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What's the Buzz on the Common Management System (CMS) Audit
-----------------------------------------
Hard copies of the complete auditor's report are available at:
SSU Academic School Dean's Offices
SSU Academic Senate Office
SSU University Library (on reserve)
SSU Vice President for Administration & Finance Office
or on-line at www.bsa.ca.gov/bsa
-----------------------------------------
The California State University response to the audit can
be found
at http://cms.calstate.edu/T6_CMSAudit.asp
Recently, the Bureau of State Audits issued a report regarding the California
State University’s Common Management System (CMS) project. While
the majority of the report focuses on the CSU System-Wide aspects of CMS,
relevant information from Sonoma State University experience with CMS
is presented below for reference.
CHAPTER 1: BUSINESS CASE
The Bureau of State Audits makes several comments related to the lack
of a business case for CMS including:
-- “The University cannot demonstrate that it documented the extent
and severity of problems existing in its prior administrative software.”
-- “The University cannot support that it had severe problems with
its administrative systems as described in its “WHY CMS” document.”
-- “The University did not establish a business case for CMS by preparing
a feasibility study report or similar analysis that evaluated the need
for and the costs and benefits of this new system.”
At the time SSU was evaluating CMS, the campus faced the following challenges
which did not require external analysis to document a critical need.
The campus student system was dysfunctional. The original developer
of the legacy system was no longer providing support. The product has
been sold multiple times and reached a point where existing SSU operational
and technical efforts were being diverted to application maintenance versus
support and enhancement. The most compelling issue surrounding the student
system was the total lack of support for the financial aid module. This
single condition resulted in Sonoma State University’s inability
to accurately package and award financial aid to our students in a timely
manner.
As a result of the CMS Student Implementation, Sonoma State University
has already begun to see benefits. For example, the CMS student registration
system means students can now register for classes faster and easier than
with the former aged and antiquated voice registration system that could
not handle the call volume and caused students long waits on the telephone.
Special labs have been set up in the library where students can go to
register if they don't have access to a personal computer or to get help
with their registrations. Registration also can be done from public libraries
or any other place where Internet access is available. The campus has
few if any complaints about access to registering.
Another example relates to financial aid where students at Sonoma State
received their financial aid award letters in spring 2002 in record time,
which is a benefit to those students on tight budgets and family obligations.
A final example relates to grade changes. Because of the CMS implementation,
it took less than fifteen minutes to make grading changes for more than
1,500 students. In the old legacy system, it took two days.
The campus financial system was no longer an appropriate tool for modern
financial management.
The legacy financial system, referred to as FRS or Financial Reporting
System, had been in use since approximately 1984. This system was designed
to report financial information in a manner prescribed for California
state agencies and worked well for that period and purpose. However, revisions
to the Educational Code requiring the CSU to adhere to uniform accounting
standards in accordance with Generally Accepted Accounting Principles
(GAAP) in addition to the accounting principles of the State of California,
new requirements related to external audits, and emerging contemporary
business practices such as E-Commerce, simply mandated a change to a financial
system that not only reported financial data but also provided a tool
for comprehensive financial management.
A campus human resource system did not exist. Sonoma State University
was dependent upon locally designed and maintained applications with duplicative
data entry points and no method to ensure synchronization with the State
Controller’s Payroll Information Management System, (PIMS). During
1998, campus became aware (as did the CSU), that the State Controller
was planning to replace PIMS and there was no assurance that the human
resources management needs of the CSU would be addressed.
The Bureau of State Audits also makes the following comment related to
internal analytical tools created by the CSU to support the implementation
of CMS:
-- “The University created its own financial analysis tool that
might have helped make the business case for CMS and its supporting data
center, however, it did not require the campuses to use this tool which
would have given the university some analysis of cost savings.”
In preparing to implement CMS, Sonoma State University used the referenced
CSU Financial Planning Tool as an aid to developing a campus-specific
funding plan for the initiative and to help make the business case for
CMS and its supporting data center. This tool provided the campus with
an analytical understanding of anticipated cost savings of proceeding
in a collaborative and common fashion.
