Budget and Policy Post
February 25, 2016

The 2016-17 Budget

Child Welfare Services–New System

Below, we provide a brief description of the Child Welfare Services–New System (CWS-NS) information technology (IT) project; discuss recent changes to the project’s implementation approach; describe the Governor’s 2016-17 budget proposal for expenditure authority and various staff changes to assist with planning and procurement activities and to prepare for the design, development, and implementation (DD&I) phase of the project; and recommend approval of the Governor’s budget proposal, with our recommended updates to a reporting requirement.


The CWS-NS Project. The CWS-NS project will replace the existing Child Welfare Services/Case Management System (CWS/CMS), which is the statewide case management system currently supporting the state’s CWS program. The CWS workers throughout the state rely on CWS/CMS for access to child, family, and other case-related information to make timely decisions, perform effective case management, and ultimately keep children safe and families intact. The existing system is out of compliance with state and federal requirements. The CWS-NS project is intended to bring the system into compliance with state and federal laws and regulations, make the system easier to use for CWS workers, result in enhanced data reliability and availability, allow user mobility, and automate system interfaces with other state partners to enable data sharing. According to the most current special project report (SPR), approved in April 2014, the CWS-NS project is estimated to cost $449 million ($224.5 million General Fund) and planned to be fully implemented in April 2019. We note that it is our understanding that the administration is currently in the process of putting together an updated SPR that may change the estimated cost and timeline for the project. (Refer to our February 27, 2013 report, The 2013-14 Budget: Analysis of the Health and Human Services Budget, for a more comprehensive description of the project and its history.)

Legislature Requires Monthly Updates. As part of the 2014-15 budget package, the Legislature adopted supplemental reporting language that called for the California Department of Social Services (DSS)—the project sponsor—and the Office of Systems Integration (OSI) in the California Health and Human Services Agency—the project manager—to provide monthly updates on the project to the Legislature and stakeholders. The reporting language specified that reports include, but not be limited to, the project’s vacancy rate, a description of challenges with recruiting and retaining qualified staff, a description of challenges with procurement, a discussion of any issues or risks that may jeopardize the project, and an update on the project’s progress towards completing upcoming milestones. The DSS and OSI have fulfilled this reporting requirement through a combination of written reports and in-person briefings in 2014-15 and continue to provide these updates to the Legislature.

Recent Shift in Project Implementation Approach. In November 2015, DSS and OSI announced a shift from a traditional implementation approach to an “agile” implementation approach for the CWS-NS project. Under the traditional approach, any implementation of the new IT system does not being until all phases of the project are complete (it often takes several years to reach this point). In contrast, the agile approach is an iterative approach for developing IT systems. Instead of trying to build an IT system in its entirety and then deploying the system as a whole, the system is built incrementally from the start of the project and deployed module by module. The agile approach works by breaking projects down into multiple discrete modules of functionality, prioritizing them, and then continuously delivering them over relatively short periods of time. Analysis, design, coding, and testing continue for each module until the entire IT system is complete.

The project has also changed its procurement approach in order to implement the new agile approach. Rather than contract with a single vendor that would meet all of the requirements of the CWS-NS project, the project has been divided into multiple discrete modules and a separate vendor will be selected for each module.

Agile Approach Presents Potential Benefits and Risks. The switch from a traditional approach to an agile approach presents both potential benefits and risks. On the benefit front, the agile implementation approach is inherently much more flexible than the traditional implementation approach. This is mainly because the modular structure of the agile implementation approach provides IT projects with the opportunity to address challenges with one module without compromising other aspects of the IT project. This flexibility allows for functions to be completed and deployed to users more quickly. However, the agile approach may also create a risk in that it may be more disruptive to the users of an IT system. Whereas in a traditional implementation approach system users would only have to adapt to change once, in an agile implementation, system users would have to adapt to changes as each module is implemented.

