Wednesday, November 19, 2008

Who gains from Collin County’s suit against its auditor?

By Bill Baumbach of The Collin County Observer

In May of this year, the Collin County Commissioners filed a lawsuit against the County Auditor in an attempt to stop the auditor from gaining access needed to audit the county's numerous computer programs that generate reports on all facets of county financial operations including, cash receipts, payroll, fines, expenses and tax collections.

Donald Cozad, the County Auditor had been trying for several years to gain "read only" access to the tables, calculations, permissions and formulas that these systems used to create the reports that are summarized in the county's financial statements.

Last month visiting Judge Calhoun ruled (PDF) for the second time against the commissioners court, and acknowledged that the Auditor has all the rights to the software that he had been requesting. So far, these suits have cost the Collin County taxpayer over $300,000. [see Turf battle costs taxpayers over $300,000, CCO, Nov. 9, 2008]

The costs to the taxpayer will continue to rise, and probably double as the county has filed a notice of appeal.

One question that nags anyone who has examined the issues in this dispute is "Who gains from a successful suit by the Commissioners Court?". The commissioners warn of disastrous financial consequences if the auditor is allowed to prevail. A closer look at the issues and players involved with this suit suggests that there may be hidden agendas that have nothing to do with saving taxpayer money.

A "power grab"

For years now, the commissioners have coveted and expressed resentment over any county operation they do not control. Texas state law, in providing for a system of checks and balances has placed several departments beyond the authority of the commissioners court. These departments include the County Auditor, the Purchasing Agent, Court Reporters, and Juvenile Probation.

The commissioners complain that they are responsible for the budget, but 10% of the budgeted funds are spent by officials the commissioners have no authority over. Commissioners want the final policy and hiring authority over all non-elected department heads.

During the last legislative session, the commissioners tried and failed to get the Texas Legislature to allow the commissioners to replace court reporters with electronic taping systems, even over objections from an elected judge. This year they are asking the legislature to prohibit the auditor from accessing and auditing software and from controlling payroll. They are also asking that they be given control over the purchasing department.

In their suit against the auditor, the commissioners claim that granting the auditor's demands will be burdensome and expensive.

In their filings with the 219th District Court (PDF), the commissioners charge that, "The Auditor’s Questions are proposals for radical change to Collin County’s computer systems masquerading as an innocent effort to clarify his statutory duties as the county auditor."

Claiming that the auditor is engaging in a "power grab", the commissioners wrote that, "The Auditor seeks to vastly increase his influence and power in the Collin County government." and that "the additional powers the Auditor seeks would have disastrous consequences for Collin County’s taxpayers."

These "disastrous consequences" to the Collin County taxpayer were at the heart of the the commissioners' argument before the court.

Millions of dollars

The commissioners charge that, "the Auditor’s proposed changes would cost the taxpayers of Collin County millions of dollars in vendor modifications to computer software and hardware and lost man-hours for county employees."

In a sworn affidavit (PDF), Collin County's IT Director, Caren Skipworth told of the Auditor's requests to gain "read only" access to the major IT systems -

Ms. Skipworth wrote that with one major software package, the multi-million dollar installation of "PeopleSoft", the vendor was able to make the changes that allowed Mr. Cozad 'read only' access. Another huge program named "Land Deeds and Vitals System" that is used by the County Clerk could be modified to meet the requirements of the auditor for only $5,000.

However, with the $7 million dollar installation of the court room management software package called "Odyssey" it was a different matter. Odyssey was developed and sold by Tyler Technologies of Dallas. According to Ms. Skipworth, Odyssey's vendor has told her that the required changes could not be made.

Ms. Skipworth also wrote that, "Typically, however, vendors do not develop software applications with view inquiry access to configurations, workflow, user profiles and security". "More over", Skipworth wrote, "it is highly unusual for a vendor to be willing or able to alter an application to allow for something like view inquiry access after the program's development."

Really?

Auditor's portals

PeopleSoft was able to offer the modifications easily. Land Deed and Vitals was able to do so cheaply. Only Odyssey seems to be impossible to modify - even by the programmers who wrote it.

A look at Tyler Technologies' website shows that Tyler offers custom programming and development. It would seem extraordinary that they can customize other operations, but can't fix their own programming to meet current accounting standards.

