From Crains:
Investigators say poor oversight allowed a New York City payroll-technology project to spiral into a $700 million tangle of contractor fraud, budget overruns and delays.
A Department of Investigation report released Friday says the city lacked proper management safeguards to detect and prevent the problems with the CityTime project.
Its costs ballooned from about $70 million to $700 million. Authorities later concluded a key contractor hired and overpaid consultants through companies his associates owned.
Eight people have been convicted or pleaded guilty. The prime company on the project repaid the city more than $500 million.
Showing posts with label citytime. Show all posts
Showing posts with label citytime. Show all posts
Sunday, July 27, 2014
Monday, July 29, 2013
That's some interesting logic
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One of the worst frauds in New York history actually saved the “lucky” city money, Mayor Bloomberg boasted Friday.
Federal prosecutors have indicted 11 contractors and consultants in a $500 million rip-off involving the computerized CityTime payroll system.
But, since the U.S. attorney forced the main contractor, SAIC, to reimburse the city’s losses, taxpayers came out ahead, Bloomberg said.
“There was fraud,” Hizzoner conceded Friday on his weekly radio show,” but added, “We recovered most of the money ... that whole system cost us something like $100 million dollars and it should’ve been many times that.”
“We were lucky,” the mayor continued. “Because of the fraud, in the end, it turned out, that because of the recovery that we saved a lot of money.”
Saturday, March 17, 2012
Who knew what when?
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The defense for a half-dozen criminal defendants in the CityTime scandal faces an uphill climb — through a mountain of documents.
Prosecutors in the massive multimillion-dollar ripoff revealed Thursday that they turned over more than 9 million pages during pre-trial discovery.
Word of the enormous amount of evidence came one day after Science Applications International Corp. — the crooked contractors in the seven-year scam — agreed to a $500 million payout to avoid prosecution.
About 5 million pages came from the Virginia-based business, a Fortune 500 company responsible for billions of dollars in defense contracts.
The six defendants in the case include SAIC projects manager Gerard Denault and city subcontractor Mark Mazer, the scheme’s purported mastermind.
Two other suspects remain on the run: husband and wife Reddy and Padma Allen, who fled to their native India. The couple owned TechnoDyne and are charged with providing multimillion-dollar kickbacks in the scheme.
From the Daily News:
Bloomberg has not yet explained how such a massive theft - the biggest stain on his administration - could occur for so long without any of his aides noticing.
Only one city official, former Payroll Administration director Joel Bondy, has lost his job because of CityTime.
Maybe when the criminal trial of the CityTime crooks finally begins, we'll learn what our own officials knew and didn't know.
Labels:
Bloomberg,
citytime,
government waste,
scam,
scandal
Thursday, March 15, 2012
Citytime payback
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The company at the center of the CityTime corruption scandal has agreed to a half-billion-dollar settlement with the city and federal prosecutors.
Virginia-based Science Applications International Corp. said the agreement would allow the company to avoid criminal charges related to the federal investigation of the timekeeping project the contractor oversaw for the city. SAIC had faced only one criminal count, but in the case of Arthur Andersen that was enough to take down a huge company.
The settlement will ultimately net the city $507 million—offsetting most of the nearly $700 million it spent on the 12-year CityTime project to automate how the city counts the hours worked by 163,000 municipal employees.
Federal prosecutors in Manhattan said SAIC agreed to pay $370 million in restitution to the city and a $130 million penalty. The city will receive $466 million of that and won't have to pay an outstanding $41 million invoice from SAIC for CityTime-related services.
In response to this scandal, the City Council passed a joke of a law that requires the City to report to them any large unanticipated increases in spending. While it sounds good on the surface, there actually are no consequences if the City fails to report cost increases and none if it does. It's just Quinn posturing for her mayoral run, which a lot of morons support. We get the government we deserve.
Sunday, December 11, 2011
CityTime refund due
From the NY Post:
The company responsible for the fraud-ridden CityTime payroll system acknowledged yesterday it will have to pay back at least $232 million to the Big Apple, according to records filed with the feds.
Virginia-based Science Applications International Corp., which already has sacked three top execs because of the CityTime boondoggle, said that it might well have to pay even more to City Hall but that the preliminary reimbursement sum is already proving to be a drag on company revenues. SAIC yesterday announced a $17 million loss for the third quarter.
