In a heated meeting of a state legislative panel that's trying to monitor the New Orleans school system's finances, Superintendent Tony Amato said he has all but decided to scrap the system's troubled Oracle computer network -- after five years and untold millions spent trying to make it work.

In the meantime Amato said the district will be taking several key steps in the coming months to repair its finances, from instituting direct deposit for all employees to filling four key finance positions.

Amato's spoke Monday at session of the state Legislature's Audit Advisory Council, meeting at Dillard University. The council has taken an increasingly active role in monitoring the school system's attempt to gain its financial bearings after nearly five years of nearly nonexistent accounting. The problems started in 1999 with the installation of the Oracle network, a top-flight system that was supposed to simplify the system's financial and operational tasks.

Estimates of the system's total cost provided perhaps the most striking example of the continuing in-the-dark fiscal management: Committee members complained that Amato's estimate of $18.6 million contrasted sharply with an estimate of $60 million given at a previous meeting. Neither Amato nor his staff cleared up the discrepancy under questioning from panel members. But in an interview after the meeting, Amato said the earlier estimate was an off-the-cuff response from school board members.

It wasn't the only matter left murky: Amato and other officials gave conflicting answers to the question of whether the School Board had approved a budget that overspends its revenues by $30 million. Amato told panel members that the system would have to cut that amount from the approved budget throughout the year; his chief financial officer, Bob Peters, said the cuts already had been made; School Board members said they were under the impression they had approved a balanced budget.

Amato later explained that the predicted $30 million deficit was headed off through a scrubbing of the district's budget. "The board passed a balanced budget -- period," Amato said.

Audit council members pronounced the system finances a farce -- along with official attempts to explain them. They said they had seen little progress since they began monitoring the system in March.

"This stuff is just crazy," Rep. Ed Murray, D-New Orleans, said after the meeting.

Panel members' comments during the meeting, a broad-ranging public flogging of the administrations of Amato and his predecessors, showed a growing frustration with fuzzy budget figures and so-far-unfulfilled promises to right the system.

State Sen. Tom Schedler, R-Mandeville, compared the system's attempts to fix its finances to a cat chasing a ball of yarn. Rep. Rick Farrar, D-Pineville, said several times he was "irritated" with the evasive and conflicting answers of the administration. At one point he asked state Legislative Auditor Steve Theriot, "Are things just so screwed up that they (Amato and his staff) don't have any idea what's going on, or are they just being dishonest with us?"

Theriot paused for a moment and replied, "It's becoming increasingly difficult to make sound decisions."

In an interview after the meeting, Amato said the district has a plan to address its financial problems but acknowledged that the plan has to be somewhat malleable to deal with unforeseen financial pitfalls.

"The fact is that we've been dealing with deep-seated financial situation going back for four or five years," he said. "Every day we find another bill, another encumbrance, that hasn't been paid. I know we will master all of this but . . . it's about surfacing and working forward from all of the financial mishaps of the past four years."

Farrar, Murray and Rep. Cedric Richmond, D-New Orleans, brought up the possibility of the committee cutting off all state money to the school system, a rarely used power of the council that would cripple and maybe even shut down the district. When Richmond said the board was "seriously" considering the option, however, Murray injected that such talk was premature.

On the matter of ditching Oracle, Amato told the panel he had tried to work through systemic data and training problems with the help of Oracle consultants, but the system was now beyond repair.

"We're beginning to look at other systems," Amato told the panel, adding he planned to examine financial accounting systems in Jefferson and East Baton Rouge parishes. He said it's too early to estimate the cost of replacing Oracle.

When panel members later brought Peters to the microphone, he said, "I think we'd have to make as much of an investment to fix it as to replace it."

The Oracle software itself has never been the problem, Amato and others repeatedly have said. The failure is that of the district, which has employed an expensive but unsuccessful mixture of staff hires, consultant contracts and training regimens in trying to adapt the system's Byzantine financial practices to the software.

The School Board bought the Oracle system in 1999, in part over fears of the Y2K computer glitch. Almost immediately, the system's payroll office began fouling up paychecks. On one memorable payroll, all the teachers at one school received checks for 2 cents, which they then had enlarged to make signs for a protest at a School Board meeting.

Attempts to ensure teachers got paid took the security controls off the system, which officials and outside investigators have said opened the floodgates to fraud, theft and costly mistakes. By one conservative estimate, employees have cashed at least $3 million in errant checks they received from the school system.

Further, despite the help of a number of computer network consultants in a series of multimillion-dollar contracts, system employees -- a revolving cast -- have never acquired the expertise to run the network, officials said.

Amato's intent to throw away a multimillion-dollar system could mark the end of a long, strange and expensive trip. The initial purchase accounted for $8 million of a larger $19 million computer upgrade, and consultant costs have at times topped $2 million yearly. So far this year, system technology chief Gwen Hurd told the panel, the system has spent $1.7 million on upgrades and consultants.

State Rep. Taylor Townsend, D-Natchitoches, asked why the system could expect better results from merely buying new equipment.

"If you don't have adequately trained people to run the system, what makes you think you'll have adequately trained people to run the next system?"

The Times-Picayune

-- Anonymous, August 10, 2004