California State Comptroller initiates $1.2B payroll system overhaul amid scrutiny

California's Assembly Budget Subcommittee No. 5 on State Administration convened on May 20, 2025, to discuss critical funding proposals aimed at enhancing state operations and accountability. The meeting highlighted four key initiatives, including a significant investment in the California State Payroll System Project, which is set to transform payroll and human resources management across various state departments.

The subcommittee approved a request for 20 permanent positions and $117 million to support the ongoing development of the payroll system, which is projected to cost $1.2 billion over six years. This project aims to replace 13 outdated systems, improving integration and reporting for over 60 state departments. Despite a pending lawsuit challenging the project's procurement process, officials expressed confidence that it would remain on schedule and within budget.

Additionally, the meeting addressed a funding realignment for the Unclaimed Property Management System, seeking increased support from the Unclaimed Property Fund to cover rising maintenance costs and transaction volumes. A technical adjustment was also proposed to allocate $300,000 for mandated audit work related to school facilities programs, ensuring compliance with audit reporting standards.

Concerns were raised regarding the adequacy of the State Controller's Office's audit capabilities, especially in light of increasing financial transactions. Subcommittee members emphasized the need for a strategic plan to enhance audit resources, suggesting that investing in these capabilities could yield significant savings for taxpayers by detecting waste and fraud.

The discussions underscored a commitment to improving state financial transparency and operational efficiency, with a focus on leveraging technology for better data management and decision-making. As the state prepares for challenging budget cycles ahead, the outcomes of these proposals could play a pivotal role in shaping California's fiscal landscape.