Report 94107 Summary - April 1994

The Department of Motor Vehicles and the Office of Information Technology did not Minimize the State's Financial Risk in the Database Redevelopment Project

Over the years, the Department of Motor Vehicles (DMV) has developed very large and complex databases to support its activities. More than a million transactions are processed by the DMV database system every day. The current databases and their application software programs were developed in the 1960s. Thus, the basic technology of the databases is 30 years old, and it has become increasingly difficult to maintain these old systems. As a result, the DMV determined that it was necessary to modernize their databases.

The Database Redevelopment (DBR) project was initiated in 1987 to redesign the DMV's systems and databases to meet all existing requirements and functions, structure the system to be more responsive to future changes, and improve the efficiency of electronic data processing services. The DBR project was intended to provide a variety of improvements to the system that would allow the DMV to improve service levels and move into the future. In addition to addressing technical concerns, the DMV intended the DBR to address certain strategic objectives. These objectives were prompted by legislative mandates and proposals that would require the DMV to cross-match information in their various databases, a capability it did not have at that time.

Results in Brief

During our comprehensive audit of the DMV's DBR project, we found that the DMV continued its effort to fully implement the project despite significant unresolved problems and deficiencies, which led to the ultimate failure of the project in 1994. Further, our audit revealed that the Office of Information Technology (OIT), the State's information technology oversight body, continued to recommend additional funding for the project despite the fact that the DMV had not followed approved policies to minimize financial risk to the State. Additionally, we found that the DMV's actual and obligated costs were $5.1 million higher for the project than originally reported to the Legislature and the Department of Finance, and that the DMV violated numerous contracting laws and regulations, including falsifying a purchase order for approximately $46,000. Specifically, we noted the following:

These problems occurred because the project's management desired to keep the project on schedule, incorrectly believed that the technical problems could be resolved, and incorrectly asserted that critical developmental objectives had been achieved. In addition, the situation was allowed to continue because the DMV management failed to establish an effective quality assurance process that would provide an independent assessment of progress and because management did not satisfactorily react when they were ultimately informed by the project's management team that problems existed.

Furthermore, the OIT did not exercise its authority to insist that the DMV accomplish the working model before recommending continued funding.