Assembly members press for external audit of Anchorage software project

Anchorage Assembly members are renewing calls for an external audit of a city software project beleaguered by cost overruns and missed deadlines.

Assembly member Amy Demboski, who is running for mayor, is requesting $200,000 for an independent review of the implementation of SAP -- a system designed to automate city government functions -- and Kronos, a timekeeping system.

The SAP project is running more than two years behind schedule, and the budget is now $31.6 million, more than three times the planned amount. Kronos cost the city $1.2 million and has been in use since 2013.

Demboski said her decision to request the audit was based on a Sept. 19 Assembly work session with the municipality's new chief fiscal officer, Kate Giard, on the status of the project. Giard, who previously served as chief fiscal officer under Mayor George Wuerch, used blunt terms to describe fear and uncertainty surrounding the project, painting a bleaker picture than previous presentations from the administration of Mayor Dan Sullivan.

Giard has been tasked with conducting a 60-day analysis of the SAP project. She told Assembly members at the work session that after several weeks of observation, it was not certain how much the project would ultimately cost or when it would be fully implemented.

Giard also expressed doubts about whether the SAP system could properly calculate payroll, which Demboski said was particularly troubling.

"With all the money at stake, we have to have an independent look at it to make sure we know what we're doing," Demboski said.


Assembly member Elvi Gray-Jackson, a longtime critic of the SAP project, signed on earlier this week as a co-sponsor of the audit request.

"I'm glad to see the rest of my colleagues, for the most part, realizing, 'No, we have to not sit back and just let this happen,'" Gray-Jackson said.

This is not the first time members of the Assembly have demanded an independent review of the software project. Last fall, Gray-Jackson and Dick Traini sponsored a similar proposal.

It failed in a 4-7 vote, with Demboski in the majority voting no. Demboski said her position at the time was tied to assurances from the Sullivan administration that the project was under control and an external audit would sap resources and lead to missed deadlines.

"They assured me it was under control and manageable," Demboski said in a follow-up text. "Now I am not convinced of that."

In an email through a spokesman, Sullivan repeated his administration's earlier objections to an external audit.

"Diverting vital resources away from the ongoing implementation process would be a mistake at this time," Sullivan wrote. "As CFO Giard explained at the recent Assembly work session, she is performing a 60 day analysis of the project status, including what final resources may be needed to bring the SAP system online.

"After receiving her report, if the Assembly needs additional information, then that would be the appropriate time to request it."

He said the city's aging PeopleSoft system cost $25 million in today's dollars, and an incomplete implementation led to inefficiencies.

"SAP will be fully implemented and will serve the city well for many years but it is important that we not lose momentum as we near project completion," Sullivan said.

The Assembly is scheduled to vote on the audit request at its meeting Oct. 21, four days after a regularly scheduled monthly update on the SAP project.

The renewed calls for scrutiny come as the city is bringing on additional staff to work on the SAP project, and the Sullivan administration is asking the Assembly to authorize a request to increase the project budget by another $3 million. The funds would come in the form of a loan through a city borrowing agreement with KeyBank, which has been used to finance capital projects since 2007, according to a document submitted with the city's request to the Assembly.

The document states that the city's information technology department "has identified additional capital needs that require financing" through the KeyBank agreement. It also says the municipality is planning to amend contracts associated with the SAP project, including its contract with the project consultant, the Peloton Group.

Devin Kelly

Devin Kelly was an ADN staff reporter.