I've spoken to several vendors of large ERP systems. (ERP stands for Enterprise Management Program.) ERP systems are large programs designed to run entire corporate finance, production, and logistics departments. Without exception, these vendors all offer "read only" audit access. One salesman told me he wouldn't even try to sell a large software system without an "auditor's portal". No one would buy it.

Because, in the world after Enron and Worldcom, such audit functions are required by law. The Sarbanes-Oxley Act, enacted in 2002 makes such auditor oversight mandatory for public corporations - but not for government.

I also spoke with experts who deal with regulatory software - the large programs that are used by, for example, food processors to insure regulatory compliance. These programs too must contain "read only" access to base functions for auditing.

What's the deal with Odyssey?

Odyssey was born out of a vision by the Texas Legislature and Texas Supreme Court to automate much of the functions of the court system in such a way that would enable efficiencies in automated filing and allow communication between the trial courts and the appellate courts.

In the late 1990's the 75th Texas Legislature created the Judicial Committee on Information Technology (JCIT). The JCIT is made up of judges, lawyers and DA lawyers from around the state.

The JCIT was tasked to, "establish standards and guidelines for the systematic implementation and integration of information technology into the trial and appellate courts in Texas." In other words, the JCIT was to write the program specifications for automating the court systems.

From 2001 to 2003, the JCIT solicited input from courts and vendors, developed program parameters, and published standards to be incorporated into courtroom software.

One of the companies that gave input into the process and developed software to meet these new standards was Tyler Technologies. Their Odyssey program is a suite of software programs designed to automate courts, jails and justice operations.

In 2006, the Conference of Urban Counties (CUC) selected Odyssey in a $12.4 million software license agreement under its TecShare program (PDF) for joint use and license by its members. The CUC is a non-profit organization composed of 34 member counties representing nearly 80 percent of the population of Texas.

The agreement gave existing CUC members the right to adopt Tyler's Odyssey Case Manager and Odyssey Prosecutor software applications. The agreement also gave CUC members that adopt the court management system access to other applications in Tyler's Odyssey suite of applications, such as Law Enforcement, Jail Manager and Check Manager.

Collin, Dallas, Galveston, Denton, Fort Bend, Grayson, Guadalupe, Hidalgo, Kaufman, Kerr, Nueces, Tarrant, Taylor and Williamson counties are among the CUC members that have signed contracts and are adopting Odyssey.

The JCIT, Gardere and Tyler Technologies

Remember that the base criteria and specifications for Odyssey were written by the JCIT. The chairman of the JCIT was and is Peter S. Vogel, a partner at the Dallas law firm of Gardere, Wynne Sewell LLP.

Mr. Vogel is also Collin County's lead attorney in its suit against its auditor.

Critics have charged that Mr. Vogel is defending software written to his specifications using Collin County tax dollars.

Mr. Vogel's law firm Gardere, Winn Sewell, LLP can also count Tyler Technologies as one of its major clients. A quick Google search will turn up many SEC filings by Tyler Technologies - all prepared by or signed off by Gardere, Winn Sewell, LLP.

If the Auditor wins the appeal, this kind of "read only access" to county computer systems will likely become the de facto standard for all counties in Texas.

Tyler Technologies' Odyssey suite has a large Texas county customer base. It would be reasonable to believe these installations will sooner or later require the same modifications requested by the Collin County auditor - Tyler Technologies would then have to reprogram every Texas installation of Odyssey and any other program it sells without "read only" audit capabilities to county governments.

Tyler could try to bill the counties for this service. One would suspect that if they did, the law suits would fly from many directions. Tyler Technologies is a growing company that sells software exclusively to governments. It wants more business, not lawsuits from its customers. In all probability, Tyler would have to reprogram all these Odyssey installs at its own expense - but only if the Collin County Commissioners lose their appeal to the 5th Court of Appeals.

The total cost to Gardere's other client of such a reprogramming is unknown, but other than the costs of this litigation, it shouldn't cost the Collin County taxpayers a dime.

Not one dime.

Related stories

• Where in the world is Collin County auditor Don Cozad? (June 15, 2009)
• Collin County vs. Auditor: Who won? Who lost? (May 4, 2009)
• 2008 in review: Why I write the Collin County Observer (Dec. 29, 2008)
• Pegasus News week in view: Accolades edition (Nov. 19, 2008)

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• Politics and Government > County Government > Collin County

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