“It is possible that the figure could be larger,” according to an SAIC statement released as the stock market was closing for the day.
SAIC CEO Walt Havenstein, in a conference call with analysts, said the company made the loss calculation based on recent “developments,” but he refused to elaborate.
CityTime was supposed to prevent fraud and time padding by city workers but instead became the biggest financial scandal of Mayor Bloomberg’s 10-year reign.
The megabucks payment is about 30 percent of the total of some $760 million the city spent on the system.
The company responsible for the fraud-ridden CityTime payroll system acknowledged yesterday it will have to pay back at least $232 million to the Big Apple, according to records filed with the feds.
Virginia-based Science Applications International Corp., which already has sacked three top execs because of the CityTime boondoggle, said that it might well have to pay even more to City Hall but that the preliminary reimbursement sum is already proving to be a drag on company revenues. SAIC yesterday announced a $17 million loss for the third quarter.
“It is possible that the figure could be larger,” according to an SAIC statement released as the stock market was closing for the day.
SAIC CEO Walt Havenstein, in a conference call with analysts, said the company made the loss calculation based on recent “developments,” but he refused to elaborate.
CityTime was supposed to prevent fraud and time padding by city workers but instead became the biggest financial scandal of Mayor Bloomberg’s 10-year reign.
The megabucks payment is about 30 percent of the total of some $760 million the city spent on the system.
Labels:
citytime,
office of payroll administration,
refund
Wednesday, September 7, 2011
Bloomberg was warned about CityTime
From the NY Post:
The $760 million CityTime scandal should have been no surprise to Mayor Bloomberg and his inner circle.
One of Hizzoner’s top aides was sounding alarms about the fraud-ridden payroll system more than four years ago, The Post has learned, and the response from City Hall was silence.
The warnings came from Paul Cosgrave, the mayor’s commissioner of information technology and telecommunications at the time, according to three people with direct knowledge of the discussions. And Cosgrave brought his concerns directly to Bloomberg’s senior staffers -- who are supposed to have Hizzoner’s ear.
Cosgrave “was of the mind that, frankly, they should have just shut the project down,” one source at the meetings in 2007 told The Post. “They were just spending money without a clear management process in place.”
Bloomberg’s aides responded to Cosgrave by saying, “We’ll look into it,” and never got back to him.
Cosgrave was the highest-ranking official to voice concerns about CityTime at the time, but lower-level officials had already started sounding alarms.
The $760 million CityTime scandal should have been no surprise to Mayor Bloomberg and his inner circle.
One of Hizzoner’s top aides was sounding alarms about the fraud-ridden payroll system more than four years ago, The Post has learned, and the response from City Hall was silence.
The warnings came from Paul Cosgrave, the mayor’s commissioner of information technology and telecommunications at the time, according to three people with direct knowledge of the discussions. And Cosgrave brought his concerns directly to Bloomberg’s senior staffers -- who are supposed to have Hizzoner’s ear.
Cosgrave “was of the mind that, frankly, they should have just shut the project down,” one source at the meetings in 2007 told The Post. “They were just spending money without a clear management process in place.”
Bloomberg’s aides responded to Cosgrave by saying, “We’ll look into it,” and never got back to him.
Cosgrave was the highest-ranking official to voice concerns about CityTime at the time, but lower-level officials had already started sounding alarms.
Wednesday, June 29, 2011
Mayor says it's ok to blame him
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Mayor Bloomberg admitted yesterday that he didn't devote enough time to scrutinizing CityTime, the $760 million computerized timekeeping project prosecutors claim was "corrupted to its core."
"Nobody paid as much attention to it as they should have from me on down," the mayor said after speaking at a graduation ceremony for the city's civic corps at Gracie Mansion.
"We're going to find out who did what."
Eleven individuals and one corporation have been implicated in what is shaping up as one of the largest corruption scandals in municipal history.
But the mayor said it's not clear how much money taxpayers will end up losing.
Labels:
Bloomberg,
citytime,
fraud,
government waste,
scandal
Thursday, June 23, 2011
Citytime scandal just keeps getting worse
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Authorities now estimate more than $600 million that New York City paid for the “CityTime“‘ automated payroll project was directly or indirectly tainted.
