Costly State Computer System Remains Behind Schedule

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Inside a secure room at the Ohio Department of Taxation, dozens of computer programmers are talking tech and writing code to transform Ohio's tax collection system.

It will be known as the State Taxation Accounting and Revenue System - or STARS.

Ohio Tax Commissioner Joe Testa said when it's online; STARS will replace 27 separate tax computer systems with just one.

The $53 million project was heralded when it began in 2008.  

The department said it was to be a “major technology upgrade designed to increase the scope of customer services, the efficiency of operations, and the effectiveness of tax collections.”

Then-tax commissioner Richard Levin said the project was a "critical investment for the future of the department and a significant commitment to building a more effective, efficient operation."

At this point, STARS has been anything but stellar.  The state has spent 10 million of your tax dollars on STARS and it is years behind schedule.

Watchdog 10’s Kurt Ludlow asked Testa why the project was not online by the planned 2012 date.

“A lot of things happened,” said Testa.

Testa said to start with, almost immediately after winning the state contract in 2008, Electronic Data Systems was sold to Hewlett-Packard.  

"There were some disconnects, there was some misdirection, (and) there were some management issues that the HP staff had brought in,” said Testa.

The result, he says, was that HP kept missing deadlines, and its contract with the state allowed for too much wiggle room. It did not have fixed penalties for missing important delivery dates.

So, Testa, who became Tax Commissioner in 2010, said something had to be done.

"Things were not moving as promised, so I contacted the corporate office and said we've got a real serious problem here and we're not going to tolerate this,” said Testa.

He said he got a surprising response during a face-to-face meeting with company executives.

"This is embarrassing.  We have not provided you, the state what we had committed.  We have the wrong management, we have the wrong staff, we have the wrong skill-sets, we have bungled this, and we admit it,” Testa said.

HP then fired just about everybody, brought in an entire new staff, with new skillsets, and management style. According to Testa, he demanded they accept new contract terms requiring them to meet deadlines or face penalties.

And he says the price of the contract remains the same.

Testa confirmed to Ludlow that the cost remains $53 million, and he said he was encouraged by the restart.

He insists the first phase of the STARS project will be online in November, with the other phases to follow. If so, it will have taken nearly seven years to complete.

But Testa insists STARS will save taxpayers hundreds of millions of dollars over time, by reducing costs and increasing tax collections.

"The Department of Taxation's going to be able to be much more efficient, much more flexible.  Provide much better service to the citizens of this state,” said Testa.

Watchdog 10 asked to speak to somebody from Hewlett Packard.

Instead, the company released a statement, which reads:

"Earlier this month, HP delivered the common tax framework for STARS, which represents the largest percentage of system software. We are working with the Ohio Department of Taxation (ODT) to develop, test and implement the remainder of the solution required for each of Ohio’s 23 different tax programs. We are committed to a successful delivery of this complex project under the leadership of Commissioner Testa." - William R. Ritz, Manager of Public Relations, Health and Life Sciences/State and Local Government

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