Metropolis: Wednesday, March 20, 2003
Systems Failure

A ‘scathing’ external audit confirms bad management at the city’s IT department.


If a troop of vicious third-graders had been running the city’s information technology department over the last two years, the report the Fort Worth City Council received from outside auditors Tuesday couldn’t have been much worse.

In what council member Clyde Picht called a “scathing” report, the Premis Consulting Group told the council that, until a few weeks ago, almost every major function of the IT Solutions department was being operated under “high risk” conditions. The auditors said controls over vendors were extremely lax, what should have been major planning functions were nonexistent, and that more than half of IT staffers had no faith in the ethical guidance of their department.

Premis auditors said IT managers had little understanding — or least performed little enforcement — of procurement rules, and that no one was even keeping data by which a controversial contractor’s work could be evaluated. On a major outsourcing contract, that same contractor, Avizion Technologies Group, was allowed to write the bid specifications, held improper discussions with bidders, actually partnered with another company to bid on the project — and then was supposed to help evaluate the bids, auditors said.

Avizion’s lucrative city contract was cancelled Feb. 28, the same day that IT department director David Miller was forced out. Miller, hired in February 2001, said at the time that he had resigned voluntarily, but numerous witnesses said that he was escorted out of the building by police, that his and Avizion workers’ access to city computers was immediately cancelled, and that their computers were secured by police officers. Neither Miller nor Terry Bay, managing partner of Avizion, who oversaw her company’s work for the city, could be reached for comment for this story.

City Manager Gary Jackson announced the same day that a transition team, headed by Water Department Director Dale Fisseler, had been installed to temporarily oversee the troubled IT operation, which runs the city’s mainframe computer, oversees its network of personal computers, and is charged with other vital city functions.

The Premis report was delivered at the informal session that preceded Tuesday’s council meeting. In a preface to it, City Auditor Costa Triantaphilides told council members that the IT department represented “a very bad case of mismanagement,” among the worst he has seen in two decades of auditing. Triantaphilides had recommended seeking Premis’ expertise after his own department found problems in IT operations.

“We recognize significant changes are needed,” Jackson said. “We’re going to turn a corner on this operation that has been troublesome for quite some time.” The outside auditors recommended an extensive reorganization of the department and reordering of its goals and priorities, something Jackson said is beginning to be done by the transition team.

Premis auditors made another recommendation that could have even further reaching effects: creation of an ethics board, to which city workers could bring ethical concerns, and which could encourage understanding and enforcement of the city’s ethical guidelines.

Council member Chuck Silcox said after the presentation that he thought neither the council nor city managers had listened sufficiently to the city workers and former city workers who sounded the alarm about actions of the IT department, Miller, and Avizion for more than a year. Instead, he said, the complaints were written off as “sour grapes.”

“We have to get it where employees can bring problems forward,” Silcox said. “I hope we have learned a lesson.”

Many of the problems experienced by the IT Solutions department were centered on Avizion, which was brought in as a consultant in 2001 to analyze what Miller saw as problems in the IT department. The company was then given lucrative contracts to fix the problems it had diagnosed. Ten IT workers, including some veteran and highly respected managers, were subsequently laid off and replaced by Avizion contract workers — who, as it turned out, were paid at even higher rates, even though many of these workers lacked the expertise of the workers they had replaced.

Almost every project undertaken for the city by Avizion was “somewhere close to a disaster,” said Premis founder Beth Malloy, who led the audit here. And, she said, the plans, status reports, and other data by which Avizion’s performance could have been gauged were nonexistent.

Malloy said that, despite the expensive and critical nature of the “outsourcing” effort, she found that the department had no outsourcing strategy. When she asked about that plan, she said, she was told repeatedly that “everything is on the table” — meaning that IT employees never knew whether they would be the next to be replaced by Avizion contract workers. She said the department had no technology planning function — usually a major role for IT departments, in helping other agencies throughout city government improve their performance with computer technology.

Instead, she said, the department was consumed with “filling potholes, but never repaving the road.” And, she said, paying contract workers on an hourly basis, as the city was doing, was a sure way to lose any chance of savings. “You’re paying them to show up,” she said, “as opposed to paying them for something delivered.”

The one area in which the IT department was rated highly by other city agencies that depended on it, Malloy said, was in customer service. But even there, she said, there was little structure that encouraged high-quality service, just some “really good people.”

The other thing IT Solutions was good at, Malloy found, was in billing other departments. “It almost seemed like their mission was to produce a bill,” she said. The department devoted far more resources to billing other departments for the work IT did for them than would be the case in most cities, she said — twice as many people. Nonetheless, she said the billing was a source of constant complaint and friction with people in other departments, who neither understood nor trusted the bills they got from IT.

Mayor Kenneth Barr told Jackson that he thought both the city’s internal audit of IT Solutions, delivered in December, and Premis’ work, showed that the city’s “system worked” in rooting out mismanagement and other problems. He asked Jackson to keep the council informed on the progress in fixing the IT mess — with at least quarterly reports for the next several years.

Silcox raised another concern that no one at the pre-council meeting was prepared to answer Tuesday. “Possibly we let some employees go who should not have been let go,” in 2002, he said.

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