U.S. Attorney Preet Bharara says it is truly jaw dropping. Prosecutors had previously put the figure at about $85 million.
“Unfortunately, in just a few months since the first announcement of arrests, we have developed evidence that the corruption on CityTime was epic in duration, magnitude and scope,” Bharara said on Monday.
The new estimate came as federal prosecutors and the New York City Department of Investigation announced more charges in the case.
The indictment names a Wayne, N.J.-based subcontractor, TechnoDyne LLC, and its owners. Prosecutors say they believe Padma and Reddy Allen have fled to their native India. Efforts to reach them for comment through online messages were unsuccessful.
Labels:
citytime,
DOI,
immigrants,
thief,
U.S. Attorney
Saturday, May 28, 2011
Consultant arrested; Bloomberg thinks it's not all bad
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A former consulting company executive was charged on Friday with receiving at least $5 million in illegal kickbacks in connection with his work as a project manager on the CityTime automated payroll project, people briefed on the matter said.
The consultant, Gerard Denault, a former executive of Science Applications International Corporation, was also charged with wire fraud conspiracy and money laundering in an indictment unsealed in United States District Court in Manhattan.
Mr. Denault was arrested in Danbury, Conn., on Thursday, and he is expected to be presented in federal court in Manhattan on Friday.
He was charged as a result of an ongoing investigation by the city’s Department of Investigation and the United States attorney’s office in Manhattan.
From the NY Post:
It might be the most-scandal plagued project of his administration, but Mayor Bloomberg today pronounced the $722 million CityTime timekeeping project a great success.
"We actually did a pretty good job here, in retrospect," the mayor said on his weekly WOR radio show.
Bloomberg argued that mega-software projects are fraught with technical peril and noted that some never get done.
"The FAA hasn't been able to get their new traffic control system and the IRS -- at the federal level some of these programs go on for decades, cost billions and billions of dollars and never come up with anything," he said.
Labels:
Bloomberg,
citytime,
consultants,
court,
DOI,
government waste,
graft
Wednesday, March 30, 2011
Has he lost his marbles?
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On his Friday radio show, [Bloomberg] was asked about a new shift in city policy that had been in the newspaper for two days running - and didn't seem to know it had happened.
It's a shift on something that had been a sore point for Bloomberg's critics - outside contractors paid six-figure salaries for tech projects that blow deadlines and budgets, like the scandal-ridden CityTime system.
...it was news last week when one of Bloomberg's deputy mayors, Stephen Goldsmith, agreed with critics and said New York will save tens of millions of dollars by bringing the work in-house.
On the radio, WOR-AM host John Gambling tossed Bloomberg a softball about it. But instead of explaining the new company line on insourcing, the mayor defended outsourcing.
If the Bloomberg administration has a new message on contracts, why did Bloomberg himself go off-message?
...perhaps it's a sign of...a third-term mayor who has delegated the nuts and bolts of government to new aides like Goldsmith but isn't paying enough attention to what they're doing.
Those who work closely with City Hall - even Bloomberg's allies - have seen signs of third-term drift. His attention is on national and world issues, not day-to-day business like plowing snow or rewriting tech contracts.
Labels:
Bloomberg,
citytime,
contractors,
outsourcing,
Steve Goldsmith
Monday, January 24, 2011
What's he getting out of it?
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Will taxpayers be held hostage to the CityTime money pit for years to come?
Defense giant SAIC, the main contractor on the scandal-plagued $700 million timekeeping and payroll project, failed to provide city officials with so much vital information about the system's design that no one else can operate or maintain it.
That's the astonishing conclusion of a new study of CityTime by accounting firm KPMG.
The knowledge transfer that is standard in private industry for such huge information technology purchases did not occur with SAIC, the report concluded.
"The lack of formal knowledge transfer planning and documentation increases the risk that the City will continue to be reliant on vendor support of the application," KPMG said in a 62-page report it handed to city officials on Jan. 11.
More than 10 years after CityTime was launched, it "is not only overdue, overpriced and wrought with allegations of fraud, but today we learned that it doesn't even come with a user manual," city Controller John Liu said in statement.
Mayor Bloomberg agreed to commission the KPMG study in September to win Liu's approval for extending until June the deadline for SAIC to finish rolling out CityTime to the full target population of 165,000 city workers.
