$33 million plus $17 million

Implementing computer software to streamline the Clark County School District's accounting and business functions could cost the school system up to $17 million more than projected.

The Clark County School Board in December 2004 approved the $33 million purchase of the Enterprise Resource Planning software, or ERP.

The portion of the program to handle purchasing was to begin operating by July, and the human resources functions were to come online in December. But problems installing hardware and a change in personnel on the project have caused delays and driven up costs, said Keith Bradford, the district's assistant superintendent of business.

"I would anticipate the total cost will be somewhere between $40 million and $50 million. Probably closer to $50 million," Bradford said.

He said he will have a better estimate of the total cost on Wednesday, when he is scheduled to address School Board members about the project during a meeting to discuss the budget for next school year.

Costs exceeding the amount budgeted for the system will be covered by the district's general fund, according to Superintendent Walt Rulffes.

The program will manage accounting for the district's general budget, Human Resources and Purchasing and Warehouse departments. The software will streamline hiring and eventually allow administrators to purchase school supplies from their campus computers.

Bradford said even though the project is late and over budget, the program is needed to efficiently run the school system and will save the district money in the long run. The original project budget was underestimated, he said.

The district now expects to roll out the financial and purchasing components by July. A hiring and recruiting function for support staff isn't expected to be completed until July 2008.

Rulffes said the move to the ERP software came about after a state-mandated audit of the district concluded the district's software was antiquated. Rulffes echoed Bradford's comments that the district underestimated the budget for the project.

"We knew then (in 2004) that costs may be higher, eventually," Rulffes said. "But we wanted to create a budget that was absolutely defendable at the time."

Rulffes said Bradford's current $50 million estimate was "tentative and subject to more scrutiny."

Once the system is fully functioning, the district will be able to continue growing without hiring additional personnel to perform some jobs required by the current software system, Rulffes said.

"This is a classic case of switching from manpower to current technology," he said.

The district is one of the fastest growing and fifth-largest in the nation with nearly 303,000 students. The school system also has about 35,000 employees.

While there are contractual penalties if school buildings are not finished on time, Rulffes was unsure if the district's contract with the software provider has a similar provision.

Bradford said if the district goes over its budget, it will not be able to recover any money contractually that exceeds the $33 million price tag. But outside parties involved with the project only get paid after completing specific tasks, he said.

The software provider is SAP Americas, based in Washington, D.C.

School Board members had mixed reactions to the project being late and over budget. Some trustees were concerned with Bradford's $50 million estimate, but said the district needs to keep up with the latest technology and increase efficiency.

School Board member Larry Mason, who is battling leukemia and has recently been in and out of the hospital, didn't know ERP was facing difficulties. But Mason likened the project to owning a car that doesn't work.

"It's like one of those things, you buy a car and you're stuck with it, even when it's a lemon," Mason said.

Trustee Terri Janison said she has many questions about the delays and increased costs. Janison said she's looking forward to learning the answers at Wednesday's meeting.

"I need to understand better why there is such an increase from the original cost," Janison said. "I need to make sure the funds being requested are completely necessary."

Andy Kendzie, a spokesman for SAP Americas, said his organization is the largest vendor of such software in the world and has worked with 450 school institutions worldwide. Large school systems in Los Angeles, Seattle, and Orlando have recently implemented, or are in the process of implementing, ERP software, Kendzie said.

But Kendzie didn't know any specifics about problems with the Clark County School District's implementation of the software.

Delays are not unusual, he said.

"Part of this is really the innovation of Clark County," Kendzie said. "They are trying to install software systems not just for today, but for the next 10, 20, 30 years. ... When they get them right -- and they always get them right -- the savings, efficiency and expediency are absolutely worth it."

Calls to district's in Los Angeles and Orlando to inquire about their ERP systems were not returned.