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State of Michigan’s Project 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
2
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.
.
3
Project SIGMA Overview
4
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
1.
2.
3.
4.
5.
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 Allocation 5
SIGMA’s Integrated System
6
MIDB
Time, Expense
Reimbursement,
and Labor
Budget
Development
Self Service
For
Employees
Management
Self Service Fixed
Assets
Accounts
Payable Inventory
Purchasing
Financial
Management
Vendor
Self Service
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
Implemented
10/2016
(13 months)
(27 months)
10
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 Portal
11
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
13
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
14
• 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
15
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
16
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
18
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 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 Development
Phase 1, 1.5, 2, and Beyond
Salary and Benefit Forecast (SBFS)
19
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)
20
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)
21
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.
23
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
Standardized use of
coding block/COA
25
• 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
COA Mapping R*STARS to SIGMA
Sample
26
COA elements to be
used in Phase 1:
• Department
• Fund
• Appropriation
• Object
• Revenue
• BFY (= AY)
Budget Fiscal Year (BFY)
28
• 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.
Budget Control
29
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
Budget Control Planned Defaults
30
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
31
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
32
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
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
36
Project Communications
• Website - https://stateofmichigan.sharepoint.com/teams/SBO/project_sigma
Newsletter
Frequently asked questions
Presentations
Project announcements
Training
Agency Implementation Guide
Contact Us
37
Newsletter
Image from Website
Questions?
38
Upcoming Town Hall Meeting
Thursday, April 30, 8:30-10:30 Capitol Commons Center - Conference Rooms A/B/C/D (Basement)
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