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New York City Comptroller William C. Thompson, Jr. today issued an audit that found that the Human Resources Administration spent more than $47 million on an automated public assistance system that's still not finished after a decade of work.

Thompson found that, despite spending the $47 million, the HRA's Paperless Office System (POS) is not complete and does not meet the agency's initial business and operating requirements.

"While HRA suggests that this project, which started during the previous administration, was a success, the fact is that the City has invested more than $47 million on a system that is still in development seven years after its scheduled completion date," Thompson said. "Currently, nearly one out of every four of the system's functions are not operational."

The HRA provides income support and social services to the City's needy residents by managing entitlement programs such as income support, food stamps and medical assistance. In 1993 the agency reviewed its benefit application process and found it labor-intensive, inefficient and prone to errors. As a result and in anticipation of an increased service demand, HRA decided to develop the POS.

"This system was intended to serve as a single data entry point for several HRA programs and to automate the process of determining and re-certifying public assistance eligibility," Comptroller Thompson said. "POS would electronically verify applicant eligibility data, reduce the number of fraudulent claims and fair hearing losses, improve eligibility worker productivity and client service, and promote accountability responsive case management."

Since then, more than $47 million has been spent, even though the Mayor's Management Report has stated it would be complete by April 1998. As of now, POS is implemented at 31 of the agency's offices and at two of HRA's centers.

Thompson's audit of the HRA system found delays attributable to the agency's decision not to employ a quality assurance consultant at the start of the project, not assign a full-time manager to the project until one year after HRA realized the need for one, and to change the system development methodology midstream.

The audit also determined that:

• HRA said it spent $47 million on POS's development, including $26 million on 11 consulting contracts, $14 million on personal services of HRA personnel, and $7 million on system hardware. The Comptroller located 17 other contracts totaling $15.9 million where HRA spent money on POS development; however, because these contracts also included other projects and did not isolate costs by project, auditors couldn't ascertain the amounts directly attributable to POS.

Thompson noted that: "We cannot be reasonably assured of having obtained all contracts related to POS development, and therefore cannot determine the total amount that HRA has expended on its development."

• Procurement files for six contracts were missing documentation - such as specifications and contracts - needed to evaluate the whether the purchases conformed to City Charter provisions and procurement rules.

• HRA's disaster recovery plan is inadequate to ensure that critical agency operations can be restored in the event of a disaster and that the POS has not been incorporated into that plan.

• Many users are unsatisfied with POS's performance. Auditors found that 76 percent of users who responded to the Comptroller's survey would like to see changes made to the system. Those changes include: faster response times, increased application availability, standardization of screens and modes of completing action, isolation of errors and more frequent training in system use.

• HRA does not have written policies and procedures in place to ensure that user accounts are adequately controlled. Auditors found that on HRA's list of 3,112 user-IDs, there were 244 duplicates, 12 IDs that had no associated username, and one that has been assigned to four users. Additionally, 643 users hadn't accessed the system in more than 90 days, 451 hadn't in more than 180 days, and 44 of listed users were either not at their specific work sites, were not actually system users, or were dead.

• The status of POS was inaccurately reflected in the Mayor's Management Reports. The information presented to the public about the system in Fiscal Years 1994 to 1996 gave the impression that the system was progressing smoothly.

Additionally, Thompson noted, "There is no mention of the system in the Fiscal Year 2003 MMR, thereby denying the public complete and reliable information about the costly project." In fact, the system has not been mentioned since 2002.

"A project of this magnitude, for which the Department has already expended more than $47 million, is of significant public interest," Thompson said.

The Comptroller made a series of recommendations, asking HRA to:

• Complete and make all operational missing functional items including all computer links identified in the report.

• Enhance the system to include various information such as testing results, user-acceptance certificates and corresponding acceptance criteria, and a complete project management log.

• Successfully complete testing before implementing all subsequent portions of POS.

• Employ an independent quality-assurance consultant on future projects to oversee and monitor the entire development process.

• Maintain complete documentation related to all contracts including pre-solicitation reviews, contract specifications, source-selection criteria and evaluations, price-cost analyses, bids and proposals, recommendations for awards, and contract registrations.

• Establish a comprehensive agency-wide disaster recovery plan and incorporate POS into that plan.

• Ensure that user concerns identified by the Comptroller about POS be addressed.

• Develop written policies and procedures for tracking system users and terminating inactive user-IDs.

• Ensure that it provides complete and reliable information to the Mayor's Office of Operations for inclusion in the MMR.

HRA disputed the findings of the audit. However, Thompson noted that HRA's "sweeping rejection of our audit findings is not substantiated by our review and analysis of the documentation provided by the Department."