-- “The University is likely to spend more rather than less to
maintain and operate its new software."
Sonoma State University always projected spending more to operate PeopleSoft
than what was spent on previous systems since the CMS project (a) included
a Human Resource System that never existed at SSU, (b) provided a robust
student system that was never a reality on campus, and (c) was a system
for the University and its four auxiliary organizations. This was not
the case with the previous systems.
CHAPTER 2: PROJECT COSTS
The Bureau of State Audits makes several comments related to CMS project
costs including:
-- “Updated university cost projections indicate that the amount
it expects to spend over the life of the CMS project exceeds initial estimates.”
-- “The university does not have a system-wide funding plan for
the CMS project.”
-- “Campus CMS expenditures have been primarily supported by the
University’s General Fund although some campuses have found other
funding sources.”
At Sonoma State University, dollars projected to implement the Finance,
Human Resource and Student Administration system were expected to total
approximately $8,945,000. These three systems have now been implemented
at a cost of $6,707,000.
Sonoma State University also projected that CMS would bring on-going costs
once the System was implemented. Sonoma State University budgets $1,636,000
per year for this purpose.
Dollars for implementation and on-going costs have come from both the
University’s State General Fund and Non-State auxiliary enterprise
funds. State General Fund dollars were obtained from non-instructional
dollars provided to the campus by the State for institutional, academic
and student service support – the budget programs which rely on CMS
for day-to-day operations. Dollars from Non-State auxiliary enterprise
funds were obtained in accordance with CSU Executive Order 753 which requires
reimbursement for costs incurred on behalf of Non-State Auxiliary Enterprise
Funds by the General Fund.
Some have questioned whether CMS was a “good deal” for the campus.
Had Sonoma State University chosen to address its information system needs
independent of CMS, implementation costs would have risen by $3,165,100
as indicated below:
|
CMS Approach
|
SSU Alone
|
|
| CMS Implementation Costs |
$6,707,000
|
$6,707,000
|
| Plus PeopleSoft License Fee |
0*
|
760,600
|
| Plus Additional Computer Servers |
0*
|
1,400,000
|
| Plus Network Improvements |
0*
|
100,000
|
| Plus Additional IT Staff |
0*
|
792,000
|
| Plus Additional Consulting Support |
0*
|
112,500
|
| TOTAL |
$6,707,000
|
$9,872,100
|
* Provided by CMS System-Wide Initiative
Moreover, annual operating costs would have risen by $1,082,000 each year
as the following data illustrates:
|
CMS Approach
|
SSU Alone
|
|
| CMS Annual Operating Costs |
$1,636,000
|
$1,636,000
|
| Plus Software Maintenance Agreement |
0*
|
150,000
|
| Plus Maintenance Agreement Servers |
0*
|
140,000
|
| Plus Additional IT Staff |
0*
|
792,000
|
|
0*
|
||
| TOTAL |
$1,636,000
|
$2,718,000
|
* Provided by CMS System-Wide Initiative
CHAPTER 3: BUSINESS OBJECTIVES
The Bureau of State Audits makes several comments related to CMS Business
objectives including:
-- “The CMS project may not fully achieve the University’s
stated business objectives.”
At Sonoma State University, the CMS project has already met or surpassed
the University’s stated business objectives.
-- “Initial versions of the vendor’s software required about
200 modifications to meet the university’s business needs.”
Modifications to the vendor’s software are less a result of University
business needs and more a function of the collective bargaining agreements,
State personnel payroll requirements, and State financial reporting requirements.
Any vendor software would have required modifications since no vendor
software directly conforms to CSU bargaining agreements and State financial
regulations.
-- “Ideally, the University could have chosen to use the same
best business practices at each campus supported by one shared copy of
the software.”
At Sonoma State University, the CSU best business practices have been
adopted. Moreover, these same best business practices have also been adopted
by Sonoma State University’s four auxiliary organizations who are
supported by one copy of the software which is shared by the University
and its auxiliary organizations.
-- “The University is not installing shared data bases.”
Sonoma State University has installed a shared database not only with
its four auxiliary organizations but also with the California Maritime
Academy, an independent CSU campus located in Vallejo, California.
