County Finance Director Bob Cowan called the report "very useful" and said the executive generally concurred with its findings. The report will be helpful in deciding whether to restart the project, he said. An advisory committee is reviewing options.

Only one element of the system has been installed. It handles payroll for about one-third of all county employees. The rest still are paid through older, separate computer systems, some using 20-year-old software.

Francis & Kirschner said about $3.6 million of project transactions did not comply with county policies or procedures. The largest single expenditure it questioned was $1.15 million paid directly to a consulting firm that was a subcontractor on the project and didn't have its own contract with the county.

In its response, the executive argues the unusual arrangement saved the county more than $500,000 but acknowledges "a breakdown in contract administration occurred."

Sims upset some council members last month when he issued a press release that summarized the report's findings before it was available to the council or the public. "That was inappropriate," Pullen said.

Seattle Times

-- Anonymous, October 15, 2001