ProjectONE Report to the 82nd Legislature
ERP in Texas
When financial crises pushed two of Detroit’s “Big Three” car companies into Chapter 11 bankruptcy in 2009, the world learned some shocking news about the state of finances at one of those companies.
General Motors (GM) executives had no idea how much money the company had.
As U.S. Treasury Auto Industry Advisor Steven Rattner told MSNBC, “This was a company that could not tell us on any given day within $500 million how much cash they had.“
The Wall Street Journal later reported that a draft of GM’s initial public stock offering (IPO) registration statement reads that by June 30, 2010, “... we concluded that our disclosure controls and procedures were not effective ... because of the material weakness in our internal control over financial reporting.”
GM’s inability to report quickly and accurately on its financial position is a sobering reminder of the speed at which money moves in today’s economy. Without fast-paced, robust technological systems in place, large companies – and states – can find themselves relying on faulty, outdated information.
By creating fast, reliable, interactive business systems, ERP changes the way companies operate, and Texas is joining many other states in applying this technological solution to the needs of government.
ProjectONE – Our New Enterprise – is bringing ERP to Texas over the next several years with a system called CAPPS (Centralized Accounting and Payroll/ Personnel System). With this system in place at all state agencies, Texas can lead the nation in fiscal accounting and taxpayer transparency. ERP promises to provide the tools needed to shine the brightest light on the state’s finances, give decision makers seamless access to state data, and allow the state to make better use of the data at its fingertips.
Benefits of CAPPS
Unlike existing statewide accounting and payroll systems like the Uniform Statewide Accounting System (USAS) and the Uniform Statewide Payroll/Personnel System (USPS) and the various internal systems used by state agencies, CAPPS will:
- Give state decision makers a single source for reliable, real-time information that can be compared across agencies.
- Provide easy, direct, secure access to the state’s vast array of financial and HR information.
- Eliminate data conflicts often encountered when using financial accounting programs that lack integration.
- Provide better tracking and standardization of financial information, such as:
- Method of finance – The state will be able to identify the funding source used to pay for any item or service (such as appropriated receipts, federal funds, grants, interagency contracts, etc.).
- Appropriations/budgets/expenditures – Every state dollar will be traceable, from the initial appropriation to a state agency budget through the final expenditure.
- State assets and budget planning – State assets will be easily tracked, leading to improved budget planning and accountability at the statewide level. In addition, the CAPPS system will report on replacement schedules and costs for big-ticket items such as computers and vehicles, giving budget planners more flexibility in scheduling major purchases.
- Create real-time transparency. Legislators and citizens will be able to track spending and know how agencies and institutions are spending the funds they receive throughout the year.
- Allow users to estimate carry-forward or lapsing federal funds or grants. This is a difficult and problematic exercise at the statewide level today. With the CAPPS system, decision makers will be able to track and monitor expected federal receipts and compare them against actual usage across agencies.
CAPPS will also allow agencies to redirect employees from time-consuming data entry positions to mission-critical tasks and core business functions. After the upgrade to PeopleSoft 8.3 in 2002-2003, Texas Health and Human Services (HHS) agencies recognized gains in efficiency and speed in HR/ payroll functions by using an HR contract provider and a variety of self service applications. By the end of October 2005, the agencies were able to reduce more than 400 HR/payroll administrative positions. Some employees in those positions retired or left the agency, while many others were hired into other positions across the enterprise, enabling HHS to retain institutional knowledge while filling positions that offered a higher return to the agencies.
Reporting is another area that will see increased efficiency. The Texas Department of Transportation (TxDOT) has identified a number of reports that CAPPS will be able to generate that address recommendations of the Grant Thornton management and organizational review. Activity-based costing reports can be created, and data can be pulled from multiple sources, creating reports that are more detailed and more accurate.
In addition, enhanced set-up screens will ensure that payments to historically underutilized businesses (HUBs) will be recorded and reported accurately, so the state can assess the effectiveness of its program. For samples of these and other reports that will be available, see Appendix D: Sample Reports.
CAPPS will provide exceptional value to the Comptroller’s office, state agencies, the Legislature, oversight agencies and the general public. It will provide benefits that will save time, improve customer service, improve transparency, create economies of scale and enhance security by accomplishing the following:
- Eliminating obsolete business processes, including manual processing, duplicate data entry, paper processing and manual reconciliation.
- Eliminating redundant databases.
- Increasing security while maintaining transparency.
- Improving response time to inquiries from legislators, oversight agencies, media and the public by utilizing real-time processing and integrated databases.
- Establishing a common data language, which provides for consistent reporting and better analysis of how the state’s money is spent.
- Establishing a procurement system that will be fully integrated with the financial accounting, asset management and inventory management modules, thus providing strategic sourcing data that can reduce the state’s cost of goods and services.
It should be noted, however, these benefits will have minimal impact until CAPPS is implemented at all state agencies. Until then, agencies will continue to use the current statewide systems (such as USAS and USPS), maintaining redundant databases, housing conflicting data and providing limited access to crucial information. In addition, the state will continue to pay for maintenance and operation of duplicative systems and will not take advantage of the full range of CAPPS capabilities.