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Legislators at Wisconsin's statehouse will receive monthly reports detailing the progress of repairs being done to the state's $37 million tax system. Image Credit: Newscom

The state of Wisconsin this month started to fix a troubled $37 million tax system that has caused mistakes in collecting and distributing millions of dollars.
The Wisconsin Department of Revenue is working with service provider CGI-AMS Inc. to mend the flaws in the DOR's Integrated Tax System (ITS), said Laura Engan, deputy secretary at the DOR. CGI-AMS built the ITS more than three years ago.
CGI-AMS, which is a subsidiary of Montreal-based CGI Group Inc., this month started testing the system and fixing its performance problems, according to state officials.
A separate review of the system by CGI and state engineers is slated to be completed in April. CGI has agreed to fix any further problems found during the review.
"We're working with the vendor to fix the problem now," Engan said. "We'd like that to have happened earlier. We're just incredibly frustrated with the performance of the system and the outcomes we've seen."
She attributed the bulk of the problems to "design flaws" in the system as delivered by CGI-AMS in December 2002.
In an e-mail, a CGI-AMS spokeswoman said that "the system was designed according to the original specifications. We are committed to working with the DOR to resolve outstanding issues" without charge.
The ITS was designed to automatically process sales and use taxes and to determine how much revenue is distributed to Wisconsin's 58 counties and two professional sports districts.
Since the installation, the system has been plagued by software defects that caused calculation and programming errors along with processing backlogs.
According to a report issued last month by the state legislature's audit bureau, the system has underpaid several counties by $9.1 million combined and overpaid others by $8.8 million. Most of those discrepancies have been settled.
The legislature's report pointed to a lack of familiarity with the ITS processes and forms by the state's retailers and the DOR's own staff for some of the problems. In addition, the report said that incomplete information was entered into the system, causing it to misread tax obligations and miscalculate retailer discounting computations.
The report said that errors occurred in some 380,000 of the roughly 8 million transactions processed since the ITS was implemented.
The ITS replaced a mainframe application with Java-based software that runs on IBM's WebSphere middleware platform and DB2 database.
CGI and DOR engineers in recent weeks have been analyzing data and testingto make sure that all defects are addressed, Engan said.
The DOR has calculated that it still owes 33 counties $1.8 million, while it has overpaid $2.8 million to 25 counties and the two sports districts, according to a report by State Auditor Janice Mueller.
In an interview, Mueller urged caution, asking that counties wait before collecting the remaining overpayments until the testing is complete and the ITS system proves reliable.
Mueller also said that the DOR has agreed to provide monthly reports, starting in February, to the state legislature on the progress of the ITS repair effort.

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