Upgrade to CACS-G

The Kentucky Department of Revenue (KDOR) entered into a contract with CGI to implement its web-based Computer Assisted Collection System for Government (CACS-G) resulting in additional collections of $77.7 million since the inception of the project. The first phase of the project went live in September of 2014.

KDORhadinstalledamainframeversionofCACSin1987.ThatsystemwasheavilycustomizedtomeetKDOR’sneeds.TheCommonwealth’sversionoftheproductbecameknownasKentuckyOnlineSystemfortheCollectionofAccountsReceivable(KY-OSCAR).Whileitsupportedthedepartment,itlimitedourabilitytogrowourcapabilities,provideadequatecustomerserviceandincreaserevenuestotheCommonwealth.

ThecaseloadassignedtotheDivisionofCollectionsmorethandoubledbetweenFiscalyear2010andFiscalYear2014duetothreechangeswithinKDOR:1. Afocusonimprovingcompliance;2. TheadditionoflegislationallowingKDORtocollectdebts

onbehalfofothergovernmentagencies;and3. Thedownturnoftheeconomy.Thelongerittakestoworkacase,thelessrevenueiscollected.Whilestillusingexistingstaffresources,greaterflexibilitytoautomateprocessesandscoreandprioritizecaseloadsbecamenecessarytomaximizepotentialrevenue.

In2012KDORbeganitsprojectwithCGItoimplementthenewestweb-basedversionoftheCACS-G.

Thatprojectincludedtwophases:1. AnEarlyWinscomponenttoimplementtechnologyto

automateleviesandfinalnotices.2. TheimplementationofthefullCACS-Gproduct.

TheCommonwealthdeterminedthistwophaseapproachwouldbebeneficialtohelpjump-startbenefitsanddemonstratesuccesstointernal and external stakeholders.

TheEarlyWinsInitiativeincludedtwocomponents:

1. Automaticfinalnoticesandleviesonactivecaseswithassets.

2. Write-offreversalsforcasesthathadbeenchargedoffwherethedebtorwasmatchedagainstavailablelevysourcesandbroughtbackintocollectionsifanassetwasavailable

WriteOffReversal $848,213

AutomatedLevy $9,120,351

FiscalYear2013Total $9,968,564

WriteOffReversal $1,124,578

AutomatedLevy $25,930,524

FiscalYear2014Total $27,055,101

WriteOffReversal $54,023

AutomatedLevy $3,898,276

FiscalYear2015Total(thruAugust31,2014) $3,952,299

TotalAll $40,975,965

Phase1oftheCACS-GimplementationwascompletedandthecaseloadwasconvertedoverLaborDayWeekend,2014.Therewassignificantfunctionality inthisfirstphaseoftheimplementation.Benefitsinthisfirstphaseincludedautomationofroutinetasksandalerts,aself-serviceportal,flexiblecorrespondencetemplates,theabilitytocombinecasesandmore.Thesebenefitsaredetailedasfollows.

Theabilitytoscorecasesandprioritizeworkloadtoallowcollectorstoconcentrateoncasesthatrequireemployeeinteractiontoachieveahigherlikelihoodofsuccess/collection.InKDOR’simplementationofCACS-G,theriskscorepredictshowlikelythecaseistoberesolvedinthefirst120daysandhowactiveemployeeinteractionwillbe.

◦ Highriskcasesareplacedonthefasttracktoenforcedcollectionactivitiesifthereareassetsavailable.Thesecasesmaynotreceivetheinitial“soft”collectionletters.◦ Mediumriskcasesarethosethataremostlikelytobenefitfromcollectorinteractionandmayonlygetone“soft”letterbeforebeingassignedtoacollector.◦ Lowriskcasesaremorelikelytoselfcureandmayreceivemoreautomatedletters.

Theabilitytoautomatemanycollectionsprocessesfreescollectorstoconcentrateontaxpayerservice.AspartoftheprojectKDORhasseensignificantbenefitsfromautomatingthefollowingletters:

◦ Theinitial“softcollectionletters”generatedwhencasesfirstenterscollections.Theseareaseriesofuptotwolettersgeneratedthatvarydependingonthecharacteristicsofthecaseandtheriskscore.◦ PaymentAgreementReminderletterstoremindtaxpayerswhentheirnextpaymentisdue.◦ Balanceduelettersonlowbalancecases.A“nocontact”letterifaphonenumberisunavailable.

Inaddition,thefollowingenforcedcollectionactionswereautomated:◦ The“FinalNoticeBeforeSeizureLetter”requiredbeforewageandbankleviesthatissentviaCertifiedMail. ThisletteralsodoublesasourcertifiednoticerequiredbeforetheTOPSoffset.◦ Subsequent“FinalNotice” lettersasnewdebtsareaddedtothecase.◦ TaxLiens– Liensmaybegeneratedautomaticallydependingoncasecharacteristics(balanceandcaseage)andwhetherthereareassetsavailableforcollection.Thereisalsoathrottlethatcontrolsthemaximumnumberofautomaticliensthatmaybegeneratedeachday.◦ WageandBankLevies- Leviescannowbeautomaticallygenerateddependingonthepresenceoftheappropriateassetandcasecharacteristics(balanceandcaseage).Thereisalsoathrottlethatcontrolsthemaximumnumberofautomaticleviesthatmaybegeneratedeachday.◦ Automaticreleaseofliensandlevieswhenthecaseisresolved.

Theabilitytoadd,deleteandmodifycorrespondencetemplatesasneeded.◦ Allversionsofthecorrespondencetemplatesaremaintainedsothatifaletterisviewedatalaterdate,theproperversionofthetemplateisused.

