state of michigan’s project sigma presented to state association of accountants, auditors and...
TRANSCRIPT
State of Michigan’sProject SIGMA
Presented to State Association of Accountants, Auditors and Business Administrators (SAAABA)
Ruth Schwartz, CPA, Project Director
April 21, 2015
Topics for Today
• Project Overview, Targeted Improvements, and Functionality
• Schedule, Team, and Accomplishments
• Phase 1, Budget Development
• Phase 2, Core Financials, Procurement, Employee Time & Expense, and Labor Distribution
• End User Benefits
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Project SIGMA
Statewide Integrated Governmental Management Applications (SIGMA) is the State of Michigan’s Enterprise Resource Planning (ERP) business process and software implementation.
SIGMA will integrate systems and provide end-to-end support in one system for statewide administrative functions including financial management, procurement, asset management, performance budgeting, time and expenses.
It will ultimately be used by all 50,000 state employees, external vendors, local units of government, and colleges & universities.
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Project SIGMA Overview
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Eliminates operational risk related to critical financial systems that have outlived their usefulness including MAIN and DCDS
Provides built-in best practices and business rules for government accounting that expands the tools for existing staff, protects us with retiring staff, and attracts new talent
Provides sophisticated statewide controls while providing the flexibility Departments need to operate efficiently
Provides timely management information that supports operational improvements and performance reporting
Fiscally conservative business case
Key Rationale for SIGMA
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Targeted Improvements
• Increase Accounting Detail Posted from Agency Systems
• Support Treasury Functions:
• Debt Reporting
• Support for Investment Accounting
• Bank Reconciliation
• Warrant Writing
• Automate Interfaces with Banks
• Implementation of Positive Pay Banking (if feasible)
• Automate Vendor File Synchronization
• Reduce the Number of Applications Supported and Interfaced
• Integrated Procurement
• Automate and Streamline Budget Preparation
• Reform Chart of Accounts /Uniform Coding Block Usage
• Enhance Transparency & Accountability Portal
• MIDB Currency and Reporting
• Move to Vendor Supported, Upgradeable COTS Solution
• Automate and Streamline CAFR Production
• Project & Grant Reporting, Budgeting, and Processing
• Cost Allocation5
SIGMA’s Integrated System
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MIDB
Time, Expense Reimbursement,
and Labor
Budget Development
Self ServiceFor
Employees
Management Self Service
Fixed Assets
Accounts Payable
Inventory
Purchasing
Financial Management
VendorSelf Service
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Today
From…. !
Tomorrow
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..to this…. !
Tomorrow, Continued
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..and this! ! Forecasting
Project Schedule
Budget Preparation
8/2015
Core Financials
10/2016
2014 2015 2016 2017
Phase 1: Budget Development
Phase 2: Core Financials for All Agencies
Budget Dev Implemented
8/2015
Load Budget for FY17
Core Financials
Implemented10/2016
(13 months)
(27 months)
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2013
Ongoing Support
Project start 7/2014
• > 8000 Requirements• Business Case• RFP for software,
implementation services, hosting and managed services
Procurement Added to Scope
12/2014
Phase Functionality
Phase 1 Budget Preparation
• Statewide Budget Development
• Legislative Tracking
• Salary Benefit Forecasting System
• Budget Bill and Budget Book Publication
Phase “1.5” Budget Preparation
• Agency cost accounting structures added to budget development
• Foundation for performance based budgeting (objectives, measures, and metrics)
• Solution upgrade
• Integration with financials
• Budget Control
Phase 2 Core Financials
• General Ledger and Financial Reporting
• Accounts Payable and Disbursements including Vendor Self Service
• Vendor Tax Reporting and Backup Withholding
• Accounts Receivable
• Asset Management, Inventory Management
• Budget Control
• Cash Reconciliation
• Cost Allocation
• Grant and Project Accounting
• Employee Time and Attendance, Expense Reimbursement, and Labor Distribution
• FHWA Billing
• Grants Management (Grantee and Grantor)
• Positive Pay Banking
• Procurement
• Data Warehouse
• Transparency and Accountability Portal11
Roadmap
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Strong Project Team
Staffed by
~ 200 Members
Agency Implementation Leads & Teams
Consisting of:
SOM employees from 11 Agencies
3 Contract Partners: • CGI – System, Integrators, Managed
Services• ISG – Quality Assurance• Advocate - PMO
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Co-located in the Victor Center
• Validated all in scope requirements
• Managed environments available and in use
• Phase 1 design complete with no modifications
• Phase 1 system test and mock conversions over 50% complete, preparing for User Acceptance Testing
• Phase 2 business process designs well underway
• Key design decisions:
• SIGMA budget structures
• Chart of Accounts (COA)
• Budget Bill Publishing approach
• Budget Fiscal Year
• Point of Sales and Cashiering
• Grants
• Project history conversion
Key Accomplishments To Date
