“We have lost all this money.” Wayne County tries to save the software project as costs go up

“I was just blown away by it,” said Wayne County Commissioner Glenn Anderson, recalling when he and other commissioners were recently briefed on the project’s failures by the county’s chief financial officer.

The county took the extraordinary step recently of walking away from the vendor, saying the company missed multiple key deadlines and ultimately lacked the right experience. Still, the company collect just under $10 million.

Highlights

  • The project involves the county’s Enterprise Resource Planning system, or ERP. It’s designed to track every penny of Wayne County’s $1.7 billion budget, from payroll and benefits to pensions and contracts to state and federal grants.

  • “He basically dropped the bomb that we had lost all this money with this company,” he said.

“We could fail in pension payments, fail in payroll,” Commissioner Anderson aid. “This would just devastate everything.”

In Wayne County, getting the new system up and running fast is critical because the county’s current decades-old payroll system is on its last leg. Officials fear could collapse at any moment, causing significant headaches.

The county has worked to implement an ERP system since 2018, according to Newsome, and entered into a contract with CherryRoad, a New Jersey-based tech company, in 2019. They were selected through a competitive bidding process, scoring higher than eight other firms.

But after more than two years of work and $16 million spent between CherryRoad and other vendors, the system that was supposed to be up and running today is nowhere near completion. The county now estimate it may not be ready until the end of 2023 or longer.

Last month, the county and CherryRoad mutually agreed to part ways. “We could not continue to put money into a contract where we were not getting the return that the taxpayers needed,” Newsome said.

According to the Wayne County, CherryRoad was in over its head. The company missed multiple “go live” dates, first in 2020 and then again in 2021. Wayne County ultimately concluded that the company “did not have the right level of experience for this size of project and had very little experience with governmental accounting,” even though the county picked them for the job.

“I don’t think there’s anything malicious or gross negligence,” Newsome said, addint later: “These things are difficult to do.” But not only is the project behind schedule, the cost to finish it has now ballooned. As the county looks to replace CherryRoad, the original project budget of $31 million has nearly doubled to about $57 million.

“Instead of the commission having greater oversight, if anything in the last few years it’s been less oversight,” Anderson said. But CherryRoad disagrees with the county’s assessment, saying there’s plenty of blame to go around.

Kinloch and Anderson say they were kept in the dark about the ERP project’s failures until about six weeks ago. The first budget, officials say, wasn’t realistic. “It’s just very disappointing to hear that this issue is out of control at the level that it is,” said Commissioner Jonathan Kinloch.