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Delays Plague State IT Upgrades Totaling More Than $1 Billion

Information technology projects throughout state government are regularly deferred, which has created a backlog of necessary and expensive upgrades.

Vermont’s state government is contemplating at least $1 billion of information technology projects in the coming years. The wish list is long, and some projects — even important ones — are likely to stay on it for a long time.

While state officials scramble to fund $36 million more in Medicaid charges this year than they budgeted for, they’re also scratching their heads a bit. It’s one thing to figure out how to pay a big bill. It’s quite another to understand how it got so big in the first place.

With Medicaid, data to explain this year’s cost overages don’t come easy. That’s because the system that runs the health care program for low-income Vermonters is so antiquated that analysts can't use it to get all the answers they need. 

“Our ability to use the system effectively to understand the various underlying data and understand what’s actually going on is less than in a system that doesn’t have the flexibility that a modern system might," says Steve Klein, Vermont’s chief fiscal officer. 

The Medicaid information system was due for a big upgrade several years ago. That’s been put off, a couple times, and it’s still on hold into the foreseeable future. Some new components are getting added, but the core system is just not set up to compute all the information that today’s policymakers need to build an accurate budget.

Information technology projects like Medicaid’s get put off for various reasons, and throughout state government. Vermont’s Judiciary, its Departments of Motor Vehicles and Public Safety, the Public Service Board, the state’s accounting and procurement offices are all home to IT projects that face continual delays.

Sometimes, there’s just not enough money or resources to get the projects done. Sometimes leadership doesn’t understand their importance. 

Sometimes, there's just not enough money or resources to get the projects done. Sometimes leadership doesn't understand their importance.

And sometimes, says Chief Information Officer Richard Boes, delays are good.

“Sometimes changes in technology actually give you new opportunities. You can say, ‘We were really trying to do this item three years ago, but now new technology allows us to do it much more effectively, so here’s a new proposal.’ And those may have better justification that reach a better audience.”

Still, Boes says, delays also carry risks: like putting off a stitch to mend a sweater, or a patch to fix a roof, deferred maintenance on IT systems can be more costly in the end.

“And so when you maintain software for sustainability, keep it updated, it does tend to last longer than if you defer some of those maintenance activities and then have to go through a major upgrade," Boes says. "And that major upgrade is generally more costly at that time than if that software had been maintained throughout its life cycle.”

Credit Taylor Dobbs / VT Digger
VT Digger
Richard Boes, Vermont's chief information officer, says deferred upgrades can cost more in the long run. The state's accounting system, for example, hasn't gotten all the upgrades it should have had over time. Now it's on the table for significant work to bring it up to standard.

He says the state’s accounting system, for example, hasn’t gotten all the upgrades it should have had over time. Now it’s on the table for significant work to bring it up to standard.

In the Agency of Human Services, one project has been on the wish list for at least 18 months: file sharing for four different offices that coordinate residential placements for children in need. Some staffers actually still haul binders of paper to weekly meetings at off-site locations to track kids’ cases.

Fiscal officer Steve Klein says paper pushing is another way deferred IT projects ultimately add cost — by reducing efficiency. But it’s about more than money.

“It’s not something people see day to day, but it prevents us from accomplishing a lot of our goals," Klein says. 

Information Officer Richard Boes says the state’s older IT systems still work for what they were designed to do. The problem is, they weren’t designed for today. Public needs evolve. Technologies advance. Governments amend policy. These changes change what we need from IT.

But keeping older systems up-to-date is challenging. And, the longer incremental changes are delayed, the less yesterday’s information systems are up to the task of running today’s — or tomorrow’s — government.

This is the first in a two-part series on the challenges facing Vermont's IT systems. Read the second story here.

Hilary is an independent investigative reporter, data journalism consultant and researcher based in Montpelier. She specializes in telling stories of how public policy shapes people's daily lives.
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