Another potential benefit of the agile approach is that dividing an IT project into multiple modules, each focused on developing specific functions, may increase vendor interest and participation. There are a limited number of vendors with the expertise to design and implement IT systems for large projects that are implemented under the traditional approach—where a single vendor is responsible for developing and implementing all functions of the project. The agile approach may increase participation of vendors that may be interested in bidding on more discrete portions of an IT project, but would lack the qualifications to competitively bid on the entire IT project. Despite this potential benefit of engaging new and potentially more innovative vendors, this may however create a potential risk. At the conclusion of the project, all the modules must work seamlessly together in order to fully meet the objectives of the project. Engaging multiple vendors for discrete modules will require increased coordination to ensure the modules function seamlessly at the conclusion of the project.

SPR Formalizing Shift in Implementation Approach Forthcoming. It is our understanding that an SPR formalizing the shift from a traditional implementation approach to an agile implementation approach is currently under development. The SPR would update the cost and timeline for the project to reflect the new agile approach.

The Governor’s 2016-17 Budget Proposal

The Governor proposes an increase to OSI expenditure authority in 2016-17 of $171,000 for one new permanent position, the conversion of eight existing limited-term positions to permanent, and the transition of 8.5 existing positions from CWS/CMS to CWS-NS to assist with planning and procurement activities and to prepare for the DD&I phase of the project.

LAO’s Findings

Request Appears Reasonable . . . The increase in expenditure authority and various staffing changes associated with the Governor’s proposal appear to be reasonable. Converting the limited-term positions to permanent may help ensure the project can recruit and retain knowledgeable staff while mitigating potential schedule and cost impacts due to staff turnover. Leveraging the existing CWS/CMS staff may provide the project with needed expertise without having to hire additional staff.

. . .But Current Project Plan Requires Updating. As we have noted, the current SPR does not reflect the announced shift from a traditional implementation approach to an agile implementation approach. Until the SPR is finalized, the level of resources that will ultimately be needed to complete the CWS-NS project is uncertain.

State Has Limited Experience With Agile Approach; Current Reporting Requirement Outdated. While there may be merit to the agile implementation approach, the state has limited experience planning, procuring, and developing an IT system based on the agile approach. The current reporting requirement for the CWS-NS project was adopted prior to the shift in implementation approach. Revising the reporting language to require additional information relevant to the change from a traditional approach to an agile approach could keep the Legislature and stakeholders better informed of project developments.

LAO’s Recommendations

Recommend Approval of Governor’s Budget Proposal. We recommend approval of the Governor’s proposal to increase OSI expenditure authority by $171,000 to establish one new permanent position, make eight existing positons permanent, and transition 8.5 existing CWS/CMS positions to CWS-NS. The CWS-NS project was designed to comply with state and federal law and incorporate critical business functionality to provide effective and efficient child welfare services. The approval of this request will provide the necessary staff for planning and procurement activities and prepare the CWS-NS project for DD&I project activities. As more information becomes available about the application of the agile approach to the CWS-NS project, the resources and overall project schedule and cost may change. The Legislature would be given the opportunity to approve the necessary budget adjustments related to these changes.

Recommend Revised Reporting Language. Additionally, we recommend the Legislature revise the project’s reporting requirement to reflect the planned shift from the traditional to an agile implementation approach. Specifically, we recommend the addition of the following issues to the existing reporting requirement: (1) a description of each of the modules, their current status, and any associated risks and issues (including impacts on county child welfare programs); (2) a description of how the agile approach has affected the project’s overall cost and schedule; (3) a description of how the Department of Technology’s approval and oversight processes are being applied to the agile implementation approach; and (4) information on how lessons learned from the agile implementation of the CWS-NS project can be leveraged by other state IT projects. We think that revising the reporting requirement to reflect the shift in implementation approach could help the Legislature (1) evaluate the progress of the CWS-NS project and (2) assess the benefits and challenges of using the agile implementation approach on future IT projects.