UPDATE, Thursday evening: The Board of Education has approved the resolution. See end.
The Board of Education will vote today on whether to pour an additional $6 million into its $2.8 million no-bid contract with Alvarez & Marsal, the firm hired to fix the school district’s ongoing payroll crisis.
That would mean the district will be spending 64 percent of its $13.7 million price tag for the EmPowerSF payroll system, which debuted in January. More than 3,000 SFUSD employees have gone underpaid, mispaid or unpaid since the district switched to the new system.
The Board will vote on the contract amendment at a special meeting open to the public at 6 p.m. If tonight’s motion passes, the district will be spending up to $8.8 million to fix a system that hasn’t even been in place for a year.
The amended contract would roughly double Alvarez & Marsal’s staffing, and extend its last day of services by an additional four months, from Jan. 31 to May 31, 2023.
Alvarez & Marsal staff are contracted to support the ongoing Corrective Action Plan, which involves working through the ticket backlog, as well as addressing underlying EmPowerSF issues and their root causes.
“It’s a weird feeling,” said Chris Clauss, a special education teacher at Washington High, when asked about tonight’s vote. “I want the payroll system fixed, but that’s $6 million more that could have gone to schools, to staff, to students, and programs that support students.”
Cynthia Lasden, an educator at McKinley Elementary School, said she believed that the school district should spend money on a different, trusted system.
“Another $6 million to fix a broken system does not sound like a good idea to me,” she said.
Rafael Picazo, the president of the staff SEIU 1021, said the district needs to admit it made a mistake and return to the old payroll system, and “stop throwing good money after bad money.”
“I knew this would happen, and I believe it’s a joke that the school district wants to continue to waste taxpayers’ money on a system that has failed since the beginning of it being implemented,” Picazo said.
SFUSD employee Roberto Peña said that fixing EmPowerSF and ensuring errors no longer happen are the most important things the school district should do.
“I do see our current SFUSD leadership as more transparent and attempting to fix EmPower, but at what point, or millions, do they just cut their losses?” he asked.
The district declined to answer questions regarding the contract amendment in a press inquiry, stating that it anticipates having more information to share after tonight’s meeting.
The amendment has been approved.
The new $8.8 million contract, previously with a fixed fee of $175,000 per week, would be changed to a range between $175,000 and $310,000, plus a maximum of 15 percent extra for out-of-pocket expenses such as travel, meals and hotels.
It will be funded by carry-over funds from the 2021-2022 academic school year, rather than the unrestricted general fund. The school district also expects about $1.1 million in 2022-2023 salary savings from “vacancies in operations departments.”
In his Board presentation, Superintendent Dr. Matt Wayne also gave an update about what went wrong in the initial implementation of EmpowerSF, which had happened before Wayne took over for Vincent Matthews in July, 2022.
Infosys, the company that’s contracted to implement EmpowerSF, had recommended adding 28 staff to payroll, human resources and technology to transition to EmpowerSF.
However, Wayne said, that recommendation had come at a time that the school district was “reducing millions of dollars at school sites, so it wasn’t tenable to be able to move forward with that.”
In other words, the district cut back on hiring payroll and HR staff in a cost-cutting move that turned out to be wildly counterproductive, and went against the explicit advice of the contractor implementing the new payroll system.
Wayne added, “there really does need to be a full accounting of what happened, and where this went wrong.”
“I know we were facing budget, but I’m sure if anybody were asked, would you invest in this to avoid that, everybody would have said yes. How did that not enter into the conversation to be able to make a decision?” he said. “So, we need that full accounting of it. And secondly, while I recognize some of these things happened while I was not here, while I’m here, what is being put in place to ensure that it doesn’t happen again?”
An assessment by Alvarez & Marsal has indicated that 30 to 50 full-time-equivalent employees, plus the “partial use” of SFUSD employees, were required “for testing and other functional support” when SFUSD first implemented EmpowerSF.
Based on assessments of EmpowerSF’s initial implementation, SFUSD concluded that it should have invested between $7 million and $12 million in staffing for 2021-22 and 2022-23 to have successfully implemented EMPowerSF, according to Wayne.
“We’re bringing forward those costs, now with a premium, because we’re in a state of emergency,” he said.
I had to leave SFUSD because I wasn’t paid for about two months and then when they claimed they had paid me, it was taxed at 40-50%. My last check was $750 gross. I saw $356 of it. I spent hours of my own time looking into it and emailing and I’m still not sure I was paid what I was owed and because quitting went smooth as glass, I can’t access EmPower to go over my paystubs. Someone is getting paid, it’s just not the overworked underpaid teachers.
Can you report on the poor teachers living through this? I’d really like to understand how it’s legal to let people go unpaid for so long and what kind of compensation they should be getting
Empower is either criminally incompetent or just criminal. It was brought in by Myong Leigh who retired last June. Ask him to cough up a few of his bucks to pay for this mess.
Couple of questions.
1. Why would the fixers have travel, meals and hotel expenses?
2. Has anyone ever tried to claw back these costs from Empower, the company that screwed it all up to begin with?
SF has a long history of taking software actually designed for somewhat similar purposes and trying to shoehorn their requirements into it without any real thought. The result has been at least two accounting systems that have had horrendous problems during implementation. Looks like SFUSD follows a similar course.
Debacle after debacle in the world of San Francisco.
So many debacles, so little accountability.
Wow, doubling down on their mistake—unfortunate but not totally surprising. That’s a lot of money being funneled out of the district and into the private sector.
Seriously gang, just cut your losses and use ADP or any of the other tried-and-true systems that the rest of the world uses. Does SFUSD even have a Controller?
Have yet to find the EmPowerSF developers/implementation team (Infosys) side of things. One would expect with the vast amount of negative publicity, Infosys would be working overtime to fix things.
On the flip side – Infosys is a NYSE listed company with 17.53 billion in revenue. Maybe it don’t matter to them. Some implementations are going to fail so we’re just gonna bail.
We spent $3 million on the homeless EVERY DAY last year.
$6 million to get our teachers paid is nothing.
haha, in both cases we don’t get anything in return.