The city Office of Payroll Administration is jointly run by the controller and the mayor, so the vote of both men is needed for any new contract.
"All deficiencies caused by the vendor [should be] cured at no additional cost to taxpayers," Liu insisted yesterday.
It is absurd, however, that a private company created timekeeping and payroll system for public workers that only it can operate.
Federal prosecutors recently subpoenaed SAIC's own records as part of their continuing probe of the project.
Now we learn that for $700 million, the city got a system it can't operate itself.
Bloomberg would never allow an outside vendor to exercise such unprecedented control over the computer systems of his own company.
So why does he accept it for the payroll system of New York City workers?
Tuesday, January 4, 2011
Liu rejects 911 modernization contract
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Comptroller John Liu refused today to approve a $286 million contract to complete a five-year-old upgrade of the 911 system, contending that "some of the issues are similar to problems" encountered in the scandal-ridden CityTime project.
In a brief letter to Mayor Bloomberg, Liu said he’s concerned that the project’s cost has increased from $380 million in 2005 to $666 million "and counting."
Liu said the new IT contract with Northrup Grumman that would help establish a second 911 center to back up one that began operating at Brooklyn’s Metrotech in May 2009 includes multiple layers of contractors and a time and expense billing arrangement "which does not encourage timely completion."
But city officials insisted that most of contract is for "fixed-cost deliverables" and hourly rates only apply to selected portions of the deal.
Liu aides said he acted because the Department of Information Technology and Telecommunications, which is overseeing the contract, couldn’t produce documents relating to "a number of pricing issues" and couldn’t justify the cost of various hardware used in building the system.
The modernization of 911 — known as the Emergency Communications Transformation Project — is designed to centralize all call and dispatch functions of police, fire and ambulance services into one computerized system.
A spokesman for the mayor responded by saying, "We will be working with the comptroller to resolve any concerns and ensure this important project, which has already improved public safety in the city, can move forward."
The projected bill for the overall 911 modernization plan — which includes equipment, building and land acquisition costs — is $2 billion, of which $645 million has been spent.
Labels:
911,
Bloomberg,
citytime,
comptroller,
DOITT,
government waste,
John Liu
Tuesday, December 21, 2010
What do you mean you didn't know?
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Without so much as a cursory interview, Bloomberg signed off on giving the job to a mope who had worked for the city's child protective agency, who had left that job to become a consultant to the payroll project, who set his sights on running the whole shebang - and who then hired a pal, another child protective agency mope, as a quality control consultant.
Soon enough, that very good $60 million idea was an $800 million nightmare, mope No. 2 had awarded up to $80 million in contracts to associates, and, according to prosecutors, had reaped $25 million in kickbacks.
One person got suspicious - and it wasn't the mayor or controller. Daily News columnist Juan Gonzalez began highlighting the scope of the boondoggle as well as taking note of what seemed enormous consulting fees.
Bloomberg was, ahem, not pleased. But his irritation was misplaced. The target was Gonzalez, when it should have been mope No. 1, Joel Bondy, who held onto his job until after the Manhattan U.S. attorney and Department of Investigation blew the scandal wide open.
Said Bloomberg: "The issue is that here we had somebody that we trusted, or one of our contractors trusted and that trust was misplaced."
Uh, uh. The issue was that Bloomberg blew it, big time.
From Crains:
Mayor: Alleged fraud slipped through cracks New York Mayor Michael Bloomberg says payroll consultants accused of stealing $80 million from the city were allegedly able to do so because they simply slipped through the cracks.
Mr. Bloomberg said Friday on his weekly radio show that the alleged fraud should have been detected earlier. But he said the city can't investigate everything at all times.
He said this project involved many layers of contracts, which can be difficult to police.
He declared the city is still relatively free of corruption and crime.
From the NY Post:
Prosecutors have charged four consultants with ripping off $80 million from a program to develop an electronic-timesheet system for municipal employees.
Yet still on the loose is the guy responsible for a possible loss on the project of nearly 10 times that sum.
This would be Mayor Mike.
After all, work on CityTime -- an automated time-tracking system for city employees, started just before Mike took office -- was supposed to cost $63 million. Its current price tag?
A staggering $722 mil lion.
And the project still isn't done.
Where's Michael Bloomberg been?
