If it takes three examples to make a trend, get ready for the hottest new fashion in local government: accounting software that can’t do math.
Never mind, that until 30 years ago governments were able to keep good records with pencils, pens and paper. You might as well chisel arithmetic into stone tablets. Today, to keep good financial records, you need good software. And the first thing you need to know about good software is that the software you have is never quite good enough. Computer-based accounting systems are like than the clothes in your closet — if you own it already, chances are it’s already out style. And there’s always someone there to sell you the new thing.
The beginning of the end for public accounting.
As usual, Jefferson County is the trendsetter. When it comes to new styles of expensive and ineffective accounting software, the county has exceptional taste.
Six years ago, under then-Commission President Larry Langford and Finance Director Steve Sayler, Jefferson County decided to replace its old accounting software. The old system was practically eaten up with moth holes, the county said. The new system, called SAP, would make the county’s finances cutting-edge again.
The price tag: $2.6 million.
That number by itself was bracing, but the commission approved the purchase. Unfortunately, the county wasn’t done, let’s say, accessorizing. The county then paid Bearing Point Management and Technology Consultants $7 million to install the software and train county employees to use it. It was painful but necessary, the county told the public.
Then they turned the system on.
The new new system’s accounting style shocked the town. It neglected long-standing and commonly accepted conventions, such as being able to add numbers or subtract.
People began to wonder whether the new system had been a mistake — people such as vendors who were no longer getting paid. Some threatened to cut the county off if they didn’t start cutting checks again. Commissioners asked whether the county could go back to the old accounting system, only to discover the county had failed to run parallel accounting systems. Those problems begat new ones. Soon, the county couldn’t even produce audited financial statements.
Since then, Jefferson County has spent another $2.7 million trying to get the system in working order, bringing the total to more than $12 million. But officials there are still unhappy with SAP and now want to replace it altogether.
No matter the mess Jefferson County had made of itself, Birmingham voters and business elite liked the county’s style so much that they chose Commission President Langford to become Mayor Langford. And Mayor Langford tapped former Jefferson County Finance Director Sayler to become Birmingham Finance Director Sayler.
Birmingham finances, while neat and conservative, had been positively boring under Mayor Bernard Kincaid. They were about to get a complete makeover.
The new administration implemented a new accounting system, called the New World accounting system.
No sooner did the city turn on the New World Accounting system than it could no longer produce monthly financial reports as required by state law. You might have thought Langford, Sayler & Co. would have learned from the mistakes across the park and maintained parallel accounting systems until the new one was fully functional, but high expectations just lead to disappointment.
The Langford administration hired Tech Providers Inc., a consulting firm with ties to Langford’s campaign manager, to install the system and train city employees to use it. At first, Tech Providers asked for a 12-month $1.3 million contract, but after the firm burned through that money in six months, it asked for another $3.3 million to do the same job. The city council eventually approved $2.7 million, bringing the total installation cost to $4 million.
But by the time Langford went to jail and his administration left City Hall, the system still didn’t work. A glitch in the system, which the city’s technology department warned finance officials about, caused the city to overpay firefighters $22 million over two years.
That and other problems in the system have lead the new mayor, William Bell, to seek a $89,000 consulting contract for Carr, Riggs and Ingram to fix the remaining problems. Only this time, the council balked. Councilors Steven Hoyt, Roderick Royal, Maxine Parker and Lashunda Scales refused to approve the allocation. Mind you, Hoyt, Royal and Parker approved the previous $4 million of consulting work under Langford, barely batting an eye. (Scales was not yet on the council.)
Until the city fixes these problems, audited financial statements won’t be possible, Bell says.
Birmingham and Jefferson County are not alone with their accounting faux pas. This week, the Montgomery County Appraisal office said that it had spent $900,000 on faulty accounting software. That money was pretty much wasted, officials there said.
The system has sent bogus or flawed bills to property owners and county employees have to take hours to fix mistakes that they once could have corrected in minutes.
The system has to go, the county appraiser told the Montgomery County Commission, and that will cost anywhere from $500,000 to $1 million. What’s worse, because Montgomery County and the City of Montgomery’s systems have to talk to each other, the city might have to shell out that much money, too.
Montgomery’s accounting system was all but antiquated the moment county officials there turned it on.
On in other words, it was already out of style.
In fashion, they say there’s no accounting for taste, but in government there’s no taste for accounting.