In my last Oinkonomics podcast, I asked former Secretary of Finance Steve Cummings to discuss the commonwealth’s travails in upgrading its financial information systems. In the glory days of Virginia journalism, reporters could have mined these remarks for a half dozen articles. Today? Government-efficiency stories don’t generate clickthroughs, so they don’t get written. — JAB

Cummings: Two things I’ll talk about in finance, because this was a priority of the Governor. Secretary [of Administration Lyn] McDermid, who was CIO at the Richmond Fed, really focused on this. We had within our cabinet reports a tracker of all IT projects. We’d pause and look at things that were shifting status from green to yellow to red so there’s a conversation to find out what’s going on because state government’s notorious for poor execution in IT.

In finance, I’d say the two big things are first, the core ERP system, Cardinal, which has a financial function and HR in one package, PeopleSoft. And they installed the finance package starting 10, 12 years ago. They got partway done with it. And then they found they were end-of-life on the old HR system. I don’t know how that was such a surprise, but they had to shift all of their resources off finance over to HR, which means they never really finished the finance package. As a result of that, over 50 agencies had to build their own to close that gap.

And you can imagine what that looked like, because again, there’s no consistent way that comes top down from VITA (Virginia Information Technologies Agency). Getting that all implemented, getting it connected to the rest of the system, just led to all kinds of inefficiencies. And they really wanted, now that they were living with those, they were going to end-of-life themselves, saying, we need a better package.

So, this goes back to DOA (the Department of Accounts). We thought we had to replace PeopleSoft. We thought we were going to go to cloud. That’s going to be an incredibly expensive project. And there are, say, about a dozen states that are in the process or have tried to launch in cloud. Nobody has done it successfully yet. And, so, through great work from our controller, Scott, we broke it down, detailed review, 230 agencies they talked to, and we now have a 5- to 10-year plan to optimize what we have and get ready to go to cloud in 5 to 10 years based upon what the rest of the world has done. With AI, who knows what that’s going to look like in three years, much less 5 to 10. So, we spent some money. But we actually saved a tremendous amount of money by just doing good work and really digging in.

The other one is the tax system, the core tax system called ERMS, implemented 20 years ago, old, one of those that’s in code that not many people still can really manage. In the tax world if you’re looking at policy options and if you’re going to implement new taxes, you better have a modern system so you can manipulate it and test it and all that stuff. Since 2017, they had paid for three different studies, and never got approval to proceed. And we had a new head of Commissioner of Tax and we got that done. It’s a $132 million project that’s going to take the next three or four years. It’s well underway, really in great shap

This is the problem. It’s like building big buildings in the state government. Those are big commitments and there is a lot of hand-wringing about doing them because when you approve it, you’re going to go through a couple administrations of getting it executed. IT is even worse. And nobody loves to do IT because it’s a burden to multiple budgets, but it’s why we’re so far behind. Because we do it so infrequently, we are just not well staffed to do a good execution. Actually, VITA is doing a nice job of building a SWAT team that’s going to be leading these large implementations. So, I think there’s a lot of good stuff that’s has taken place.