Case studies

Putting the pieces together for success

State of New York – A case study for finance transformation

The Statewide Financial System (SFS) is New York state government’s new accounting and financial management system. The SFS is a state-of-the-art system for collecting and moving financial information between and among state agencies, state control agencies (the Division of the Budget and the Office of the State Comptroller), the state legislature, vendors, and the general public. The SFS, through which all the state’s financial transactions flow, is the backbone of the commerce of state government.

Improved financial transparency

  • New capabilities and a multi-level chart-of-accounts allow easier reporting across agencies, providing executives with a statewide view of budget and spending information at a level of detail that is needed for managing the State’s resources
  • New streamlined and consistent processes from agency to agency provide a consistent statewide view of government
  • Enhanced capabilities enable state auditors to focus on high value cash transactions and other payments of particular interest earlier in the approval process
  • Greater ability to track, analyze, and reconcile procurement card and travel card transactions in SFS, providing better visibility into, and control over travel spending and agency purchases
  • It is now easier to drill down to source transactions to respond to audit findings and inquiries

State of NY numbers

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Greater state accountability

  • The State has fundamentally improved how it conducts its business. Standardized administrative functions and business processes are the rule now across agencies, and with that, more consistent recording and reporting of financial activities
  • Better unified control over state finances through a single system for entering transaction data, performing required processing steps, tracking the status of transactions, and automating the flow of information between agencies
  • Newly designed and streamlined process using new tools for book-to-bank reconciliation provides better controls over the State’s monies, as evidenced by a reconciliation that showed a discrepancy of only $5K for fiscal year 2013. This provided an opportunity to address the root causes of discrepancies that existed prior to SFS
  • SFS tracks electronic bank-to-bank transfers (more than 6,000 in FY13); these were tracked manually before SFS
  • Enables more timely and accurate monitoring of cash balances, cash flow forecasting, and timing of disbursements

Agency financial systems

Elimination of duplicative and disparate agency financial systems:

  • Dozens of systems, including the legacy mainframe central accounting system, have been decommissioned as SFS provides the same or better functionality
  • A single implementation effort eliminated the need for each agency to individually expend the effort and incur the cost of replacing its legacy financial management system 

Improved management of federal grants

  • All federal grants are now in one place with similar management processes across all of the federal grants
  • Enhanced federal grant budgeting, tracking, and reporting provides the State with better information and controls over federally funded state programs, which constitute approximately 35% of the State’s overall expenditures
  • Enhanced ability to capture matching state/private grants and provide consolidated reporting for all grants related monies
  • The State now has the ability to immediately close a project to stop spending or to assign a liquidation date after which spending is not allowed

Improved state budget control

  • New management controls allow control agencies and program agencies to better manage their spending at a more detailed level than previously possible
  • Agency funding and resources can now be redeployed from formerly system-focused support to program-focused activities

Enhanced program information

Enhanced program information and financial reporting for state managers, bond-rating agencies, and other public users of state data:

  • New reporting framework provides flexibility to generate reports in multiple formats, including spreadsheet formats, enabling better analysis of the data for management decisions and statutory reporting
  • Enables improved performance reporting and monitoring and more informed resource allocation decisions
  • Automates certain entries for the State’s Comprehensive Annual Financial Report (CAFR), enabling the State’s resources to focus on analysis rather than re-entering data
  • Provides enhanced tracking of payroll accruals and outstanding debt, reducing the manual effort needed to complete CAFR reporting, as evidenced by completion of the FY13 CAFR within only 116 days of the fiscal year-end

Improved efficiency

Improved efficiency and productivity for state agencies and control agencies:

  • The SFS is accessible to authorized users via the Internet, providing greater flexibility for the State’s workforce to access the system from any authorized location and at any time; this has led to increased productivity and enhanced disaster recovery capability
  • Electronic workflow results in reduced cycle time for approvals and improved efficiencies in multiple areas, such as purchase order to receipt to invoice matching and travel and expense claim processing
  • The time to process a voucher has decreased by 33%
  • Less paper for agencies to submit as they now have the ability to electronically attach supporting documentation to SFS transactions
  • Fewer paper checks now that employee travel expense payments are made through Automated Clearing House (ACH) remittance. There has been a nearly 60% increase in the number of ACH payments and over 9,000 employees have already submitted travel expenses via SFS
  • Employees now have the ability to automatically import, reconcile, and submit their purchase card transactions for payment
  • 15 public benefit corporations are using SFS to initiate debt service payments, which improves efficiency and transparency
  • SFS automatically processed more than 1,500 inter-agency billing transactions without moving funds outside of the State’s bank accounts. Prior to SFS, checks would be produced and then deposited by the collecting agency

New online system for vendors

  • Vendors now have real-time online visibility into the status of their payments and the ability to maintain accurate vendor information themselves. To date, more than 20,000 vendors have used the Internet to update their vendor information in SFS
  • Improved tracking of vendor performance and automated enforcement of matching among purchase orders, vendor invoices, and goods received has resulted in reduced rates of incorrect and duplicate payments
  • A single statewide vendor database of more than 165,000 vendors provides better management of the vendor relationship and a single data management point for vendors
  • The new common vendor file can be leveraged in the future to reduce costs to agencies through volume buying discounts, improved management of vendor agreements, common assessment of a vendor’s legal capacity to do business with New York State, reduction in fraudulent claims, and an improved contract negotiating position
  • One vendor record used by all state agencies eliminates the need for agencies to maintain duplicate records and for vendors to register multiple times
  • The use of the common vendor file, which allows for combining of payments across agencies, has reduced the number of payments each year by more than150,000

State government operations

Continuous improvement:

  • Additional eGovernment functions can be more efficiently added to the strong SFS Enterprise Resource Planning backbone that handles the back-office processes
  • Provides the foundation for a shared services function that can provide multiple agencies with services that were previously decentralized, resulting in:
    • Better service
    • Improved operating efficiency
    • Reduced operating costs
  • Provides the foundation for a grants reform initiative to streamline grant contract processes, accelerate performance of local grant programs, and improve compliance with audit requirements
  • Provides the foundation for the State to assume monthly Supplemental Security Income/State Supplementary Payment payment processing for over 700,000 state citizens from the federal government starting October 2014, which could provide cost savings
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