The Little Hoover Commission is calling for a major overhaul of the way California plans, funds, procures and manages government technology, recommending a shift away from centralized project controls and toward a product-based model that gives state departments more responsibility for delivering results.

The recommendations follow public hearings examining California’s history of troubled technology projects, including cost overruns, delays and systems that have failed to meet expectations. The commission’s final report argues that the state’s current approach places too much emphasis on administrative controls and procedural compliance at the expense of successful outcomes. Witnesses included Code for America Founder Jennifer Pahlka, California Government Operations Agency Secretary Nick Maduros, California Office of Data and Innovation Director Jeffery Marino, Amy Tong, former Senior Counselor to Gov. Newsom, former Assemblymember Lloyd Levine, former California Health and Human Services Agency Secretary Michael Wilkening, and former DGS Director Daniel Kim, among others, over three hearings earlier this year. 

“We’ve confused technical compliance with actual success. And we haven’t built a system that rewards success and rewards thrift,” Government Operations Agency Secretary Nick Maduros told the commission during its June 25 hearing.

At the center of the commission’s nine recommendations is a shift to a product model, under which technology would be treated as an ongoing service rather than a project that ends when a system launches. Departments would focus on measurable outcomes, user needs, iterative development, and continuous improvement.

The commission recommends giving departments greater flexibility and holding agency executives more directly accountable for results, with ongoing, risk-based oversight replacing many upfront approvals. It would shift CDT’s focus from project approvals to statewide technology policy, standards, shared services and technical assistance, while creating a Technology Finance Board to oversee phased funding and intervene when projects falter.

The commission also calls for streamlined procurement focused on the problems and outcomes agencies are seeking, rather than detailed technical specifications, with requirements scaled to project risk. It encourages greater use of commercial and reusable technology, along with AI-assisted coding where appropriate, to reduce duplication and the cost of custom systems.

Finally, the commission recommends a phased modernization of California’s aging technology infrastructure, prioritizing systems based on operational importance, resident impact, cybersecurity risk and long-term sustainability. It calls on the governor and Legislature to work with agencies, the private sector and organized labor on the statutory and organizational changes needed to implement the reforms.

“California’s next generation of technology reform should preserve strong accountability while empowering departments and technology teams to deliver services that more effectively meet the needs of Californians,” the report reads. 

The Little Hoover Commission examines state operations and policies and recommends ways to reduce costs, improve efficiency and strengthen public services. The report is expected to be considered by the Governor and Legislature with potential new policies, laws and government reorganization plans. 

From the draft report’s executive summary, adopted by the commission on Sept. 24, the recommendations include: 

Recommendation 1: Comprehensive Reform Needed California’s technology project delivery system requires comprehensive reform. The Governor and Legislature should lead a collaborative effort involving state agencies, the Legislature, the private sector, and organized labor to develop a plan for modernizing the state’s technology delivery system. Within a specified timeframe, participants should recommend the statutory, administrative, and organizational changes needed to implement the reforms outlined in this report.

Recommendation 2: Adopt a Product Model and Strengthen ODI California should manage technology initiatives using a product approach that focuses on achieving measurable outcomes and improving services. This approach should emphasize continuous ownership, user-centered design, iterative development, modular implementation, and regular evaluation of whether technology solutions are meeting the needs of residents and state workers. California should strengthen the Office of Data and Innovation to help departments build the expertise and capacity necessary for product-oriented technology delivery.

Recommendation 3: Give Departments the Flexibility to Deliver California should reduce its reliance on centralized project controls and give departments greater independence to manage IT projects in the manner best suited to their operational needs. At the same time, departments—and, above all, their executive leadership—should remain accountable for understanding end-user needs and for core project decisions, including project design, procurement strategy, vendor management, implementation oversight, and long-term system performance.

Recommendation 4: Measure Performance, Not Compliance California should shift away from burdensome, front-loaded approval processes and toward a system of continuous reporting, risk-based oversight, and financial accountability designed to improve transparency, support funding decisions, and identify problems early throughout project development and implementation. The California Department of Technology should shift its focus from approvals to statewide technology policy, technical standards, interoperability, shared services, and technical assistance rather than project approvals and procedural oversight.

Recommendation 5: Establish a Technology Finance Board to Support Phased Funding California should establish a Technology Finance Board to oversee phased funding, modernization funding programs, financial accountability, and corrective intervention for troubled projects, while leaving operational control and implementation decisions with departments.

Recommendation 6: Simplify Technology Procurement The procurement process should be sufficiently clear and streamlined that departments can develop solicitations and a wide range of vendors can respond to them using standard internal expertise rather than relying heavily on outside consultants. Procurement requirements should be proportionate to project risk and structured to reduce unnecessary administrative burdens while preserving accountability and competition. California should modernize technology procurement by defining the problems departments are trying to solve and the outcomes they seek to achieve rather than prescribing detailed technical solutions.

Recommendation 7: Integrate Innovation Funding California should continue to support and strengthen the Technology Modernization Fund and other modernization funding programs as part of a broader technology delivery framework. These programs should provide departments with early-stage resources to test ideas, develop minimum viable products, and validate solutions before seeking larger investments through the traditional budget process. Structured as revolving funds, these programs can help align technology development with state funding cycles while preserving resources for future modernization efforts.

Recommendation 8: Lower Costs by Reducing Duplication and Customization California should reduce unnecessary customization and duplicative technology development by prioritizing commercially available products, scalable and reusable solutions, and AI-assisted coding tools where appropriate.

Recommendation 9: Pursue Strategic Modernization California should pursue a phased statewide strategy to modernize its outdated and fragmented technology systems, including code, databases, and infrastructure. Modernization efforts should be prioritized based on operational importance, resident impact, cybersecurity risk, interoperability benefits, and long-term system sustainability, with the goal of improving reliability, maintainability, cybersecurity, and data sharing across state government.