At their Tuesday meeting, the Board of Supervisors approved a new accounting system for Sonoma County, replacing the current software that was first used 27 years ago. The $22.4 million project will unify department accounting systems and modernize cash flow and payment services throughout the County.

The software and hardware upgrades have been a topic of discussion for more than a decade and a priority for nearly eight years. But according to the County’s staff report, a decision was made early last decade to focus on other upgrading other areas of County operations first – namely timekeeping, payroll, and human resources. Economic pressures prevented action once those areas had been modernized. However, in 2009, the condition of the County’s accounting system was deemed critical and a task force was organized to develop and review alternatives.

What they discovered was the County’s outdated systems failed to cover evolving needs in various departments, resulting in piecemeal solutions. Different departments used supplemental programs to provide their full range of services. Compounding the challenge was the fact that both the software and the mainframe hardware were no longer supported.

Wholesale change was deemed necessary and endorsed in September 2012. In January, an agreement was reached.

The $22.4 million solution will switch the County from a mainframe-based system to a cloud system offered by Oracle and Peoplesoft. Implemented in two phases, the first upgrade will address general ledgers, accounts payable, purchasing, and fixed assets. That system will go live before the start of the 2014/15 fiscal year.

The second phase will address cost accounting, budget, grant accounting, accounts receivable. That will go live in time for the 2015/16 fiscal year.

Despite the need to upgrade the system, the County does not have the $18.5 million needed over the next three fiscal years. Instead, Oracle agreed to provide fixed-term financing for the upgrades at just 2.55 percent interest. The cost of borrowing the money would be about $63,000, according to the staff report.

The current fiscal year budget included $3.9 million, shy of the $5.2 million current year requirement to upgrade the system.