Reliance on consultants cited in Ohio data loss

7/24/2007

COLUMBUS - The state was so intent on meeting deadlines for its massive new computerized payroll system that it relied heavily on highly paid consultants and failed to ensure sensitive data like that on a tape stolen from an intern's car had been removed from the system.

Files from the Ohio inspector general's office also revealed that J. Pari Sabety, Gov. Ted Strickland's budget director, told investigators she was so alarmed that the $158 million system was so dependent on computer consultants that she'd initiated the process of removing some of them before the theft occurred.

Jared Ilovar, the now-fired college intern from whose car the tape was taken on June 10, described a system in which interns essentially supervised each other. He told state investigators that fellow interns elected him to take home a tape each night that would serve as an emergency backup to their work station in the event of an office disaster.

Shortly after Inspector General Tom Charles issued his report Friday spreading the blame, Mr. Strickland fired Mr. Ilovar, accepted the resignation of project manager David L. White, terminated the contracts of CompuWare consultants Brian Welch and Avadhut Kulkarni, and initiated disciplinary proceedings against two other state employees, team leaders Jerry Miller and Phil Rowe, who was Mr. Ilovar's immediate supervisor.

The state reviewed the tape's on-site twin and determined that the stolen tape contains names, Social Security numbers, and in some cases bank-account information for 1.1 million individuals and businesses, including taxpayers and lottery winners slow to cash checks, state employees, and some of their dependents, and others.

The state has maintained that the need for specialized equipment and knowledge would make it highly unlikely someone would be able to access the information on the tape, but it has offered a year of taxpayer-financed identify-theft monitoring to the affected individuals.

Ms. Sabety said she suspected Mr. White was in over his head with the Ohio Administrative Knowledge System project, which is designed to consolidate the payroll, billing, purchasing, and various accounting functions of multiple state agencies.

"Was there a huge risk in replacing him six months before going live on an installation that cost $150 million and has 10,000 users affecting 64,000 state employees? Uh, probably high risk. Probably really high risk," she told investigators, according to a transcript of her July 3 interview.

Accenture is the prime consultant on the OAKS project with CompuWare serving as one of a number of other consultants on the project.

To lessen what she characterized as a "culture of subcontractors," Ms. Sabety said she had already begun taking steps to edge CompuWare out.

"To my horror, the assistant project manager [Mr. Welch] is a CompuWare employee who has worked for them for 10 years," she said. "He has no fiduciary responsibility to the state."

Mr. Ilovar, a temporary intern from DeVry University in Columbus, said yesterday he's under instructions from his attorney not to comment. He said he may issue a statement later in the week.

Mr. Strickland fired Mr. Ilovar after he refused to resign. The intern was on the job three months when the theft occurred.

"We basically managed one another, to be honest with you," he said, noting he dealt little with his supervisor, Mr. Rowe, or his now retired predecessor, Carl Miller.

Both Mr. Ilovar and Mr. Kulkarni told investigators that Mr. White advised the intern not to mention that the tape may contain Social Security numbers when he reported it stolen to police in Hilliard, Ohio, where he and two other DeVry University students share an apartment.

The inspector general's report suggested police may have lost valuable time in checking local Dumpsters to see if the thief, unaware of what he had, might have discarded it. Location of the device could have saved the state potentially $800,000 in identity-theft-monitoring costs for individuals whose personal information has been found to be on the tape.

"At the point that I instructed him to go file the police report, I did not know exactly what was on the tape, and I didn't think that we could, or he could, anybody could tell anybody, you know, what was stolen at that point," Mr. White said.

But Ms. Sabety told investigators: "They understood the level of risk. And they understood it right then and there. I will argue to you they knew the moment Jared walked in the door."

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.