The City Department of Health (DOH) appears to have wasted as much as $10.3 million on a failed project to automate the death certificate process, leaving grieving families with delayed access to needed funds, New York City Comptroller Alan G. Hevesi revealed today. DOH is now attempting to develop a new electronic death registration system from scratch with a different vendor at a cost of at least another $1.8 million, and possibly much more as the new contract may only cover the first phase of development. Meanwhile, countless families may be left waiting months to get the death certificates they need to access money and to settle estates. Standing with New York City funeral directors Robert Ruggiero, Martin Kasdan and Ayris B. Granby, Hevesi called on DOH to account for the project's cost and to implement a system that actually works.

"This is an example of government operating at its worst," said Hevesi. "DOH circumvented the City's and State's competitive procurement processes and spent millions of taxpayer dollars to develop a system that doesn't work. Now, six years after the funeral industry first presented the City with a plan for an electronic death registration system, and about two years after DOH began developing such a system, DOH finds itself back at square one, and grieving families are left to deal with a bureaucratic nightmare."

"Imagine being unable to get money from a bank account or a life insurance policy for three months or more just because of a spelling error on a death certificate. That's how long it can take to get a corrected death certificate," said Robert Ruggiero, President of F. Ruggiero & Sons. "I've seen that scenario and others like it played out on countless occasions. An electronic death registration system would eliminate the agonizing wait times that families currently experience."

Two months ago, the Comptroller's Office began an investigation of the failed project after receiving complaints from anonymous sources involved in the Electronic Death Registration System ("EDRS") project. The sources provided information about potential contract abuses and mismanagement at DOH that resulted in the agency spending millions for an EDRS that doesn't work.

Annually, there are about 63,000 deaths and 123,000 births reported to DOH's Office of Vital Records. DOH issues a combined total of 725,000 certified copies of birth and death certificates each year. Certified copies of death certificates constitute a significant portion of the 725,000 copies issued because people need multiple certified copies of a death certificate to settle an estate. DOH charges New Yorkers $15 for each certified copy of a birth or death certificate. Each year, DOH collects approximately $11 million in revenues from the issuance of certified copies of birth and death certificates.

An EDRS would eliminate DOH's existing paper-based system for filing, correcting and issuing certified copies of death certificates. Currently, funeral directors, who file the majority of death certificates in the City, must obtain a completed death certificate from a doctor, and then bring it to 125 Worth Street, where the only office for processing death certificates in the City is located. Funeral directors typically encounter long lines and must wait, sometimes up to two hours, to have a clerk approve the death certificate. If it is not approved, because an error is detected or the clerk on duty does not find the completed certificate satisfactory, the funeral director must track down the doctor to make the changes to the certificate, and then return to the DOH office on Worth Street to have the revised certificate approved.

"Picture the most bureaucratic system you can. Whatever you've imagined, the process for getting death certificates from DOH is ten times worse," said Martin Kasdan, President of Schwartz Brothers-Jeffer Memorial Chapel. "There is no accountability at DOH. An electronic death registration system would eliminate the bureaucracy that currently makes it so difficult to get a death certificate."

"The current system is broken and the only way to repair it is to create a new one with new technology, " said Aryis B. Granby, a funeral director at Granby's Funeral Service and President of the Metropolitan Funeral Directors Association.

Families need an original certified copy of a death certificate to give to each and every financial institution or organization involved in the process of settling an estate or a deceased person's financial affairs. Typically, families encounter problems when they underestimate the number of certified copies they need, as it can take three to six weeks to obtain additional copies. Moreover, if families find that the death certificate issued by DOH contains an error, they must wait eight to 12 weeks to get a corrected certificate, according to funeral directors. As a result, families are too often left waiting weeks, if not months, to begin or complete the difficult process of probate.

"There is simply no reason why, in the computer age, people should have to wait months for a death certificate, when that may mean they can't get to money that belongs to them and that they may need to pay for living expenses," said Hevesi. "The Health Department has taken much too long to get this project going."

"When families are grieving and trying to get their financial affairs in order, they reach out to us for help," said Kasdan. "DOH, however, offers no compassion to these people. It does nothing to move the process along because to DOH a death certificate is
just a piece of paper. To grieving families, a death certificate is a valuable document.
For some families, getting a death certificate means they will be able to pay their bills."

