SACRAMENTO -- The legislative committee investigating the California State University system's multimillion-dollar software buys ended its probe Tuesday, as lawmakers said university officials' stonewalling could hurt them financially.
The lack of cooperation from CSU Chancellor Charles Reed and others could lead to cuts in CSU's budget for administrators, said Assemblywoman Rebecca Cohn, chairwoman of the Joint Legislative Audit Committee.

A Democrat from Saratoga, Cohn said she ended the hearings because university officials were "not answering our questions."

The university system had hoped to consolidate its computer systems so it could integrate student data, financial information and personnel records. But state auditor Elaine Howle said in a March report that the contract was signed before university officials established the need for the software.

Howle also said the system will cost $662 million, not the $440 million CSU estimated.

The software has been partly installed at Stanislaus State, though officials said in March that completing the project will take until 2009.

The state audit also found the university didn't do enough to deter or detect conflicts of interest of CSU employees who were involved in the technology deal.

Reed defended the handling of the contract, but said he would implement the auditor's recommendations to avoid problems in future contracts.

That didn't satisfy lawmakers, who said university officials hadn't taken meaningful steps to stop conflicts of interest. One, state Sen. Tom McClintock, R-Northridge, said he would seek Reed's ouster.

"Squandering two-thirds of a billion dollars, no cost-benefit analysis, serious suggestions of criminal actions and conflicts of interest, and nobody's been fired and nobody's been disciplined," McClintock said.

The audit found a senior manager in the technology project also was working as a consultant for the contractor, Pleasanton-based PeopleSoft Inc. The employee didn't vote on decisions involving the company and had disclosed the consulting work to his supervisors, Reed said.

The employee hasn't been fired or disciplined and no longer works for PeopleSoft.

Reed, who was appointed after the contract was awarded, said the universities have long needed to upgrade computer systems.

"We had 45,000 employees and didn't have a human resources system in the university," he said.

The auditor's estimate of the total cost of the system was higher than CSU's because it considered future maintenance costs, Reed said.

Several lawmakers criticized Reed and the campus presidents for paying nearly $500,000 to consultants for various studies of the system, including one for a cost-benefit analysis that examines the technology the universities had in 1998, before signing the contract with PeopleSoft.

Cohn said the university will have to answer to the Legislature in the budget process and two bills pending in the Legislature would add oversight.

A bill by Sen. John Burton, D-San Francisco, would ban CSU employees from working for a company in a similar position, and it would require CSU trustees to offer ethics training for certain employees.

Another bill, by Assemblyman Manny Diaz, D-San Jose, would tighten oversight on CSU's information technology purchases by requiring the Department of Finance to approve any purchase or contract over $100,000.

"I happen to believe that CSU should be held accountable like any other institution that's publicly funded by the state," said Diaz, who was one of two lawmakers who requested the audit.

The CSU opposes that bill, because "we at CSU should be able to manage our information technology ... and not get all tangled up with the problems of the state agencies," Reed said.