Blame aplenty in benefits mess
Counties and state played roles in debacle
By Karen Augé
Denver Post Staff Writer
Nearly every agency, contractor and department that touched the state's new $200 million computer benefits system in some way contributed to its debacle, a Denver Post review of state records has found.
And even as a $300,000 audit of what went wrong goes on - and thousands of needy, elderly and sick Coloradans wait for their food stamps and health care - "nobody has ever stood up and said, 'I'm responsible,"' said Edwin Kahn, one of several attorneys who have taken the state to court over its implementation of the Colorado Benefits Management System.
"I think somebody should be held accountable in the executive branch and also the governor's Office of (Innovation and Technology) and indirectly the governor," Kahn said.
The CBMS has a noble goal: a single, streamlined and speedy computer system for all of Colorado's social benefits programs.
With such a system, clients would no longer have to drive all over town and file half a dozen applications. Counties would save millions. The sick, the needy, elderly and children could get help immediately.
What could go wrong? A lot.
The system took longer and cost more to create than anyone predicted.
And when it finally debuted last Sept. 1, more than a year late but nevertheless over the protests of many who felt it still wasn't ready, CBMS unleashed a torrent of misery as some of the state's neediest people struggled to get the help they needed.
In the eight months since the system launched, the state, the contractor and the counties have blamed one another for the the problems.
But a review of records and correspondence associated with CBMS indicates that they all bear some responsibility.
The contractor, Electronic Data Systems, failed to meet critical early deadlines, underestimated the capacity the system needed and, according to state officials, was way off in its calculations of how many people and hours it would take to design key parts of the system.
The state realized early on it could not afford all it wanted out of the system, but forged ahead anyway. As one veteran of the project who didn't want to be identified put it, "The state never had enough resources assigned to the project."
Counties administer the programs CBMS is designed to handle. But some of them failed to participate in the computer system's development or get their employees trained.
A final blow was delivered by a rotten economy, which forced layoffs and budget cuts in state departments and county offices, burdening fewer employees with bigger caseloads even as they tried to cope with the transition to CBMS.
"We have two companies, two departments and the counties pointing fingers at each other, and there is no way in our system for the legislature to get to the bottom of that," said Rep. Bernie Buesch er, a Mesa County Democrat.
In fact, in an appearance before legislators last month, members of the governor's commission on innovation and technology cited CBMS as one of the commission's success stories.
"I just lost my cool" at that, Buescher said.
Troubled birth of "beast"
Dubbed the "beast with many tentacles" by Gov. Bill Owens' spokesman, Dan Hopkins, CBMS dates back more than a decade.
After years of internal research, the state in 1998 asked companies to bid on the project.
When the two original bids came in at about $200 million, state officials erased some bells and whistles and assumed more responsibility for software design and the training of employees on the new system.
The state and EDS finally signed a $91 million contract in 2000. Work was supposed to have been finished in 32 months.
Things started going wrong almost immediately.
EDS got behind and missed early deadlines.
And, in a memo taking issue with a report critical of the state's performance, a state consultant said EDS "grossly underestimated" the time it would take for the state to complete what are known as "decision tables" - the computer codes for rules and regulations that determine who is eligible for which benefits.
In a March 1, 2004, letter, Michael Whitlock, a consultant hired by the state to coordinate the CBMS project, wrote that "EDS estimated that 752 decision tables would be required, when in reality 1,554 decision tables have been developed."
EDS estimated it would take three weeks to complete decision tables for food stamps, but in reality it took 14 1/2 months, Whitlock wrote.
The contractor takes issue with that.
"This was a pilot program to train the state how to develop decision tables, because the decision tables are the state's responsibility," company spokesman Bill Ritz said.
When CBMS was plugged in across the state last Sept. 1, the system simply couldn't handle the volume.
Asked how EDS could have made such a massive miscalculation,
Ritz said: "When the system went live, there were more users at one time than we expected. However, EDS quickly recognized the problem, and we aggressively moved to correct it, which we did at EDS expense."
The addition of 12 processors tripled case-processing capability. But beyond that point, the state and EDS can't agree. The governor's office said the fix came at Owens' insistence; EDS officials say they initiated it.
In either case, in February, when the state submitted to Denver District Judge John Coughlin a court-ordered progress report, officials blamed the ongoing backlog on the initial lack of processor capacity.
Last week, Ritz called that "unfair and misleading."
EDS, for its part, says the state underestimated how many people would be using the system and the caseload it would be handling.
State officials dispute that. But they concede they never had enough people or money dedicated to the project.
"We brought the system up with not enough resources," said Marva Hammons, head of the state Department of Human Services.
"We all probably underestimated what we needed. I don't think we ever asked for in hindsight what we probably needed," Hammons said.
With the state and EDS both falling behind, CBMS start dates began to be pushed back.
Finally, EDS, Hammons and Karen Reinertson, executive director of the Department of Health Care Policy and Financing, settled on a Sept. 1, 2004, start date.
Letters poured into the offices of Reinertson and Hammons, and Owens, from county commissioners, caseworkers, advocates for the poor, and a host of others - all begging the state not to launch the system Sept. 1.
"We were just dismissed," said former Arapahoe County Commissioner Debra Vickrey, who served for several years on a CBMS oversight committee.
At the time, Reinertson and Hammons sent letters stating that the decision was not whether to start up on Sept. 1 or wait.
"Rather the choice before us today is to go live Sept. 1, 2004, or to abandon CBMS altogether," the counties were told.
"We were out of money," Reinertson said last week.
The state had already spent its allotment for CBMS, and then some. With each delay, officials had to scrape together more, and by July 2004, the state legislature had no more to give, she said.
Even if the state had been able to offer more money, Reinertson and Hammons remain convinced it wouldn't have helped much, because problems with CBMS wouldn't have become apparent until it went into use.
And despite their complaints, the counties aren't blameless.
In fact, some counties "boycotted" the training process, said one county official who asked not to be named.
According to a March 2004 letter written by a state employee, only 29 counties had reported their status on a system created by the state to track county readiness.
"The state ... is actively pursuing greater county participation in the readiness reporting process," the employee wrote.
Another letter, from the state to Mesa County, pointed out that nearly 30 of the county's 110 employees who needed it had not registered for training as of spring 2004.
The state is now spending up to $365,000 for Deloitte Consulting to figure out whose fault this mess is, what can be done to fix it and at what cost.
In the meantime, the state and EDS say they are making progress.
But critics say the efforts amount to a little bandage on hemorrhaging wounds.
"For a $200 million system, they're using Scotch tape" to fix it, Vickrey said. "That's a travesty."
Staff writer Karen Augé can be reached at 303-820-1733 or email@example.com.