The comments came during a briefing to help lawmakers grapple with funding and overseeing large information technology projects, especially those that deliver human services benefits. Projects tend to have different funding sources with funding timelines set by the federal government — and even the accounting software the state uses to track IT spending, imperfectly, needs an $18.5 million upgrade.
The most accurate public list has 132 projects in the queue worth $1.3 billion. Martha Haley, the project manager within the Department of Information and Innovation, estimated Monday that about 40 of the projects are worth more than $1 million. At the behest of the Legislature, her team will have detailed reports on those projects ready for the upcoming legislative session.
The most expensive projects are meant to replace outdated systems in which users plug their information into a website and state workers manually transfer the information to an internal database. For example, the Agency of Human Services has a more-than-30-year-old computer system that’s both labor-intensive and making federal compliance with certain benefits programs difficult.
But following the problematic rollout of Vermont Health Connect, lawmakers are wary about pursuing new IT systems.
Vermont is not alone
Doug Robinson, the executive director of the National Association of State Chief Information Officers, said Vermont is one of many states dealing with a “talent crisis” in recruiting and retaining IT workers. He said other states are outsourcing their technology projects to private companies and opting to pay subscription fees on cloud-based software to avoid the personnel challenges.
Robinson reported that 85 percent of state chief information officers now see themselves as brokers between private and public resources. Eighty-seven percent of chief information officers say their states are either either “highly invested” in cloud services or partially invested and they are considering expanding their investments in outsourced software, he said. Including Vermont, 36 states have a private company running .gov portals.
“The current unemployment rate in information technology is negative,” he said. “Retirements are growing. We estimate that by 2020, 50 percent of the IT workforce will be eligible for retirement. And yet we’re still running these retired, legacy systems.”
Cloud services avoid the costly and time-consuming process of putting out requests for proposals for customized software, Robinson said, and they’re often cheaper to maintain than other systems because states are leveraging the economies of scale offered by companies hosting the software.
State officials agree. Sen. Jane Kitchel, D-Caledonia, chair of the Senate Appropriations Committee, said: “It’s nice to know that everybody’s sort of struggling with this part of government. I thought having that kind of national kind of thinking is always helpful.”
While Boes has said he believes the department does a good job overseeing the state’s IT portfolio, he said Thursday the state needs a strategic vision for IT projects. That means less customization and better adherence to the Department of Information and Innovation’s best practices for project management, he said.
“We are essentially letting the tail wag the dog,” Boes said. “Where we see opportunities, we say, ‘Let’s take advantage of those opportunities,’ instead of doing it in a strategic way. We say, ‘Oh there’s a pot of money available right now. Let’s leverage it the best we can.’”
“Our eyes are bigger than our stomachs, if you will, and we have some great challenges that are appropriate for the state to undertake to try to improve constituent-based services,” he said. “We need to look at things realistically, and we need to say, ‘What can we accomplish?’”
Human Services IT projects
Lawrence Miller, the chief of health care reform for the Shumlin administration, said one of those projects with unrealistic expectations was Vermont Health Connect. The project will remain “challenged” for a long time in part, he said, because the federal government issues new mandates for the exchange on a monthly basis.
That doesn’t mean other human services projects are doomed, however, Miller said.
He said there were “absolutely” ways that management fell down during the Vermont Health Connect rollout. But he said lawmakers deserve to feel confident that the executive branch has the right staff to handle future major projects.
Vermont Health Connect staff didn’t have insurance brokerage expertise when it started out, Miller said. In contrast, the Agency of Human Services has many employees who understand Medicaid eligibility and can help implement both the $129 million integrated eligibility system and the Medicaid Management Information System, or MMIS.
During the 2015 legislative session, the Shumlin administration asked for $16 million of bonded money over two years to help pay for the integrated eligibility system, which would help Vermonters determine instantly if they qualify for any of the 44 benefit programs the state offers. The Legislature eliminated the fiscal year 2016 appropriation and pared the fiscal year 2017 number down to $5.5 million.
Rep. Butch Shaw, R-Florence, pressured the agency Monday to say where it was getting the money for the integrated eligibility system. Sarah Clark, the chief financial officer for the agency, said it can use up to $7.9 million in money set aside for the project, and it has already spent between $2 million and $3 million. The agency is moving forward in negotiations with a contractor called Wipro to develop a contract that would phase in costs over time. That means the Legislature would need to approve more appropriations in the future.
As oversight conversations move forward, legislators continue to weigh whether they should appoint a new standing committee for information technology — or if IT projects should be funded through a separate bill, similar to the capital bill or the transportation bill. They continued to press the executive branch on how they could cut IT costs by moving to off-the-shelf software.
“We’re being asked to invest millions and millions of dollars in things, sometimes in operations and sometimes in capital,” said Rep. Cynthia Browning, D-Arlington. “We’re so reliant on members of the administration that may or may not have a political agenda. If you don’t address that, you haven’t addressed the key problem that I see in that issue.”
Rep. Peter Fagan, R-Rutland City, said Vermont should coordinate with other states to implement major IT projects, such as integrated eligibility and the health care exchange. Miller said that would be impossible because states have different eligibility rules for Medicaid and other programs.
Miller said the Legislature could play a key role in reeling in the scope of proposed projects. He suggested the policy committees think about “what are we really trying to achieve at the agency.” Lawmakers should require agencies and lobbyists to make a case for a project’s necessity, and then make recommendations to the money committees, he said.
“Trust me, you don’t want to be on the evening and weekend phone calls with me on the day-to-day management of these projects,” he said.
