Office of Mayor William Peduto
Mayor William Peduto Releases Fact-Finding Results on City Payroll Project
Payroll system was $1 million over budget and not approved by City Council when suspended last year; New system and oversight procedures now being implemented

PITTSBURGH, PA (March 25, 2015) Mayor William Peduto’s administration released an independent fact-finding report today on a city payroll project that was $1 million over budget before the Mayor suspended it last year.

The forensic report by the firm DeForest, Koscelnik Yokitis & Berardinelli backs up Mayor Peduto’s concerns with the project, which began in 2012 and was supposed to be operational by January 2013.

The report found:

  • The city never entered a formal contract with Denovo, the firm implementing the payroll system, or presented a contract agreement to City Council or the Law Department for review.
  • Denovo was hired in 2012 to implement the City payroll project by January 1, 2013, at a cost of $263,940. As of March 2014 Denovo had filed eight change orders, increasing their payments to $1,252,584 -- five times the original cost.
  • Seven of the change orders were signed by former city Innovation & Performance Manager Chuck Half. The report found no documentation giving the performance manager authority to agree to the change orders, or any documentation indicating he was directly supervised in regard to the payroll project by more senior city officials.

“I refused to stand by while taxpayer dollars were being wasted on a poorly-managed system that could have put paychecks for city workers at risk, and this report shows why. A new payroll system will soon be in place that includes extra oversight from top officials in my administration,” Mayor Peduto said.

After suspending the payroll project last year the City contracted with another independent firm called Independent Catalyst to do a technical evaluation of the payroll system. That evaluation is complete and the City is about to enter a phase two contract with the firm to implement its recommended technological fixes. (A report on those recommendations is here.) The new payroll system should be implemented this fall.

A new executive steering committee comprised of the Chief Administration Officer, the Office of Management and Budget Director, and the Personnel Director will oversee the system’s implementation.

Additionally, OMB now requires all software contracts to be signed off by the Innovation & Performance Director, which provides an additional check and balance to help the City oversee its software inventory and its consistency with city policies.

The report and 49 supporting document sets are below.

ERP Fact Finding Report


Wednesday, March 25, 2015
Timothy McNulty
Communications Director
City of Pittsburgh
Cell: 412-660-1999

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