Hizzoner prides himself on his managerial prowess. And he recently said, with characteristic, um, modesty, that he should be in the running for best New York City mayor ever.
But just as Ed Koch had to live for years with the Parking Violations Bureau scandal of the late '80s, Bloomberg is going to be wearing this albatross for a very long time indeed.
Let's face it: Being mayor of New York requires laser focus; Gotham, remember, spends some $65 billion a year.
Yet Mike remains fixated on pedestrian plazas, bike lanes and "not running for president." Plus, of course, his "bipartisanism" bushwa.
All at New York's expense, it seems.
Fact is, the city needs him right here.
Doing his job.
When $722 million goes up in smoke and nobody notices, there has been a fundamental breakdown.
Mike needs to fix it.
Hey, Mike, don't despair. Despite this massive failure, in a couple of decades your political pals will have forgotten all about it and may even name the Brooklyn Bridge after you.
BTW, weren't these the same papers that were lauding the mayor for his managerial skills and endorsed him because he was the only person in the world who could govern the city in tough economic times? What a difference a year makes!
Friday, December 17, 2010
CityTime consultants busted
From the Daily News:
Four highly paid consultants hired to computerize the municipal payroll to eliminate waste and fraud were charged Wednesday with using the city as a "cash cow" to steal $80 million.
Manhattan U.S. Attorney Preet Bharara unsealed charges against the four hired as part of a project called CityTime that Daily News columnist Juan Gonzalez first revealed was hobbled by waste and bloat.
The four were arrested Wednesday morning, along with the wife and mother of one of the consultants. All were charged with with using a network of shell companies to siphon off millions of taxpayer dollars.
Bharara said the plotters "used the the city as their own personal cash cow, making misrepresentations that led to the misappropriation of tens of millions of dollars."
Consultant Mark Mazer put front companies in the names of his wife and mother to pocket more than $25 million, according to a criminal complaint filed in Manhattan federal court.
Prosecutors said the defendants also took kickbacks and engaged in money laundering.
More from Daily News:
Read on for more fallout from the CityTime mess, including from Council Speaker Christine Quinn, who insists no one could have known the scope of what was happening -- even the Daily News (despite the fact that our Juan Gonzalez has been exposing problems with CityTime for ages)...
Four highly paid consultants hired to computerize the municipal payroll to eliminate waste and fraud were charged Wednesday with using the city as a "cash cow" to steal $80 million.
Manhattan U.S. Attorney Preet Bharara unsealed charges against the four hired as part of a project called CityTime that Daily News columnist Juan Gonzalez first revealed was hobbled by waste and bloat.
The four were arrested Wednesday morning, along with the wife and mother of one of the consultants. All were charged with with using a network of shell companies to siphon off millions of taxpayer dollars.
Bharara said the plotters "used the the city as their own personal cash cow, making misrepresentations that led to the misappropriation of tens of millions of dollars."
Consultant Mark Mazer put front companies in the names of his wife and mother to pocket more than $25 million, according to a criminal complaint filed in Manhattan federal court.
Prosecutors said the defendants also took kickbacks and engaged in money laundering.
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Read on for more fallout from the CityTime mess, including from Council Speaker Christine Quinn, who insists no one could have known the scope of what was happening -- even the Daily News (despite the fact that our Juan Gonzalez has been exposing problems with CityTime for ages)...
"No one, even in the Daily News, would have thought this was happening. ... The Council's had a number of oversight hearings on CityTime. I think we're all anxiously awaiting the results of what the deputy mayor will find. You know, everyone was very unhappy I think across the city to hear this yesterday. But I was grateful to the mayor that he reacted quickly and thoroughly and that he's putting the deputy mayor in charge. ... I don't know that he could have done anything more quickly than as soon as he found out yesterday. You know, you can't, sometimes these investigations start and you can't, you may even know about them, and you can't do anything. They have to play their course out to get to the point where law enforcement can make the arrest. So really, the mayor could not have done anything until after yesterday. He didn't let any grass grow under his feet."
Labels:
citytime,
consultants,
money laundering,
theft,
U.S. Attorney
Wednesday, June 9, 2010
Still keeping CityTime
From the Daily News:
Even as he freezes pay for teachers and slashes budgets for most city agencies, Mayor Bloomberg plans to toss nearly another $100 million into the CityTime money pit next year.
