Approved:       February 7, 2007        

Date

MINUTES OF THE HOUSE GOVERNMENT EFFICIENCY AND TECHNOLOGY COMMITTEE

The meeting was called to order by Chairman Jim Morrison at 3:34 P.M. on February 6, 2007, in Room 526-S of the Capitol.

All members were present except Representatives Ruiz, Wilk, Sloan, and McLeland, all of whom were excused.

Committee staff present:

Mary Galligan, Kansas Legislative Research

Tatiana Lin, Kansas Legislative Research

Renae Jefferies, Office of Revisor of Statutes

Gary Deeter, Committee Assistant

Conferees appearing before the committee:

Duncan Friend, Project Manager, Kansas Department of Administration, Division of Information Systems and Communications

Others attending:

See attached list.

Staff Renae Jefferies reviewed the main points of HB 2207, known as the Taxpayer Transparency Act, which calls for the Kansas Department of Administration to create and maintain a searchable website that lists all aspects of the state budget procedure. She said the bill applies to appropriated and non-appropriated funds as well as other revenue and expenditures, information which can be derived from the State Treasurer’s Office, the Kansas Department of Revenue (KDOR), as well as the Division of Budget. The bill requires the information to be available January 1, 2008, and be updated within 30 days of the beginning of each fiscal year. She said that one section amends a confidentiality provision of KDOR to allow the agency to publish certain statistics.

Members discussed the bill. A member expressed concern that the bill created an overwhelming amount of information. Another member noted that the bill would offer one-stop access to state government. Duncan Friend responded to a request from the Chair, saying that the current online budget offers no interactive or detailed capabilities.

Mr. Friend, Project Manager, Kansas Department of Administration, Division of Information Systems and Communications, then reviewed the proposed statewide Financial Management System (FMS), which would replace the aging STARS (Statewide Accounting and Reporting System) (Attachment 1). He stated that a needs assessment in 2001 recommended replacing STARS, but the state’s financial limitations precluded going forward with the project; a new needs assessment just completed by Salvaggio, Teal and Associates, which takes into account changes in business processes and technology, restates the need for replacing the old system, especially since some agencies have been forced to build “shadow systems” to accommodate the increasing limitations of STARS. He observed that over 200 individuals and 50 agencies participated in the needs assessment, which recommends replacing the budget system, accounts payable, and procurement as well as creating an asset management system and a data warehouse/reporting system; the recommendation excludes the HR/Payroll system (SHARP) and Regents institution systems. He said if FMS goes forward, the project will require 18 months pre-implementation and 21 months to build the system; the cost is estimated to be $40.7 million. He commented that the state will derive about $5.7 million in benefits annually beginning with the second year, with another $11.3 million realized in cost-avoidance, providing a 10-year payback.

Answering questions, Mr. Friend said that with the present procurement system, many statistical details are not captured. He replied that the project will draw some of the best staff from other state agencies and “backfill” the vacant positions with temporary help. A member expressed dismay at the high cost of consultants. Mr. Friend noted that the consultant fees are in line with what other states (Tennessee, Kentucky) are paying and observed that the last SHARP upgrade took 47,000 hours. Another member expressed concern that the time expended on the system will cause it to be obsolete prematurely. Mr. Friend said regular updates to the system are included in the project. He replied that the system is based on commercial off-the-shelf (COTS) software, further noting that initial funding is included in the Governor’s FY 2008 budget. He reviewed the alternatives listed in the study: a custom development, an incremental build, enhancement of the present system, outsourcing, and a COTS solution.

Duane Goossen, Director, Division of the Budget, explained that the present system is difficult to maintain and does not provide needed information, recommending that the state find a way forward in providing better financial management.

Mr. Friend replied to a question that $600,000 was allocated for training in the proposed FMS project.

The meeting was adjourned at 4:34 p.m. The next meeting is scheduled for Wednesday, February 7, 2007.