The North Carolina agency that oversees the business operations of state government needs around $11.3 million to replace its procurement system, which is scheduled to be discontinued at the end of the year.
The rollout could be stalled, however, because of the budget impasse and the Department of Administration’s failure to request additional funds.
General Assembly Fiscal Analyst Grant Schwab told lawmakers Friday that the delay is a compliance violation by the Department of Administration (DOA).
“DOA did not submit a formal budget request for the replacement project to the General Assembly, which is not against the law,” Schwab told members of the Joint Legislative Oversight Committee on General Government. “However, it limits the General Assembly’s ability to fully consider a project.”
The department uses the procurement system to manage purchases and contracts for state agencies, schools and colleges.
The system’s vendor advised DOA in March 2017 that the system will be phased out by December 2020. About $7.5 million of the rollout-cost for the new system was included in the 2019-2021 budget vetoed by Gov. Roy Cooper in late June. The agency also has remaining nonrecurring funds in its account, but North Carolina law requires the General Assembly to approve the money before it can be spent.
“The replacement project is a necessary project to prevent a disruption in service to a statewide IT system,” Schwab said. “However, there are some issues on how the project is going forward without an appropriation from the General Assembly.”
The new system is an upgrade from the current one, Schwab said.
Cooper vetoed the budget a few days ahead of the fiscal year, which started July 1. In September, the House overrode Cooper’s veto, but it will take a three-fifths vote from the Senate to complete the override.
DOA now will have to wait until the legislative session reconvenes in late April for lawmakers to propose the allocation. That will cover only the current fiscal year, according to officials.
North Carolina law states that if operating funds for a project are not available then work on the project may be halted, Schwab said.
Kristin Walker, deputy director for the Office of the State Budget Management, said the recurring funds in the agency’s base budget can be used for the system replacement.
“The base budget for this fund actually states – that you all have approved and appropriated – states that the funds can be used for additions and enhancements to the system,” she said.
Walker said the budget management office also has a backup plan if the $7.5 million in the vetoed budget is not approved, which includes pulling from reserves set aside for unexpected occurrences.
– The Center Square
