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State Controller seeks funds for payroll modernization and consulting; committee presses audit and transparency questions
Summary
The State Controller's Office requested consulting funds for GAAP reporting and additional positions and dollars to continue the California State Payroll System (CSPS) project; legislators asked the SCO about audit capacity and financial transparency.
The State Controller’s Office outlined several May Revision requests including consulting funds for financial reporting, a large multiyear payroll modernization project and adjustments to unclaimed property maintenance funding.
SCO officials said they requested $4 million for consulting to support generally accepted accounting principles (GAAP) financial reporting to restore timely publication of the State’s Annual Comprehensive Financial Report. The SCO also requested 20 permanent positions and $117 million in 2025–26 to continue the California State Payroll System (CSPS) project, which SCO described as a multi‑year, multi‑agency initiative to modernize personnel, payroll and travel/expense management across state departments and higher education components. SCO said the CSPS project has completed the procurement milestone and signed with a solution integrator in March; the project has an estimated total cost of about $1.2 billion over several years, according to LAO commentary.
LAO and SCO staff confirmed the CSPS program is large and will warrant continued legislative oversight; LAO noted the project is the subject of litigation challenging procurement and advised monitoring. Assemblymembers asked about SCO’s audit capacity and transparency. Members noted the SCO’s audit and reporting functions have not scaled at the same pace as the growth of statewide transactions and requested a plan showing how SCO would use extra audit or transparency resources to detect waste, fraud and abuse and to publish transaction‑level data that enables external review and third‑party analysis.
SCO also requested a funding realignment for the Unclaimed Property Management System replacement to reflect updated maintenance and operations costs and transaction volumes and a small technical adjustment to support mandated school facilities audit work.
Ending note: The subcommittee did not take final action on the SCO requests. Members asked SCO to return with more detail on audit staffing, transparency tools and how the payroll system and other investments would deliver reporting and accountability improvements.
