Calling the situation "dire," Pittsburgh Controller Michael Lamb yesterday urged the prompt merger of the city's teetering accounting system with Allegheny County's well-maintained one, lest a software crash plunge the half-billion-dollar city operation into financial darkness.

"We are talking potential calamity here, with respect to the city's financial records, the city's ability to pay bills, and the city's ability to know where its money is," Mr. Lamb said.

The agreed-upon fix is merging the city's accounting with the county's system, but Mr. Lamb said the effort hasn't gotten the focus it should, jeopardizing chances to get it done by the critical Jan. 1 start of both governments' fiscal year. "We've been dragging our feet in the city and county for the last year," he said.

City Finance Director Scott Kunka said that Mayor Luke Ravenstahl is also on board, but implementation details and costs are still in negotiation. County Controller Mark Patrick Flaherty said the process has to start, pronto, if it's to be done by year's end.

"We're ready to go, so whenever the city decides that they want to use the software system, it's basically a matter of deploying it," said Kevin Evanto, spokesman for County Executive Dan Onorato.

The city's PeopleSoft system, installed in the mid-1990s, has had problems for a decade and is now totally obsolete, said Mr. Lamb. It hasn't been updated in many years, there is no longer any vendor support for it and most of the city employees who knew how to fix it have left, he said.

"It's very difficult when we do have a breakdown, getting that system back up and running," he said.

He said the city in April quietly suffered "a horrible system failure" that paralyzed his department for a week and kept some departments from paying bills for a month. That's just a preview of what he called "the catastrophic event" to come.

The potential for theft by current or former city employees is dangerously high already, he said, citing an independent report on city financial management released last month. Authored by accountants The Binkley Kanavy Group, it found a lack of technological and management controls that makes it impossible for the city to fully monitor who spends how much on what.

Mr. Lamb said that even when the software is running well, there's no way to tell what the city owns and where it is housed -- except for computers, which are tracked -- so the city may be buying supplies it already has and material can "go walking away" without anyone missing it.

The accounting system doesn't enforce the city's bidding rules. Money sits, unused and largely undetected, in various pots for years until someone ferrets it out and finds a new use for it.

In 2006, the Intergovernmental Cooperation Authority, a panel created by the state to monitor the city's financial recovery, demanded improvements in the system.

"Going toward a shared [city-county] platform and shared services is what they should be doing," said ICA board Chairwoman Barbara McNees. The ICA has assumed that merging at year end "was everybody's goal and that it would be met."

Mr. Flaherty said he floated a plan one month ago to install the county's well-updated software on city computers. He said he gave the city an informal deadline of June 30 by which to decide whether to make the move, which was missed, but which he can extend -- slightly.

Mr. Kunka said that accounting software had taken a back seat to development of a new financial recovery plan.

Still under negotiation is the cost.

Mr. Flaherty said he thinks the city should pay $2 million to $3 million to reflect the costs of consultants and staff time, plus licensing fees and other expenses involved in putting the city on the county's custom-built system, by software firm Oracle's JD Edwards unit. He noted that the county has spent some $10 million upgrading the system over the last eight years, and it could cost the city $10 million to $15 million for the city to build a system from scratch.

Mr. Kunka said the $2 million to $3 million figure seems reasonable but is still the subject of negotiations.

"Money is not an issue in getting this done," Mr. Lamb said. He noted that the just-finalized sale of the Pittsburgh Municipal Courts building to the state for $9 million includes $3.5 million earmarked for improving the city's financial system.