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Down for the Count: Tech Projects that Failed to Make the Executive Budget

|February 1, 2017|


If you read my last blog about the Governor’s FY2018 executive budget, then you learned about the agency technology projects that Governor Ducey supports. Even though the legislature and the governor must ultimately come to an agreement on how to allocate funding in the final budget, it always helps for the governor to have your back.

In light of those projects that seemed to curry favor with Governor Ducey, you may be wondering if any agency technology budget requests didn’t make the cut-off and may potentially be benched until the next fiscal year.

It’s easy to think that a department’s technology plans may be sidelined when you don’t see any dollars in the executive budget. And, you may have seen a recent local article that listed five agency IT projects that were excluded. But while these projects weren't in the governor's FY18 budget, it wasn’t due to a lack of support. Most of the projects didn’t need additional funding – either because the agency already received the funding in prior fiscal years or because the project concludes this year. The only department truly left behind in the FY18 executive budget was the department of education.

Here are the five technology projects not mentioned in the Governor’s executive budget, and what it means:

Department of Revenue: While the Department of Revenue received $1 million this fiscal year to conduct a feasibility study to replace the aging state tax system, the department did not seek any new funding in FY18 for a system overhaul. Instead, it is focusing on replacing its outdated infrastructure at a price tag of $10 million. So, while some may think that the governor chose not to fund the tax system replacement; keep in mind that the department has more pressing technology priorities.

Department of Administration: The e-procurement system replacement was the big winner in the department’s FY17 budget. The department already received $15 million to replace ProcureAZ presently operated by Periscope. A report presented to the JLBC last September stated that the system “lacks the ability to integrate with the state’s accounting system,” as well as other major shortcomings. The department did not seek any new funding in FY18 and is presently in RFP evaluation for a new system.

Department of Economic Security:  While the department received $1.3 million for IT Security in FY17, it did not ask for any additional funding in FY18. Generally, appropriations for IT security carry over into the new fiscal year.

Department of Corrections: Don’t be fooled by the absence of any budget request for the Adult Inmate Management System. The Business & Decision project is presently in the third and final year of funding.

Department of Education: Since 2011, the department of education has been toiling away at building a new Arizona Education Learning and Accountability System (AELAS). Using a Microsoft technology stack, AELAS is comprised of a number of systems designed to count and fund students, as well as track student achievement and teacher effectiveness. In 2015, the legislature mandated that the department contract with an independent third-party vendor to begin providing quarterly reports.

Last year, a third-party review observed that some school districts have expressed concerns about transitioning from the old system to AELAS and there has been less interest in the statewide Student Information System, a component of AELAS, potentially related to the failure of the SIS vendor to provide training to districts on-time. With already over $30 million spent on the development of the system, the governor rejected the department’s FY18 budget decision package for another $17.5 million to continue development and corresponding support and maintenance of the current system. The department also mentioned that it may need another $19 million in FY19 to complete the system.

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