The state of California employs 7,800 people to provide Information Technology (IT) services to state government. These IT professionals administer the state’s networks, ensure the integrity of its data, and develop and maintain computer programs utilized in the daily delivery of public services. But this is only a portion of the state’s IT expenditures. Since Fiscal Year 2003-2004, the number of contracts for IT work in force in any given year has doubled while total annual expenditures have increased by at least 50%. And while state departments’ and agencies reliance on IT contracts is on the rise, its oversight mechanisms for these costly contracts remains weak.
Given the Governor’s executive order to state agencies to cut “non-essential” contracts to reduce state expenditures, we recommend that the Legislature seek answers to the following questions:
- How are departments taking action to cut “non-essential” IT contracts?
- Is the Legislature in a position to determine where IT contracts are, what they are for and whether they can be cut?
- Who is reviewing IT contracts to ensure that proper guidelines and state laws are being followed in ensuring departments have the legal authority to contract and whether departments are cancelling contracts?
- Are there more cost-effective ways to provide IT services now being contracted?
- Does the Legislature have the information it needs to evaluate the meteoric increase in IT contracts for state services? This report helps answer some of these questions.
It documents the state’s dependence on IT contracts, reviews relevant cost concerns, identifies state practices and controls that need reform, and makes specific policy recommendations to reduce reliance on costly contract staff.