State report: ‘Significant deficiencies in internal controls’ following issues with IT projects

News 3 first reported on project halted at ETF
State report: ‘Significant deficiencies in internal controls’ following issues with IT projects

State auditors said there is a “significant deficiency” in internal controls at the Department of Employee Trust Funds following the halting of work on a major technical overhaul.

News 3 first reported that work had halted at the Department of Employee Trust Funds on a major overhaul of the state’s online benefits system. Questions about the viability of the project began in late 2017 and work stopped in early 2018, according to reports submitted to lawmakers.

The state’s annual financial report shows a “significant deficiency in internal controls” at the Dept of Employee Trust Funds, where work has halted on a new system to implement retirement benefits. #News3 has been reporting on this issue: https://t.co/Lj2QBwwqPM pic.twitter.com/32PAmv4O18

— Jessica Arp (@news3jessica) December 21, 2018

In the state’s comprehensive annual financial report issued by the Legislative Audit Bureau, or LAB, auditors said they had identified a “significant deficiency in internal control” at ETF, in part because the employee benefits system was supposed to be replaced and the lack of an update poses risks for the department.

“The information systems that were scheduled to be replaced with this new system continue to age and present risks for ETF to manage,” the report said. “ETF will need to continue to maintain these older systems to ensure effective administration of benefits.”

The financial report notes that ETF had contracted with vendor Vitech Systems for $27.1 million for the project. Records show that at least $8 million was paid to Vitech through 2018, and an ETF spokesman has said the department is working with the Department of Justice on possible legal action.

The financial report released Friday also details continued concerns with another information technology project called STAR, the state’s system to administer accounting, payroll and purchasing. Auditors found there were also significant deficiencies in internal control that have persisted since the implementation of STAR in 2015.

The report also found deficiencies in management of the Department of Transportation, the Department of Health Services and the Office of the Commissioner of Insurance.

Lawmakers who oversee the Joint Legislative Audit Committee issued a statement Friday calling on the state to take action to remedy the issues.

“Maintaining oversight of our IT systems’ security is of the utmost importance to the state,” said Sen. Rob Cowles, R-Green Bay. “Several of these findings are ongoing concerns that still need to be addressed from prior audits. It is my hope that state agencies will implement the LAB recommendations quickly and put these IT security issues behind us.”

The committee chairs have asked that the state report progress on the issues by March 29, 2019.

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