ITS allocates the cost of services it provides to county agencies using methods that vary according to the type of service provided. During the 1997 budget process, ITS performed a detailed analysis of the methodologies used to allocate its infrastructure and GIS operating and maintenance (O & M) costs among users. This analysis resulted in ITS selecting an infrastructure rate that was based on the number of FTEs for the WAN and the number of e-mail addresses for e-mail costs, and selecting a GIS rate that was based on the number of system licenses. These methods resulted in approximately $2.5 million (35%) of the infrastructure O & M costs and $488,000 (39%) of the GIS O & M costs being allocated to CX-funded agencies. Although audit staff determined that the CX impact for infrastructure O & M costs could have been reduced by $11,569 during 1997 if department FTE counts were adjusted to reflect overtime, extra help, and temporary contract workers, we also determined that the methodologies used were fair and reasonable.

The audit recommended that the Metropolitan King County Council make a policy decision to either accept the methods currently used by ITS to establish cost allocation rates or determine what modifications, if any, should be made in the methodologies to reduce the impact on CX-funded agencies.

Finding 2.2. Information and Telecommunications Services charged its mainframe and analyst costs for 1997 based on a proposed rate ordinance that had lapsed, rather than the previously adopted rate ordinance.

ITS established rates for some of its services in an ordinance that became effective in January 1994. In 1996, ITS developed a new rate ordinance that recommended both rate increases and decreases. Although the proposed ordinance was introduced but lapsed without being adopted, ITS began charging the rates in the proposed ordinance rather than continuing to use the rates established in the adopted ordinance. However, audit staff also found that ITS was the only internal service fund agency that established its rates by ordinance, and that rescinding the portion of the rate ordinance that applies only to support of other county departments would provide ITS with more flexibility in being able to adjust its rates as necessary.

The audit recommended that ITS draft an ordinance to rescind the sections of the current rate ordinance that pertain to rates charged only to county agencies and revise the fees for services provided only to external users.

Finding 3.1. The County spent substantially more on a county-wide wan than originally planned. However, the WAN was implemented for significantly more users than originally planned.

The Information Services Division in the former Department of Metropolitan Services began installing the WAN infrastructure in early 1995 with a $5.8 million budget appropriation. When the council authorized a technology bond in December 1995 to fund the WAN, the estimated cost of the WAN had increased to $8.4 million (including $1.2 million for e-mail), and a parallel project, WAN connectivity, had been added with a budget of $3.3 million. Although the project plan stated that 82 sites would be connected to the WAN, and the appropriation documents increased that to 93 sites, a total of 127 sites had been connected and 14 more were in the process of being connected by August 1997. Additionally, 7,746 employees had e-mail access, although e-mail was not included in the original planning documents and the appropriation documents anticipated only 4,000 e-mail users.

Based on the estimated number of WAN and e-mail users, the appropriated budget amount represented an average cost of $90,000 for each site connected to the WAN and $300 per e-mail user. However, the actual costs averaged $52,000 per site, or 57.8% of the estimated cost, and $176 per e-mail user, or 58.7% of the estimated cost. Based on the significant differences between the estimated and actual costs, audit staff concluded that the cost estimates developed in the planning phase of the project were unsatisfactory.

Finding 3.2. The WAN design team study report was a detailed design plan, but not an adequate budget plan. However, it was the basis of the original decision in 1997 to provide $5.8 million to fund a WAN.

The planning document for the WAN infrastructure project was the Design Team Study Report, completed in April 1994. Audit staff found that although the report was a detailed design document, it lacked important budget information. For example, the report did not break out capital and operating costs and it provided only rough cost estimates (i.e., rounded numbers with little detail to back them up). Moreover, although changes were made in the scope of the project after the Design Team Study, these changes were not well documented or referenced back to the original plan. These deficiencies limited the ability of audit staff to track changes in the project's scope and costs and determine the reasonableness of the original cost estimates and actual expenditures.

The audit recommended that ITS establish policies and procedures to ensure better planning, tracking and accountability for all information technology capital projects. Such procedures should require consistent use of a project plan that clearly describes the project's scope, details the project's estimated capital and operating costs, establishes a format for tracking project expenditures, and requires that subsequent changes to a project's scope be referenced back to the original plan to facilitate tracking of changes in scope or costs.

Finding 4.1. King County's GIS projects achieved the desired outcomes, within their original budgets, as specified in planning documents.

A Coordinated Scoping Document, with a total budget of $9.2 million, was developed in 1993 to serve as a guide for implementing GIS in the consolidated King County-Metro government. A subsequent GIS plan was created in 1994 that provided detailed steps and timelines for acquiring a GIS but did not include either comprehensive references to the projects and deliverables cited in the Scoping Document or a budget. However, audit staff determined that the deliverables outlined in the Coordinated Scoping Document and several additional interface capabilities were realized. Audit staff also determined that the GIS was implemented with over $546,000 remaining from the total available funds.

Updated: 06/24/02