In December 1994, the Metropolitan Funeral Directors Association approached the City about the need to automate the death registration process. To that end, the Metropolitan Funeral Directors Association, the New York State Funeral Directors Association, and New Jersey Funeral Directors Association paid more than $60,000 for a feasibility study and plan to implement electronic death registration systems in their respective jurisdictions. The Metropolitan Funeral Directors Association presented the study to the City and proposed forming a public-private partnership with New York City to pay for, develop and implement the project. According to the Association, the City rejected the proposed partnership and decided to pursue the development of an EDRS alone.

In 1997, the New York State DOH contracted with Sybase, Inc. to develop an electronic death registration system, or an EDRS, at a cost of approximately $200,000, according to a July 1, 2000 article in The New York Times. While sources familiar with the State's system indicate it has not yet been implemented because of other priorities within the State DOH, New Jersey's Department of Health obtained a copy of that EDRS software in July 1999. At a cost of about $250,000, New Jersey modified the software to conform to its death registration needs. Within six months of receiving the software, New Jersey began using the EDRS and now has it working in seven of 21 counties.

As with New Jersey, the City would have had to modify the State's EDRS to fit its needs. Given New Jersey's experience, that should have been feasible. Nevertheless, DOH contracted with IBM to develop a new EDRS. When that EDRS was tested, it crashed, according to the July 1, 2000 article in The New York Times. Sources familiar with the EDRS say that the system still does not work.

On January 19, 2001, DOH issued an RFP for the development of a new EDRS. The RFP contained no reference to the system developed by IBM. Thus, it appears that DOH is starting from scratch with a new vendor to develop a workable EDRS.

Hevesi's staff found that:

• · DOH violated the City's and State's competitive procurement processes when it contracted directly with IBM.
• · DOH inappropriately used an existing state contract meant for computer maintenance, not development, to secure IBM's services for the development of a new software system. State officials confirmed that the scope of the contract used
  by DOH does not encompass hardware purchases or large software development projects, such as the EDRS project. Moreover, in April 2001, an employee of DOH was asked to generate an after-the-fact justification for DOH's use of the State contract. In an e-mail obtained by the Comptroller's Office, the employee noted the difficulty of performing such a task.
• · It appears the City has already paid IBM $10.3 million for the failed EDRS and other projects, based on a series of purchase orders reviewed by the Comptroller's Office. According to information obtained by the Comptroller's Office, the bulk of the $10.3 million was spent on EDRS alone, and the other projects referenced in the purchase orders were mere "window dressing" to conceal the true costs of the EDRS project. The exact amount spent on the EDRS project is unknown because DOH failed to follow appropriate contracting practices as well as City and State competitive guidelines for information technology projects.

"DOH needs to come clean about EDRS," said Hevesi. "I am calling on DOH to immediately release all relevant documents and information in connection with this project."

In a letter to DOH, Hevesi demanded that it provide:

• · An accounting of how much has been spent on EDRS.
  
• · A report on the status of the EDRS project.
  
• · The scope of work and cost estimates for the EDRS when IBM first started the development project.
  
• · IBM's original technical and cost proposal to complete an EDRS.
  
• · A copy of any and all evaluations of IBM's work on the EDRS project and of the project itself.
  
• · Information on whether DOH required IBM to provide a completed EDRS application under the terms of its agreement, or whether DOH simply paid IBM on an "as-you-go" basis.
  
• · Information regarding what, if anything, DOH is doing to recover its costs from IBM.
  
• · All documentation regarding DOH's selection of a new vendor to succeed IBM, including all documents related to the new RFP and the contract signed as a result.
  
• · Information regarding who is now managing the project and what systems are in place to ensure that the City obtains a working EDRS at the price proposed by the vendor.
  
• · A copy of DOH's contract file regarding EDRS.

"Right now, it appears that DOH has nothing to show after years of planning and possibly spending as much as $10.3 million of taxpayer money," said Hevesi. "Not only have taxpayer dollars been wasted, but families are still suffering from unnecessary delays. Before DOH starts the new EDRS project, we need to know what steps it is taking to make sure the project is successful this time."

This is not the first time the Comptroller's Office has found problems with DOH's vital records department. During an audit in 1995, the Comptroller's Office found a backlog of 12,545 unprocessed mailed-in requests for birth and death certificates, along with the accompanying undeposited checks and money orders that totaled approximately $272,000. About half of the mail-in requests were found unopened and the other half were stored in boxes that were located on desks or the floor of the vital records office. During a follow-up audit in 1997, auditors found that DOH corrected the problems associated with processing mail-in requests.

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