Imagine that you want to buy a new Ford Explorer. You’re a student, your parents are putting you through school and you don’t want them to object to how you spend their money–they’re on a tight budget, too. So how do you justify buying a $30,000 SUV?

CSU Chancellor Charles Reed faced the same type of question with his Common Management System project. How do you engineer the biggest computer hardware and software purchase in the history of American higher education, without having lawmakers or CSU constituencies — students, faculty and staff — get in the way?

First, you argue that a breakdown is just around the corner. You say that your 1991 Nissan Sentra is about to die on the road. Although you don’t have any real facts — after all, it’s obvious — you contend repairing and maintaining the car exceeds the cost of a brand-new Explorer.

That’s exactly the way Reed justified launching the CMS, the $660 million software and hardware upgrade designed to unify information tracking among the 23 far-flung campuses of the CSU and its Long Beach headquarters.

“When I got here in 1998, one of the biggest surprises was how old, broken down and outdated the computer system was,” Reed said when I spoke to him about CMS last July. “We were running 1960s technology. It was like having a car that you can’t get parts for anymore.”

State Auditor Elaine Howle can’t figure out how Reed knew that. “The university did not establish a case for CMS by preparing a report… that evaluated the need for and the costs and benefits of this new system,” she wrote in her March 11 audit summary to legislators. A cost-benefit analysis was never performed before the money was committed. Reed’s assertion, it turns out, had no formal study to back it up.

Then there’s the efficiency argument. Driving the dilapidated Nissan hurts your education. Breakdowns have made you late to class, and you’re always distracted, worrying about whether you’ll make it to your next destination. Getting the SUV means you’ll get better grades.

Reed’s chief complaint was that the old computer system’s inefficiencies cost the CSU money and hurt its ability to serve students. Transferring student records, payroll and a host of other data was difficult, because each university sends separate reports to CSU’s Long Beach headquarters, which are then collated. “CMS will increase efficiency and allow us to focus more on whom we’re here for–the students,” Reed told me during that July interview. “The students will benefit from this.”

But the state auditor says that Reed has no idea if CMS is saving work — it’s probably creating more. According to Howle’s report, “The university does not track workloads attributable to CMS.” Judging by the number of people hired to run the system, the auditor’s best guess is that the 11 pilot campuses together added approximately 250 full-time staff because of CMS.

And the auditors predict the project will cost at least $260 million more than the $400 million originally estimated, requiring two more years than the seven planned to get the project running at all 24 locations.

But what about your brother, who thinks buying the Explorer is a waste of family money? What about his idea that you just get a newer Sentra? Simple. Accuse him of being jealous, of placing his interests ahead of what’s good for the family. In fact, he wants the money for himself, you say.

That’s the position Reed took for years, whenever CSU faculty or staff unions criticized CMS costs or voiced concern that it was siphoning money from education budgets. His relationship with the California Faculty Association and the California State Employees Association has been a bitter five-year feud over pay, faculty-to-student ratios and the explosive growth of administration jobs and compensation.

That feud became a way for Reed to discount CMS skeptics.”The unions used the political process (by convincing legislators to call for an audit). That’s fine,” Reed said last summer. “This is a classic labor-management dispute. They’d like for us to spend every penny on compensation.”

When asked during a March 12 press conference whether elected officials had become a tool of the unions, one of the two legislators who first pushed for the CMS audit angrily brushed aside the notion. “Those kinds of accusations don’t accomplish anything, nor do they change the fact that the CMS is taking money away from student education and outreach programs, especially now, when the state is in hard financial times,” said Sen. Richard Alarcon (D-San Fernando Valley). “The chancellor’s office would do well to worry about their own business.”

The worst part of the CMS debacle isn’t the hundreds of millions of dollars it appears have been squandered on a boondoggle. It isn’t even that two CSU administrators have come under fire after auditors raised questions about conflicts of interest. The worst part is what the CMS debacle has done to the university’s credibility.

Which takes us back to the Ford Explorer. Where do you get the money to make the payments? Remember, finances are tight and you’re not sure that your parents will go along with your plan, despite your best arguments.

Reed’s answer? Steal money from everyone else in the house. That’s what his CMS mandate was to the 23 presidents: Find the cash anywhere you can. Each university must come up with its share of the cost, no matter what.

Sac State has paid approximately $2.27 million from July 1998 through June 2002. Campus administrators believe the total cost will approach $19 million, enough to fund 211 class sections per semester over the life of the nine-year project. That “technology tax” is pulled from the school’s general fund, the same pot of money that pays salaries, funds classes and buys books for the library, among other things.

By forcing each school to make cuts to fund CMS, Reed avoided going to the legislature to beg for extra money to fund the project. And that meant he wouldn’t have to produce a host of studies and field myriad questions from lawmakers to justify his plan.

So now the “parents” are gearing up to reassert control over the CSU’s budget, since Reed has made such a mess of it. Earlier this month, Assemblywoman Cindy Montanez (D-San FernandoValley) introduced a bill that would force the CSU to report its administrative budget each year to the state Department of Finance, the Legislative Analyst and four different budget and policy committees.

That sounds good, until you realize that it’s merely the first shot in what is sure to be a salvo of legislation. It’s likely more problems than those detailed in Howle’s 180-page report will surface this summer when the Attorney General and the Legislature investigate CMS. Legislators will respond with more bills, more constraints on the CSU and how it spends money.

The days of financial freedom for the CSU are over, all because Reed has lost the trust of lawmakers. His CMS-at-any-cost policy may cost him his job. It certainly will hobble future administrations’ relationship with the Legislature.

The worst is yet to come.

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