A new report from State Auditor Doug Hoffer found that only one of six audited information technology projects undertaken by the Vermont Agency of Digital Services was completed on time and within budget.
In one instance, the report found, the Secretary of State’s Office failed to deploy a usable website for its planned business portal more than two years after it was supposed to go online, despite the fact that the vendor had already been paid $2 million — 95% of the total project cost.
Hoffer found that the project had an unrealistic completion date and the contractor stopped working on it without solving problems identified in testing.
“They spent the money before there was any certainty that the deliverables had been completed,” he told VTDigger on Tuesday. “That’s not appropriate.”
Other projects Hoffer reviewed included the application system for the Cannabis Control Board, an integrated information system at the Department for Children and Families’ Child Development Division and websites for licensing and enforcement at the Department of Liquor and Lottery and patient access at the Department of Vermont Health Access.
For the Cannabis Control Board and Department for Children and Families projects, the report found, estimated costs more than doubled and deadlines for completion were extended by at least 18 months.
Only the Vermont Health Access self-service portal for people applying for Medicaid was completed on time and within budget, the report found.Â
Secretary of Digital Services Shawn Nailor attributed cost overruns and missed deadlines to the fact that technology is always changing.
“You get partway through even a three-year project, you could be two-and-a-half years in and the landscape of technology has evolved a lot in 30 months,” Nailor said. “We like to take pride in making sure that we’re assessing what is current and making adjustments where appropriate so that we’re not delivering to the state outdated technology the day it goes live.”
In the case of the secretary of state’s business portal, Nailor said the contractor had completed the initial work, which was to create a business portal where new businesses could register with the Secretary of State’s Office and have the data shared with four other state entities.
But then, Nailor said, the project’s scope was increased to accommodate other work by the Secretary of State’s Corporations Division.
“And that’s the part that became a struggle after the fact because that was done as an add-on to the project,” Nailor said.
In March, the Agency of Digital Services sought a refund of more than $700,000 from the contractor, Texas-based MTX. As of Tuesday, the contractor had not responded to the demand for a refund, Nailor said, adding that the contract could end up in litigation.
“But we’re going to continue to finish that project,” Nailor said.
MTX did not respond to a request for an interview.
According to the auditor’s report, the state is trying to salvage the project by splitting it into two projects and hiring new contractors. The Agency of Digital Services estimated in March that one of those two projects would cost an additional $2.73 million and would be completed next year.
Nailor said the tradeoff for the ability to adapt to new technology often leads to schedule and cost overruns.
Many times, he said, the schedule and costs are out of his department’s control. As an example, Nailor said if the Legislature implements fee increases at the Department of Motor Vehicles, his staff must interrupt the modernization of the Department of Motor Vehicles site to enact the new fees.
“As much as we would like to hit all of our initial dates and estimates, often it’s in the best interest of Vermonters that we incorporate whatever is the current information,” Nailor said, “and that can mean taking a pause from a project to implement updated fees in the motor vehicles systems.”
The fees were raised in the budget passed by the Legislature. Gov. Phil Scott vetoed the budget over Memorial Day weekend.
Hoffer said that the most important finding in the report was that the Agency of Digital Services and the agencies for which it was performing the information technology work used weak measures to determine the value of the projects.
“That’s not to say they didn’t solve problems or improve the delivery of services and save money,” Hoffer said. But he encouraged the agencies to do a better job in measuring the performance of projects.
Nailor said measuring the performance of services is the job of the agencies for which his agency has installed the information technology.
“We focus on the technology,” Nailor said. “We’re really focused on making sure that when we’re in the heat of the project, we’re monitoring performance and delivery of the vendor and project team at that time.”
Hoffer disagreed that this is the extent of the responsibility of the Agency of Digital Services.
“I think ignoring the purpose of the expenditure is not appropriate,” Hoffer said. He argued that the Agency of Digital Services, as a state agency, is responsible for making sure that public funds are well spent.
Correction: The initial version of this story misstated the name of the Department of Vermont Health Access.