March 28, 2002

Panel advises state to shelve part of flawed computer system

By the Associated Press

HELENA - An influential legislative committee has recommended the state Revenue Department scrap part of a new multimillion-dollar computer system that has been plagued by problems for years.

The Legislative Audit Committee unanimously agreed that work on phase II of the new revenue- and tax-tracking system, called POINTS, be abandoned for now and the department focus its efforts on getting the first part of the system functioning properly.

"We have crossed the point where spending more is a better option than going in a different direction," said Sen. Cory Stapleton, R-Billings.

Kurt Alme, department director, said Wednesday that no decision had been made on whether to follow the committee's recommendation made Tuesday.

"We will consider what they said and take it into account before deciding how to proceed," he said, adding that a choice will be made by mid-April.

The new computer system has had troubles from the start. Installation began in May 1998 and the two-phase project was financed by the state borrowing $32 million through the sale of bonds.

The first phase was to provide basic internal business functions to handle the various taxes collected by the department.

The state agreed in December 1999 to accept and begin using the system despite its bugs, because officials believed the glitches could be easily fixed. While many parts are working, others have serious defects causing delays in issuing tax refunds, double payment of refunds and trouble issuing statements of taxpayers' accounts.

Phase two would add programs to deal with individual and corporate income taxes.

The department already has spent $26 million on the project, including about $12.3 million on the second phase.

Committee members said it is time the department concentrate on the first phase of the project and shelve the second portion, in hopes of getting the initial program working correctly by the end of this year.

"There is no certainty in this program whatsoever," said Rep. Jeff Pattison, a Glasgow Republican and vice chairman of the committee. "I'm a little disgusted by the whole thing. It may be time to cut and run."

Chuck Swysgood, budget director for Gov. Judy Martz, told the committee he was not ready to abandon a portion of the project that already has cost the state more than $12 million. There is no guarantee that setting aside the second half of the project will mean phase one problems can be corrected even a year from now, he said.

"It comes down to the question of what the state wants to get out of this," Swysgood said. "There's risk going either way. I've agonized over whether we should pull the plug."

He said the administration would like to continue working on the entire project at least through December. But committee members said that would not allow enough time for the next Legislature - convening in January - and the administration to work out an alternative to phase two of POINTS.

Missoulan

-- Anonymous, April 15, 2002