A closer look at the history of Manatee Schools’ troubled new computer system
Like playing a high-stakes game of Whac-A-Mole or fixing an airplane that’s mid-flight, the School District of Manatee County is trying to stabilize its operations under a new business management system, which launched nearly 10 months ago.
The district’s efforts drew many comparisons at Thursday’s meeting of the Audit Committee, but the message was clear: Time is running out and the consequences are dire.
Manatee’s new enterprise resource planning system, or ERP software, affects every aspect of district operations, as evidenced by a new report.
“Contract pay is not functioning as needed and is causing issues in departments,” the report states. “For example, employees who change contract positions are no longer accruing vacation and sick leave at the levels due to them based on original hire date.”
And while the system affects district employees, it can also impact the amount of funding Manatee receives from the state. The district’s internal auditors — Carr, Riggs and Ingram — provided Thursday’s draft report, which included a second report by CRI Solutions Group.
“The lack of functioning in these areas is putting significant government dollars at risk,” it read.
Manatee replaced a system that was nearly two decades old, but not before the budget spiked from less than $10 million to more than $20 million over several years, sparking changes in upper management and a review by the Florida Auditor General.
To finally make its investment worthwhile, the school district should form a governance team that meets weekly and oversees the repairs, according to internal auditors. It would include a school board member, the superintendent, the deputy superintendent of operations, the chief technology officer and others.
District leaders said people have worked on the system for months, but auditors said a high-level team should be formalized and held accountable. And the project is still plagued by understaffing and burnout, so auditors recommended that Manatee hire more employees or outside contractors, depending on who has expertise in the program.
Superintendent Cynthia Saunders told the committee she would develop an action plan in the next week, including measurable goals and timelines. She said it was imperative to stabilize the system by July 1, though a long-term fix likely would take six months to one year.
“This is where we are,” she said. “It’s our responsibility to correct it and ensure that next year the system is functioning as it should.”
District leaders recognized the need for a new ERP system in 2013, but the process started under former Superintendent Diana Greene in 2015.
Manatee had problems with turnover and the eventual bankruptcy at Ciber, a company hired to implement the new software. The project also suffered from employee burnout, aggressive deadlines, slow decision making and possible deception by upper management, according to a past review by the Bradenton Herald.
On July 1, 2018, more than two years after the original contract approvals, and the same day Saunders became superintendent, Manatee launched its new system.
The problems were immediately apparent, and Saunders hired a consultant to review the new programs. George Kosmac, a retired deputy superintendent out of Seminole County, described parts of the system as “insufficient and useless” in his report.
Saunders held a press conference to announce the findings on Aug. 20. One day later, at a school board meeting, she said “we’re not going to notice any problems” by Christmas break.
It seems the ERP project was more troublesome than expected, and Saunders joined members of the Audit Committee in reviewing the pressing issues on Thursday afternoon.
“Right now we are just keeping the operation afloat — barely,” she said.
How the system affects district employees
There are more than 7,000 employees in the school district, and each is depending on the ERP system to properly function, and for district staff to properly use the system.
Thursday’s draft report outlined problems related to employee salaries and benefits. Off-cycle checks are payments made outside of the normal payroll schedule, often to fix errors. After the software launched, off-cycle checks were “not coded to properly reduce the contract pay,” according to auditors.
“The conversion of an employee’s hourly rate to annual salary is done using a standard 2080 hours, which is not standard work hours in a school district,” the report continues. “This can cause an individual’s annual salary to be highly inflated and that salary is printed on the employee’s paycheck.”
“When an employee changes roles they are terminated and rehired under a new contract and this is impacting the amount of vacation and sick time that is accrued,” it further explains.
The second report, drafted by a separate division of the same company, was more blunt in the description of pay-related issues.
“Contract pay appears to be a disaster,” it reads.
The first report used bold font to recommend a solution: switch to bi-weekly pay — 26 pay periods a year — by July, a change that would require union approval. A change would simplify the process and possibly reduce errors.
“If we don’t change this one element, we will continue to have issues with payroll and data,” Saunders said at Thursday’s meeting.
Troubles at MTC
About nine months after the ERP project official started, the school board approved an expansion to include Manatee Technical College in the software overhaul, a reaction to audit findings at two campuses. They drove up the project’s budget in hopes of fixing problems at MTC, but it created new headaches after the system’s launch.
Students weren’t able to access needed information without “manual intervention” by employees in the admissions office, and “extensive manual effort” was needed to process students’ financial aid, according to the report.
“Students have been applying for next fiscal year since October, but the financial data needed for MTC has not been loaded,” the report states. “As a result staff have to manually obtain the data needed from external websites.”
And pell refunds, the amount left over from a student’s grant after tuition and fees, were not automatically processed. It takes 10 minutes of manual work for every student, followed by two business days for processing.
While a partial solution is available from the software company, auditors said, at least two weeks of thorough testing is required before the update can be safely applied. In the meantime, MTC employees are grappling with the troubled system.
“The MTC staff remain positive about the power and possibility of the application,” auditors reported. “However, they are struggling to learn the application including spending many hours researching and reading materials themselves as much as they can.”
A goal at the onset of Manatee’s project was to avoid customizing the ERP system — keep it simple. PeopleSoft is mainly for district operations, and Campus Solutions was added for MTC. The latter was highly customized, according to Thursday’s conversation.
Customizations make it hard to apply vital updates, and to find people who can work on the unfamiliar system.
“The largest firm in the world, with incredible experience in this area, will not touch MTC,” said Scott Hopes, a school board member who attended the recent meeting.
Historical problems still remain: The district needs more staff, training and foresight.
Doug Wagner, the director of adult, career and technical education, took on a second role as the interim superintendent of operations with the retirement of Ron Ciranna, who was under an internal investigation for the ERP fiasco.
With the school board’s approval on Tuesday afternoon, Wagner will shed his interim label and become the official deputy superintendent of operations.
The district also hired its new chief information officer, the person who manages technology projects in the school district. Scott Henson filled the role previously held by Rob Malloy, who also left during an internal investigation.
Eight months after it started its first investigation, the district had yet to complete its review of Ciranna, Malloy and former project manager Angie Oxley. The district’s record custodian, Linda Lambert, denied a request for the investigations on April 16, citing the ongoing inquiry.
The school board is also considering a large contract at Tuesday’s meeting. It could approve the spending of up to $700,000 per year for the maintenance of its ERP system and its hiring software, Taleo.
More contracts are sure to come, especially when it comes to training for district employees, and emergency help from new staff or contractors.
However, before making any changes to the system, there should be thorough testing to ensure that “small changes made in one area do not have unintended consequences in another area,” auditors reported.
The second report started with a hopeful tone, praising district leaders for “a major change in openness from a year ago,” adding that “everyone was open and forthcoming with answers.” However, the report went on to highlight major problems with unity.
“School district continues to think, decide and act in silos,” the report states. “Every function is doing what they think is the right thing, but in this data/system crisis, someone needs to lead them to think about the broader organization.”
At the Audit Committee’s meeting on Thursday, the superintendent said Manatee’s leadership team would have to be decisive, while also being mindful of its spending.
Visibly frustrated, committee member Joe Blitzko said he was astounded by the report.
“We’re no better off than we were three years ago,” he said. “What are we going to do?”