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California State Auditor Report Number : 2016-125.2

The University of California Office of the President
The University of California Office of the President Increasing Costs and Scheduling Delays Have Hampered the UCPath Project and Originally Anticipated Savings Are Unlikely to Materialize

Figure 1

The title of Figure 1 is The Office of the President Envisioned UCPath as a Systemwide Payroll and Human Resources IT Solution.

Figure 1 is a graphic that shows the evolution of the 11 variations of the Payroll Personnel System transformed into one system called UCPath. The graphic is split into two panels. The left panel has 11 small circles and gears that are interconnected in a larger circle with lines connected between the different smaller circles and gears. Below that there is a picture of buildings which represent the 10 campuses, 5 medical centers, and other locations that comprise the university as a whole. Other locations include the Lawrence Berkeley National Laboratory; the Associated Students of University of California, Los Angeles; the Division of Agriculture and Natural Resources; the Office of the President; and Hastings College of Law. The right panel has a large gear which is connected to the left hand panel with a spot light, shaped like a triangle. The gear has UCPath written on the inside and the outside of the gear contains the following text: Payroll, Academic Personnel, Timekeeping, and Human Resources, which is what UCPath stands for.

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Figure 2

The title of Figure 2 is The Office of the President’s Timeline for UCPath Has Been Affected by Leadership Changes and Schedule Slips.

Figure 2 is a timeline of significant UCPath events that begins in 2011 and ends in 2019 when UCPath is projected to be fully deployed and the project is finished. The timeline is colored blue for events that have already taken place in time and white for events in the future. There are 17 events on the timeline which are the following:

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Figure 3

The title of Figure 3 is The Office of the President Has Established a Governance Structure for the UCPath Project
Regents.

Figure 3 is the organization chart of the governance structure for UCPath with descriptions of the membership and roles of the different governing bodies. At the top of the hierarchy are the regents.  Below the regents is the university president and below the university president are the project sponsors. The UCPath project sponsors are the executive vice president, chief financial officer and the executive vice president, chief operating officer. The project sponsors are responsible for making final decisions in the executive leadership team when a 70 percent consensus cannot be reached and also for updating the regents. Below the projects sponsors is the project director who leads the project management office. On the right hand side of the figure there are two boxes with the heading of project governance. The first box is the Executive Leadership Team, which is composed of members from all 10 campuses who are in the following roles: vice chancellor, chief financial officer, or equivalent role. Each individual functions as the location’s executive sponsor. The Office of the President has the following members; executive vice president, chief financial officer; executive vice president, chief operating officer; chief information officer; associate vice president, systemwide controller; executive director, UCPath Center; vice president, human resources; vice provost, academic personnel. The chair of the steering committee and the chair of the pilot (referred to as Wave 2 in the report) deployment subcommittee are labeled as Other executive leadership team members. The executive leadership team is responsible for making final decisions to the cost, timeline, scope, and policy for UCPath.

The next box is the Steering Committee, which has members from each of the 10 campuses who are in the following positions: controller, chief human resources officer, academic personnel director, and chief information officer. The Office of the President has the following members; associate vice president, systemwide controller; systemwide deputy audit officer; and executive director, academic personnel. The steering committee is responsible for making final decisions for the following systemwide processes: payroll, academic personnel, human resources, and benefits administration. There are lines to indicate that the project management office is linked to the Steering Committee which is linked to the Executive Leadership Team which is linked to the project sponsors.

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Figure 4

The title of Figure 4 is The Office of the President Plans to Deploy UCPath in Waves.

Figure 4 is a map of California depicting the locations of the Office of the President, the UCPath Center, the ten campuses and four auxiliary entities and the order of the four waves these university locations will deploy UCPath. UCPath will deploy in four waves. Each wave is numbered and color coded to show the university locations in the wave. Wave 1 deployed in November 2015 to 1,865 university employees. This wave is color coded magenta and includes the Office of the President and the UCPath Center. Wave 2 will deploy in December 2017 to 62,481 university employees and is color coded light blue. The wave includes Merced, Los Angeles, Riverside, and the Associated Students of the University of California at Los Angeles. Wave 3 will deploy in July 2018 to 73,866 employees and is color coded purple. This wave includes Davis, Santa Cruz, Santa Barbara, Irvine,  and the Division of Agriculture and Natural Resources. Wave 4 will deploy in December 2018 to 85,822 university employees and is color coded dark blue. This wave includes Berkeley, San Francisco, San Diego, Lawrence Berkeley National Laboratory, and Hastings College of Law. The five medical centers at Davis, Irvine, Los Angeles, San Diego, and San Francisco will deploy at the same time as the campus.