That's the computerized timekeeping and payroll system that is seven years behind schedule and has already cost taxpayers more than $700 million - 10 times its original price tag.
The mayor has admitted CityTime is "a disaster," yet he refuses to turn off the spigot for the army of computer consultants that has fed off the project for at least a decade.
Beginning next month, the Office of Payroll Administration will hire 61 computer technicians at an average salary of $77,000 - and all will be assigned to CityTime.
But those new employees will cost only a tiny portion of the new spending allotted for CityTime.
An official at the Office of Payroll Administration confirmed yesterday that the agency will spend an additional $93 million next year on the project...
From Crains:
Mark Page, the director of the Office of Management and Budget, told members of the City Council Finance Committee that to cut off funding now to the CityTime project would render the investment made so far worthless, forcing the city to spend more money in the future for a new system. Mr. Page said once CityTime was fully implemented, by the end of 2011, it would eventually cost around $30 million a year to maintain the system.
Even as he freezes pay for teachers and slashes budgets for most city agencies, Mayor Bloomberg plans to toss nearly another $100 million into the CityTime money pit next year.
That's the computerized timekeeping and payroll system that is seven years behind schedule and has already cost taxpayers more than $700 million - 10 times its original price tag.
The mayor has admitted CityTime is "a disaster," yet he refuses to turn off the spigot for the army of computer consultants that has fed off the project for at least a decade.
Beginning next month, the Office of Payroll Administration will hire 61 computer technicians at an average salary of $77,000 - and all will be assigned to CityTime.
But those new employees will cost only a tiny portion of the new spending allotted for CityTime.
An official at the Office of Payroll Administration confirmed yesterday that the agency will spend an additional $93 million next year on the project...
From Crains:
Mark Page, the director of the Office of Management and Budget, told members of the City Council Finance Committee that to cut off funding now to the CityTime project would render the investment made so far worthless, forcing the city to spend more money in the future for a new system. Mr. Page said once CityTime was fully implemented, by the end of 2011, it would eventually cost around $30 million a year to maintain the system.
Wednesday, March 17, 2010
Distractions causing dereliction of duty
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Mayor Bloomberg loves to think big...
All this attention to big projects comes at a price, though.
Some of the price comes out of your pocket - water and sewer rates have skyrocketed under Bloomberg, and the city's construction debt is higher than ever before.
Some of the price comes in the changed character of a city marked by giant footprints - neighborhood haunts like Freddy's Bar and some apartment buildings replaced by a new Brooklyn arena.
And some of the price comes in opportunities lost, inattention to detail, small problems that could have been fixed before they became big ones.
While billionaires fought over what to build at Ground Zero, two firefighters lost their lives in the former Deutsche Bank building in a scandalous breakdown of administration.
Bloomberg brags about installing GPS monitors and credit card readers in taxis, but nobody bothered to program them so they couldn't rip off $8.3 million in excess fares.
The man who made his billions on technology admitted Friday that he should have paid more attention to the CityTime technology program, which will eventually computerize city workers' time sheets but is hundreds of millions of dollars over budget.
History doesn't worry much about a few hundred million extra here and there. It's the taxpayers' job to look at the price tag.
Friday, March 5, 2010
Bloomberg admits payroll system a disaster; has no idea who is in charge
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Mayor Bloomberg acknowledged Monday the $722 million CityTime system has "been a disaster" - but offered no plans to fix it.
He couldn't even say who was in charge of it.
The project to replace paper timesheets with hand scanners for city workers was supposed to cost $68 million when proposed in 1998, but is still only one-third finished.
"It's been a disaster. It is one of these massive computer projects that very seldom ever is successful," said Bloomberg, who made his fortune with financial data systems.
He made no suggestions on how to fix CityTime, and mistakenly told reporters Deputy Mayor Ed Skyler had been working on it for years.
"Ed's spent, it's an incalculable amount of time over the last few years looking at it, and you know, he's still trying to figure out," Bloomberg said, turning to Skyler. "You want to add anything to that?"
"No," the startled Skyler replied.
CityTime is managed by the Office of Payroll Administration, which is jointly controlled by the mayor and controller.
OPA Director Joel Bondy reports to Mark Page, Bloomberg's budget director.
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