-- “Functionality will vary across the campuses.”
Sonoma State University does not anticipate that the functionality at
SSU will vary from the CSU baseline functionality defined for CMS. SSU
has already or shortly will have implemented each feature of CMS core
functionality.
-- “System-wide reporting processes will remain substantially
unchanged after CMS is implemented."
Sonoma State University never expected CMS to change its method of System-Wide
reporting.
-- “Although CMS provides some functionality that did not previously
exist, some campuses have lost some functionality.”
The CMS initiative has added substantial functionality to campus operations
that previously did not exist. The addition of a comprehensive human resources
system where there was none is one major example of this fact. Moreover,
in the very limited cases were some functionality may be less in PeopleSoft
than in the replaced legacy system, the functionality will likely be regained
in future software releases.
-- “The CMS project has encountered other problems in work quality
and information security.”
Sonoma State University is working actively with the CSU to resolve issues
related to information security and sensitive information. Security is
of prime concern to SSU. The campus will continue to address security
issues and will develop solutions that provide optimal protection of individual
and institutional information. Progress has already been made. PeopleSoft
is helping campuses make the switch to a “unique identifier”
rather than using Social Security numbers for students, thus protecting
students’ privacy and confidential information.
-- “The University did not sufficiently evaluate its business
processes before procurement.”
Sonoma State University chose to modify its business processes to meet
the requirements of the CMS initiative. Consequently, an evaluation of
existing business processes prior to CMS implementation would not have
added value to the implementation exercise.
-- “Maximized System-Wide Reporting was not an intended benefit
of CMS.”
Sonoma State University is pleased that the CMS initiative has maximized
campus financial reporting for the University and its four auxiliary organizations.
Before the CMS initiative, this was not possible.
-- “The University did not establish an effective quality assurance
function.”
Sonoma State University chose not to hire an independent consultant to
perform various quality assurance functions or to evaluate the progress
of the project. Instead, the University chose to use existing staff and
managers to perform this important function. The fact that Sonoma State
University is one of the first campuses in the CSU to fully implement
the CMS project on time and under budget for five corporate entities is
documentation of our employees’ diligence, competence and success
in this regard.
CHAPTER 4: PROCUREMENT PROCESS
The procurement process used to select CMS software was managed centrally
through the CSU Chancellor’s Office. Sonoma State University believes
the process used by the CSU was competitive, well documented, and in accordance
with CSU policy.
CHAPTER 5: DATA CENTER SERVICES
The Bureau of State Audits makes several comments related to Data Center
services:
-- “The University followed recommended procurement practices
when it procured data center services.”
-- “The University outlined its needs and methodically evaluated
vendor responses.”
-- “The University negotiated a contract that shares risk with the
vendor.”
-- “The Data Center has raised services levels in recent months.”
-- “The University must address needs for CMS data warehousing”
Sonoma State University agrees with the above observations.
CHAPTER 6: POTENTIAL CONFLICT OF INTEREST
The Bureau of State Audits makes several comments related to potential
conflicts of interest:
-- “The University did not include some CMS management positions
in its conflict of interest code and did not retain all Form 700s.”
-- “The University also did not require CMS consultants to File Form
700s.”
At Sonoma State University, all CMS personnel in a position to regularly
oversee and evaluate vendors and consultants are subject to the CSU conflict
of interest policy and completed the necessary Form 700s. Sonoma State
University believes consultants are not required to file a Form 700 if
the consultant prepares a product or performs services for a single specific
matter versus performing on-going services, or if there is a significant
intervening substantive review of the consultant’s recommendations
before submission to the final decision maker.
-- “The University could not provide signed disclosure forms for
many participants in the CMS software procurement. “
-- “Form 700s indicates a University employee had an apparent
conflict of interest and another may have tried to benefit personally
from non-public information.”
These comments are not applicable to Sonoma State University.
-- “The University has no employee policy on incompatible activities
and no requirement that employees receive regular ethics training.”
Sonoma State University concurs with this finding and understands the
CSU will address this issue in the immediate future.
slk, 4/13/03