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Figure 5

The title of Figure 5 is The UCPath Project Will Not Realize Cost Savings From Staffing Reductions as the Office of the President’s
2011 Business Case Projected.

Figure 5 is a chart comparing the UCPath project’s cost and benefits between the 2011 business case and its 2017 status. The comparison is color coded: red text indicates a cost and green text and green stars indicate savings and non-monetized benefits, respectively. The chart shows that the 2011 business case reported the cost for implementation at $170 million, recurring technology at $48 million, the UCPath Center facility and equipment, and operations at $15 million, and staff severance at $73 million. The  total estimated cost is $306 million. The 2017 status shows the cost for each of the cited categories and several others. The implementation cost is now $504 million, the recurring technology is zero because the Office of the President included that cost with the implementation cost. The UCPath Center facility and equipment, and operations is now $130 million, and staff severance is $0. The 2017 status recognizes costs the 2011 business case did not. Added costs are implementation financing of $115 million, UCPath Center acquisition and financing of $53 million, and additional campus implementation of $140 million.  The total cost for the 2017 status is$942 million.

The chart shows that the 2011 business case reflected reductions in staffing costs of $753 million and benefits that were not monetized related to efficiencies, IT stability, and a unified system. The benefits are shown as green stars. The total estimated savings from the 2011 business case is $753 million. Subtracting the costs of $306 million (color coded red) leaves net savings of $447 million (color coded green).  The chart shows that the 2017 status of savings from reductions in staffing costs is zero; although each of the non-monetized benefits is still anticipated and are shown with green stars. With zero estimated savings as of 2017, the cost of UCPath is $942 million (color coded red). Go back to Figure 5

Figure 6

The title of Figure 6 is The Office of the President Did Not Consistently Inform the Regents of Changes to UCPath’s Implementation Cost and Schedule.

Figure 6 is a figure with a timeline down the center showing the years 2011 through 2019. The dates run from the bottom to the top. The left side plots the revised UCPath implementation dates and the right side plots cost estimate changes and the dates that the Office of the President provided the regents with status updates.  The left side implementation dates are coded red and green. Green indicates an implementation date change that was communicated to the regents; red indicates an implementation date change that was not communicated to the regents.  The first date is the September 2011 project start, which is an orange circle. In total there are five implementation dates with green or red triangles. The August 2014 date is green triangle and it is the original completion date for UCPath. The August 2015 date is a red triangle, the December 2017 date is a green triangle, the December 2018 date is a red triangle, and the June 2019 date is a red triangle. June 2019 is the date when post-deployment support ends and UCPath is fully deployed, indicating that the project is complete.

The right side plots the UCPath project’s cost estimate changes of $10 million or more from 2011 into 2017 along with seven status updates and one financing request that the Office of the President communicated with the regents. The initial 2011 project cost estimate was $170 million. The figure shows the project cost estimate was raised seven times up to $503 million in 2017. In March 2013 the cost estimate was increased to $221 million. In that same month the Office of the President provided a status update but did not communicate a cost estimate or a schedule change to the regents. In May 2013 the Office of the President made a financing request to the regents and communicated a cost estimate of $221 million. In June 2014 to the cost estimate increased to $345 million. In July 2014 the Office of the President provided a status updated to the regents and communicated the project’s cost estimate at $220 million. In September 2014 to the cost estimate increased to $382 million. In July 2015 the Office of the President provided the regents with a status update and communicated the project’s cost estimate as $375 million. This amount is lower than the September 2014 cost estimate of $382 because the project had lowered the estimated cost. In December 2015 the UCPath project cost estimate was $435 million and in January 2016 the Office of the President provided the regents with a status update, but did not share a cost estimate amount at that time. In March 2016 the cost estimate increased to $446 million and in December 2016 it increased again to $479 million. In February 2017  the project cost estimate was set at its current amount of $503 million. In April 2017 and again in July 2017 the Office of the President provided the regents with status updates and reported the project’s cost estimate at $504 million both times. Go back to Figure 6