Aself-serviceInternetportalallowstaxpayerstomakepayments(ACHDebit)onlineona24/7basis.◦ Ifthetaxpayerdoesenterintoapayplanviatheportal,thesystemrecognizesthisandautomaticallymovesthecasetopayplanmonitoringsothatallotherautomatedactions(liensandlevies)cease.◦ Thesystemisintuitiveandassuresthatdebtorswhoarenoteligibleforthisprocessareautomaticallyexcludedfromtheself-serviceportal.Instead,taxpayerswouldreceiveamessagetocontactKDOR.Anexamplewouldbeacasewithanonfiledperiodwhichrequiresthatareturnbefiledpriortoenteringintoapayplan.

Real-timecapabilitytoreviewcollectoractivitiestofacilitatetraining,coachingandperformancemeasures.

Debtscannowbeattachedtomorethanonecaseforcollectionpurposes.

◦ InKentucky,corporateofficersandLLCmembersmaybeheldpersonallyliableforcertainbusinesstaxdebts.Onceacollectorhasdeterminedwhoshouldbeassessedandinitiatesthefirstassessment,thesystemautomaticallymaintainsanysubsequentassessmentsasneweligibledebtsareaddedtothebusinesscase.SeparateResponsibleParty(RP)collectioncasesarecreatedoncetheassessmentsaredueandpayableandcollectionactionmaybestarted.However,thisisthesamedebtthatisalsoattachedtothebusinesscase.Whateverpaymentsandadjustmentsaremadetothedebt(s)arereflectedinbothcases.

TheflexibilityofahighlyconfigurableworkflowprocessthatallowsKDORtocontrolcaseflow,andtimingandvolumesofautomatedcorrespondence.KDORestablishedaninternalCACS-Gusergroupcomprisedofcollectors,supervisorsandsystemadministratorsthatisresponsibleforvettingsystemenhancementrequests,managingcorrespondencetemplatesandadministeringworkflowrules.Thisgrouphasachievedagreatdealofsuccessinmakingimprovementssincego-live.

◦ MovementofcasesfromoneplacetoanotherisbasedonrulesdeterminedbycasecharacteristicsandcompletelycontrolledbyKDORstaff.◦ Morethan100changestoworkflowhavebeenmadesincego-live.Thesehavebeeninresponsetoissuesraisedbyusersandmanagementrequests.

InSeptember2015,KDORsuccessfullyimplementedPhase2oftheCACS-GProject.Thisphaseincludedadditionalfunctionalityandautomationtofurtherenhancecollections.

TheKentuckyGeneralAssemblygaveKDORtheauthoritytorevoke,suspendorpreventrenewalofprofessionallicenses,vehicleregistrationsanddriverlicensesintheeventtherewereunpaidtaxes.Theseactionsarereservedforthosecaseswhereotherformsofcollectionhavebeenexhausted.Thisprocessalsorequiresnewnotificationstothetaxpayer

Phase2providedthefollowingautomatedcapabilitiesrelatedtolicensesuspensions:◦ Certified ImportantNoticeLettertothetaxpayeradvisingoftheimpendingsuspensionordenialoflicenserenewal.Thevolumeoflettersgeneratedeachdayisalsocontrolled.◦ Professional LicenseSuspension◦ VehicleRegistrationDenial◦ DriverLicenseSuspension◦ LiquorLicenseDenial◦ Thevolumeofsuspensions/denialscreatedeachdayiscontrolled.◦ Automatedreleaseofthesuspensionswhenthecaseisresolved.

Inaddition,thefollowingenhancementswereadded:

} Automatedclearingofnon-filedperiodsforwhichithasbeendeterminedareturnisnotneeded.

} Automatedjeopardyassessment(estimatedassessment)forbusinesscaseswithnon-filedperiods.

} Wehavelearnedtomanagethevolumeoflettersgeneratedeachdayinordertocontrolcosts.

} UsertrainingwasprovidedbyCGIandiscriticaltoensurestaffispreparedtodealwithtaxpayerinquiries.Thevolumeofdailyphonecallsisincreased.

} Weinitiallyhadtoconvertmostcasesintoastatewhereacollectorhadtoreviewthecasetodeterminehowtoprepareitandwhereitneededtogo.Itwas2to3monthsbeforewehadsufficientcaseloadstagedtodeterminetheeffectivenessoftheautomatedprocesses.

} Changesinprocedures,adjustmentstoperformancemeasures,andchangestoemployeeevaluationprocesseswerediscussedandplannedfortomakethetoughtransitionfrommostlymanualprocessestomostlyautomatedprocesseseasierforusersandmanagers.

} Thesystemhasbeensetuptoprocessworkflowruleschangesonceweekly,ifneeded.Inthisway,wearebetterabletorespondtoissuesorrequestsforchangesinatimelymanner.

CollectionsfromCACS-GUpgradePhase1 Phase2 Total

FiscalYear2015 $19,169,864 $19,169,864FiscalYear2016* $16,591,562 $945,249 $17,536,811TotalAll $36,706,675*AsofApril30,2016

AlthoughKDORhasimplementedagreatdealofautomationwithinitsCACS-Gworkflow,itshouldbenotedthatthesedecisionsarecompletelywithinthecontrolofKDOR.Anyprocessthatisimplementedcanhaveaslittleorasmuchautomationasisallowedordesiredbytheagency.Atanytime,KDORcanadjusttheamountofautomation.Asanexample,KDORincreasesthecasebalanceeligibleforautomatedleviesduringrefundoffsetseasonbecausemanylowbalancecasesareresolvedbythoseoffsets.Thishelpspreventoverpayments.

TheDepartmentofRevenueispleasedtoannouncethatourCACS-GUpgradeProjecthasbeenhonoredwiththe2016OutstandingComplianceProgramAwardfromtheFederationofTaxAdministrators(FTA).