(The Center Square) – Virginia’s financial system runs on technology so old that some of it dates back to 1987.
A new report to lawmakers says the commonwealth needs to spend millions over the next few years just to keep payroll and accounting running smoothly.
The plan, outlined in the Cardinal Modernization Program report submitted to the General Assembly this month, starts with an $18.3 million immediate upgrade scheduled from September 2025 through September 2026.
That project will update PeopleSoft, the system Virginia uses to run payroll, accounting and benefits, so it stays supported by Oracle. The report says the upgrade is needed to reduce “technical debt” and prevent disruptions to the commonwealth’s financial operations.
The report describes the plan as a roadmap with immediate fixes, mid-term replacements and longer-term goals, including a potential move to the cloud.
The report also warns that failing to replace the commonwealth’s aging fixed asset and lease systems, known as FAACS and LAS Plus, would be an “unacceptable risk” because they are no longer supported by modern technology. Without replacement, Virginia could struggle to produce accurate financial statements and meet reporting deadlines.
After the first phase, the commonwealth projects another $20.2 million effort to replace FAACS and LAS Plus by 2029.
Those systems have been in service since 1987 and currently run on Cold Fusion, an outdated platform expected to lose support within the next four years.
Of the $20.2 million cost, $4.7 million will be covered by the Cardinal program’s annual support budget, while the commonwealth plans to request the remaining $15.5 million in the 2026–28 budget cycle.
Looking further ahead, Virginia’s long-term plan is to move its entire financial system to the cloud.
The report estimates the phased rollout could begin around 2032 and cost about $157 million.
Lawmakers were cautioned, however, that other states moving early to cloud systems have seen cost overruns and delays.
Officials argue the investments will lead to more efficient business processes, better integration between agencies and fewer reporting errors. Right now, many agencies still rely on spreadsheets and manual data entry for payroll, fixed assets and grants.
A survey of 247 state agencies found 14 major systems that could eventually be decommissioned if Cardinal is expanded.
The Center Square reached out to the Department of Accounts, Sen. Louise Lucas and Del. Luke Torian for comment, but did not receive a response before publication.
