CO financial computer system has risk of failure

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A computer system considered the backbone of Colorado’s financial workings is outdated and could trigger a failure that would prevent critical governmental transactions, according to a report released Monday.

A collapse of the Colorado Financial Reporting System, known as COFRS, would paralyze the state’s ability to perform several key functions, including processing checks to vendors that provide services to the state, the report said. It would also make it impossible to know Colorado’s true financial position.

“COFRS is beyond mission critical. It’s foundational to state government. Nothing really works unless the system does,” said Dara Hessee, chief of staff for the governor’s Office of Information Technology, the department that manages the system.

The evaluation by the state Auditor’s Office says the computer is at risk of failure because it’s based on obsolete technology and programming code from 20 years ago that few people know how to use.

Hessee said her department has known about the impending problems, but the state’s chronic budget struggles have made it difficult to bring much attention to the issue. She said she and her colleagues welcomed the evaluation.

“It helps us in telling our story and getting our message across,” she said.

The system processed about $36 billion in state expenditures and $34 billion in state revenues in fiscal year 2010. Each month that year, COFRS processed an average of 300,000 financial documents.

The evaluation recommends the state keep employees with knowledge of the system and work with lawmakers to get funding to modernize it in the coming years. But even if work started today, it would take three to five years to revamp the system, said Jonathan Trull, deputy state auditor.

One reason for the heightened concern is that by 2014, all state staff familiar with COFRS programming will be retired.

Only the Colorado Department of Transportation and the higher education institutions don’t rely on the computer financial system because they’ve developed their own. All other state agencies would suffer “significant financial, operational, and political ramifications” if there’s a system failure, the report said.

“It really handles all of the money that the state has to process,” Trull said.

A system breakdown would prevent the state from updating food stamp payments, and officials would not be able to distribute grants it receives from the federal government or process payments for state construction contracts.

“When people don’t get money that’s owed to them, that tends to be the thing that gets people upset,” Trull said.

And it’s all from a system that few people walking down the street would even know exists.

“Frankly it’s not very sexy,” Hessee said. “People don’t get jazzed about accounting.”