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• Engaged stakeholders
• Collaborated with Office of Internal Audit and IT Investment Fund Project Assurance
• Multiple Agencies in 100+ validation, Core Design, and Business Process sessions
• Delivered 24 system overview sessions in open forums and received good feedback
• Agency Implementation Guide rolled out to Agencies week of 4/13
• Training for Phase 1 User Acceptance Testing this week
Key Accomplishments To Date
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Budget Development Phase 1, 1.5, and 2
Key gains upon full project implementation
• Automate and streamline budget development processes• Single data repository • Automated workflow • Integration with financials• Projections, what-if capabilities, modeling, trend analysis • Improved baseline economic processes • Eliminate duplicate data entry
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Michigan’s Budget Process
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Michigan’s Budget Process is made up of 5 major processes
• Budget Development• Executive Budget Book• Budget Bills• Legislative Tracking• Budget Administration
Budget process begins with the Budget Instructions and ends with the loading of the budgets to Financial
SIGMA Budget will be utilized to complete all 5 of the major processes
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Phase 1
Current Services Baseline
Proposals for Change Capital Outlay Salary and Benefits
Forecasting Publication of
Executive Budget Book and Budget Bills
Tracking of Legislative Changes
Phase 1
Current Services Baseline
Proposals for Change Capital Outlay Salary and Benefits
Forecasting Publication of
Executive Budget Book and Budget Bills
Tracking of Legislative Changes
Phase 1.5
Load enacted budget to SIGMA Financial
Statewide Spending Plans
Work Projects Foundation for
performance-based budgeting
Phase 1.5
Load enacted budget to SIGMA Financial
Statewide Spending Plans
Work Projects Foundation for
performance-based budgeting
Phase 2 and Beyond
Post enactment budget changes
The ability to develop budgets at lower chart of account elements
Integration with actual revenue and expenditure data
Trend analysis, projections, and “What-If” scenarios
Performance-based budgeting capabilities
Phase 2 and Beyond
Post enactment budget changes
The ability to develop budgets at lower chart of account elements
Integration with actual revenue and expenditure data
Trend analysis, projections, and “What-If” scenarios
Performance-based budgeting capabilities
Budget DevelopmentPhase 1, 1.5, 2, and Beyond
Salary and Benefit Forecast (SBFS)
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The Salary and Benefit
Forecasting (SBFS) tool
within SIGMA Budget is
designed to use position and
employee data to develop highly
accurate estimates of
personnel related budget costs. The following Query is an
example of data available as an output from the SBFS process.
Current Services Baseline (CSB)
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A CSB adjustment is a level of funding appropriated and/or the caseload or
workload actually funded in the current fiscal year
appropriations. Adjustments remove one-time items and
reflect non-discretionary budget costs across the
budgeting horizon.
Proposal for Change (PFC)
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A PFC adjustment is a discretionary initiative,
including a fee proposal, which reduce or enhance a
department's enacted budget. These adjustments are ongoing, one-time, or both upon submission and
are tracked through the process by the type of
funding.
Form created at the department level.
Upcoming Activities For Phase 1 Go Live
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Phase 1 Go Live Activities
Version Date: 4/15/2015
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Phase 2 Core Financials
Looking forward to:
• Standardized use of coding block/COA
• Data coding reduction options
• Automated Cost Allocation
• Elimination of Administrative Revolving Funds (ARFs)
• Integrated Time & Expense, Procurement, Fixed Asset and Inventory
modules
• Integrated Procurement functionality
• Improved Project and Grant budgeting, accounting, billing and reporting
• Increased Reporting and Workflow functionality
• Online queries
• Parallel and sequential
Design Approach
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Standardized use of
coding block/COA
• Increased accuracy and effectiveness of the COA
• Improved Transparency Portal reporting
• Flexibility, as agencies can use detailed elements and still maintain centralized data integrity
• Improved access to summary level data while still providing drill down capability to detail level data
• Increased accuracy and efficiency by the use of additional detail COA elements that are standardized across agencies
• Increased flexibility, as agency ledgers and the central ledgers are based on single transaction processing that updates affected ledgers and balances
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COA Mapping R*STARS to SIGMASample
COA elements to be used in Phase 1:
• Department
• Fund
• Appropriation
• Object
• Revenue
• BFY (= AY)
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SIGMA Chart of Accounts
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Budget Fiscal Year (BFY)
• Work projects and capital outlay appropriations will remain available to spend for the statutorily authorized length of time by using a unique multi-year BFY code.
