It only took Hawaii officials slightly more than 26 years to follow through on a state Auditor’s recommendation to modernize its payroll system, the Department of Accounting and General Services announced yesterday.
“Our state payroll personnel do an amazing job each pay cycle, especially considering that the current system is extremely manual and paper-based,” state Comptroller Douglas G. Murdock said in the Feb. 16 press release. “We appreciate their work and look forward to building on that foundation to add 21st Century payroll capabilities and efficiencies.”
According to the press release, the state’s payroll system currently serves “more than 75,000 full- and part-time employees statewide.” The release also notes that the current system “is more than 40 years old, runs on the mainframe, and relies heavily on paper-based processes.”
To say the system is old is laughable. State auditors recognized that it was obsolete back in 1989 when they issued their report “Study of the Payroll System of the State of Hawaii.” Back then, when the system was only about 20 years old, the auditors–specifically, Price Waterhouse–repeatedly used terms like “extremely labor intensive” to describe why it needed to go.
“While the system continues to prepare payroll for some 50,000 employees, it is burdened with major problems,” auditors noted. “The payroll system is extremely labor intensive because of the many manual activities that could be automated. The computerized applications of the payroll system are outdated when compared to the more modern efficient and flexible technology used in modern payroll systems.”
Ha! “Modern payroll systems.” Keep in mind that when those words were written, John Waihee was Hawaii’s governor and Hannibal Tavares was Mayor of Maui County.
In the 1989 report, auditors noted that state employees used State Accounting Form D-55 for a timesheet. Logging the information on the sheet was rather burdensome, auditors noted at the time.
“The present payroll system has no complete time and attendance system for all employees,” the report noted. “Hourly employees report all hours worked. Salaried employees report hours worked over and above their normal workload, such as overtime. After all D-55 Forms are manually prepared and processed, they are forwarded to ICS [Information and Communications Services division of the Department of Budget and Finance] where time and attendance data are entered into the computer system and kept for historical purposes.”
This form is still in use to this day (click here to read it for yourself at Department of Accounting and General Services’ “Forms Central” webpage). Indeed, as the tiny type in the lower right corner notes, it hasn’t been revised since July 1, 1977.
The funniest part of all this is that back in 1989, the state Department of Accounting and Government Services completely agreed with the Price Waterhouse auditor’s report.
“While the State has never missed a payroll on payday, we heartily agree that a new payroll system is needed to replace the existing one, to meet the ever changing and increasing demands continually being placed on the system,” then-state Comptroller (and future Honolulu District Court judge) Russel S. Nagata wrote in his official response to then-Legislative Auditor Newton Sue on Dec. 5, 1989.
Not quite believing that even the State of Hawaii would shelve an Auditor’s report for entire generation before dusting it off, I forwarded the 1989 report to Cathy Chin, the Department of Accounting and General Services’ spokesperson, and asked how the payroll system has changed since that damning report came out.
“There have been incremental adjustments, but no whole system modernization,” she emailed back on Feb. 17.
Anyway, perhaps all this will soon just be an obscure footnote of Hawaii history. Comptroller Murdock certainly seems to think so.
“Following through on Gov. David Ige’s call for a more results-driven strategy for ERP [enterprise resource planning], payroll and time and attendance have been identified as targeted projects we can accomplish now,” said Murdock in the Feb. 16 press release. “By repurposing requirements gathered during previous efforts, the state is in a good position to expedite and launch this ambitious modernization initiative using existing capitol improvement project funding.”
Click here to see the state’s new payroll system Request for Proposals.
Photo of the Elmer Candy Co. offices in 1917: Covert via LSU Digital Library, Louisiana State Museum/Wikimedia Commons