Unfinished welfare computer system’s cost hits $94 million

Friday, June 26, 1998 | 11:32 a.m.

CARSON CITY -- Despite misgivings, state legislators Thursday authorized another $899,000 be spent on developing the ill-fated state welfare computer system, the cost of which has risen to $94 million.

The system, supposed to be ready in 1995, won't be completed until August 1999.

"I don't think it will ever fly," said Sen. Bill O'Donnell, R-Las Vegas, a computer expert. "This is the Spruce Good of data processing. It will get 10 feet in the air and then land."

He was referring to Howard Hughes' wooden airplane that made only one flight.

The issue went before the Legislative Interim Finance Committee, members of which were unhappy about the long-delayed project which is 67 percent financed by the federal government.

The work started in the late 1980s when the budget was $22.6 million. It was scheduled to be completed in three years. In addition to delays and cost overruns, the system had to be modified when the federal government overhauled welfare laws.

Assemblyman Morse Arberry, D-Las Vegas, said the committee showed the "upmost confidence" in Welfare Administrator Myla Florence. But he added, "We're skeptical and we're sitting on the hot seat."

But Florence said the extra money "was a small price to pay" to get the project finished. The state is going to be penalized $713,000 by the federal government for missing the October 1997 deadline for completion. There could be a further penalty of $1.6 million in September 1999 and $2.2 million in September 2000.

Discussions during the committee revealed bad feelings have developed between state officials and IBM which is building the system.

Florence said she needed the extra money to hire people for quality assurance to see that the computer program is being properly built. Present funds have been exhausted.

IBM project manager Frank Pecovich would not be reached for comment.

Committee members said they did not think the $899,000, which is federal money, should be used for quality assurance but should be spent to train the welfare staff to take over the system when completed.

Florence said her staff could do the training and she wanted the money for evaluation of IBM's work. After the meeting, she said it was clear that IBM had submitted a proposal to committee members to allow it to be hired to train the welfare staff. But she conceded she had not seen the IBM suggested plan.

There are 21 other states who are facing penalties for not making the 1997 deadline. California abandoned its $354 million welfare computer effort.