Payroll system flunks - computer firm has glitches at large sites in other states : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Payroll system flunks

Computer firm has glitches at large sites in other states

A knuckle-rapping _Teachers give district until Friday to straighten payroll out Who to call if your pay is wrong Pay crisis politics _Tip of the iceberg, or just a glitch? Agreement on one thing: It stinks

by Kevin Haney Daily News Staff Writer


What problems?

An executive of the company that sold the School District a computer system that is paying dead people, failing to pay live ones and stiffing contractors, says he only knows what he read in the paper.

Mark Andrews, a vice president of American Management Systems, said he learned of the extent of the problems here in reading the Daily News' report yesterday.

Andrews, who is in charge of the company's state and local government projects, said he was unaware there were any big problems in the district's new system.

"I don't know the specifics about Philadelphia," said Andrews. "I hope to find out more. We will work with the School District."

"If people are not being paid," he added, "It's clearly a problem."

The "problem" goes even deeper, the Daily News discovered.

The School District's $26 million computer payroll and purchasing system has mistakenly paid more than half a million dollars to retirees and other former employees, including some who are dead; failed to pay hundreds of present employees, underpaying others and even overpaying some.

It also has failed to pay contracted bonuses to janitors, school police and building engineers, and nearly 50 vendors have cut off supplies to the district because they haven't been paid.

Employees who have not gotten their paychecks are suffering. They're missing mortgage payments, getting behind in other bills and are being threatened with having their utilities shut off.

The Philadelphia Federation of Teachers is threatening some kind of legal action against the School District if its members are not paid. The union set a Friday deadline to get the mess straightened out.

The School District said in a statement that problems were caused when errors were made in entering data into the new system, called "Advantage."

"Unfortunately, this year the Advantage system has become a lightning rod for all payroll-related problems, even problems that occur at the start of every school year," the district said.

The district said it actually experienced fewer problems this year than last. "In September 1999, we issued 153 correction paychecks, compared to 294 correction paychecks in September 1998," the district said.

To help employees who have not been paid, the district said it will open its "response center" every day, rather than just on paydays. The center has the power to authorize the issuance of checks with proper documentation.

"The district apologizes to any employee who has suffered as a result of the payroll errors that have occurred," the statement said.

The district did not respond to other findings in the Daily News report, such as checks being issued to the dead and the problems with paying vendors.

The AMS's Andrews said the company's payroll and finance systems should tell the agency when there is an error in computer entries.

But the systems can't detect errors if key information, such as the names of deceased people, is not initially placed in the computer, he added.

"It is my understanding that a wide variety of tests were run over the summer," he said.

AMS computer systems provide agencies with a variety of options for processing information, but it's up to the agency to choose the options, he said.

Foul-ups also can occur if computer coding is wrong, if there are training problems or if users simply make mistakes in entering data, Andrews said.

AMS, with more than $1 billion in annual revenues, has installed over 300 computer systems for state and local governments over the last 15 years, Andrews said.

They include statewide payroll and accounting systems for the states of Massachusetts and Illinois.

AMS, with a 29-year track record, has a good reputation in the information technology industry, two industry analysts said yesterday.

But the problems in Philadelphia are the latest of several glitches in government contracts for the company.

AMS was sued by the state of Mississippi in May for allegedly failing to install successfully a new tax-collection processing system.

That state is seeking nearly $1 billion from AMS. It has claimed that AMS provided faulty software that has cost the state $234 million in lost revenue and added costs. It wants another $750 million in punitive damages.

AMS has denied the allegations in court filings and labeled the lawsuit "without merit."

That contract was for $11.2 million.

The Fairfax, Va. computer firm, also has come under scrutiny from legislators in Kansas.

The state paid AMS $36 million starting in 1995 for a new computerized tax collection system, which left 34,000 taxpayers without refunds as of July.

A legislative audit committee questioned the firm's ability to fix the problems and also blamed the state's revenue department.

A Mississippi state official said they believed AMS had diverted personnel from their contract to the larger project in Kansas, an accusation denied by AMS.

The computer firm lost a $20 million deal with a British phone company in 1996 when it missed deadlines for delivering software.

It also lost a $50 million contract with Switzerland's national phone company after a change in the Swiss firm's management.

In 1995, Andersen Consulting LLP, one of the world's largest accounting and business consulting firms, charged AMS with misappropriating software design information while the two firms worked on a joint tax collection computer software project in New York.

Andersen charged AMS used parts of Andersen's design in computer project bids in Mississippi, Kansas and New Mexico.

A judge denied Andersen's request for an injunction, ruling that the firm filed its injunction request too late.

The judge didn't rule on whether AMS actually used Andersen's computer design plan.

-- Homer Beanfang (, October 19, 1999


I am a strategic and process consultant in the HR area, and am currently working with a company that ATTEMPTED to install PeopleSoft for HR/Benefits/Payroll, but realized early this year that they couldn't get it done in time. They abandoned PeopleSoft, and embarced on a two prong approach:

Remediate the current system Make plans to outsource as a contingency.

If they did neither of these things, their people would not get paid in January, because their current system was neither compliant nor ready. The remediation of their current system (which by original accounts would be finished by 6/30), will be ready for November Payroll. Outsourcing is just about ready, also.

This is a company with about 10,000 employees, very risk averse, and VERY into Y2K preparations. Look how close they are cutting it! And with all their preparations, know what? These preps are for payroll only. For benefits, the contingency plans are all manual. Know what else? The General Ledger is in serious trouble. It may not be ready in time.

I'm working with another company. Wanted to put PeopleSoft payroll in also. Been working for quite awhile. Since late 97. It was supposed to be ready 10/98. No problem for y2k, right? Well, 10/98 became 4/99, then 6/99, then 8/99. They're making a go/no-go decision for Novemeber this week. It doesn'd look good.

They started remediating the current system as a contingency 3 WEEKS ago! The kicker? This company has over 100,000 employees!!! No manual prep for them! How will the company operate if payroll is off line?

How many companies are in the following situations?

- Everything fine, tested, ready to go - Up and running, but are de-bugging (like the company in the news story above - Currently remediating, running out of time, testing getting seriously squeezed on the back end, and no serious contingency in place - Installing new systems, but losing testing time, and running risk of installing like the company above - Y2K? I thought that wasn't going to be a problem. Anyway, payroll isn't mission critical. Don't laugh at this, I called my local gas company after the Jim Lord events, and their top tech person told me that payroll was not listed as mission critical!!!! He said it should be fine, but if it's not identified as mission critical, do y'all think that contingency plans for failure would have been developed????

As for HR and benefits, well, maybe they aren't "mission critical", but tell that to an employee who has NO health coverage come January beocause of system problems.

The bottom line is that the companies that are taking it seriously are running out of time. What of the companies that started late? The will be forced, in many instances, to go live with systems that will invariably have serious problems like the company above. End-to- End testing is simply not going to be available to many of these companies.

If I'm seeing this in the industry I work in, can I assume it's similar for other business functions as well? I think so.

-- Duke 1983 (, October 28, 1999.

That was my first posting to this newsgroup, so I'm sorry for what it did to my formatting. Hope y'all can follow it easily enough. I'll learn as we go.


-- Duke 1983 (, October 28, 1999.

Duke 1983,

In a later article, it was disclosed that this Philadelphia school district had bullet proof windows installed at their headquarters building. I would suggest telecommunicating to work.

-- Homer Beanfang (, October 28, 1999.

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