• Rolling this budget authority forward for qualifying encumbrances is a recognized best practice in accounting, and provides greater online transparency of total budget dollars spent.
• Unspent budget authority that is not a qualifying encumbrance, capital outlay appropriation, or work project appropriation will continue to lapse and not roll forward.
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Budget Control
A multi-level budget structure will track budget amounts for both spending and revenues. COA Combination Validation pages are being developed to supplement Michigan’s Budget Control needs.
• ‘Management budgets’ allow agencies more granularity than the state-wide appropriation budget. Management Budgets…
• Allow monitoring expenditures and revenues with budget versus actuals.
• Allow agency variation, but at a minimum, will include ‘Event Types’ to record the initial budget amount and any adjustments for comparison to the Spending Plan in SIGMA Budget.
Appropriated in Budget Bills
Tracking and Establishing Control of work projects
Performance Budgeting
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Budget Control Planned Defaults
Formula Default Severity
Budget Line / Allotment
Line
Unobligated >= $0 Warning Budget
Current Budget - Cash Expenditures - Accrued Expenditures >= $0 Override Budget & Allotment
Total Revenue - Cash Expenditures - Accrued Expenditures - Encumbrances >= $0 No Action Budget
Total Revenue - Cash Expenditures - Accrued Expenditures >= $0 No Action Budget & Allotment
• Severity Levels can be set as a default on most budget lines. • Exceptions are made in SIGMA Financial by users with appropriate security. Example of a potential Budget Control list is shown below:
Integrated Procurement functionality: Req to Check
•Vendor Creation•Vendor Modification•Prevent duplicate vendors
•Accounting quick codes•Real-time budget validations/posting
•Create award documents right from requisitions•Minimized data entry from requisition•Reusable Templates
•Powerful search on Award # and other identifiable fields•Partial receipt and invoice•Reoccurring payments
Receive/Invoice
•3-way matching•P-Card reconciliation•Travel Reimbursement
Payment Request &
Disbursement
Procurement Accounts Payable
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Vendor File
Purchase Requisition
Award
Workflow• Workflow any
document, any field, any value
Real-time Validations and GL Posting• Validations against budgets in real-time• Transactional documents post to GLs at
the time of entry
Reporting• Delivered Reports• Ad-Hoc Inquiry Reporting
from Advantage BI
Procurement Functionality
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Integrated Procurement
Procurement• Workload management• Information governance• Solicitation management• Bid evaluation and
award• Contract management• Full lifecycle for
requisition to disbursements
Vendor Self-Service• Vendor web registration• E-mail bid notifications• Vendor bulletin board• Electronic response• Financial transaction
inquiry• Invoice submission
Financials• Encumbrances• 2 or 3 way match• Automated Payment• Disbursements• Single vendor/customer file• Automated updates to
Inventory and Fixed Assets• TBD- pre-encumbrances
Business Intelligence
Vendor Self Service Invoice – PO Flip
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Invoice – Coming from Vendor to Accounts Payable
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Three Way Match
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SIGMA for End Users
• Less manual, paper-intensive work
• Greatly improved reporting and data analysis
• Less redundant data entry
• Less reconciliation across systems
• Easier, more automated tracking and approvals
• Streamlined business processes that work similarly across departments
• Export/Import capabilities, powerful inquiries, improved data warehouse functionality
• One system for budgeting, procurement, and accounting, with expanded capabilities
• Ease in moving from one agency to another and one job to another
• Reduced training time for new hires
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Project Communications
• Website - https://stateofmichigan.sharepoint.com/teams/SBO/project_sigma Newsletter Frequently asked questions Presentations Project announcements Training Agency Implementation Guide Contact Us
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Newsletter
Image from Website
Questions?
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Upcoming Town Hall Meeting
Thursday, April 30, 8:30-10:30Capitol Commons Center - Conference Rooms A/B/C/D (Basement)