Union warning over IT projects poses political threat for Ige

Twice this fall the state’s largest union has issued dire warnings about efforts by Gov. David Ige’s administration to upgrade critically important state computer systems, and that pushback is taking on political implications as Ige prepares for a tough Democratic primary next year.

When Ige first came to office, he publicly pledged to implement “state-of-the-art technology” that would allow state agencies to do their jobs more efficiently and effectively. Administration officials specifically cited the obsolete state payroll and attendance record-keeping systems as components of Hawaii government that are long overdue for modernization.

But recent employee and union complaints about the administration’s computer projects raise questions about whether Ige can make good on those promises just as public attention is beginning to shift to next year’s election.

A contract worth more than $37 million was awarded last year to overhaul the state’s payroll and worker attendance systems, but the Hawaii Government Employees Association last week sent state Comptroller Rod Becker a letter warning the payroll project is being rushed and is understaffed.

HGEA Executive Director Randy Perreira also alleged that contractor CherryRoad Technologies Inc. is “delivering poor-quality work.”

When state workers point out problems with the project, “those who identify the challenges are harassed, scolded or even threatened” by the contractor, by Ige’s Chief Information Officer Todd Nacapuy, or by his staff, Perreira wrote.

Perreira’s letter to Becker echoes another warning he sent to Ige on Oct. 31 warning of “turmoil” in the $60 million overhaul of the computers in the state Department of Taxation. Known as the Tax System Modernization or TSM, that project is another effort to replace an obsolete computer system that state officials say is on the verge of failing.

Ige defends his administration’s efforts to complete both projects, but the union challenges could sting him politically. Ige has presented himself to the public as a technocrat and a competent manager, and virtually everyone involved agrees these are urgently needed projects.

Political fallout

Most voters probably can’t recall any flashy accomplishments by Ige at this stage of his administration, and most likely they perceive Ige as more of a manager than a politician, said Jerry Burris, an author and longtime Honolulu political columnist.

“People will generally give him marks for basic competence, and this goes directly to the heart of competence, especially for an engineer,” he said.

“Here is the biggest union saying things aren’t being managed properly, and someone’s going to jump on that,” Burris said. “It will be used against Ige — not so much that he presided over a scandal, but they’ll use it to attack his competency, which is something that supposedly he should get high marks on.”

Ige is being challenged by U.S. Rep. Colleen Hanabusa in the Democratic primary, and is also being opposed by Republican House Minority Leader Andria Tupola and retired Republican lawyer John Carroll.

HGEA has not yet made any public endorsement in the governor’s race, and Perreira rejected any suggestion that the union’s public criticisms of the tax and payroll projects are politically motivated.

“This is all about the employees being concerned about what the end product is going to be. They want it to work,” Perreira said. “If they make it work, then the governor looks better, so from their perspective, there’s nothing political about this. It’s all about making sure that, at the end of the day, we can collect taxes and that the payroll system is going to pay them.”

After the Honolulu Star-Advertiser published an account Nov. 19 of the union’s concerns about the tax system, Perreira said HGEA received “unsolicited input” from both union members and managers who aren’t union members expressing similar concerns about the payroll project.

“For us, this is all about the employees feeling that this is adversely affecting what they do. This is their profession. This is their passion, and they’ve been looking for a voice because internally, people who speak out are chastised,” Perreira said. “There have been people who have been called in at different levels and threatened; they have been removed from the project input process.”

He added: “As a result, there are grave concerns that at the end of the day, both systems could fail. For the employees, who the hell wants the payroll system to fail? Because then they don’t get paid.” The state payroll system generates paychecks for more than 75,000 full- and part-time employees statewide.

‘Change is hard’

When asked last week about the union criticisms of the effort to launch a new payroll system, Ige told reporters that the state is replacing antiquated systems that have been in place for many years and “change is hard.”

“We engage our employees; we do know that they’re on the front line. The payroll project touches every single department … so we are consulting and conferring with them. We’re including employees in the discussions as we move the project through,” Ige said last week. He added that “we want them to become experts on the new system because we do believe that it will allow them to become more efficient and effective.”

As for the new tax system, Ige points out the state has already successfully completed the first three phases of the tax modernization project.

“I just want to emphasize that the project has proceeded; we have a management team in place now,” Ige told reporters last week. Both the payroll and the tax projects are complex, and they change the way that almost every employee operates, he said.

“I think it really is about change and managing change,” he said. “We are committed to provide the training that all the employees will need so that they can be successful as we transition from the old system to the new system.”

State employees working on the payroll system, also known as the HawaiiPay Project, “are critical to its success,” state Comptroller Becker said in a written statement. “We will be meeting with HGEA and responding to the union’s concerns in writing.”

More criticism of TSM

The new payroll system will complete a major test in January that will provide a better sense of whether the project is functioning as it should. The first state departments are scheduled to shift from the old system to the new one in mid-2018.

As for the new tax system, HGEA has not been the only source of criticism of the project, which is being implemented by a contractor called Fast Enterprises.

Earlier this year, state lawmakers rejected a request from Ige for an additional $18 million in funding for the tax modernization project, citing complaints about the new system after the general public began using it to file and pay their general excise taxes.

Ige in July named Nacapuy as “executive sponsor” of the tax project, and lawmakers transferred a half-dozen of the key tax department staff involved in the TSM project to the Office of Enterprise Technology Services, where they work under Nacapuy.

Earlier this month, a report from a supposedly independent consultant hired by the state to oversee the tax project revealed the consultant was instructed by state tax officials on which subjects “should and should not” be addressed in its monitoring reports to lawmakers and the public. That report by consultant Advan­Tech LLC also stated the tax department had requested changes in its reports before they were made public, which the consultant said is “not the norm” in its experience.

State Tax Director Maria Zielinski abruptly submitted her resignation last week just a day before it became effective, and Ige announced Wednesday he was appointing Linda Chu Takayama as Zielinski’s replacement. Takayama had been serving as Ige’s director of the state Department of Labor and Industrial Relations.